Putnam VT International Equity Fund
Prospectus 4 | 30 | 20
IMPORTANT NOTICE: Delivery of paper fund reports In accordance with regulations adopted by the Securities and Exchange Commission, beginning on or after January 1, 2021, at the election of your insurance provider, you may not receive paper copies of the fund’s annual and semiannual reports in the mail from the insurance provider that offers your variable annuity contract or variable life insurance policy unless you specifically request it. Instead, they will be available on a website, and your insurance provider will notify you by mail whenever a new one is available, and provide you with a website link to access the report. If you wish to continue to receive paper reports free of charge after January 1, 2021, please contact your insurance provider. If you already receive these reports electronically, no action is required.
FUND SYMBOLS CLASS IA CLASS IB — —
Fund summary 2 What are the fund’s main investment strategies and related risks? 3 Who oversees and manages the fund? 6 How to buy and sell fund shares 7 How does the fund price its shares? 8 Distribution plan and payments to dealers 8 Policy on excessive short-term trading 9 Fund distributions and taxes 10 Financial highlights 11
This prospectus explains what you should know about Putnam These securities have not been approved or disapproved by VT International Equity Fund, one of the funds of Putnam Variable the Securities and Exchange Commission (SEC) nor has the SEC Trust, which is available for purchase by separate accounts of passed upon the accuracy or adequacy of this prospectus. Any insurance companies. Please read it carefully. Certain shares of statement to the contrary is a crime. other funds of the Trust are offered through other prospectuses. Fund summary may consider, among other factors, a company’s valuation, financial strength, growth potential, competitive position in its Goal industry, projected future earnings, cash flows and dividends Putnam VT International Equity Fund seeks capital appreciation. when deciding whether to buy or sell investments. We may also consider other factors that we believe will cause the stock price to Fees and expenses rise. We may also use derivatives, such as futures, options, certain The following table describes the fees and expenses you may foreign currency transactions, warrants and swap contracts, for pay if you buy and hold shares of the fund. The fees and expenses both hedging and non-hedging purposes. information does not reflect insurance-related charges or expenses borne by contract holders indirectly investing in the Risks fund. If it did, expenses would be higher. It is important to understand that you can lose money by investing in the fund. Annual fund operating expenses (expenses you pay each year as a percentage of the value of your investment) The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, Distribution Total annual Management and service Other fund operating including general economic, political or financial market condi- Share class fees (12b-1) fees expenses expenses tions, investor sentiment and market perceptions, government Class IA 0.69% N/A 0.16% 0.85% actions, geopolitical events or changes, and factors related to a Class IB 0.69% 0.25% 0.16% 1.10% specific issuer, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity Example in the fund’s portfolio holdings. Growth stocks may be more The following hypothetical example is intended to help you susceptible to earnings disappointments, and value stocks compare the cost of investing in the fund with the cost of may fail to rebound. These risks are generally greater for small investing in other funds. The example does not reflect insurance- and midsize companies. The value of international investments related charges or expenses. If it did, expenses would be higher. It traded in foreign currencies may be adversely impacted by fluctu- assumes that you invest $10,000 in the fund for the time periods ations in exchange rates. International investments, particularly indicated and then redeem or hold all your shares at the end of investments in emerging markets, may carry risks associated those periods. It assumes a 5% return on your investment each with potentially less stable economies or governments (such year and that the fund’s operating expenses remain the same. as the risk of seizure by a foreign government, the imposition of Your actual costs may be higher or lower. currency or other restrictions, or high levels of inflation), and may be or become illiquid. Share class 1 year 3 years 5 years 10 years Class IA $87 $271 $471 $1,049 Investments focused in a single region may be affected by Class IB $112 $350 $606 $1,340 common economic forces and other factors. In addition, events in any one country within the region may impact the other coun- Portfolio turnover tries or the region as a whole. Because the fund currently invests, The fund pays transaction-related costs, such as commissions, and may in the future invest, significantly in European companies, when it buys and sells securities (or “turns over” its portfolio). A the fund is particularly susceptible to economic, political, regula- higher turnover rate may indicate higher transaction costs. These tory and other events or conditions affecting issuers in Europe. costs, which are not reflected in annual fund operating expenses European financial markets have in recent years experienced or the above example, affect fund performance. The fund’s increased volatility due to concerns with some countries’ high turnover rate in the most recent fiscal year was 80%. levels of sovereign debt, budget deficits, and unemployment. Our use of derivatives may increase the risks of investing in Investments, risks, and