Annual Report by Investment Company Form N CSR

2024-10-10PT011_PutnamTaxExemptIncomeFund_ClassA_TSRAnnual

	UNITED STATES

	SECURITIES AND EXCHANGE COMMISSION

	Washington, D.C. 20549

	FORM N-CSR

	CERTIFIED SHAREHOLDER REPORT OF REGISTERED

	MANAGEMENT INVESTMENT COMPANIES

	Investment Company Act file number:	(811-02675)

	Exact name of registrant as specified in charter:	Putnam Tax Exempt Income Fund

	Address of principal executive offices:	100 Federal Street, Boston, Massachusetts 02110

	Name and address of agent for service:	Stephen Tate, Vice President

		100 Federal Street

		Boston, Massachusetts 02110

	Copy to:	Bryan Chegwidden, Esq.

		Ropes & Gray LLP

		1211 Avenue of the Americas

		New York, New York 10036

		James E. Thomas, Esq.

		Ropes & Gray LLP

		800 Boylston Street

		Boston, Massachusetts 02199

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

	Date of fiscal year end:	September 30, 2024

	Date of reporting period:	October 1, 2023 - September 30, 2024

	Item 1. Report to Stockholders:

	The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:

	Item 2. Code of Ethics:

(a) The fund's principal executive, financial and accounting officers are employees of Putnam Investment Management, LLC, the Fund's investment manager, or Franklin Templeton. As such they are subject to a comprehensive Code of Ethics adopted and administered by Putnam Investment Management, LLC and Franklin Templeton which is designed to protect the interests of the firm and its clients. The Fund has adopted a Code of Ethics which incorporates the Code of Ethics of Franklin Templeton with respect to all of its officers and Trustees who are employees of Putnam Investment Management, LLC and Franklin Templeton. For this reason, the Fund has not adopted a separate code of ethics governing its principal executive, financial and accounting officers.

(c) In connection with the acquisition of Putnam Investments by Franklin Templeton, the Putnam Investments Code of Ethics was amended effective January 1, 2024 to reflect revised compliance processes, including: (i) Compliance with the Putnam Investments Code of Ethics will be viewed as compliance with the Franklin Templeton Code for certain Putnam employees who are dual-hatted in Franklin Templeton advisory entities (ii) Certain Franklin Templeton employees are required to hold shares of Putnam mutual funds at Putnam Investor Services, Inc. and (iii) Certain provisions of the Putnam Investments Code of Ethics are amended that are no longer needed due to organizational changes. Effective March 4, 2024, the majority of legacy Putnam employees transitioned to Franklin Templeton policies outlined in the Franklin Templeton Code.

	Item 3. Audit Committee Financial Expert:

The Funds' Audit, Compliance and Risk Committee is comprised solely of Trustees who are "independent" (as such term has been defined by the Securities and Exchange Commission ("SEC") in regulations implementing Section 407 of the Sarbanes-Oxley Act (the "Regulations")). The Trustees believe that each member of the Audit, Compliance and Risk Committee also possesses a combination of knowledge and experience with respect to financial accounting matters, as well as other attributes, that qualifies him or her for service on the Committee. In addition, the Trustees have determined that each of Mr. McGreevey and Mr. Singh qualifies as an "audit committee financial expert" (as such term has been defined by the Regulations) based on their review of his or her pertinent experience and education.The SEC has stated, and the funds' amended and restated agreement and Declaration of Trust provides, that the designation or identification of a person as an audit committee financial expert pursuant to this Item 3 of Form N-CSR does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Audit, Compliance and Risk Committee and the Board of Trustees in the absence of such designation or identification.

	Item 4. Principal Accountant Fees and Services:

	The following table presents fees billed in each of the last two fiscal years for services rendered to the fund by the fund's independent auditor:

Fiscal year ended	Audit Fees	Audit-Related Fees	Tax Fees	All Other Fees
September 30, 2024	$65,253	$ -	$7,732	$ -
September 30, 2023	$69,052	$ -	$7,732	$ -

	For the fiscal years ended September 30, 2024 and September 30, 2023, the fund's independent auditor billed aggregate non-audit fees in the amounts of $968,529 and $228,364 respectively, to the fund, Putnam Management and any entity controlling, controlled by or under common control with Putnam Management that provides ongoing services to the fund.

	Audit Fees represent fees billed for the fund's last two fiscal years relating to the audit and review of the financial statements included in annual reports and registration statements, and other services that are normally provided in connection with statutory and regulatory filings or engagements.

	Audit-Related Fees represent fees billed in the fund's last two fiscal years for services traditionally performed by the fund's auditor, including accounting consultation for proposed transactions or concerning financial accounting and reporting standards and other audit or attest services not required by statute or regulation.

	Tax Fees represent fees billed in the fund's last two fiscal years for tax compliance, tax planning and tax advice services. Tax planning and tax advice services include assistance with tax audits, employee benefit plans and requests for rulings or technical advice from taxing authorities.

	Pre-Approval Policies of the Audit, Compliance and Risk Committee. The Audit, Compliance and Risk Committee of the Putnam funds has determined that, as a matter of policy, all work performed for the funds by the funds' independent auditors will be pre-approved by the Committee itself and thus will generally not be subject to pre-approval procedures.

The Audit, Compliance and Risk Committee also has adopted a policy to pre-approve the engagement by Putnam Management and certain of its affiliates of the funds' independent auditors, even in circumstances where pre-approval is not required by applicable law. Any such requests by Putnam Management or certain of its affiliates are typically submitted in writing to the Committee and explain, among other things, the nature of the proposed engagement, the estimated fees, and why this work should be performed by that particular audit firm as opposed to another one. In reviewing such requests, the Committee considers, among other things, whether the provision of such services by the audit firm are compatible with the independence of the audit firm.

	The following table presents fees billed by the fund's independent auditor for services required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.

Fiscal year ended	Audit-Related Fees	Tax Fees	All Other Fees	Total Non-Audit Fees
September 30, 2024	$ -	$791,963	$168,834	$960,797
September 30, 2023	$ -	$220,632	$ -	$220,632

	(i) Not applicable

	(j) Not applicable

	Item 5. Audit Committee of Listed Registrants

	Not applicable

	Item 6. Investments:

	The registrant's schedule of investments in unaffiliated issuers is included in the Financial Statements and Other Important Information in Item 7 below.

	Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.

Putnam
Tax Exempt Income
Fund

Financial Statements and Other Important Information

Annual | September 30, 2024

Table of Contents

Report of Independent Registered Public Accounting Firm	1
The fund's portfolio	2
Financial statements	12
Financial highlights	15
Notes to financial statements	16
Federal tax information	22
Changes in and disagreements with accountants	23
Results of any shareholder votes	23
Remuneration paid to directors, officers, and others	23
Board approval of management and subadvisory agreements	24

Financial Statements and Other Important Information-Annual

franklintempleton.com

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of
Putnam Tax Exempt Income Fund:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the fund's portfolio, of Putnam Tax Exempt Income Fund (the "Fund") as of September 30, 2024, the related statement of operations for the year ended September 30, 2024, the statement of changes in net assets for each of the two years in the period ended September 30, 2024, including the related notes, and the financial highlights for each of the five years in the period ended September 30, 2024 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of September 30, 2024, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended September 30, 2024 and the financial highlights for each of the five years in the period ended September 30, 2024 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of September 30, 2024 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
November 13, 2024

We have served as the auditor of one or more investment companies in the Putnam Funds family of funds since at least 1957. We have not been able to determine the specific year we began serving as auditor.

Tax Exempt Income Fund

1

The fund's portfolio 9/30/24

Key to holding's abbreviations

AGM Assured Guaranty Municipal Corporation

AMBAC AMBAC Indemnity Corporation

BAM Build America Mutual

FGIC Financial Guaranty Insurance Company

FHA Insd. Federal Housing Administration Insured

FNMA Coll. Federal National Mortgage Association Collateralized

G.O. Bonds General Obligation Bonds

NATL National Public Finance Guarantee Corporation

PSFG Permanent School Fund Guaranteed

Q-SBLF Qualified School Board Loan Fund

U.S. Govt. Coll. U.S. Government Collateralized

VRDN Variable Rate Demand Notes, which are floating-rate securities with long-term maturities that carry coupons that reset and are payable upon demand either daily, weekly or monthly. The rate shown is the current interest rate at the close of the reporting period. Rates are set by remarketing agents and may take into consideration market supply and demand, credit quality and the current SIFMA Municipal Swap Index rate, which was 3.15% as of the close of the reporting period.

	MUNICIPAL BONDS AND NOTES (101.6%)*	Rating**		Principal amount	Value
	Alabama (1.3%)
	Black Belt Energy Gas Dist. Mandatory Put Bonds (12/1/25), Ser. A-1, 4.00%, 12/1/49	A1		$7,690,000	$7,735,060
					7,735,060
	Alaska (1.5%)
	AK State Indl. Dev. & Export Auth. Rev. Bonds
	(Dena' Nena' Henash), 4.00%, 10/1/44	A+/F		6,930,000	6,729,364
	(Tanana Chiefs Conference), Ser. A, 4.00%, 10/1/39	A+/F		2,575,000	2,581,427
					9,310,791
	Arizona (3.1%)
	AZ State Indl. Dev. Auth. Charter School Rev. Bonds, (Equitable School Revolving Fund, LLC), 4.00%, 11/1/51	A		2,200,000	2,118,839
	AZ State Indl. Dev. Auth. Ed. Rev. Bonds, (KIPP New York, Inc., Jerome Fac.), Ser. B
	4.00%, 7/1/61	BBB-		2,120,000	1,946,777
	4.00%, 7/1/51	BBB-		2,000,000	1,880,846
	AZ State Indl. Dev. Auth. Ed. 144A Rev. Bonds, (Somerset Academy of Las Vegas), 4.00%, 12/15/51	BB		700,000	595,563
	AZ State Indl. Dev. Auth. National Charter School Revolving Loan Fund Rev. Bonds, (Equitable School Revolving Fund, LLC), 4.00%, 11/1/37	A		1,100,000	1,121,260
	Glendale, Indl. Dev. Auth. Sr. Living Fac. Rev. Bonds, (Royal Oaks Life Care Cmnty.), 5.00%, 5/15/39	BB+/F		3,500,000	3,517,115
	Maricopa Cnty., Indl. Dev. Auth. Ed. Rev. Bonds
	(Great Hearts Academies), Ser. C, 5.00%, 7/1/48	AA-		600,000	609,432
	(Reid Traditional Schools Painted Rock Academy), 5.00%, 7/1/36	Baa3		250,000	253,531
	(Horizon Cmnty. Learning Ctr.), 5.00%, 7/1/35	BB+		350,000	354,654
	Phoenix, Civic Impt. Corp. Dist. Rev. Bonds, (Civic Plaza), Ser. B, FGIC, NATL, 5.50%, 7/1/43	Aa1		1,000,000	1,261,950
	Phoenix, Indl. Dev. Auth. Ed. Rev. Bonds, (Great Hearts Academies)
	5.00%, 7/1/44	BBB		1,000,000	1,000,265
	Ser. A, 5.00%, 7/1/36	BBB		1,010,000	1,017,544
	Phoenix, Indl. Dev. Auth. Ed. 144A Rev. Bonds, (BASIS Schools, Inc.)
	5.00%, 7/1/35	BB		100,000	100,623
	Ser. A, 5.00%, 7/1/35	BB		150,000	150,957
	Salt Verde, Fin. Corp. Gas Rev. Bonds
	5.50%, 12/1/29	A3		1,900,000	2,085,810
	5.00%, 12/1/37	A3		500,000	559,548
	Yavapai Cnty., Indl. Dev. Ed. Auth. Rev. Bonds, (Agribusiness & Equine Ctr.), 5.00%, 3/1/32	BB+		225,000	225,091
					18,799,805
	California (7.9%)
	CA Cmnty. Hsg. Agcy. Essential Hsg. 144A Rev. Bonds
	(Aster Apt.), Ser. A-1, 4.00%, 2/1/56	BB+/P		850,000	772,303
	(Fountains at Emerald Park), 3.00%, 8/1/56	BBB/P		5,975,000	4,583,615
	CA Hsg. Fin. Agcy. Muni. Certif. Rev. Bonds, Ser. 21-1, Class A, 3.50%, 11/20/35	BBB+		3,029,697	2,966,359
	CA Muni. Fin Auth. Multi-Fam. Rev. Bonds, (Terry Manor Sr. Hsg.), FNMA Coll., 4.20%, 8/1/40	Aaa		3,600,000	3,703,110
	CA State Poll. Control Fin. Auth. 144A Rev. Bonds, (Wtr. Furnishing), 5.00%, 11/21/45	Baa3		3,500,000	3,505,419
	CSCDA Cmnty. Impt. Auth. Rev. Bonds, (Pasadena Portfolio), Ser. A-2, 3.00%, 12/1/56	BBB-/P		3,250,000	2,350,934
	CSCDA Cmnty. Impt. Auth. 144A Rev. Bonds
	(1818 Platinum Triangle Apt.), 3.25%, 4/1/57	BBB/P		1,600,000	1,215,447
	(City of Orange Portfolio), 3.00%, 3/1/57	BBB-/P		2,350,000	1,754,977
	(Essential Hsg.), Ser. A-2, 3.00%, 2/1/57	BBB-/P		4,300,000	3,212,429