performance the fund by increasing investment exposure (which may be Investments considered leverage) or, in the case of many over-the-counter We invest mainly in common stocks (growth or value stocks or instruments, because of the potential inability to terminate or sell both) of large and midsize companies outside the United States derivatives positions and the potential failure of the other party that we believe have favorable investment potential. For example, to the instrument to meet its obligations. we may purchase stocks of companies with stock prices that reflect a value lower than that which we place on the company. There is no guarantee that the investment techniques, analyses, Under normal circumstances, we invest at least 80% of the fund’s or judgments that we apply in making investment decisions net assets in equity investments. This policy may be changed for the fund will produce the intended outcome or that the only after 60 days’ notice to shareholders. We invest mainly in investments we select for the fund will perform as well as other developed countries, but may invest in emerging markets. We securities that were not selected for the fund. We, or the fund’s
2 Prospectus of the Trust
other service providers, may experience disruptions or operating Purchase and sale of fund shares errors that could negatively impact the fund. Fund shares are offered to separate accounts of various insurers. The fund requires no minimum investment, but insurers may The fund may not achieve its goal, and it is not intended to be require minimum investments from those purchasing variable a complete investment program. An investment in the fund is insurance products for which the fund is an underlying invest- not insured or guaranteed by the Federal Deposit Insurance ment option. Insurers may purchase or sell shares on behalf of Corporation or any other government agency. separate accounts by submitting an order to Putnam Retail Performance Management any day the New York Stock Exchange (NYSE) is The performance information below gives some indication of open. Some restrictions may apply. the risks associated with an investment in the fund by showing the fund’s performance year to year and over time. The perfor- Tax information mance information does not reflect insurance-related charges Generally, owners of variable insurance contracts are not taxed or expenses. If it did, performance would be lower. Please currently on income or gains realized with respect to such remember that past performance is not necessarily an indication contracts. However, some distributions from such contracts of future results. may be taxable at ordinary income tax rates and distributions to contract owners younger than 59½ may be subject to a 10% Annual total returns for class IA shares penalty tax. For more information, please see the prospectus (or other offering document) for your variable insurance contract. 28.44% Year-to- 26.93% 25.55% 22.21% date per- formance –20.40% Payments to insurance companies through 10.27% 3/31/20 The fund is offered as an underlying investment option for vari-
0.41% Best able insurance contracts. The fund and its related companies calendar 18.98% –2.21% quarter may make payments to the sponsoring insurance company (or –6.58% Q3 2010 its affiliates) and dealers for distribution and/or other services. Worst –16.71% These payments may create an incentive for the insurance –18.95% calendar –24.07% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 quarter company to include the fund, rather than another investment, Q3 2011 as an option in its products and may create a conflict of interest for dealers in recommending the fund over another investment. Average annual total returns (for periods ended 12/31/19) The prospectus (or other offering document) for your variable insurance contract may contain additional information about Share class 1 year 5 years 10 years these payments. Class IA 25.55% 4.87% 5.50% Class IB 25.15% 4.59% 5.23% What are the fund’s main investment MSCI EAFE Index (ND) (no deduction for fees or expenses) 22.01% 5.67% 5.50% strategies and related risks? This section contains greater detail on the fund’s main invest- Your fund’s management ment strategies and the related risks you would face as a fund Investment advisor shareholder. It is important to keep in mind that risk and reward Putnam Investment Management, LLC generally go hand in hand; the higher the potential reward, the greater the risk. As mentioned in the fund summary, we pursue Portfolio manager the fund’s goal by investing mainly in common stocks issued by Vivek Gandhi, Portfolio Manager, portfolio manager of the fund companies outside the United States. We consider a company to since 2018 be located outside the United States if the company’s securities trade outside the United States, the company is headquartered Sub-advisors or organized outside the United States or the company derives a Putnam Investments Limited majority of its revenues or profits outside the United States. The Putnam Advisory Company, LLC* • Common stocks. Common stock represents an ownership * Though the investment advisor has retained the services of The Putnam interest in a company. The value of a company’s stock may fall Advisory Company, LLC (PAC), PAC does not currently manage any assets of the fund. as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company’s products or services. A stock’s value may also fall because of factors affecting not just the company, but also other
Prospectus of the Trust 3
companies in the same industry or in a number of different ––Unreliable or untimely information: There may be less industries, such as increases in production costs. From time to information publicly available about a foreign company than time, the fund may invest a significant portion of its assets in about most publicly-traded U.S. companies, and foreign companies in one or more related industries or sectors, which companies are usually not subject to accounting, auditing would make the fund more vulnerable to adverse developments and financial reporting standards and practices as stringent affecting those companies, industries or sectors. as those in the United States. Foreign securities may trade on markets that are closed when U.S. markets are open. As a The value of a company’s stock may also be affected by changes result, accurate pricing information based on foreign market in financial markets that are relatively unrelated to the company prices may not always be available. or its industry, such as changes in interest rates or currency exchange rates. In addition, a company’s stock generally pays ––Limited legal recourse: Legal remedies for investors may be dividends only after the company invests in its own business more limited than the remedies available in the United States. and makes required payments to holders of its bonds and other ––Limited markets: Certain foreign investments may be less debt. For this reason, the value of a company’s stock will usually liquid (harder to buy and sell) and more volatile than most react more strongly than its bonds and other debt to actual U.S. investments, which means we may at times be unable or perceived changes in the company’s financial condition to sell these foreign investments at desirable prices. For the or prospects. same reason, we may at times find it difficult to value the fund’s foreign investments. Growth stocks — Stocks of companies we believe are fast- growing may trade at a higher multiple of current earnings than ––Trading practices: Brokerage commissions and other fees other stocks. The values of these stocks may be more sensitive to are generally higher for foreign investments than for U.S. changes in current or expected earnings than the values of other investments. The procedures and rules governing foreign stocks. If our assessment of the prospects for a company’s earn- transactions and custody may also involve delays in payment, ings growth is wrong, or if our judgment of how other investors delivery or recovery of money or investments. will value the company’s earnings growth is wrong, then the price The risks of foreign investments are typically increased in coun- of the company’s stock may fall or may not approach the value tries with less developed markets, which are sometimes referred that we have placed on it. In addition, growth stocks, at times, to as emerging markets. Emerging markets may have less devel- may not perform as well as value stocks or the stock market oped economies and legal and regulatory systems, and may be in general, and may be out of favor with investors for varying susceptible to greater political and economic instability than periods of time. developed foreign markets. Countries with emerging markets are Value stocks — Companies whose stocks we believe are under- also more likely to experience high levels of inflation or currency valued by the market may have experienced adverse business devaluation, and investments in emerging markets may be more developments or may be subject to special risks that have caused volatile and less liquid than investments in developed markets. their stocks to be out of favor. If our assessment of a company’s For these and other reasons, investments in emerging markets prospects is wrong, or if other investors do not similarly recog- are often considered speculative. nize the value of the company, then the price of the company’s Certain risks related to foreign investments may also apply to stock may fall or may not approach the value that we have placed some extent to U.S.-traded investments that are denominated on it. In addition, value stocks, at times, may not perform as well in foreign currencies, investments in U.S. companies that are as growth stocks or the stock market in general, and may be out traded in foreign markets or investments in U.S. companies that of favor with investors for varying periods of time. have significant foreign operations. • Foreign investments. Foreign investments involve certain • Geographic focus. If the fund invests a substantial percentage special risks, including: of its assets in issuers located in a single country, a small number ––Unfavorable changes in currency exchange rates: Foreign of countries, or a particular geographic region, the fund’s perfor- investments are typically issued and traded in foreign mance will likely be closely tied to the market, currency, political, currencies. As a result, their values may be affected by economic, regulatory, geopolitical, and other conditions in such changes in exchange rates between foreign currencies and the countries or region. These conditions could generally have a U.S. dollar. greater effect on the fund than they would on a more geographi- ––Political and economic developments: Foreign investments cally diversified fund, which may result in greater losses and may be subject to the risks of seizure by a foreign government, volatility. Because the fund currently invests, and may in the direct or indirect impact of sovereign debt default, imposition future invest, significantly in European issuers, the fund will of economic sanctions or restrictions on the exchange or be subject to the risk that geopolitical concerns, such as the export of foreign currency, and tax increases. potential that a member country might exit the Economic and
4 Prospectus of the Trust