2

Tax Exempt Income Fund

	MUNICIPAL BONDS AND NOTES (101.6%)* cont.	Rating**		Principal amount	Value
	California cont.
	Los Angeles, Cmnty. Fac. Dist. No. 11 Special Tax Bonds, 4.00%, 9/1/46	BB/P		$1,460,000	$1,391,236
	Los Angeles, Dept. of Arpt. Rev. Bonds
	5.00%, 5/15/46 (Prerefunded 11/15/31)	AAA/P		5,000	5,629
	4.00%, 5/15/48	Aa3		10,000,000	9,827,925
	4.00%, 5/15/35	Aa3		1,500,000	1,530,931
	M-S-R Energy Auth. Rev. Bonds, Ser. A, 6.50%, 11/1/39	BBB+		2,250,000	2,947,290
	Menifee, Union School Dist. Cmnty. Fac. Special Tax Bonds, (Dist. No. 2011-1)
	4.00%, 9/1/45	BB+/P		860,000	859,123
	4.00%, 9/1/41	BB+/P		800,000	803,758
	San Francisco, City & Cnty. Arpt. Comm. Intl. Arpt. Rev. Bonds, Ser. A, 5.00%, 5/1/35	A1		3,000,000	3,293,056
	San Francisco, City & Cnty. Arpt. Comm. Intl. Arpt. VRDN, Ser. B, 2.15%, 5/1/58	VMIG 1		2,000,000	2,000,000
	San Francisco, City & Cnty. Cmnty. Fac. Dist. No. 2016 144A Special Tax Bonds, (Impt. Area No. 2), Ser. A, 4.00%, 9/1/42	BB-/P		2,000,000	1,943,401
					48,666,942
	Colorado (3.7%)
	CO State Hlth. Fac. Auth. Rev. Bonds, (Valley View Hosp. Assn.), 5.00%, 5/15/45	A		1,000,000	1,004,530
	CO State Hlth. Fac. Auth. Hosp. Rev. Bonds, (Covenant Living Cmnty. and Svcs. Oblig. Group), 4.00%, 12/1/50	A-/F		4,100,000	3,758,060
	Denver City & Cnty., Arpt. Rev. Bonds
	Ser. D, 5.75%, 11/15/37 T	Aa3		2,500,000	2,915,650
	Ser. D, 5.75%, 11/15/38 T	Aa3		3,175,000	3,684,523
	Ser. A, 5.50%, 11/15/38	Aa3		2,100,000	2,410,526
	Ser. A, 5.50%, 11/15/35	Aa3		2,000,000	2,324,229
	Ser. A, 5.00%, 11/15/37	Aa3		1,450,000	1,589,069
	E-470 CO Pub. Hwy. Auth. Rev. Bonds, Ser. A, NATL, zero %, 9/1/34	A1		5,000,000	3,499,510
	Vauxmont, Metro. Dist. G.O. Bonds, AGM, 3.25%, 12/15/50	AA		1,605,000	1,389,555
					22,575,652
	Connecticut (0.6%)
	CT State Hlth. & Edl. Fac. Auth. Rev. Bonds
	(Masonicare Issue), Ser. F, 5.00%, 7/1/34	A-/F		1,500,000	1,521,973
	(Stamford Hosp. Oblig. Group (The)), Ser. M, 5.00%, 7/1/34	BBB+		600,000	652,766
	CT State Hsg. Fin. Auth. Rev. Bonds, Ser. B-1, 4.10%, 11/15/39	Aaa		1,685,000	1,685,152
					3,859,891
	Delaware (0.1%)
	DE State Econ. Dev. Auth. Charter School Rev. Bonds, (ASPIRA of Delaware Charter Operations, Inc.), 4.00%, 6/1/42	BB		730,000	665,808
					665,808
	District of Columbia (5.3%)
	DC G.O. Bonds, Ser. A, 5.00%, 1/1/45	Aaa		5,000,000	5,549,757
	DC Rev. Bonds
	(DC Intl. School), 5.00%, 7/1/49	BBB		1,670,000	1,710,278
	(KIPP DC), Ser. A, 5.00%, 7/1/48	BBB+		1,250,000	1,273,371
	(DC Intl. School), 5.00%, 7/1/39	BBB		2,000,000	2,090,527
	(KIPP DC), Ser. A, 5.00%, 7/1/37	BBB+		2,500,000	2,592,560
	DC, Income Tax Rev. Bonds, Ser. A, 5.00%, 7/1/47	AAA		1,500,000	1,644,993
	Metro. DC Arpt. Auth. Rev. Bonds, Ser. A, 5.00%, 10/1/31	Aa3		2,500,000	2,749,319
	Metro. Washington DC, Arpt. Auth. Dulles Toll Rd. Rev. Bonds
	(Dulles Metrorail & Cap. Impt. Proj.) 4.00%, 10/1/53 T	A-		2,050,000	1,970,932
	(Dulles Metrorail & Cap. Impt. Proj.) Ser. B, 4.00%, 10/1/44 T	A-		2,050,000	2,025,605
	4.00%, 10/1/37	A-		3,140,000	3,188,925
	4.00%, 10/1/36	A-		1,490,000	1,515,752
	(Metrorail), Ser. A, zero %, 10/1/37	A-		11,000,000	6,026,154
					32,338,173
	Florida (5.6%)
	Double Branch Cmnty. Dev. Dist. Special Assmt. Bonds, Ser. A-1, 4.25%, 5/1/34	A		890,000	890,217
	FL Insurance Assistance Interlocal Agcy., Inc. VRDN, Ser. A-2, 3.92%, 9/1/32	VMIG 1		3,500,000	3,500,000
	FL State Dev. Fin Corp. Sr. Living Rev. Bonds, (Glenridge on Palmer Ranch Oblig. Group), 5.00%, 6/1/51	BB/P		1,300,000	1,306,496
	FL State Dev. Fin. Corp. Ed. Fac. Rev. Bonds, (River City Ed. Oblig. Group)
	4.00%, 7/1/55	Baa3		750,000	659,107
	4.00%, 7/1/45	Baa3		600,000	559,236

Tax Exempt Income Fund

3

	MUNICIPAL BONDS AND NOTES (101.6%)* cont.	Rating**		Principal amount	Value
	Florida cont.
	FL State Dev. Fin. Corp. Hlth. Care Fac. Rev. Bonds
	(Shands Jacksonville Med. Ctr.), 5.00%, 2/1/52	Ba1		$1,000,000	$1,006,533
	(Shands Jacksonville Med. Ctr., Inc.), 4.00%, 2/1/52	Ba1		2,250,000	1,815,710
	Miami-Dade Cnty., Hsg. Fin. Auth. Multi-Fam. Hsg. Mandatory Put Bonds (1/1/26), (Fairfield Running Brook II LP), 3.55%, 1/1/27	Aaa		6,525,000	6,556,757
	Orange Cnty., Hlth. Fac. Auth. Rev. Bonds, (Orlando Hlth.)
	5.00%, 10/1/42	A+		1,250,000	1,380,374
	4.00%, 10/1/52	A+		7,265,000	6,978,642
	Palm Beach Cnty., Hlth. Fac. Auth. Rev. Bonds, (Acts Retirement-Life Cmnty., Inc.), 5.00%, 11/15/32	A-/F		5,000,000	5,155,024
	Seminole Cnty., 144A Rev. Bonds, (Galileo School Foundation, Inc. (The))
	4.00%, 6/15/56	Ba1		805,000	679,840
	4.00%, 6/15/51	Ba1		830,000	716,023
	4.00%, 6/15/41	Ba1		425,000	390,346
	4.00%, 6/15/36	Ba1		315,000	305,517
	Tampa, Cap. Impt. Cigarette Tax Rev. Bonds, (Cap. Appn.), Ser. A
	zero %, 9/1/49	A1		2,250,000	707,128
	zero %, 9/1/42	A1		830,000	378,789
	Village Cmnty. Dev. Dist. No. 15 144A Special Assmt. Bonds, 4.80%, 5/1/55 ##	BBB-/P		700,000	709,590
	Volusia Cnty., Edl. Fac. Auth. Rev. Bonds, (Embry-Riddle Aeronautical U., Inc.), Ser. A, 4.00%, 10/15/39	A1		500,000	505,729
					34,201,058
	Georgia (2.1%)
	DeKalb Cnty., Hsg. Auth. Multi-Fam. Hsg. Rev. Bonds, (HADC 1086 on Montreal, LLC), 4.00%, 3/1/34	A+		5,000,000	5,051,118
	Main Street Natural Gas, Inc. Gas Supply Mandatory Put Bonds (3/1/32), Ser. B, 5.00%, 12/1/54	Aa1		3,300,000	3,620,924
	Muni. Election Auth. of GA Rev. Bonds
	(One), Ser. A, BAM, 5.25%, 1/1/54 ##	AA		1,750,000	1,935,529
	(Plant Vogtle Units 3 & 4), 5.00%, 1/1/63	BBB+		2,000,000	2,044,892
					12,652,463
	Hawaii (0.6%)
	HI State Harbor Syst. Rev. Bonds, Ser. A
	4.00%, 7/1/36	Aa3		375,000	381,130
	4.00%, 7/1/31	Aa3		250,000	261,079
	Honolulu City & Cnty., Waste Wtr. Syst. Rev. Bonds, 5.00%, 7/1/38 ##	AA+		2,500,000	2,894,514
					3,536,723
	Illinois (6.4%)
	Chicago, G.O. Bonds, Ser. A, 4.00%, 1/1/36	BBB+		3,850,000	3,853,311
	Chicago, Board of Ed. G.O. Bonds
	Ser. C, 5.25%, 12/1/39	BB+		1,500,000	1,501,130
	Ser. A, 5.00%, 12/1/40	BB+		1,800,000	1,859,712
	Ser. A, 5.00%, 12/1/35	BB+		1,910,000	2,007,965
	Chicago, Hsg. Auth. Rev. Bonds, Ser. A, 5.00%, 1/1/31	AA-		4,540,000	4,791,449
	Chicago, O'Hare Intl. Arpt. Rev. Bonds, Ser. A
	5.50%, 1/1/55	A+		3,825,000	4,171,812
	5.00%, 1/1/38	A+		200,000	209,446
	IL Fin. Auth. Rev. Bonds, (U. of IL)
	5.25%, 10/1/53	Aa2		2,500,000	2,717,947
	5.00%, 10/1/48	Aa2		2,500,000	2,680,694
	IL State G.O. Bonds
	Ser. B, 5.25%, 5/1/41	A3		1,250,000	1,378,355
	Ser. B, 5.25%, 5/1/40	A3		2,650,000	2,933,195
	Ser. A, 5.00%, 12/1/31	A3		2,870,000	3,027,138
	IL State Fin. Auth. Rev. Bonds
	(Lawndale Edl & Regl. Network Charter School Oblig. Group), 4.00%, 11/1/51	BBB		1,500,000	1,350,667
	(Lawndale Edl & Regl. Network Charter School Oblig. Group), 4.00%, 11/1/41	BBB		725,000	687,913
	(Riverside Hlth. Syst. Oblig. Group), 4.00%, 11/15/31	A+		500,000	503,945
	IL State Fin. Auth. Student Hsg. & Academic Fac. Rev. Bonds, (CHF-Chicago, LLC), 5.00%, 2/15/47	Baa3		500,000	501,827
	Metro. Pier & Exposition Auth. Rev. Bonds, 4.00%, 12/15/47	A		2,900,000	2,810,428

4

Tax Exempt Income Fund

	MUNICIPAL BONDS AND NOTES (101.6%)* cont.	Rating**		Principal amount	Value
	Illinois cont.
	St. Clair Cnty., Cmnty. Cahokia Unit School Dist. No. 187 G.O. Bonds, Ser. A, AGM
	5.00%, 1/1/54	AA		$1,000,000	$1,064,402
	5.00%, 1/1/49	AA		1,000,000	1,069,458
					39,120,794
	Indiana (1.8%)
	IN State Fin. Auth. Waste Wtr. Util. Rev. Bonds, (CWA Auth., Inc.)
	5.00%, 10/1/45	AA		1,000,000	1,116,073
	5.00%, 10/1/44	AA		1,275,000	1,427,704
	5.00%, 10/1/43	AA		1,550,000	1,741,831
	Indianapolis, Local Pub. Impt. Bond Bk. Rev. Bonds
	Ser. A, 5.25%, 2/1/54	Aa1		3,500,000	3,697,994
	(Circle City Forward Phase II), 4.125%, 2/1/52	Aa1		3,185,000	3,169,883
					11,153,485
	Iowa (0.6%)
	IA State Fin. Auth. Rev. Bonds, (Lifespace Cmnty., Inc. Oblig. Group), Ser. A, 4.00%, 5/15/46	BBB/F		3,850,000	3,467,052
					3,467,052
	Kentucky (2.5%)
	KY State Property & Bldg. Comm. Rev. Bonds, (No. 127), Ser. A, 5.25%, 6/1/38	Aa3		3,290,000	3,756,460
	KY State Pub. Energy Auth. Gas Supply
	Mandatory Put Bonds (6/1/26), Ser. A, 4.00%, 12/1/50	A1		5,000,000	5,048,994
	Mandatory Put Bonds (6/1/25), Ser. C-1, 4.00%, 12/1/49	A1		2,060,000	2,067,870
	Louisville & Jefferson Cnty., Metro. Govt. Hlth. Syst. Rev. Bonds, (Norton Healthcare), Ser. A, 5.00%, 10/1/31	A		1,135,000	1,167,661
	Louisville, Regl. Arpt. Auth. Syst. Rev. Bonds, Ser. A
	5.00%, 7/1/31	A+		415,000	415,421
	5.00%, 7/1/30	A+		1,000,000	1,001,083
	U. of KY Lease Purchase Oblig. Rev. Bonds, (Hlth. Care Cancer Ctr.), 5.00%, 10/1/43	AA		1,700,000	1,896,728
					15,354,217
	Louisiana (1.2%)
	LA Pub. Fac. Auth. Rev. Bonds, (Calcasieu River Bridge), 5.75%, 9/1/64	Baa3		3,250,000	3,617,361
	St. John The Baptist Parish Mandatory Put Bonds (7/1/26), (Marathon Oil Corp.), Ser. A-3, 2.20%, 6/1/37	Baa3		4,000,000	3,919,688
					7,537,049
	Maryland (0.3%)
	Gaithersburg, Econ. Dev. Rev. Bonds, (Asbury, Oblig. Group), Ser. A, 5.00%, 1/1/36	BBB/F		750,000	769,378
	MD State Hlth. & Higher Ed. Fac. Auth. Rev. Bonds, (Adventist Hlth. Care Oblig. Group)
	5.00%, 1/1/30	Baa3		285,000	303,397
	5.00%, 1/1/29	Baa3		290,000	306,241
	5.00%, 1/1/28	Baa3		300,000	313,447
	5.00%, 1/1/27	Baa3		430,000	443,681
					2,136,144
	Massachusetts (0.6%)
	MA State Hsg. Fin. Agcy. Rev. Bonds, Ser. A, 5.10%, 12/1/30	AA+		680,000	680,693
	MA State Port Auth. Rev. Bonds, Ser. B, 4.00%, 7/1/46	Aa2		3,500,000	3,354,883
					4,035,576
	Michigan (1.9%)
	Chippewa, Valley School G.O. Bonds, Ser. A, Q-SBLF, 5.00%, 5/1/34	Aa1		250,000	254,450
	Detroit, G.O. Bonds
	Ser. C, 6.00%, 5/1/43	BBB		500,000	575,911
	(Fin. Recvy.), Ser. B-1, 4.00%, 4/1/44	BB/P		2,150,000	1,716,781
	Karegnondi, Wtr. Auth. Rev. Bonds
	(Wtr. Supply Syst.), Ser. A, 5.25%, 11/1/31	A1		250,000	251,236
	5.00%, 11/1/36	A+		1,285,000	1,342,253
	Kentwood, Econ. Dev. Corp. Rev. Bonds, (Holland Home Oblig. Group)
	4.00%, 11/15/45	BBB-/F		1,125,000	993,995
	4.00%, 11/15/43	BBB-/F		695,000	625,901
	4.00%, 11/15/31	BBB-/F		480,000	471,227
	MI State Fin. Auth. Rev. Bonds
	Ser. H-1, 5.00%, 10/1/39 (Prerefunded 10/1/24)	A+		2,675,000	2,675,000
	(Tobacco Settlement), Ser. A-1, 2.326%, 6/1/30	A		119,750	118,938