Monetary Union of the European Union and/or European Union, than stocks of larger companies. Stocks of small and midsize could lead to increased volatility in European markets and nega- companies may therefore be more vulnerable to adverse devel- tively affect the fund’s investments both in issuers in the exiting opments than those of larger companies. In addition, stocks of country and throughout Europe. small and midsize companies, at times, may not perform as well • Derivatives. We may engage in a variety of transactions as stocks of larger companies or the stock market in general, and involving derivatives, such as futures, options, certain foreign may be out of favor with investors for varying periods of time. currency transactions, warrants and swap contracts, although Small companies in foreign countries could be relatively smaller they do not represent a primary focus of the fund. Derivatives are than those in the United States. financial instruments whose value depends upon, or is derived • Liquidity and illiquid investments. We may invest up to from, the value of something else, such as one or more under- 15% of the fund’s assets in illiquid investments, which may be lying investments, pools of investments, indexes or currencies. considered speculative and which may be difficult to sell. The We may make use of “short” derivatives positions, the values of sale of many of these investments is prohibited or limited by which typically move in the opposite direction from the price law or contract. Some investments may be difficult to value for of the underlying investment, pool of investments, index or purposes of determining the fund’s net asset value. We may not currency. We may use derivatives both for hedging and non- be able to sell the fund’s investments when we consider it desir- hedging purposes. For example, we may use foreign currency able to do so, or we may be able to sell them only at less than transactions to increase or decrease the fund’s exposure to a their value. particular currency or group of currencies. We may also use • Market risk. The value of investments in the fund’s portfolio derivatives as a substitute for a direct investment in the securi- may fall or fail to rise over extended periods of time for a variety ties of one or more issuers. However, we may also choose not of reasons, including general economic, political or financial to use derivatives based on our evaluation of market conditions market conditions; investor sentiment and market perceptions or the availability of suitable derivatives. Investments in deriva- (including perceptions about monetary policy, interest rates or tives may be applied toward meeting a requirement to invest in the risk of default); government actions (including protectionist a particular kind of investment if the derivatives have economic measures, intervention in the financial markets or other regula- characteristics similar to that investment. tion, and changes in fiscal, monetary or tax policies); geopolitical Derivatives involve special risks and may result in losses. The events or changes (including natural disasters, epidemics or successful use of derivatives depends on our ability to manage pandemics, terrorism and war); and factors related to a specific these sophisticated instruments. Some derivatives are “lever- issuer, geography, industry or sector. Foreign financial markets aged,” which means they provide the fund with investment have their own market risks, and they may be more or less volatile exposure greater than the value of the fund’s investment in the than U.S. markets and may move in different directions. These derivatives. As a result, these derivatives may magnify or other- and other factors may lead to increased volatility and reduced wise increase investment losses to the fund. The risk of loss from liquidity in the fund’s portfolio holdings. During those periods, certain short derivatives positions is theoretically unlimited. the fund may experience high levels of shareholder redemptions, The value of derivatives may move in unexpected ways due to and may have to sell securities at times when it would otherwise the use of leverage or other factors, especially in unusual market not do so, and at unfavorable prices. conditions, and may result in increased volatility. • Management and operational risk. The fund is actively Other risks arise from the potential inability to terminate or sell managed and its performance will reflect, in part, our ability derivatives positions. A liquid secondary market may not always to make investment decisions that seek to achieve the fund’s exist for the fund’s derivatives positions. In fact, many over-the- investment objective. There is no guarantee that the investment counter instruments (investments not traded on an exchange) techniques, analyses, or judgments that we apply in making will not be liquid. Over-the-counter instruments also involve the investment decisions for the fund will produce the intended risk that the other party to the derivatives transaction will not outcome or that the investments we select for the fund will meet its obligations. For further information about additional perform as well as other securities that were not selected for the types and risks of derivatives and the fund’s asset segregation fund. As a result, the fund may underperform its benchmark or policies, see Miscellaneous Investments, Investment Practices and other funds with a similar investment goal and may realize losses. Risks in the Statement of Additional Information (SAI). In addition, we, or the fund’s other service providers, may experi- ence disruptions or operating errors that could negatively impact • Small and midsize companies. These companies, some of the fund. Although service providers are required to have appro- which may have a market capitalization of less than $1 billion, priate operational risk management policies and procedures, are more likely than larger companies to have limited product and to take appropriate precautions to avoid and mitigate risks lines, markets or financial resources, lack profitability or depend that could lead to disruptions and operating errors, it may not on a small management group. Stocks of these companies often be possible to identify all of the operational risks that may affect trade in smaller volumes, and their prices may fluctuate more
Prospectus of the Trust 5
the fund or to develop processes and controls to completely Who oversees and manages the fund? eliminate or mitigate their occurrence or effects. The fund’s Trustees • Other investments. In addition to the main investment strat- As a shareholder of a mutual fund, you have certain rights and egies described above, the fund may make other types of protections, including representation by a Board of Trustees. The investments, such as investments in U.S. companies, preferred Putnam Funds’ Board of Trustees oversees the general conduct stocks, convertible securities, and debt instruments. The of the fund’s business and represents the interests of the Putnam fund may also loan portfolio securities to earn income. These fund shareholders. At least 75% of the members of the Putnam practices may be subject to other risks, as described under Funds’ Board of Trustees are independent, which means they Miscellaneous Investments, Investment Practices and Risks in are not officers of the fund or affiliated with Putnam Investment the SAI. Management, LLC (Putnam Management). • Temporary defensive strategies. In response to adverse market, economic, political or other conditions, we may take The Trustees periodically review the fund’s investment perfor- temporary defensive positions, such as investing some or all of mance and the quality of other services such as administration, the fund’s assets in cash and cash equivalents, that differ from custody, and investor services. At least annually, the Trustees the fund’s usual investment strategies. However, we may choose review the fees paid to Putnam Management and its affiliates for not to use these temporary defensive strategies for a variety of providing or overseeing these services, as well as the overall level reasons, even in very volatile market conditions. These strategies of the fund’s operating expenses. In carrying out their respon- may cause the fund to miss out on investment opportunities, sibilities, the Trustees are assisted by an administrative staff, and may prevent the fund from achieving its goal. Additionally, auditors and legal counsel that are selected by the Trustees and while temporary defensive strategies are mainly designed to limit are independent of Putnam Management and its affiliates. losses, such strategies may not work as intended. Contacting the fund’s Trustees • Changes in policies. The Trustees may change the fund’s Address correspondence to: goal, investment strategies and other policies set forth in this The Putnam Funds Trustees prospectus without shareholder approval, except as otherwise 100 Federal Street provided in the prospectus or SAI. Boston, MA 02110 • Portfolio turnover rate. The fund’s portfolio turnover rate measures how frequently the fund buys and sells investments. The fund’s investment manager A portfolio turnover rate of 100%, for example, would mean The Trustees have retained Putnam Management, which has that the fund sold and replaced securities valued at 100% of the managed mutual funds since 1937, to be the fund’s investment fund’s assets within a one-year period. manager, responsible for making investment decisions for the fund and managing the fund’s other affairs and business. From time to time the fund may engage in frequent trading. The basis for the Trustees’ approval of the fund’s management High turnover may also cause a fund to pay more brokerage contract and the sub-management and sub-advisory contracts commissions and other transaction costs, which may detract described below is discussed in the fund’s semiannual report to from performance. The fund’s portfolio turnover rate and the shareholders dated June 30, 2019. amount of brokerage commissions it pays will vary over time based on market conditions. The fund pays a monthly management fee to Putnam Manage- ment. The fee is calculated by applying a rate to the fund’s average • Portfolio holdings. The SAI includes a description of the fund’s net assets for the month. The rate is based on the monthly policies with respect to the disclosure of its portfolio holdings. average of the aggregate net assets of all open-end funds spon- For more specific information on the fund’s portfolio, you may sored by Putnam Management (excluding net assets of funds that visit the Putnam Investments website, putnam.com/individual/ are invested in, or that are invested in by, other Putnam funds to annuities, where the fund’s top 10 holdings and related portfolio the extent necessary to avoid “double counting” of those assets), information may be viewed monthly beginning approximately 15 and generally declines as the aggregate net assets increase. days after the end of each month, and full portfolio holdings may be viewed quarterly beginning on the 8th business day after the The fund paid Putnam Management a management fee (after any end of each calendar quarter. This information will remain avail- applicable waivers) of 0.69% of average net assets for the fund’s able on the website at least until the fund files a Form N-CSR or last fiscal year. publicly available Form N-PORT with the SEC for the period that Putnam Management’s address is 100 Federal Street, Boston, includes the date of the information, after which such information MA 02110. can be found on the SEC’s website at http://www.sec.gov.