Tax Exempt Income Fund

5

	MUNICIPAL BONDS AND NOTES (101.6%)* cont.	Rating**		Principal amount	Value
	Michigan cont.
	MI State Fin. Auth. Ltd. Oblig. Rev. Bonds
	(Lawrence Technological U.), 5.25%, 2/1/32	BBB-		$1,855,000	$1,889,744
	(College for Creative Studies), 5.00%, 12/1/45	BBB		250,000	247,822
	MI State Hsg. Dev. Auth. Rev. Bonds, (Rental Hsg.), Ser. A, 4.45%, 10/1/34	AA+		100,000	100,048
	Warren, Cons. School Dist. G.O. Bonds, Ser. A, Q-SBLF, 5.00%, 5/1/35	AA		350,000	360,947
					11,624,253
	Minnesota (0.3%)
	Duluth, Econ. Dev. Auth. Rev. Bonds, (Benedictine Hlth. Syst. Oblig. Group), Ser. A
	4.00%, 7/1/36	BB/P		1,250,000	1,160,912
	4.00%, 7/1/31	BB/P		1,000,000	967,720
					2,128,632
	Missouri (2.9%)
	Kansas City, Indl. Dev. Auth. Arpt. Special Oblig. Rev. Bonds
	5.00%, 3/1/46	A2		2,700,000	2,797,736
	4.00%, 3/1/39	A2		5,215,000	5,206,772
	MI State Hlth. & Edl. Fac. Rev. Bonds, (U. of Hlth. Sciences & Pharmacy in St. Louis)
	4.00%, 5/1/43	BB+		1,400,000	1,160,153
	4.00%, 5/1/40	BB+		2,300,000	1,974,000
	4.00%, 5/1/34	BB+		2,000,000	1,858,070
	MI State Hlth. & Edl. Fac. 144A Rev. Bonds, (U. of Hlth. Sciences & Pharmacy in St. Louis), 4.00%, 5/1/45	BB+		1,750,000	1,416,422
	St. Louis, Muni. Fin. Corp. Rev. Bonds, AGM
	5.00%, 10/1/45	AA		2,250,000	2,373,001
	5.00%, 10/1/40	AA		1,000,000	1,076,495
					17,862,649
	Nebraska (0.4%)
	Omaha, Pub. Pwr. Dist. Elec. Rev. Bonds, Ser. A, 5.25%, 2/1/48	Aa2		2,500,000	2,807,105
					2,807,105
	Nevada (0.2%)
	Sparks, Tourism Impt. Dist. No. 1 144A Rev. Bonds, Ser. A, 2.75%, 6/15/28	Baa2		1,090,000	1,066,991
					1,066,991
	New Hampshire (2.7%)
	National Fin. Auth. Rev. Bonds, (NH Bus. Fin. Auth.)
	Ser. 24-1, Class A, 4.25%, 7/20/41	A2		1,989,315	2,002,394
	Ser. 23-2, 3.875%, 1/20/38	BBB		3,059,789	3,017,780
	Ser. 2, 3.625%, 8/20/39	A3		3,393,294	3,254,500
	National Fin. Auth. Hosp. Rev. Bonds, (St. Luke's Hosp. Oblig. Group)
	4.00%, 8/15/41	A3		1,000,000	974,900
	4.00%, 8/15/39	A3		1,100,000	1,101,170
	4.00%, 8/15/38	A3		1,000,000	1,001,337
	4.00%, 8/15/36	A3		600,000	608,765
	NH State Hlth. & Ed. Fac. Auth. Rev. Bonds, (Southern NH Med. Ctr.), 5.00%, 10/1/37	A-		4,500,000	4,596,426
					16,557,272
	New Jersey (1.9%)
	NJ State Econ. Dev. Auth. Rev. Bonds, (Provident Group-Montclair State U. Student Hsg. & Properties), 5.00%, 6/1/37	AA		1,250,000	1,295,549
	NJ State Econ. Dev. Auth. Special Fac. Rev. Bonds, (Port Newark Container Term., LLC), 5.00%, 10/1/37	Baa2		3,000,000	3,108,920
	NJ State Hlth. Care Fac. Fin. Auth. VRDN, (AHS Hosp. Corp.), Ser. B, 3.23%, 7/1/36	VMIG 1		2,000,000	2,000,000
	Passaic Cnty., Impt. Auth. Rev. Bonds, (Paterson Arts & Science Charter School), 5.375%, 7/1/53	BBB-		1,000,000	1,051,401
	Tobacco Settlement Fin. Corp. Rev. Bonds, Ser. A, 5.00%, 6/1/36	A-		4,000,000	4,200,850
					11,656,720
	New Mexico (0.6%)
	Farmington, Poll. Control Rev. Bonds, (Pub. Service Co. of NM), Ser. B, 2.15%, 4/1/33	Baa2		2,000,000	1,665,916
	Sante Fe, Retirement Fac. Rev. Bonds, (El Castillo Retirement Res.), 5.00%, 5/15/32	BB+/F		2,155,000	2,156,915
					3,822,831

6

Tax Exempt Income Fund

	MUNICIPAL BONDS AND NOTES (101.6%)* cont.	Rating**		Principal amount	Value
	New York (9.5%)
	Brookhaven, Local Dev. Corp. Rev. Bonds, (Brookhaven Memorial Hosp. Med. Ctr., Inc. Oblig. Group), 4.50%, 10/1/25	A		$605,000	$603,934
	NY City, Hsg. Dev. Corp. Multi-Fam. Hsg. Rev. Bonds
	(Sustainable Dev.), Ser. J, 3.35%, 11/1/65	AA+		5,670,000	4,387,072
	(Sustainability Bonds), Ser. I-1, FHA Insd., 2.55%, 11/1/45	AA+		3,075,000	2,332,131
	Ser. D-1B, FHA Insd., 2.40%, 11/1/50	AA+		4,000,000	2,719,449
	NY State Liberty Dev. Corp. Rev. Bonds
	Ser. A, BAM, 3.00%, 11/15/51	AA		3,500,000	2,806,143
	(Port Auth. of NY & NJ), Ser. 1WTC, 2.75%, 2/15/44	AA-		5,250,000	4,091,849
	NY State Thruway Auth. Personal Income Tax Rev. Bonds, Ser. C, 5.00%, 03/15/54 T	AA+		7,200,000	7,785,720
	NY State Trans. Dev. Corp. Exempt Fac. Rev. Bonds, (Empire State Thruway Partners, LLC)
	4.00%, 4/30/53	BBB-/F		3,000,000	2,653,136
	4.00%, 10/31/46	BBB-/F		2,000,000	1,822,999
	NY State Trans. Special Fac. Dev. Corp. Rev. Bonds, (Laguardia Arpt. Term. B Redev. Program), Ser. A, 5.00%, 7/1/46	Baa2		2,000,000	2,000,030
	NY State Urban Dev. Corp. Sales Tax Rev. Bonds, Ser. A, 5.00%, 3/15/44	Aa1		10,000,000	11,196,644
	Oneida Indian Nation, 144A Tax Rev. Bonds (Oneida Indian Nation of NY), Ser. B, 6.00%, 9/1/43	BBB-/F		825,000	917,797
	Port Auth. of NY & NJ Rev. Bonds, Ser. 207
	Ser. 218, 5.00%, 11/1/49 T	Aa3		4,745,000	4,949,510
	5.00%, 9/15/31	Aa3		300,000	314,880
	5.00%, 9/15/29	Aa3		3,525,000	3,732,348
	Triborough Bridge & Tunnel Auth. Sales Tax Rev. Bonds, 5.25%, 5/15/57	AA+		5,600,000	6,157,099
					58,470,741
	North Carolina (0.9%)
	NC State Med. Care Comm. Hlth. Care Fac. Rev. Bonds, (Lutheran Svcs. for the Aging, Inc. Oblig. Group)
	4.00%, 3/1/51	BBB/F		2,000,000	1,750,956
	4.00%, 3/1/41	BBB/F		1,050,000	992,996
	4.00%, 3/1/36	BBB/F		900,000	886,992
	NC State Med. Care Comm. Retirement Fac. Rev. Bonds, (United Methodist Retirement Homes, Inc. (The)), Ser. A
	5.125%, 10/1/54	BBB/F		1,500,000	1,572,275
	5.00%, 10/1/39	BBB/F		250,000	270,042
					5,473,261
	North Dakota (0.3%)
	Grand Forks, Hlth. Care Syst. Rev. Bonds, (Altru Hlth. Syst. Oblig. Group), AGM, 3.00%, 12/1/46	AA		2,000,000	1,639,539
					1,639,539
	Ohio (2.1%)
	Cleveland-Cuyahoga Cnty., Port Auth. Cultural Fac. Rev. Bonds
	(Playhouse Square Foundation), 5.50%, 12/1/53	BB+		2,500,000	2,548,188
	(Cleveland Museum of Natural History (The)), 4.00%, 7/1/46	A3		950,000	911,183
	(Cleveland Museum of Natural History (The)), 4.00%, 7/1/41	A3		230,000	231,097
	(Cleveland Museum of Natural History (The)), 4.00%, 7/1/40	A3		250,000	253,157
	(Cleveland Museum of Natural History (The)), 4.00%, 7/1/39	A3		200,000	203,441
	(Cleveland Museum of Natural History (The)), 4.00%, 7/1/38	A3		250,000	256,346
	(Cleveland Museum of Natural History (The)), 4.00%, 7/1/37	A3		200,000	206,237
	Columbus, Swr. VRDN, Ser. B, 3.15%, 6/1/32	VMIG 1		430,000	430,000
	Confluence Cmnty. Auth. Rev. Bonds, (Stadium & Sports), 4.00%, 5/1/39	AA+		750,000	755,167
	Hamilton Cnty., Hlth. Care Rev. Bonds, (Life Enriching Cmntys.), 5.00%, 1/1/32	BBB-/F		835,000	835,522
	OH State Hosp. Rev. Bonds, (Premier Hlth. Partners Oblig. Group), 4.00%, 11/15/41	Baa1		455,000	427,515
	OH State Hosp. Fac. Rev. Bonds, (Cleveland Clinic Hlth. Syst.), Ser. A, U.S. Govt. Coll., 4.00%, 1/1/43 (Prerefunded 1/1/28)	AAA/P		15,000	15,704
	OH State Private Activity Rev. Bonds, (Portsmouth Bypass), AGM, 5.00%, 12/31/35	AA		1,750,000	1,766,903
	Port of Greater Cincinnati Dev. Auth. Rev. Bonds, (Duke Energy), 5.00%, 12/1/58	AA		2,740,000	2,934,236
	Scioto Cnty., Hosp. Rev. Bonds, (Southern OH Med. Ctr.)
	5.00%, 2/15/34	Baa1		645,000	654,335
	5.00%, 2/15/33	Baa1		355,000	360,416
	Southeastern OH Port Auth. Hosp. Fac. Rev. Bonds, (Memorial Hlth. Syst. Oblig. Group), 5.50%, 12/1/43	B+/F		145,000	144,980
					12,934,427

Tax Exempt Income Fund

7

	MUNICIPAL BONDS AND NOTES (101.6%)* cont.	Rating**		Principal amount	Value
	Other (2.0%)
	Federal Home Loan Mortgage Corporation Multifamily ML certificates, Ser. 19-ML-05, Class A-US, 3.40%, 1/25/36	AA+		$3,016,955	$2,983,062
	Federal Home Loan Mortgage Corporation Multifamily VRD certificates, Ser. M-053, Class A, 2.55%, 6/15/35	AA+		6,980,000	6,231,322
	Federal Home Loan Mortgage Corporation Structured Pass-through certificates, Ser. 24 ML-22, Class A-US, 4.683%, 10/25/40	AA+		2,744,345	2,990,567
					12,204,951
	Pennsylvania (3.6%)
	Allegheny Cnty., Arpt. Auth. Rev. Bonds, Ser. A, AGM, 4.00%, 1/1/46	AA		3,500,000	3,457,908
	Chester Cnty., Indl. Dev. Auth. Rev. Bonds, (University Student Hsg, LLC), 5.00%, 8/1/30	Ba2		845,000	845,407
	Indiana Cnty., Indl. Dev. Auth. Rev. Bonds, (Foundation for Indiana U. of Pennsylvania (The)), BAM, 4.00%, 5/1/54	AA		1,000,000	987,399
	Lancaster Cnty., Hosp. Auth. VRDN, (Masonic Homes), Ser. D, 3.90%, 7/1/34	A-1		620,000	620,000
	PA State Econ. Dev. Fin. Auth. Rev. Bonds, (PennDOT Major Bridges), AGM, 5.75%, 12/31/62	AA		2,250,000	2,539,390
	PA State Tpk. Comm. Rev. Bonds
	4.90%, 12/1/44	A1		5,000,000	5,107,942
	Ser. A, 4.00%, 12/1/49	A2		2,160,000	2,132,491
	Ser. B, 3.00%, 12/1/51	A+		2,000,000	1,568,839
	Philadelphia, Auth. for Indl. Dev. Rev. Bonds
	(St. Joseph's U.), 5.00%, 11/1/47	A-/P		2,350,000	2,377,153
	(Independence Charter School-West), 5.00%, 6/15/39	BB/P		500,000	500,376
	(Independence Charter School-West), 4.00%, 6/15/29	BB/P		260,000	254,960
	Philadelphia, Auth. for Indl. Dev. VRDN, Ser. B-2, 3.14%, 10/1/30	VMIG 1		735,000	735,000
	Pittsburgh, School Dist. G.O. Bonds, 3.00%, 9/1/38	A1		1,000,000	918,255
					22,045,120
	Puerto Rico (0.7%)
	Cmnwlth. of PR, G.O. Bonds, Ser. A-1, 4.00%, 7/1/37	BB/P		1,550,000	1,540,074
	Cmnwlth. of PR, Sales Tax Fin. Corp. Rev. Bonds, Ser. A-1, 4.75%, 7/1/53	BBB-/P		2,900,000	2,908,926
					4,449,000
	Rhode Island (0.5%)
	Tobacco Settlement Fin. Corp. Rev. Bonds, Ser. B, 5.00%, 6/1/50	BBB-/P		3,250,000	3,261,840
					3,261,840
	South Carolina (2.0%)
	Lexington Cnty., Hlth. Svcs. Dist. Rev. Bonds, (LexMed Oblig. Group)
	4.00%, 11/1/32	A1		750,000	772,100
	4.00%, 11/1/31	A1		750,000	773,792
	SC State Jobs Econ. Dev. Auth. Hlth. Fac. Rev. Bonds, (Novant Hlth.), 5.50%, 11/1/50	A1		5,000,000	5,686,703
	SC State Jobs-Econ. Dev. Auth. Rev. Bonds, (Bon Secours Mercy Hlth.), 4.00%, 12/1/44	A+		1,300,000	1,299,776
	SC State Pub. Svcs. Auth. Rev. Bonds, Ser. A, 5.00%, 12/1/36	A3		4,000,000	4,084,062
					12,616,433
	South Dakota (0.4%)
	Lincoln Cnty., Econ. Dev. Rev. Bonds, (Augustana College Assn. (The))
	4.00%, 8/1/56	BBB-		1,000,000	855,106
	4.00%, 8/1/51	BBB-		250,000	218,625
	4.00%, 8/1/41	BBB-		1,400,000	1,308,520
					2,382,251
	Tennessee (2.7%)
	Johnson City, Hlth. & Edl. Fac. Board Multi-Fam. Mandatory Put Bonds (12/1/26), (Roan Hill LP), 3.60%, 12/1/27	AA+		3,000,000	3,041,455
	Knox Cnty., Hlth. Ed. & Hsg. Fac. Board Student Hsg. Rev. Bonds, (Provident Group - UTK Properties, LLC), Ser. A-1, BAM
	5.50%, 7/1/59	AA		1,750,000	1,915,898
	5.50%, 7/1/54	AA		1,000,000	1,103,273
	5.25%, 7/1/49	AA		1,250,000	1,355,699
	Memphis-Shelby Cnty., Arpt. Auth. Rev. Bonds, Ser. A, 5.00%, 7/1/45	A2		2,000,000	2,107,845
	Williamson Cnty., Indl. Dev. Board Multi-Fam. Hsg. Mandatory Put Bonds (5/1/27), (ECG Wood Duck LP), 5.00%, 5/1/42	Aaa		6,625,000	6,904,764
					16,428,934