6 Prospectus of the Trust
Putnam Management has retained its affiliate PIL to make Management before the close of regular trading on the NYSE in investment decisions for such fund assets as may be designated order to receive that day’s NAV. No fee is charged to a separate from time to time for its management by Putnam Management. account when it redeems fund shares. Putnam Management (and not the fund) will pay a quarterly sub- Please check with your insurance company to determine management fee to PIL for its services at the annual rate of 0.35% whether the fund is available under your variable annuity of the average net asset value (NAV) of any fund assets managed contract or variable life insurance policy. The fund may not be by PIL. PIL, which provides a full range of international invest- available in your state due to various insurance regulations. This ment advisory services to institutional clients, is located at 16 St prospectus should be read in conjunction with the prospectus James’s Street, London, England, SW1A 1ER. of the separate account of the specific insurance product which Putnam Management and PIL have retained their affiliate PAC accompanies this prospectus. to make investment decisions for such fund assets as may be The fund currently does not foresee any disadvantages to policy designated from time to time for its management by Putnam owners arising out of the fact that the fund offers its shares to Management or PIL, as applicable. PAC is not currently managing separate accounts of various insurance companies to serve as any fund assets. If PAC were to manage any fund assets, Putnam the investment medium for their variable products. Neverthe- Management or PIL, as applicable (and not the fund), would pay less, the Trustees intend to monitor events in order to identify any a quarterly sub-advisory fee to PAC for its services at the annual material irreconcilable conflicts which may possibly arise, and to rate of 0.35% of the average NAV of any fund assets managed by determine what action, if any, should be taken in response to such PAC. PAC, which provides financial services to institutions and conflicts. If such a conflict were to occur, one or more insurance individuals through separately-managed accounts and pooled companies’ separate accounts might be required to withdraw investment vehicles, has its headquarters at 100 Federal Street, their investments in the fund and shares of another fund may be Boston, MA 02110, with additional investment management substituted. This might force the fund to sell portfolio securities personnel located in Singapore. at disadvantageous prices. In addition, the Trustees may refuse Pursuant to these arrangements, Putnam investment profes- to sell shares of the fund to any separate account or may suspend sionals who are based in foreign jurisdictions may serve as or terminate the offering of shares of the fund if such action is portfolio managers of the fund or provide other investment required by law or regulatory authority or is in the best interests services, consistent with local regulations. of the shareholders of the fund. • Portfolio manager. The officer of Putnam Management The fund typically expects to send you payment for your shares identified below is primarily responsible for the day-to-day one business day after your request is received in good order. management of the fund’s portfolio. However, it is possible that payment of redemption proceeds may take up to seven days. Under unusual circumstances, the Trust Portfolio Positions over past manager Joined fund Employer five years may suspend redemptions or postpone payment for more than seven days, as permitted by federal securities law. Under normal Vivek 2018 Putnam Portfolio Manager Gandhi Investments Previously, Assistant market conditions, the fund typically expects to satisfy redemp- Limited Portfolio Manager, tion requests by using holdings of cash and cash equivalents or 1999 – Present Analyst selling portfolio assets to generate cash. Under stressed market The SAI provides information about this individual’s compen- conditions, the fund may also satisfy redemption requests by sation, other accounts managed by this individual and this borrowing under the fund’s lines of credit or interfund lending individual’s ownership of securities in the fund. arrangements. For additional information regarding the fund’s lines of credit and interfund lending arrangements, please see How to buy and sell fund shares the SAI. The Trust has an underwriting agreement relating to the fund To the extent consistent with applicable laws and regulations, with Putnam Retail Management, 100 Federal Street, Boston, the fund reserves the right to satisfy all or a portion of a redemp- Massachusetts 02110. Putnam Retail Management presently tion request by distributing securities or other property in lieu of offers shares of the fund continuously to separate accounts of cash (“in-kind” redemptions), under both normal and stressed various insurers. The underwriting agreement presently provides market conditions. The fund generally expects to use in-kind that Putnam Retail Management accepts orders for shares at NAV redemptions only in stressed market conditions or stressed and no sales commission or load is charged. conditions specific to the fund, such as redemption requests that represent a large percentage of the fund’s net assets in order to Shares are sold or redeemed at the NAV per share next deter- minimize the effect of the large redemption on the fund and its mined after receipt of an order. Orders for purchases or sales remaining shareholders. Any in-kind redemption will be effected of shares of the fund must be received by Putnam Retail
Prospectus of the Trust 7