8

Tax Exempt Income Fund

	MUNICIPAL BONDS AND NOTES (101.6%)* cont.	Rating**		Principal amount	Value
	Texas (10.1%)
	Arlington, Higher Ed. Fin. Corp. Rev. Bonds, (Riverwalk Education Foundation, Inc.), PSFG, 4.00%, 8/15/44	AAA		$3,600,000	$3,601,626
	Barbers Hill, Indpt. School Dist. G.O. Bonds, PSFG, 4.00%, 2/15/49 ##	Aaa		5,500,000	5,445,659
	Clifton, Higher Ed. Fin. Corp. Ed. Rev. Bonds
	(IDEA Pub. Schools), Ser. B, PSFG, 5.00%, 8/15/27	A-		375,000	388,212
	(Braination, Inc.), 4.50%, 8/15/54	Aaa		2,280,000	2,317,921
	(YES Prep Pub. Schools, Inc.), PSFG, 4.25%, 4/1/48	Aaa		2,525,000	2,540,397
	(IDEA Pub. Schools), Ser. T, PSFG, 4.00%, 8/15/47	AAA		1,410,000	1,407,277
	(IDEA Pub. Schools), Ser. T, PSFG, 4.00%, 8/15/40	AAA		1,500,000	1,543,877
	(IDEA Pub. Schools), Ser. T, PSFG, 4.00%, 8/15/39	AAA		1,500,000	1,556,112
	Galveston, Wharves and Term. Rev. Bonds, (AMT First Lien), Ser. A
	5.50%, 8/1/44	A		550,000	611,042
	5.50%, 8/1/43	A		400,000	445,170
	5.50%, 8/1/42	A		500,000	558,610
	5.50%, 8/1/41	A		500,000	559,276
	5.50%, 8/1/40	A		500,000	559,978
	Grand Parkway Trans. Corp. Rev. Bonds, Ser. A, 5.00%, 10/1/48 T	AA+		4,500,000	4,675,410
	Harris Cnty., Cultural Ed. Fac. Fin. Corp. Rev. Bonds, (YMCA of the Greater Houston Area), Ser. A, 5.00%, 6/1/28	Ba1		1,075,000	1,075,235
	Irving, Hotel Occupancy Tax Rev. Bonds
	5.00%, 8/15/39	BBB+		600,000	611,537
	5.00%, 8/15/36	BBB+		430,000	443,656
	5.00%, 8/15/34	BBB+		300,000	311,411
	5.00%, 8/15/33	BBB+		240,000	248,669
	5.00%, 8/15/31	BBB+		100,000	104,072
	Lake Houston Redev. Auth. Rev. Bonds, (City of Houston, Reinvestment Zone No. 10)
	3.00%, 9/1/47	BBB-		600,000	443,414
	3.00%, 9/1/44	BBB-		500,000	385,624
	3.00%, 9/1/40	BBB-		225,000	183,079
	3.00%, 9/1/39	BBB-		250,000	207,299
	3.00%, 9/1/38	BBB-		200,000	169,121
	3.00%, 9/1/37	BBB-		220,000	188,852
	3.00%, 9/1/34	BBB-		150,000	135,512
	Lower CO River Auth. Transmission Svcs. Contract Corp. Rev. Bonds, Ser. A, 6.00%, 5/15/52	A		3,250,000	3,691,119
	Matagorda Cnty., Poll. Control Rev. Bonds, (Dist. No. 1), Ser. A, AMBAC, 4.40%, 5/1/30	BBB+		2,250,000	2,383,073
	New Hope, Cultural Ed. Fac. Fin. Corp. Rev. Bonds
	(Westminster Manor), 4.00%, 11/1/55	BBB/F		1,250,000	1,141,998
	(TX Woman's U. CHF-Collegiate Hsg. Dining), Ser. B-1, AGM, 4.00%, 7/1/48	AA		1,705,000	1,613,291
	North TX, Tollway Auth. Rev. Bonds, (1st Tier), Ser. I, 6.50%, 1/1/43 (Prerefunded 1/1/25)	Aa3		9,700,000	9,774,165
	Port of Houston Auth. of Harris Cnty. Rev. Bonds, 5.00%, 10/1/48	AA+		5,745,000	6,278,104
	SA Energy Acquisition Pub. Fac. Corp. Rev. Bonds, (Gas Supply), 5.50%, 8/1/25	A2		250,000	253,888
	Tarrant Cnty., Cultural Ed. Fac. Fin. Corp. Retirement Fac. Rev. Bonds, (Buckner Retirement Svcs., Inc.), 5.00%, 11/15/37	A-/F		2,750,000	2,790,649
	TX State Trans. Comm. Rev. Bonds, (Central TX Tpk. Syst.), Ser. A, 3.00%, 8/15/40	A2		3,550,000	3,187,629
					61,831,964
	Utah (2.7%)
	UT Cnty., Hosp. Rev. Bonds, (Intermountain Hlth.), Ser. A, 5.00%, 5/15/41	Aa1		7,170,000	7,334,817
	UT Infrastructure Agcy. Rev. Bonds, Ser. A
	4.00%, 10/15/41	BBB-/F		500,000	481,432
	4.00%, 10/15/38	BBB-/F		500,000	493,942
	4.00%, 10/15/36	BBB-/F		300,000	299,697
	4.00%, 10/15/34	BBB-/F		800,000	804,290
	4.00%, 10/15/32	BBB-/F		500,000	504,091
	3.00%, 10/15/45	BBB-/F		1,000,000	760,242
	UT Infrastructure Agcy. Telecomm. Rev. Bonds, 4.00%, 10/15/33	BBB-/F		1,225,000	1,234,301
	UT State Bldg. Ownership Auth. Lease Rev. Bonds, (Master Lease), 5.00%, 5/15/41	Aa1		2,960,000	3,287,193
	UT State Charter School Fin. Auth. Rev. Bonds, (UT Charter Academies, Inc.)
	5.00%, 10/15/38	AA		720,000	741,763
	5.00%, 10/15/33	AA		420,000	436,442
	5.00%, 10/15/31	AA		530,000	553,038
					16,931,248

Tax Exempt Income Fund

9

	MUNICIPAL BONDS AND NOTES (101.6%)* cont.	Rating**		Principal amount	Value
	Virginia (0.9%)
	Henrico Cnty., Indl. Dev. Auth. Rev. Bonds, AGM, 5.929%, 8/23/27 (Escrowed to maturity)	A1		$5,150,000	$5,458,667
					5,458,667
	Washington (3.2%)
	Grays Harbor Cnty., Pub. Hosp. Dist. No. 1 Rev. Bonds, 6.875%, 12/1/49	BB+		3,325,000	3,783,973
	Port of Seattle Rev. Bonds, Ser. B
	5.00%, 8/1/47	AA-		1,000,000	1,063,020
	5.00%, 8/1/41	AA-		2,000,000	2,145,952
	5.00%, 8/1/38	AA-		3,000,000	3,258,959
	5.00%, 8/1/37	AA-		1,500,000	1,635,930
	WA State Hsg. Fin. Comm. Rev. Bonds
	Ser. 1, Class A, 4.085%, 3/20/40	A3		1,100,000	1,093,909
	(Social Certif.), Ser. A-1, 3.50%, 12/20/35	BBB+		3,890,330	3,719,713
	Ser. 1, Class A, 3.375%, 4/20/37	BBB		3,276,529	3,035,718
					19,737,174
	West Virginia (0.2%)
	Ohio Cnty., Comm. Tax Increment Rev. Tax Alloc. Bonds, (Highlands (The))
	5.25%, 6/1/53	BBB-		750,000	783,910
	5.25%, 6/1/44	BBB-		500,000	530,486
					1,314,396
	Wisconsin (3.7%)
	Pub. Fin. Auth. 144A Rev. Bonds, (Roseman U. of Hlth. Sciences)
	4.00%, 4/1/42	BB		830,000	792,705
	4.00%, 4/1/42 (Prerefunded 4/1/32)	AAA/P		20,000	21,809
	Pub. Fin. Auth. Arpt. Fac. Rev. Bonds, (Sr. Oblig. Group), 5.25%, 7/1/28	BBB+		575,000	575,584
	Pub. Fin. Auth. Conference Ctr. & Hotel Rev. Bonds, (U. of NC Charlotte Foundation), Ser. A, 4.00%, 9/1/56	BB+/P		2,000,000	1,487,762
	Pub. Fin. Auth. Multi-Fam Affordable Hsg. 144A Rev. Bonds, (Dominium Holdings I, LLC), Ser. 1, Class B-1, 6.81%, 4/28/36	BBB-/P		1,600,000	1,641,989
	Pub. Fin. Auth. Pooled Charter School Certif. Rev. Bonds, Ser. 23-1, Class A, 5.75%, 7/1/62	Aa3		1,431,291	1,529,185
	Pub. Fin. Auth. Student Hsg. Fac. 144A Rev. Bonds, (CHF-Manoa, LLC), Ser. A, 5.75%, 7/1/53	BBB-		2,000,000	2,192,242
	WI Pub. Fin. Auth. Hotel Rev. Bonds, (Grand Hyatt), 5.00%, 2/1/62	BBB-		2,000,000	2,056,277
	WI State Hlth. & Edl. Fac. Auth. Rev. Bonds
	(Marshfield Clinic Hlth. Syst.), 5.50%, 2/15/54	BBB		2,200,000	2,424,332
	(Hmong American Peace Academy, Ltd.), 5.00%, 3/15/50	BBB		1,375,000	1,398,055
	(Froedtert Health, Inc.), Ser. A, 4.00%, 4/1/36	AA		7,825,000	8,113,714
	(Hmong American Peace Academy, Ltd.), 4.00%, 3/15/30	BBB		400,000	403,681
					22,637,335
	Total municipal bonds and notes (cost $617,562,410)	$624,490,417

	SHORT-TERM INVESTMENTS (1.7%)*	Principal amount/shares	Value
	Putnam Short Term Investment Fund Class P 5.04% L	Shares   9,638,253	$9,638,253
	U.S. Treasury Bills 5.325%, 10/24/24 #	$1,000,000	996,986
	Total short-term investments (cost $10,634,945)	$10,635,239

	TOTAL INVESTMENTS
	Total investments (cost $628,197,355)	$635,125,656

	Notes to the fund's portfolio
	Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from October 1, 2023 through September 30, 2024 (the reporting period). Within the following notes to the portfolio, references to "Franklin Advisers" represent Franklin Advisers, Inc., the fund's investment manager, a direct wholly-owned subsidiary of Franklin Resources, Inc., and references to "ASC 820" represent Accounting Standards Codification 820Fair Value Measurements and Disclosures.
*	Percentages indicated are based on net assets of $614,607,220.
**	The Moody's, Standard & Poor's or Fitch ratings indicated are believed to be the most recent ratings available at the close of the reporting period for the securities listed. Ratings are generally ascribed to securities at the time of issuance. While the agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings do not necessarily represent what the agencies would ascribe to these securities at the close of the reporting period. Securities rated by Fitch are indicated by "/F." Securities rated by Putnam are indicated by "/P." The Putnam rating categories are comparable to the Standard & Poor's classifications. If a security is insured, it will usually be rated by the ratings organizations based on the financial strength of the insurer. Ratings are not covered by the Report of Independent Registered Public Accounting Firm. For further details regarding security ratings, please see the Statement of Additional Information.

10

Tax Exempt Income Fund

#	This security, in part or in entirety, was pledged and segregated with the broker to cover margin requirements for futures contracts at the close of the reporting period. Collateral at period end totaled $347,883 and is included in Investments in securities on the Statement of assets and liabilities (Notes 1 and 8).
##	Forward commitment, in part or in entirety (Note 1).
L	Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
T	Underlying security in a tender option bond transaction. This security has been segregated as collateral for financing transactions.
	Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.
	144A after the name of an issuer represents securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
	On Mandatory Put Bonds, the rates shown are the current interest rates at the close of the reporting period and the dates shown represent the next mandatory put dates. Rates are set by remarketing agents and may take into consideration market supply and demand, credit quality and the current Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Index, Intercontinental Exchange (ICE) London Interbank Offered Rate (LIBOR) USD 1 Month, ICE LIBOR USD 3 Month, US Secured Overnight Financing Rate (SOFR), Chicago Mercantile Exchange (CME) Term SOFR 3 Month or CME Term SOFR 6 Month rates, which were 3.15%, 4.96%, 4.85%, 4.96%, 4.59%, and 4.25%, respectively, as of the close of the reporting period.
	The dates shown parenthetically on prerefunded bonds represent the next prerefunding dates.
	The dates shown on debt obligations are the original maturity dates.
	The fund had the following sector concentrations greater than 10% at the close of the reporting period (as a percentage of net assets):

	Transportation	21.9%
	Health care	17.3
	Housing	14.4
	Education	12.9

	FUTURES CONTRACTS OUTSTANDING at 9/30/24
		Number of contracts	Notional amount	Value	Expiration date	Unrealized appreciation
	U.S. Treasury Bond Ultra 30 yr (Short)	58	$7,719,438	$7,719,438	Dec-24	$61,519
	Unrealized appreciation					61,519
	Unrealized (depreciation)					-
	Total	$61,519

	ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund's investments. The three levels are defined as follows:
	Level 1: Valuations based on quoted prices for identical securities in active markets.
	Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
	Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement.
	The following is a summary of the inputs used to value the fund's net assets as of the close of the reporting period:

		Valuation inputs
	Investments in securities:	Level 1	Level 2	Level 3
	Municipal bonds and notes	$-	$624,490,417	$-
	Short-term investments	-	10,635,239	-
	Totals by level	$-	$635,125,656	$-

		Valuation inputs
	Other financial instruments:	Level 1	Level 2	Level 3
	Futures contracts	$61,519	$-	$-
	Totals by level	$61,519	$-	$-

The accompanying notes are an integral part of these financial statements.