through a pro rata distribution of all publicly traded portfolio revised from time to time and the number of days on which securities or securities for which quoted bid prices are available, fair value prices will be used will depend on market activity, subject to certain exceptions. The securities distributed in an it is possible that fair value prices will be used by the fund to a in-kind redemption will be valued in the same manner as they significant extent. As noted above, the value determined for an are valued for purposes of computing the fund’s net asset value. investment using the fund’s fair value pricing procedures may Once distributed in-kind to an investor, securities may increase differ from recent market prices for the investment. or decrease in value before the investor is able to convert them into cash. Any transaction costs or other expenses involved in Distribution plan and payments to dealers liquidating securities received in an in-kind redemption will be The Trust has adopted a Distribution Plan with respect to class IB borne by the redeeming investor. The fund has committed, in shares to compensate Putnam Retail Management for services connection with an election under Rule 18f-1 under the Invest- provided and expenses incurred by it as principal underwriter of ment Company Act of 1940, to pay all redemptions of fund the class IB shares, including the payments to insurance compa- shares by a single shareholder during any 90-day period in cash, nies and their affiliated dealers mentioned below. The plan up to the lesser of (i) $250,000 or (ii) 1% of the fund’s net assets provides for payments by the fund to Putnam Retail Manage- measured as of the beginning of such 90-day period. For infor- ment at the annual rate (expressed as a percentage of average mation regarding procedures for in-kind redemptions, please net assets) of up to 0.35% on class IB shares. The Trustees contact Putnam Retail Management. currently limit payments on class IB shares to 0.25% of average How does the fund price its shares? net assets. Because these fees are paid out of the fund’s assets on an ongoing basis, they will increase the cost of your investment. The price of the fund’s shares is based on its NAV. The NAV per share of each class equals the total value of its assets, less its Putnam Retail Management compensates insurance companies liabilities, divided by the number of its outstanding shares. (or affiliated broker-dealers) whose separate accounts invest in Shares are only valued as of the scheduled close of regular the Trust through class IB shares for providing services to their trading on the NYSE each day the exchange is open. contract holders investing in the Trust. The fund values its investments for which market quotations are Putnam Retail Management makes quarterly payments to readily available at market value. It values all other investments dealers at the annual rate of up to 0.25% of the average NAV of and assets at their fair value, which may differ from recent market class IB shares. prices. For example, the fund may value a stock at its fair value Putnam Retail Management may suspend or modify its payments when the relevant exchange closes early or trading in the stock is to dealers. The payments are also subject to the continua- suspended. It may also value a stock at fair value if recent trans- tion of the Distribution Plan, the terms of service agreements actions in the stock have been very limited or if, in the case of a between dealers and Putnam Retail Management, and any security traded on a market that closes before the NYSE closes, applicable limits imposed by the Financial Industry Regulatory material information about the issuer becomes available after Authority (FINRA). the close of the relevant market. In addition to the payments described above with respect to The fund translates prices for its investments quoted in foreign class IB shares, Putnam Retail Management and its affiliates also currencies into U.S. dollars at current exchange rates, which are pay additional compensation to selected insurance companies generally determined as of 4:00 p.m. Eastern Time each day the (or affiliated broker-dealers) to whom shares of the fund are NYSE is open. As a result, changes in the value of those currencies offered (“Record Owners”) and to dealers that sell variable insur- in relation to the U.S. dollar may affect the fund’s NAV. Because ance products (“dealers”) in recognition of their marketing and/ foreign markets may be open at different times than the NYSE, or administrative services support. These payments may create the value of the fund’s shares may change on days when share- an incentive for a Record Owner firm, dealer firm or their repre- holders are not able to buy or sell them. Many securities markets sentatives to recommend or offer shares of the fund or other and exchanges outside the U.S. close before the close of the Putnam funds, or insurance products for which the fund serves NYSE, and the closing prices for securities in those markets or as an underlying investment, to its customers. These additional exchanges may not reflect events that occur after the close but payments are made by Putnam Retail Management and its affili- before the scheduled close of regular trading on the NYSE. As a ates and do not increase the amount paid by you or the fund as result, the fund has adopted fair value pricing procedures, which, shown under Fund summary — Fees and expenses. among other things, require the fund to fair value foreign equity The additional payments to Record Owners and dealers by securities if there has been a movement in the U.S. market that Putnam Retail Management and its affiliates are generally based exceeds a specified threshold. Although the threshold may be on one or more of the following factors: average net assets of the
8 Prospectus of the Trust