Financial Statements

Statement of assets and liabilities

9/30/24

ASSETS
Investment in securities, at value (Note 1):
Unaffiliated issuers (identified cost $618,559,102)	$625,487,403
Affiliated issuers (identified cost $9,638,253) (Note 5)	9,638,253
Interest and other receivables	8,027,108
Receivable for shares of the fund sold	389,645
Receivable for investments sold	7,944,047
Receivable for variation margin on futures contracts (Note 1)	45,305
Prepaid assets	36,259
Total assets	651,568,020
LIABILITIES
Payable for investments purchased	1,308,860
Payable for purchases of delayed delivery securities (Note 1)	10,904,388
Payable for shares of the fund repurchased	4,982,633
Payable for compensation of Manager (Note 2)	209,040
Payable for custodian fees (Note 2)	8,605
Payable for investor servicing fees (Note 2)	109,173
Payable for Trustee compensation and expenses (Note 2)	351,488
Payable for administrative services (Note 2)	1,185
Payable for distribution fees (Note 2)	112,721
Payable for floating rate notes issued (Note 1)	18,718,639
Distributions payable to shareholders	141,268
Other accrued expenses	112,800
Total liabilities	36,960,800
Net assets	$614,607,220
Represented by
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$637,680,125
Total distributable earnings (Note 1)	(23,072,905)
Total - Representing net assets applicable to capital shares outstanding	$614,607,220
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
Net asset value and redemption price per class A share ($527,777,027 divided by 66,147,824 shares)	$7.98
Offering price per class A share (100/96.00 of $7.98)*	$8.31
Net asset value and offering price per class C share ($4,624,738 divided by 578,012 shares)**	$8.00
Net asset value, offering price and redemption price per class R6 share ($8,645,763 divided by 1,081,594 shares)	$7.99
Net asset value, offering price and redemption price per class Y share ($73,559,692 divided by 9,194,135 shares)	$8.00

*	On single retail sales of less than $50,000. On sales of $50,000 or more the offering price is reduced.
**	Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

The accompanying notes are an integral part of these financial statements.

12	Tax Exempt Income Fund

Statement of operations

Year ended 9/30/24

Investment income
Interest (including interest income of $407,552 from investments in affiliated issuers) (Note 5)	$26,162,345
Total investment income	26,162,345
EXPENSES
Compensation of Manager (Note 2)	2,606,990
Investor servicing fees (Note 2)	457,232
Custodian fees (Note 2)	17,860
Trustee compensation and expenses (Note 2)	29,433
Distribution fees (Note 2)	1,390,105
Administrative services (Note 2)	15,630
Interest and fees expense (Note 1)	715,470
Other	283,221
Total expenses	5,515,941
Expense reduction (Note 2)	(17,664)
Net expenses	5,498,277
Net investment income	20,664,068
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on:
Securities from unaffiliated issuers (Notes 1 and 3)	(6,734,012)
Futures contracts (Note 1)	(1,393,530)
Total net realized loss	(8,127,542)
Change in net unrealized appreciation (depreciation) on:
Securities from unaffiliated issuers	63,860,578
Futures contracts	(523,203)
Total change in net unrealized appreciation	63,337,375
Net gain on investments	55,209,833
Net increase in net assets resulting from operations	$75,873,901

The accompanying notes are an integral part of these financial statements.

Tax Exempt Income Fund

13

Statement of changes in net assets 

	Year ended 9/30/24	Year ended 9/30/23
Increase (decrease) in net assets
Operations
Net investment income	$20,664,068	$20,670,199
Net realized loss on investments	(8,127,542)	(7,989,538)
Change in net unrealized appreciation of investments	63,337,375	7,504,625
Net increase in net assets resulting from operations	75,873,901	20,185,286
Distributions to shareholders (Note 1):
From ordinary income
Taxable net investment income
Class A	(494,554)	(190,080)
Class B	(89)	(138)
Class C	(5,516)	(2,953)
Class R6	(6,979)	(1,716)
Class Y	(66,061)	(20,932)
From tax-exempt net investment income
Class A	(16,672,199)	(17,647,195)
Class B	(3,188)	(8,457)
Class C	(139,699)	(196,853)
Class R6	(268,113)	(202,962)
Class Y	(2,407,697)	(2,243,699)
Decrease from capital share transactions (Note 4)	(42,005,271)	(51,289,582)
Total increase (decrease) in net assets	13,804,535	(51,619,281)
Net assets
Beginning of year	600,802,685	652,421,966
End of year	$614,607,220	$600,802,685

The accompanying notes are an integral part of these financial statements.

14	Tax Exempt Income Fund

Financial highlights

(For a common share outstanding throughout the period)

INVESTMENT OPERATIONS	LESS DISTRIBUTIONS	RATIOS AND SUPPLEMENTAL DATA
Period ended	Net asset value, beginning of period	Net investment income (loss)	Net realized and unrealized gain (loss) on investments	Total from investment operations	From net investment income	From net realized gain on investments	Total distributions	Net asset value, end of period	Total return at net asset value (%)a	Net assets, end of period (in thousands)	Ratio of expenses to average net assets (%)b,c	Ratio of net investment income (loss) to average net assets (%)	Portfolio turnover (%)
Class A
September 30, 2024	$7.28	.26	.69	.95	(.25)	-	(.25)	$7.98	13.19	$527,777	.92	3.33	35
September 30, 2023	7.31	.24	(.03)	.21	(.24)	-	(.24)	7.28	2.76	524,411	.94	3.16	38
September 30, 2022	8.85	.19	(1.38)	(1.19)	(.19)	(.16)	(.35)	7.31	(13.83)	569,476	.83	2.29	57
September 30, 2021	8.68	.19	.17	.36	(.19)	-	(.19)	8.85	4.14	768,286	.80	2.11	34
September 30, 2020	8.86	.21	.01	.22	(.21)	(.19)	(.40)	8.68	2.62	785,840	.80	2.44	41
Class C
September 30, 2024	$7.31	.20	.68	.88	(.19)	-	(.19)	$8.00	12.17	$4,625	1.67	2.58	35
September 30, 2023	7.33	.18	(.02)	.16	(.18)	-	(.18)	7.31	2.13	6,802	1.69	2.41	38
September 30, 2022	8.87	.13	(1.38)	(1.25)	(.13)	(.16)	(.29)	7.33	(14.44)	9,532	1.58	1.53	57
September 30, 2021	8.70	.12	.17	.29	(.12)	-	(.12)	8.87	3.36	15,362	1.55	1.37	34
September 30, 2020	8.88	.14	.02	.16	(.15)	(.19)	(.34)	8.70	1.79	21,434	1.58	1.67	41
Class R6
September 30, 2024	$7.30	.28	.68	.96	(.27)	-	(.27)	$7.99	13.34	$8,646	.64	3.60	35
September 30, 2023	7.32	.26	(.02)	.24	(.26)	-	(.26)	7.30	3.20	6,925	.66	3.43	38
September 30, 2022	8.86	.21	(1.38)	(1.17)	(.21)	(.16)	(.37)	7.32	(13.58)	3,337	.56	2.53	57
September 30, 2021	8.69	.21	.17	.38	(.21)	-	(.21)	8.86	4.42	5,569	.54	2.36	34
September 30, 2020	8.88	.23	.01	.24	(.24)	(.19)	(.43)	8.69	2.76	3,809	.56	2.67	41
Class Y
September 30, 2024	$7.31	.28	.68	.96	(.27)	-	(.27)	$8.00	13.29	$73,560	.67	3.57	35
September 30, 2023	7.33	.26	(.02)	.24	(.26)	-	(.26)	7.31	3.16	62,506	.69	3.41	38
September 30, 2022	8.87	.21	(1.38)	(1.17)	(.21)	(.16)	(.37)	7.33	(13.57)	69,590	.58	2.52	57
September 30, 2021	8.70	.21	.17	.38	(.21)	-	(.21)	8.87	4.40	137,025	.55	2.35	34
September 30, 2020	8.88	.23	.01	.24	(.23)	(.19)	(.42)	8.70	2.84	110,294	.58	2.64	41

a	Total return assumes dividend reinvestment and does not reflect the effect of sales charges.

b	Includes amounts paid through expense offset arrangements, if any (Note 2). Also excludes acquired fund fees, if any.

c	Includes interest and fee expense associated with borrowings which amounted to the following:

	Percentage of average net assets
September 30, 2024	0.12%
September 30, 2023	0.12
September 30, 2022	0.03
September 30, 2021	0.02
September 30, 2020	0.03

The accompanying notes are an integral part of these financial statements.

Tax Exempt Income Fund

15

Notes to financial statements 9/30/24

Unless otherwise noted, the "reporting period" represents the period from October 1, 2023 through September 30, 2024. The following table defines commonly used references within the Notes to financial statements:

References to	Represent
1940 Act	Investment Company Act of 1940, as amended
Franklin Advisers	Franklin Advisers, Inc., a direct wholly-owned subsidiary of Franklin Templeton, and the fund's investment manager for periods on or after July 15, 2024
Franklin Distributors	Franklin Distributors, LLC, an indirect wholly-owned subsidiary of Franklin Templeton, and the fund's distributor and principal underwriter for periods on or after August 2, 2024
Franklin Templeton	Franklin Resources, Inc.
Franklin Templeton Services	Franklin Templeton Services, LLC, a wholly-owned subsidiary of Franklin Templeton
JPMorgan	JPMorgan Chase Bank, N.A.
PIL	Putnam Investments Limited, an indirect wholly-owned subsidiary of Franklin Templeton
PSERV	Putnam Investor Services, Inc., a wholly-owned subsidiary of Franklin Templeton
Putnam Management	Putnam Investment Management, LLC, an indirect wholly-owned subsidiary of Franklin Templeton, and the fund's investment manager for periods prior to July 15, 2024
Putnam Retail Management	Putnam Retail Management Limited Partnership, an indirect wholly-owned subsidiary of Franklin Templeton, and the fund's distributor and principal underwriter for periods prior to August 2, 2024
SEC	Securities and Exchange Commission
State Street	State Street Bank and Trust Company

Putnam Tax Exempt Income Fund (the fund) is a Massachusetts business trust, which is registered under the 1940 Act as a diversified open-end management investment company. The goal of the fund is to seek as high a level of current income exempt from federal income tax as Franklin Advisers believes to be consistent with preservation of capital. The fund invests mainly in bonds that pay interest that is exempt from federal income tax (but that may be subject to federal alternative minimum tax (AMT)), are investment-grade in quality, and have intermediate- to long-term maturities (i.e., three years or longer). Under normal circumstances, the fund invests at least 80% of its net assets in tax-exempt investments, which for purposes of this policy exclude investments paying interest subject to the federal AMT for individuals. This investment policy cannot be changed without the approval of the fund's shareholders. Interest income from private activity bonds may be subject to federal AMT for individuals. These investments are not included for the purpose of complying with the 80% investment policy. Tax-exempt investments are issued by or for states, territories or possessions of the United States or by their political subdivisions, agencies, authorities or other government entities. Franklin Advisers may consider, among other factors, credit, interest rate and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments.

The fund offers the following share classes. The expenses for each class of shares may differ based on the distribution and investor servicing fees of each class, which are identified in Note 2.

Share class	Sales charge	Contingent deferred sales charge	Conversion feature
Class A	Up to 4.00%	1.00% on certain redemptions of shares bought with no initial sales charge	None
Class C	None	1.00% eliminated after one year	Converts to class A shares after 8 years
Class R6 †	None	None	None
Class Y †	None	None	None
† Not available to all investors.

Effective September 5, 2024, the fund converted all of its class B shares into class A shares, and subsequently terminated its class B shares as a fund offering.

In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund's management team expects the risk of material loss to be remote.

The fund has entered into contractual arrangements with an investment adviser, administrator, distributor, shareholder servicing 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 fund's Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the fund, including claims against Trustees and Officers, must be brought in courts located within the Commonwealth of Massachusetts.

Note 1: Significant accounting policies

The fund follows the accounting and reporting guidance in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP), including, but not limited to, ASC 946. The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.

Security valuation Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees (Trustees). The Trustees have formed a Pricing Committee to oversee the implementation of these procedures. Under compliance policies and procedures approved by the Trustees, the Trustees have designated the fund's investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the fund's administrator in performing this responsibility, including leading the cross-functional Valuation Committee (VC). The VC is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Trustees.

Tax-exempt bonds and notes are generally valued on the basis of valuations provided by an independent pricing service approved by the Trustees. Such services use information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities in determining value. These securities will generally be categorized as Level 2.

Market quotations are not considered to be readily available for certain debt obligations (including short-term investments with remaining maturities of 60 days or less) and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by the fund's investment manager. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2. Securities

16

Tax Exempt Income Fund

quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.

Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.

To the extent a pricing service or dealer is unable to value a security or provides a valuation that the fund's investment manager does not believe accurately reflects the security's fair value, the security will be valued at fair value by the fund's investment manager, which has been designated as valuation designee pursuant to Rule 2a-5 under the 1940 Act, in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. 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 in a current sale and does not reflect an actual market price, which may be different by a material amount.

Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.

Interest income, net of any applicable withholding taxes, if any, is recorded on the accrual basis. Amortization and accretion of premiums and discounts on debt securities, if any, is recorded on the accrual basis.

Securities purchased or sold on a forward commitment or delayed delivery basis may be settled at a future date beyond customary settlement time; interest income is accrued based on the terms of the securities. Losses may arise due to changes in the fair value of the underlying securities or if the counterparty does not perform under the contract.

Futures contracts The fund uses futures for hedging treasury term structure risk and for yield curve positioning.

The potential risk to the fund is that the change in value of futures contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized on the Statement of assets and liabilities. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as "variation margin."

Futures contracts outstanding at period end, if any, are listed after the fund's portfolio.

Tender option bond transactions The fund may participate in transactions whereby a fixed-rate bond is transferred to a tender option bond trust (TOB trust) sponsored by a broker. The TOB trust funds the purchase of the fixed rate bonds by issuing floating-rate bonds to third parties and allowing the fund to retain the residual interest in the TOB trust's assets and cash flows, which are in the form of inverse floating rate bonds. The inverse floating rate bonds held by the fund give the fund the right to (1) cause the holders of the floating rate bonds to tender their notes at par, and (2) to have the fixed-rate bond held by the TOB trust transferred to the fund, causing the TOB trust to collapse. The fund accounts for the transfer of the fixed-rate bond to the TOB trust as a secured borrowing by including the fixed-rate bond in the fund's portfolio and including the floating rate bond as a liability in the Statement of assets and liabilities. At the close of the reporting period, the fund's investments with a value of $28,007,350 were held by the TOB trust and served as collateral for $18,718,639 in floating-rate bonds outstanding. For the reporting period ended, the fund incurred interest expense of $610,493 for these investments based on an average interest rate of 3.51%.

Interfund lending The fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the SEC. This program allows the fund to borrow from other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund's investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.

Lines of credit The fund participates, along with other Putnam funds, in a $320 million syndicated unsecured committed line of credit, provided by State Street ($160 million) and JPMorgan ($160 million), and a $235.5 million unsecured uncommitted line of credit, provided by State Street. Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund's borrowing at a rate equal to 1.25% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the committed line of credit and 1.30% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the uncommitted line of credit. A closing fee equal to 0.04% of the committed line of credit and 0.04% of the uncommitted line of credit has been paid by the participating funds and a $75,000 fee has been paid by the participating funds to State Street as agent of the syndicated committed line of credit. In addition, a commitment fee of 0.21% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.

Federal taxes It is the policy of the fund to distribute all of its income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code.

The fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. Each of the fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.

Under the Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred for an unlimited period and the carry forwards will retain their character as either short-term or long-term capital losses. At September 30, 2024, the fund had the following capital loss carryovers available, to the extent allowed by the Code, to offset future net capital gain, if any:

Loss carryover
Short-term	Long-term	Total
$15,362,070	$14,165,476	$29,527,546

Distributions to shareholders Income dividends are recorded daily by the fund and are paid monthly. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences include temporary and/or permanent differences from straddle loss deferrals and from amortization and accretion. Reclassifications are made to the fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. At the close of the reporting period, the fund reclassified $593,790 to decrease undistributed net investment income and $593,790 to decrease accumulated net realized loss.

Tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but closely approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. The tax basis components of distributable

Tax Exempt Income Fund

17

earnings and the federal tax cost as of the close of the reporting period were as follows:

Unrealized appreciation	$24,216,657
Unrealized depreciation	(18,420,889)
Net unrealized appreciation	5,795,768
Undistributed tax-exempt income	198,117
Capital loss carryforward	(29,527,546)
Cost for federal income tax purposes	$629,391,407

Note 2: Management fee, administrative services and other transactions

Effective July 15, 2024, Putnam Management transferred its management contract with the fund to Franklin Advisers. As a result of the transfer, Franklin Advisers replaced Putnam Management as the investment adviser of the fund. In connection with the transfer, the fund's portfolio managers, along with supporting research analysts and certain other investment staff of Putnam Management, also became employees of Franklin Advisers.

In addition, Putnam Management transferred to Franklin Advisers the sub-management contract between Putnam Management and PIL in respect of the fund.

The fund pays Franklin Advisers a management fee (based on the fund's average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of all open-end mutual funds sponsored by Putnam Management (including open-end funds managed by affiliates of Putnam Management that have been deemed to be sponsored by Putnam Management for this purpose) (excluding net assets of such funds that are invested in, or that are invested in by, other such funds to the extent necessary to avoid "double counting" of those assets). Such annual rates may vary as follows:

0.590%	of the first $5 billion,
0.540%	of the next $5 billion,
0.490%	of the next $10 billion,
0.440%	of the next $10 billion,
0.390%	of the next $50 billion,
0.370%	of the next $50 billion,
0.360%	of the next $100 billion and
0.355%	of any excess thereafter.

For the reporting period, the management fee represented an effective rate (excluding the impact from any expense waivers in effect) of 0.423% of the fund's average net assets.

Franklin Advisers has contractually agreed, through January 30, 2026, to waive fees and/or reimburse the fund's expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses, acquired fund fees and expenses and payments under the fund's investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund's average net assets over such fiscal year-to-date period. During the reporting period, the fund's expenses were not reduced as a result of this limit.

Effective July 15, 2024, Franklin Advisers retained Putnam Management as sub-adviser for the fund pursuant to a new sub-advisory agreement. Pursuant to the agreement, Putnam Management provides certain advisory and related services to the fund. Franklin Advisers pays 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 not to exceed 15% over such costs.

During the reporting period, PIL was authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Franklin Advisers from time to time. PIL did not manage any portion of the assets of the fund during the reporting period. Effective November 1, 2024, PIL, and its investment professionals, merged into Franklin Templeton Investment Management Limited (FTIML), an affiliate of the investment manager, and FTIML became a sub-advisor to the fund. If Franklin Advisers were to engage the services of FTIML or PIL, Franklin Advisers would pay a monthly sub-management fee to FTIML or PIL for its services at an annual rate of 0.20% of the average net assets of the portion of the fund managed by FTIML or PIL.

On January 1, 2024, a subsidiary of Franklin Templeton acquired Putnam U.S. Holdings I, LLC ("Putnam Holdings"), the parent company of Putnam Management and PIL, in a stock and cash transaction (the "Transaction"). As a result of the Transaction, Putnam Management and PIL became indirect, wholly-owned subsidiaries of Franklin Templeton. The Transaction also resulted in the automatic termination of the investment management contract between the fund and Putnam Management and the sub-management contract for the fund between Putnam Management and PIL that were in place for the fund before the Transaction (together, the "Previous Advisory Contracts"). However, for the period from January 1, 2024 until January 31, 2024, Putnam Management and PIL continued to provide uninterrupted services with respect to the fund pursuant to interim investment management and sub-management contracts (together, the "Interim Advisory Contracts") that were approved by the Board of Trustees. The terms of the Interim Advisory Contracts were identical to those of the Previous Advisory Contracts, except for the term of the contracts and those provisions required by regulation. On January 31, 2024, new investment management and sub-management contracts were approved by fund shareholders at a shareholder meeting held in connection with the Transaction (together, the "New Advisory Contracts"). The New Advisory Contracts took effect on January 31, 2024 and replaced the Interim Advisory Contracts. The terms of the New Advisory Contracts are substantially similar to those of the Previous Advisory Contracts, and the fee rates payable under the New Advisory Contracts are the same as the fee rates under the Previous Advisory Contracts.

Effective June 1, 2024, Franklin Templeton Services provides certain administrative services to the fund. The fee for those services is paid by the fund's investment manager based on the fund's average daily net assets and is not an additional expense of the fund.

The fund reimburses Franklin Advisers an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.

Custodial functions for the fund's assets are provided by State Street. Custody fees are based on the fund's asset level, the number of its security holdings and transaction volumes.

PSERV, an affiliate of Franklin Advisers, provides investor servicing agent functions to the fund. PSERV received fees for investor servicing for class A, class B, class C and class Y shares that included (1) a per account fee for each direct and underlying non-defined contribution account (retail account) of the fund; (2) a specified rate of the fund's assets attributable to defined contribution plan accounts; and (3) a specified rate based on the average net assets in retail accounts. PSERV has agreed that the aggregate investor servicing fees for each fund's retail and defined contribution accounts for these share classes will not exceed an annual rate of 0.25% of the fund's average assets attributable to such accounts.

Class R6 shares paid a monthly fee based on the average net assets of class R6 shares at an annual rate of 0.05%.

During the reporting period, the expenses for each class of shares related to investor servicing fees were as follows:

Class A	$395,940
Class B	93
Class C	4,387
Class R6	3,932
Class Y	52,880
Total	$457,232
Effective September 5, 2024, the fund terminated its class B shares.

The fund has entered into expense offset arrangements with PSERV and State Street whereby PSERV's and State Street's fees are reduced by credits allowed on cash balances. For the reporting period, the fund's expenses were reduced by $17,664 under the expense offset arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $471, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

The fund has adopted a Trustee Fee Deferral Plan (the Deferral Plan) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable from July 1, 1995 through December 31, 2023. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.

The fund has adopted an unfunded noncontributory defined benefit pension plan (the Pension Plan) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee's average annual attendance and retainer fees for the three years ended December 31, 2005. The 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. Pension expense for the fund is included in Trustee compensation and expenses in the

18

Tax Exempt Income Fund

Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted distribution plans (the Plans) with respect to the following share classes pursuant to Rule 12b-1 under the 1940 Act. The purpose of the Plans is to compensate Franklin Distributors, or for periods prior to August 2, 2024, Putnam Retail Management, for services provided and expenses incurred in distributing shares of the fund. The Plans provide payments by the fund to Franklin Distributors and to Putnam Retail Management at an annual rate of up to the following amounts (Maximum %) of the average net assets attributable to each class. The Trustees have approved payment by the fund at the following annual rate (Approved %) of the average net assets attributable to each class. During the reporting period, the class-specific expenses related to distribution fees were as follows:

	Maximum %	Approved %	Franklin Distributors Amount	Putnam Retail Management Amount	Totals
Class A	0.35%	0.25%	$221,470	$1,108,991	$1,330,461
Class B	1.00%	0.85%	83	976	$1,059
Class C	1.00%	1.00%	7,997	50,588	$58,585
Total			$229,550	$1,160,555	$1,390,105

For the period from August 2, 2024 through September 30, 2024, Franklin Distributors, acting as underwriter, received net commissions of $478 from the sale of class A shares and received no monies in contingent deferred sales charges from redemptions of class B and class C shares. For the period October 1, 2023 through August 1, 2024, Putnam Retail Management, acting as underwriter, received net commissions of $8,409 from the sale of class A shares and received no monies and $101 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

A deferred sales charge of up to 1.00% is accessed on certain redemptions of class A shares. For the period from August 2, 2024 through September 30, 2024, Franklin Distributors, acting as underwriter, received $1,855 on class A redemptions. For the period from October 1, 2023 through August 1, 2024, Putnam Retail Management, acting as underwriter, received $199 on class A redemptions.

Note 3: Purchases and sales of securities

During the reporting period, the cost of purchases and the proceeds from sales, excluding short-term investments, were as follows:

	Cost of purchases	Proceeds from sales
Investments in securities (Long-term)	$210,323,107	$233,501,821
U.S. government securities (Long-term)	-	-
Total	$210,323,107	$233,501,821

The fund may purchase or sell investments from or to other Putnam funds in the ordinary course of business, which can reduce the fund's transaction costs, at prices determined in accordance with SEC requirements and policies approved by the Trustees. During the reporting period, purchases or sales of long-term securities from or to other Putnam funds, if any, did not represent more than 5% of the fund's total cost of purchases and/or total proceeds from sales.

Note 4: Capital shares

At the close of the reporting period, there were an unlimited number of shares of beneficial interest authorized. Transactions, including, if applicable, direct exchanges pursuant to share conversions, in capital shares were as follows:

	YEAR ENDED 9/30/24	YEAR ENDED 9/30/23
Class A	Shares	Amount	Shares	Amount
Shares sold	4,411,003	$34,251,048	8,674,426	$65,503,724
Shares issued in connection with reinvestment of distributions	2,003,135	15,533,197	2,126,391	16,120,957
	6,414,138	49,784,245	10,800,817	81,624,681
Shares repurchased	(12,251,325)	(94,524,974)	(16,735,057)	(126,956,483)
Net decrease	(5,837,187)	$(44,740,729)	(5,934,240	$(45,331,802)

	YEAR ENDED 9/30/24*	YEAR ENDED 9/30/23
Class B	Shares	Amount	Shares	Amount
Shares sold	-	$-	3	$24
Shares issued in connection with reinvestment of distributions	409	3,163	1,073	8,144
	409	3,163	1,076	8,168
Shares repurchased	(22,288)	(175,346)	(45,761)	(350,329)
Net decrease	(21,879)	$(172,183)	(44,685)	$(342,161)

	YEAR ENDED 9/30/24	YEAR ENDED 9/30/23
Class C	Shares	Amount	Shares	Amount
Shares sold	50,818	$390,215	100,234	$761,623
Shares issued in connection with reinvestment of distributions	17,965	139,370	25,022	190,185
	68,783	529,585	125,256	951,808
Shares repurchased	(421,837)	(3,269,249)	(494,764)	(3,752,647)
Net decrease	(353,054)	$(2,739,664)	(369,508)	$(2,800,839)

	YEAR ENDED 9/30/24	YEAR ENDED 9/30/23
Class R6	Shares	Amount	Shares	Amount
Shares sold	437,359	$3,356,606	904,997	$6,900,590
Shares issued in connection with reinvestment of distributions	35,258	274,349	26,919	204,781
	472,617	3,630,955	931,916	7,105,371
Shares repurchased	(339,801)	(2,579,872)	(438,817)	(3,328,844)
Net increase	132,816	$1,051,083	493,099	$3,776,527

Tax Exempt Income Fund

19

	YEAR ENDED 9/30/24	YEAR ENDED 9/30/23
Class Y	Shares	Amount	Shares	Amount
Shares sold	3,656,358	$27,863,985	5,590,240	$42,851,147
Shares issued in connection with reinvestment of distributions	284,627	2,215,253	261,078	1,983,980
	3,940,985	30,079,238	5,851,318	44,835,127
Shares repurchased	(3,303,219)	(25,483,016)	(6,791,523)	(51,426,434)
Net increase (decrease)	637,766	$4,596,222	(940,205)	$(6,591,307)

^* Effective September 5, 2024, the fund terminated its class B shares.

Note 5: Affiliated transactions

Transactions during the reporting period with any company which is under common ownership or control were as follows:

Name of affiliate	Fair value as of 9/30/23	Purchase cost	Sale proceeds	Investment income	Shares outstanding and fair value as of 9/30/24
Short-term investments
Putnam Short Term Investment Fund Class P ‡	$6,964,147	$187,900,993	$185,226,887	$407,552	$9,638,253
Total Short-term investments	$6,964,147	$187,900,993	$185,226,887	$407,552	$9,638,253
‡ Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management and Franklin Advisers, as applicable. There were no realized or unrealized gains or losses during the period.

Note 6: Market, credit and other risks

In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default.

Note 7: Summary of derivative activity

The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was based on an average of the holdings at the end of each fiscal quarter:

Futures contracts (number of contracts)

90

The following is a summary of the fair value of derivative instruments as of the close of the reporting period:

Fair value of derivative instruments as of the close of the reporting period
	Asset derivatives	Liability derivatives
Derivatives not accounted for as hedging instruments under ASC 815	Statement of assets and liabilities location	Fair value	Statement of assets and liabilities location	Fair value
Interest rate contracts	Receivables, Net assets - Unrealized appreciation	$61,519*	Payables	$-
Total		$61,519		$-
* Includes cumulative appreciation/depreciation of futures contracts as reported in the fund's portfolio. Only current day's variation margin is reported within the Statement of assets and liabilities.

The following is a summary of realized and change in unrealized gains or losses of derivative instruments in the Statement of operations for the reporting period (Note 1):

Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments
Derivatives not accounted for as hedging instruments under ASC 815	Futures	Total
Interest rate contracts	$(1,393,530)	$(1,393,530)
Total	$(1,393,530)	$(1,393,530)

Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss) on investments
Derivatives not accounted for as hedging instruments under ASC 815	Futures	Total
Interest rate contracts	$(523,203)	$(523,203)
Total	$(523,203)	$(523,203)

20

Tax Exempt Income Fund

Note 8: Offsetting of financial and derivative assets and liabilities

The following table summarizes any derivatives, repurchase agreements and reverse repurchase agreements, at the end of the reporting period, that are subject to an enforceable master netting agreement or similar agreement. For securities lending transactions or borrowing transactions associated with securities sold short, if any, see Note 1. For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to the master netting agreements in the Statement of assets and liabilities.

	JPMorgan Securities LLC	Total
Assets:
Futures contracts §	$45,305	$45,305
Total Assets	$45,305	$45,305
Liabilities:
Futures contracts §	-	-
Total Liabilities	$-	$-
Total Financial and Derivative Net Assets	$45,305	$45,305
Total collateral received (pledged) †##	$-
Net amount	$45,305
Controlled collateral received (including TBA commitments) **	$-	$-
Uncontrolled collateral received	$-	$-
Collateral (pledged) (including TBA commitments) **	$-	$-

**	Included with Investments in securities on the Statement of assets and liabilities.
†	Additional collateral may be required from certain brokers based on individual agreements.
##	Any over-collateralization of total financial and derivative net assets is not shown. Collateral may include amounts related to unsettled agreements.
§	Includes current day's variation margin only as reported on the Statement of assets and liabilities, which is not collateralized. Cumulative appreciation/(depreciation) for futures contracts is represented in the tables listed after the fund's portfolio. Collateral pledged for initial margin on futures contracts, which is not included in the table above, amounted to $347,883.

Tax Exempt Income Fund

21

Federal tax information (Unaudited)

The fund has designated $19,454,740 of dividends paid from net investment income during the reporting period as tax exempt for federal income tax purposes.

The Form 1099 that will be mailed to you in January 2025 will show the tax status of all distributions paid to your account in calendar 2024.

22

Tax Exempt Income Fund

Changes in and disagreements with accountants

Not applicable

Results of any shareholder votes (Unaudited)

January 31, 2024 special meeting
At the meeting, a new Management Contract for your fund with Putnam Investment Management, LLC was approved, as follows:
Votes for	Votes against	Abstentions/Votes withheld
38,065,517	1,131,969	5,923,295
At the meeting, a new Sub-Management Contract for your fund between Putnam Investment Management, LLC and Putnam Investments Limited was approved, as follows:
Votes for	Votes against	Abstentions/Votes withheld
37,778,922	1,352,539	5,989,320
All tabulations are rounded to the nearest whole number.

Remuneration paid to directors, officers, and others

Remuneration paid to directors, officers, and others is included in the Notes to financial statements above.

Tax Exempt Income Fund

23

Board approval of management and subadvisory agreements (Unaudited)

At its meeting on September 27, 2024, the Board of Trustees of your fund, including all of the Trustees who are not "interested persons" (as this term is defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of the Putnam mutual funds, closed-end funds and exchange-traded funds (collectively, the "funds") (the "Independent Trustees"), approved a new Sub-Advisory Agreement (the "New FTIML Sub-Advisory Agreement") between Franklin Advisers, Inc. ("Franklin Advisers") and its affiliate, Franklin Templeton Investment Management Limited ("FTIML"). Franklin Advisers and FTIML are each direct or indirect, wholly-owned subsidiaries of Franklin Resources, Inc. ("Franklin Templeton"). (Because FTIML is an affiliate of Franklin Advisers and Franklin Advisers remains fully responsible for all services provided by FTIML, the Trustees did not attempt to evaluate FTIML as a separate entity.)

The Board of Trustees, with the assistance of its Contract Committee (which consists solely of Independent Trustees) and its independent legal counsel (as that term is defined in Rule 0-1(a)(6)(i) under the 1940 Act), requested and evaluated all information it deemed reasonably necessary under the circumstances in connection with its review of the New FTIML Sub-Advisory Agreement. At its September 2024 meeting, the Contract Committee met with representatives of Franklin Templeton, and separately in executive session, to consider the information provided. At the September Trustees' meetings, the Contract Committee also met in executive session with the other Independent Trustees to discuss its observations and recommendations. Throughout this process, the Contract Committee was assisted by the members of the Board of Trustees' independent staff and by independent legal counsel for the Independent Trustees.

Considerations in connection with the Trustees' approval of the New FTIML Sub-Advisory Agreement

The Trustees considered the proposed New FTIML Sub-Advisory Agreement in connection with the planned November 1, 2024 merger (the "Merger") of Putnam Investments Limited ("PIL"), an affiliate of Franklin Advisers and a sub-adviser to your fund prior to the Merger, with and into FTIML. In connection with the Merger, PIL investment professionals would become employees of FTIML, and, upon consummation of the Merger, PIL would cease to exist as a separate legal entity.

The Trustees noted that Franklin Templeton viewed the Merger as a further step in the integration of the legacy Putnam and Franklin Templeton organizations, offering potential operational efficiencies and enhanced investment resources for the funds. The Trustees also considered, among other factors, that:

• The Merger and the New FTIML Sub-Advisory Agreement would not result in any reduction or material change in the nature or the level of the sub-advisory services provided to the funds;

• The PIL portfolio managers who are responsible for the day-to-day management of the applicable funds would be the same immediately prior to, and immediately after, the Merger, and these investment personnel would have access to the same research and other resources to support their respective investment advisory functions and operate under the same conditions both immediately before and after the Merger;

• Despite a change in the sub-advisory fee structure for certain funds, the New FTIML Sub-Advisory Agreement would not result in an increase in the advisory fee rates payable by each fund, as Franklin Advisers would be responsible for overseeing the investment advisory services provided to the applicable funds by FTIML under the New FTIML Sub-Advisory Agreement and would compensate FTIML for such services out of the fees it receives under each fund's Management Contract with Franklin Advisers; and

• The terms of the New FTIML Sub-Advisory Agreement were substantially similar to those under the New PIL Sub-Management Contract (defined below) 1 between Franklin Advisers and PIL.

The Trustees also considered that, prior to the Merger, counsel to Franklin Advisers and FTIML had provided a legal opinion that the Merger and the appointment of FTIML as sub-adviser to the funds would not result in an "assignment" under the 1940 Act of the New PIL Sub-Management Contract and that the New FTIML Sub-Advisory Agreement did not require shareholder approval.

The Trustees also took into account that they had most recently approved the fund's New PIL Sub-Management Contract in June 2024. Because, other than the parties to the contract, the revised sub-advisory fee structure for certain funds, and certain other non-substantive changes to contractual terms, the New FTIML Sub-Advisory Agreement was substantially similar to the New PIL Sub-Management Contract, the Trustees relied to a considerable extent on their previous approval of the New PIL Sub-Management Contract, which is described below.

Board of Trustees' Conclusions

After considering the factors described above and those described below under the heading "Considerations and conclusions in connection with the Trustees' June 2024 approvals," as well as other factors, the Board of Trustees, including all of the Independent Trustees, concluded that the fees payable under the New FTIML Sub-Advisory Agreement represented reasonable compensation in light of the nature and quality of the services that would be provided to the funds, and determined to approve the New FTIML Sub-Advisory Agreement for your fund. These conclusions were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor.

Considerations and conclusions in connection with the Trustees' June 2024 approvals

At its meeting on June 28, 2024, the Board of Trustees of your fund, including all of the Independent Trustees, approved a New Management Contract (defined below) between your fund and Franklin Advisers, a New PIL Sub-Management Contract (defined below) for your fund between Franklin Advisers and its affiliate, PIL, and a new subadvisory agreement (the "New Putnam Management Subadvisory Agreement") for your fund between Franklin Advisers and Putnam Investment Management, LLC ("Putnam Management") (collectively, the "New Advisory Contracts"). Franklin Advisers, Putnam Management, and PIL are each direct or indirect, wholly-owned subsidiaries of Franklin Templeton.

The Trustees considered the proposed New Advisory Contracts in connection with an internal reorganization (the "Reorganization") whereby the fixed income and Investment Solutions investment operations of Putnam Management, your fund's investment adviser prior to the Reorganization, were combined with those of Franklin Advisers. As part of the Reorganization, Franklin Advisers assumed the role of investment

1 The New PIL Sub-Management Contract was operative until the effective date of the Merger, November 1, 2024, and was replaced by the New FTIML Sub-Advisory Agreement effective as of that date.

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Tax Exempt Income Fund

adviser for your fund and the other Putnam fixed income and Investment Solutions mutual funds, exchange-traded funds and closed-end funds (collectively, the "FI/IS Funds"), which was accomplished through a transfer by Putnam Management of all of its rights and obligations under the previous management contracts between Putnam Management and the FI/IS Funds (the "Previous Management Contracts") and the previous sub-management contract between Putnam Management and its affiliate, PIL, with respect to the FI/IS Funds (the "Previous Sub-Management Contract," and, together with the Previous Management Contracts, the "Previous Contracts") to Franklin Advisers (the "Contract Transfers") by means of assignment and assumption agreements (the Previous Management Contracts and the Previous Sub-Management Contract, as modified by the terms of the related assignment and assumption agreements, are hereinafter referred to as the "New Management Contracts" and the "New PIL Sub-Management Contract," respectively). (Because PIL is an affiliate of Franklin Advisers and Franklin Advisers remains fully responsible for all services provided by PIL, the Trustees did not attempt to evaluate PIL as a separate entity.)

In addition to the New Management Contracts and New PIL Sub-Management Contract, the Board of Trustees of your fund considered and approved the New Putnam Management Subadvisory Agreement pursuant to which Franklin Advisers retained Putnam Management as sub-adviser for each FI/IS Fund so that, following the Reorganization, Putnam Management's equity team, which was not part of the Reorganization, could continue to provide certain services that it had historically provided to the FI/IS Funds, including, as applicable, the management of the equity portion of a FI/IS Fund's portfolio, including equity trade execution services, the provision of derivatives and other investment trading facilities for a transitional period, and the provision of proxy voting services for a transitional period (the "Services").

In connection with the review process, the Independent Trustees' independent legal counsel (as that term is defined in Rule 0-1(a)(6)(i) under the 1940 Act) met with representatives of Putnam Management and Franklin Templeton to discuss the contract review materials that would be furnished to the Contract Committee. The Board of Trustees, with the assistance of its Contract Committee (which consists solely of Independent Trustees) and its independent legal counsel, requested and evaluated all information it deemed reasonably necessary under the circumstances in connection with its review of the New Management Contracts. Over the course of several months ending in June 2024, the Contract Committee met on a number of occasions with representatives of Putnam Management and Franklin Templeton, and separately in executive session, to consider the information provided. Throughout this process, the Contract Committee was assisted by the members of the Board of Trustees' independent staff and by independent legal counsel for the Independent Trustees.

At the Board of Trustees' June 2024 meeting, the Contract Committee met in executive session to discuss and consider its recommendations with respect to the approval of the New Advisory Contracts. At that meeting, the Contract Committee also met in executive session with the other Independent Trustees to discuss its observations and recommendations.

The Trustees noted that Franklin Templeton viewed the Reorganization as a further step in the integration of the legacy Putnam Management and Franklin Advisers fixed income and Investment Solutions organizations, offering potential operational efficiencies and enhanced investment resources for the FI/IS Funds. The Trustees also considered, among other factors, that:

• The Contract Transfers would not result in a change in the senior management at Franklin Templeton, so that the same management will be in place before and after the Contract Transfers, which contemplate no reduction in the nature and level of the advisory and administrative services provided to the FI/IS Funds;

• The portfolio managers who are responsible for the day-to-day management of the FI/IS Funds would be the same immediately prior to, and immediately after, the Contract Transfers, and these investment personnel would have access to the same research and other resources to support their respective investment management functions both before and immediately after the Contract Transfers; and

• The Contract Transfers would not result in an increase in the advisory fee rates payable by each FI/IS Fund and that, other than an acknowledgment by Franklin Advisers and Putnam Management that for purposes of the New Management Contracts, each applicable FI/IS Fund will continue to be "an open-end fund sponsored by Putnam Management," for purposes of calculating the advisory fee rates, and updating the parties to the agreements, the terms of the New Management Contracts and New PIL Sub-Management Contract were substantially identical to those under the Previous Contracts (including with respect to the term of the New Management Contracts and New PIL Sub-Management Contract, which run through June 30, 2025, unless the contracts are sooner terminated or continued pursuant to their terms).

With respect to the New Putnam Management Subadvisory Agreement, the Trustees considered that, under the agreement, Putnam Management would provide any necessary Services to the applicable FI/IS Fund under generally the same terms and conditions related to the FI/IS Fund as such Services were previously provided by Putnam Management under the FI/IS Fund's Previous Management Contract. The Trustees also considered that Franklin Advisers would be responsible for overseeing the Services provided to the FI/IS Funds by Putnam Management under the New Putnam Management Subadvisory Agreement and would compensate Putnam Management for such services out of the fees it receives under the New Management Contracts. The Trustees further noted Franklin Advisers' and Putnam Management's representations that Putnam Management's appointment as sub-adviser to the FI/IS Funds would not result in any material change in the nature or level of investment advisory services provided to the FI/IS Funds.

The Trustees also considered that, prior to the Reorganization, counsel to Franklin Advisers and Putnam Management had provided a legal opinion that the Contract Transfers would not result in an "assignment" under the 1940 Act of the Previous Contracts or a material amendment of those contracts, and, therefore, the New Management Contracts and New PIL Sub-Management Contract did not require shareholder approval. In addition, the Trustees considered that counsel to Franklin Advisers and Putnam Management had provided a legal opinion that shareholder approval of the New Putnam Management Subadvisory Agreement was not required under the 1940 Act.

General conclusions

In addition to the above considerations, the Independent Trustees' approvals were based on the following conclusions:

• That the fee schedule in effect for your fund represented reasonable compensation in light of the nature and quality of the services being provided to the fund, the fees paid by competitive funds and the application of certain reductions and waivers noted below; and

• That the fee schedule in effect for your fund represented an appropriate sharing between fund shareholders and Franklin Advisers of any economies of scale as may exist in the management of the fund at current asset levels.

Tax Exempt Income Fund

25

These conclusions were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees' deliberations and how the Trustees considered these factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors. The considerations and conclusions discussed herein were also informed by the fact that there would be continuity in the management of the FI/IS Funds, including your fund, immediately following the Reorganization (i.e., the same portfolio managers that managed the fund prior to the Reorganization would be in place immediately following the Reorganization). The Trustees also considered that the FI/IS Funds had no operating history with Franklin Templeton or its affiliates prior to 2024.

Management fee schedules and total expenses

Under its Previous Management Contract and under its New Management Contract, your fund has the benefit of breakpoints in its management fee schedule that provide shareholders with reduced fee levels as assets under management in the Putnam family of funds increase ("Fund Family Breakpoints"). The Trustees considered that breakpoints in a fund's management fee schedule, such as the Fund Family Breakpoints in place for your fund, were one way in which economies of scale in managing a fund can be shared with the fund's shareholders. The Trustees reviewed the total expenses of each Putnam fund, recognizing that in most cases management fees represented the major, but not the sole, determinant of total costs to fund shareholders. (Two mutual funds and each of the exchange-traded funds have implemented so-called "all-in" or unitary management fees covering substantially all routine fund operating costs.)

As in the past, the Trustees also focused on the competitiveness of each fund's total expense ratio. The Trustees, Putnam Management and the funds' investor servicing agent, Putnam Investor Services, Inc. ("PSERV"), have implemented expense limitations. These expense limitations were: (i) a contractual expense limitation applicable to specified mutual funds, including your fund, of 25 basis points on investor servicing fees and expenses and (ii) a contractual expense limitation applicable to specified mutual funds, including your fund, of 20 basis points on so-called "other expenses" (i.e., all expenses exclusive of management fees, distribution fees, investor servicing fees, investment-related expenses, interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses). These expense limitations attempt to maintain competitive expense levels for the funds. Most funds, including your fund, had sufficiently low expenses that these expense limitations were not operative during their fiscal years ending in 2023. Franklin Advisers, who now serves as your fund's investment adviser following the Reorganization, and PSERV have agreed to maintain these expense limitations until at least January 30, 2026. Franklin Advisers' and PSERV's commitment to these expense limitation arrangements, which were intended to support an effort to have fund expenses meet competitive standards, was an important factor in the Trustees' decision to approve your fund's New Advisory Contracts.

The Trustees reviewed comparative fee and expense information for a custom group of competitive funds selected by Broadridge Financial Solutions, Inc. ("Broadridge"). This comparative information included your fund's percentile ranking for effective management fees and total expenses (excluding any applicable 12b-1 fees), which provides a general indication of your fund's relative standing. In the custom peer group, your fund ranked in the second quintile in effective management fees (determined for your fund and the other funds in the custom peer group based on fund asset size and the applicable contractual management fee schedule) and in the third quintile in total expenses (excluding any applicable 12b-1 fees) as of December 31, 2023. The first quintile represents the least expensive funds and the fifth quintile the most expensive funds. The fee and expense data reported by Broadridge as of December 31, 2023 reflected the most recent fiscal year-end data available in Broadridge's database at that time.

In connection with their review of fund management fees and total expenses, the Trustees also reviewed the costs of the services provided and the profits realized by Putnam Management and its affiliates from their contractual relationships with the funds. This information included year-over-year data with respect to revenues, expenses and profitability of Putnam Management and its affiliates relating to the investment management, investor servicing and distribution services provided to the funds, as applicable. In this regard, the Trustees also reviewed an analysis of the revenues, expenses and profitability of Putnam Management and its affiliates, allocated on a fund-by-fund basis, with respect to (as applicable) the funds' management, distribution and investor servicing contracts. For each fund, the analysis presented information about revenues, expenses and profitability in 2023 for each of the applicable agreements separately and for the agreements taken together on a combined basis. The Trustees also reviewed the revenues, expenses and profitability of Franklin Templeton's global investment management business and its U.S. registered investment company business, which includes the financial results of Franklin Advisers. Because the FI/IS Funds had no operating history with Franklin Templeton or its affiliates, the Trustees did not review fund-by-fund profitability information for Franklin Templeton. The Trustees concluded that, at current asset levels, the fee schedules in place for each of the funds, including the fee schedule for your fund, represented reasonable compensation for the services to be provided by Franklin Advisers (which are substantially identical to those historically provided by Putnam Management) and represented an appropriate sharing between fund shareholders and Franklin Advisers of any economies of scale as may exist in the management of the funds at that time.

The information examined by the Trustees in connection with their review of the New Advisory Contracts included information regarding services provided and fees charged by Putnam Management and its affiliates to other clients, including collective investment trusts offered in the defined contribution retirement plan market, sub-advised mutual funds, private funds sponsored by affiliates of Putnam Management, model-only separately managed accounts and Putnam Management's manager-traded separately managed account programs. This information included, in cases where a product's investment strategy corresponds with a FI/IS Fund's strategy, comparisons of those fees with fees charged to the funds, as well as an assessment of the differences in the services provided to these clients as compared to the services provided to the funds. The Trustees also considered information regarding services provided and fees charged by Franklin Advisers and its other Franklin Templeton affiliates to other clients, including U.S. registered mutual funds, funds organized outside of the United States (i.e., offshore funds), separate accounts (including separately managed accounts), collective investment trusts and sub-advised funds, which included, where applicable, the specific fees charged to strategies that are comparable to those of the FI/IS Funds. The Trustees observed that the differences in fee rates between these clients and the funds are by no means uniform when examined by individual asset sectors, suggesting that differences in the pricing of investment management services to these types of clients may reflect, among other things, historical competitive forces operating in separate marketplaces. The Trustees considered the

26

Tax Exempt Income Fund

fact that in many cases fee rates across different asset classes are higher on average for 1940 Act-registered funds than for other clients, and the Trustees also considered the differences between the services that Putnam Management historically provided and that Franklin Advisers will provide to the FI/IS Funds as investment adviser and those that they provide to their other clients. The Trustees did not rely on these comparisons to any significant extent in concluding that the management fees paid by your fund are reasonable.

Investment performance

The quality of the investment process provided by Putnam Management represented a major factor in the Trustees' evaluation of the quality of services provided by Putnam Management under your fund's Previous Management Contract and was also a significant factor in considering approval of your fund's New Management Contract, since the portfolio managers of your fund that were employed by Putnam Management prior to the Reorganization would continue to serve as portfolio managers of your fund immediately following the Reorganization as employees of Franklin Advisers. The Trustees were assisted in their review of Putnam Management's investment process and performance by the work of the investment oversight committees of the Trustees and the full Board of Trustees, which met on a regular basis with individual portfolio managers and with senior management of Putnam Management's Investment Division throughout the year. The Trustees concluded that Putnam Management generally provided a high-quality investment process - based on the experience and skills of the individuals assigned to the management of fund portfolios, the resources made available to them and in general Putnam Management's ability to attract and retain high-quality personnel - but also recognized that this does not guarantee favorable investment results for every fund in every time period. In addition to Putnam Management's investment process and performance, the Trustees considered aggregate performance information for Franklin Advisers' fixed income and Investment Solutions investment strategies, and also met with senior investment leadership at Franklin Advisers, including the respective heads of the fixed income and Investment Solutions teams and the Head of Public Market Investments.

The Trustees considered that, in the aggregate, peer-relative and benchmark-relative Putnam fund performance was generally strong in 2023 against a backdrop of largely solid fixed income markets and strong but volatile equity markets, which were characterized by a concentration of performance among large-cap growth stocks. The Trustees also noted that corporate earnings and employment figures continued to generally show strength, underpinning market rallies in 2023, while inflation concerns, Federal Reserve actions to reduce inflation and geopolitical tensions continued to be a focus of investors. For the one-year period ended December 31, 2023, the Trustees considered that the Putnam funds, on an asset-weighted basis, ranked in the 32nd percentile of their peers as determined by LSEG Lipper ("Lipper") and, on an asset-weighted-basis, outperformed their benchmarks by 2.8% gross of fees over the one-year period. The Committee also noted that the funds' aggregate performance over longer-term periods continued to be strong, with the funds, on an asset-weighted basis, ranking in the 31st, 21st, and 22nd percentiles of their Lipper peers over the three-year, five-year and ten-year periods ended December 31, 2023, respectively. The Trustees further noted that the funds, in the aggregate, outperformed their benchmarks on a gross basis for each of the three-year, five-year and ten-year periods. The Trustees also considered the Morningstar, Inc. ratings assigned to the funds, noting that 45 funds were rated four or five stars at the end of 2023, which represented an increase of 5 funds year-over-year. The Trustees also considered that 18 funds were five-star rated at the end of 2023, which was a year-over-year increase of 11 funds, and that 90% of the funds' aggregate assets were in four- or five-star rated funds at year end.

In addition to the performance of the individual Putnam funds, the Trustees considered, as they had in prior years, the performance of The Putnam Fund complex versus competitor fund complexes, as reported in the Barron's/Lipper Fund Families survey (the "Survey"). The Trustees noted that the Survey ranks mutual fund companies based on their performance across a variety of asset types, and that The Putnam Fund complex had performed exceptionally well in 2023. In this regard, the Trustees considered that The Putnam Fund complex had ranked 1st out of 49 fund companies, 1st out of 47 fund companies and 5th out of 46 fund companies for the one-year, five-year and ten-year periods, respectively. The Trustees also noted that 2023 had marked the seventh year in a row that The Putnam Fund complex had ranked in the top ten fund companies. They also noted, however, the disappointing investment performance of some Putnam funds for periods ended December 31, 2023 and considered information provided by Putnam Management regarding the factors contributing to the underperformance and, where relevant, actions being taken to improve the performance of these particular funds. The Trustees indicated their intention to continue to monitor the performance of those funds.

For purposes of the Trustees' evaluation of the Putnam funds' investment performance, the Trustees generally focus on a competitive industry ranking of each fund's total net return over a one-year, three-year and five-year period. In the case of your fund, the Trustees considered that its class A share cumulative total return performance at net asset value was in the following quartiles of its Lipper peer group (Lipper General & Insured M& Insured Municipal Debt Funds) for the one-year, three-year and five-year periods ended December 31, 2023 (the first quartile representing the best-performing funds and the fourth quartile the worst-performing funds):

One-year period	Three-year period	Five-year period
1st	2nd	2nd

Over the one-year, three-year and five-year periods ended December 31, 2023, there were 292, 276 and 256 funds, respectively, in your fund's Lipper peer group. (When considering performance information, shareholders should be mindful that past performance is not a guarantee of future results.)

Brokerage and soft-dollar allocations and other benefits; distribution

The Trustees considered various potential benefits that Franklin Advisers and Putnam Management may receive in connection with the services provided under the New Advisory Contracts to your fund. These include benefits related to brokerage allocation and the use of soft dollars, whereby a portion of the commissions paid by a fund for brokerage may be used to acquire research services that are expected to be useful to Franklin Advisers and Putnam Management in managing the assets of the fund and of other clients. Subject to policies established by the Trustees, soft dollars generated by these means are used predominantly to acquire brokerage and research services (including third-party research and market data) that would enhance Franklin Advisers' and Putnam Management's investment capabilities and supplement their internal research efforts. The Trustees intend to continue to monitor regulatory and industry developments in this area with the assistance of their Brokerage Committee. In addition, with the assistance of their Brokerage Committee, the Trustees intend to continue to monitor the allocation of the funds' brokerage in order to ensure that the principle

Tax Exempt Income Fund

27

of seeking best price and execution remains paramount in the portfolio trading process. Your fund is not expected to generate a significant amount of soft-dollar credits.

The Trustees also considered other potential benefits that Franklin Advisers and Putnam Management may receive in connection with the services provided under the New Advisory Contracts to your fund. These potential benefits included, among others, Franklin Advisers' and Putnam Management's registered fund businesses aiding in the growth of their non-registered fund businesses and the use of an affiliated transfer agent's services (in the case of your fund, PSERV, which is affiliated with Franklin Advisers and Putnam Management), where the fees for those services are paid by the fund.

Franklin Advisers may also receive benefits from payments made to Franklin Advisers' affiliates by the mutual funds for distribution services. In connection with the consolidation of Putnam Retail Management Limited Partnership ("PRM") with Franklin Distributors, LLC ("FD"), which took place on August 2, 2024 (the "Consolidation"), the Trustees appointed FD as principal underwriter of the mutual funds, effective on August 2, 2024. Both PRM and FD are affiliates of Franklin Advisers and Putnam Management. In approving the continuation of your fund's distribution plans, the Trustees concluded that the fees payable by the mutual funds to PRM, prior to FD succeeding PRM as principal underwriter for the mutual funds, and to be paid to FD, once it assumed the role of principal underwriter, for distribution services were fair and reasonable in relation to the nature and quality of such services, the fees paid by competitive funds and the costs incurred by PRM and FD, as applicable, in providing such services.

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Tax Exempt Income Fund

© 2024 Franklin Templeton. All rights reserved.	38905-AFSOI 11/24

	Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.

	Included in Item 7 above.

	Item 9. Proxy Disclosure for Open-End Management Investment Companies.

	Included in Item 7 above.

	Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.

	Included in Item 7 above.

	Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.

	Included in Item 7 above.

	Item 12. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:

	Not applicable

	Item 13. Portfolio Managers of Closed-End Investment Companies

	Not Applicable

	Item 14. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:

	Not applicable

	Item 15. Submission of Matters to a Vote of Security Holders:

	Not applicable

	Item 16. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

	(b) Changes in internal control over financial reporting: Not applicable

	Item 17. Disclosures of Securities Lending Activities for Closed-End Investment Companies:

	Not Applicable

	Item 18. Recovery of Erroneously Awarded Compensation.

	(a) No

	(b) No

	Item 19. Exhibits:

	(a)(1) The Code of Ethics of The Putnam Funds and Franklin Templeton are filed herewith.

	(a)(2) Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant's securities are listed.

	(a)(3) A separate certification for each principal executive and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)), are filed herewith:

	(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.

	SIGNATURES

	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Putnam Tax Exempt Income Fund

	By (Signature and Title):

	/s/ Jeffrey White

	Jeffrey White Principal Accounting Officer

	Date: November 22, 2024

	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	By (Signature and Title):

	/s/ Jonathan S. Horwitz

	Jonathan S. Horwitz Principal Executive Officer

	Date: November 22, 2024

	By (Signature and Title):

	/s/ Jeffrey White

	Jeffrey White Principal Financial Officer

	Date: November 22, 2024