fund attributable to that Record Owner or dealer, sales or net after the close of the foreign markets on which the investments sales of the fund attributable to that Record Owner or dealer, trade, but prior to the later close of trading on the NYSE, the or on the basis of a negotiated lump sum payment for services time as of which the fund determines its NAV. If an arbitrageur provided. Payments made by Putnam Retail Management is successful, he or she may dilute the interests of other share- and its affiliates for marketing and/or administrative support holders by trading shares at prices that do not fully reflect their services to any one Record Owner or dealer are not expected, fair value. with certain limited exceptions, to exceed 0.25% of the average When the fund invests in securities that may trade infrequently assets of the fund attributable to that Record Owner or dealer or may be more difficult to value, such as securities of smaller on an annual basis. These payments are made for marketing companies, it may be susceptible to trading by short-term and/or administrative support services provided by Record traders who seek to exploit perceived price inefficiencies in Owners and dealers, including business planning assistance, the fund’s investments. In addition, the market for securities of educating dealer personnel about the fund and shareholder smaller companies may at times show “market momentum,” in financial planning needs, placement on the dealer’s preferred which positive or negative performance may continue from one or recommended fund company list, access to sales meetings, day to the next for reasons unrelated to the fundamentals of the sales representatives and management representatives of the issuer. Short-term traders may seek to capture this momentum dealer and administrative services performed by the Record by trading frequently in the fund’s shares, which will reduce Owner or dealer. Putnam Retail Management and its affiliates the fund’s performance and may dilute the interests of other may make other payments (including payments in connection shareholders. Because securities of smaller companies may with educational seminars or conferences) or allow other promo- be less liquid than securities of larger companies, the fund may tional incentives to Record Owners and dealers to the extent also be unable to buy or sell these securities at desirable prices permitted by SEC and National Association of Security Dealers, when the need arises (for example, in response to volatile cash Inc. (as adopted by FINRA) rules and by other applicable laws flows caused by short-term trading). Similar risks may apply and regulations. if the fund holds other types of less liquid securities, including You can find a list of all Record Owners and dealers to which below-investment-grade bonds. Putnam made marketing and/or administrative support services • Fund policies and limitations. In order to protect the interests payments in 2019 in the SAI, which is on file with the SEC and is of long-term shareholders of the fund, Putnam Management also available on Putnam’s website at putnam.com. You can also and the fund’s Trustees have adopted policies and procedures find other details in the SAI about the payments made by Putnam intended to discourage excessive short-term trading. The fund Retail Management and its affiliates and the services provided seeks to discourage excessive short-term trading by using fair by your Record Owner or dealer. In addition, you can ask your value pricing procedures to value investments under some Record Owner or dealer for information about any payments it circumstances. Because the fund invests in foreign securi- receives from Putnam Retail Management and its affiliates and ties, fair value pricing may be used to a significant extent with any services provided by your Record Owner or dealer. respect to these securities. In addition, Putnam Management monitors aggregate cash flows in each insurance company Policy on excessive short-term trading separate account that invests in the fund. If high cash flows • Risks of excessive short-term trading. Excessive short-term relative to the size of the account or other information indi- trading activity may reduce the fund’s performance and harm cate that excessive short-term trading may be taking place in a all fund shareholders by interfering with portfolio management, particular separate account, Putnam Management will contact increasing the fund’s expenses and diluting the fund’s NAV. the insurance company that maintains accounts for the under- Depending on the size and frequency of short-term trades in the lying contract holders and seek to have the insurance company fund’s shares, the fund may experience increased cash volatility, enforce the separate account’s policies on excessive short-term which could require the fund to maintain undesirably large cash trading. As noted below, each insurance company’s policies positions or buy or sell portfolio securities it would not have on excessive short-term trading will vary, and some insurance bought or sold otherwise. The need to execute additional port- companies may not have adopted specific policies on excessive folio transactions due to these cash flows may also increase the short-term trading. fund’s brokerage and administrative costs. As noted above, the fund’s shareholders are separate accounts Because the fund invests in foreign securities, its performance sponsored by various insurance companies. Because Putnam may be adversely impacted and the interests of longer-term Management currently does not have comprehensive access to shareholders may be diluted as a result of time-zone arbitrage, a trading records of individual contract holders, it is difficult (and in short-term trading practice that seeks to exploit changes in the some cases impossible) for Putnam Management to determine if value of the fund’s investments that result from events occurring a particular contract holder is engaging in excessive short-term
Prospectus of the Trust 9
trading. In certain circumstances, there currently are also opera- annuity payouts, loans, and systematic withdrawal programs; tional or technological constraints on Putnam Management’s payment of a death benefit; any deduction of fees; or payments ability to monitor trading activity. In addition, even in circum- such as loan repayments, scheduled contributions, withdrawals stances when Putnam Management has access to sufficient or surrenders; retirement plan salary reduction contributions or information to permit a review of trading, its detection methods planned premium payments. may not capture all excessive short-term trading. • Account restrictions. In addition to these monitoring practices, As a result of these limitations, the fund’s ability to monitor and Putnam Management and the fund reserve the right to reject deter excessive short-term trading ultimately depends on the or restrict transfers for any reason. Continued excessive short- capabilities, policies and cooperation of the insurance compa- term trading activity by a contract holder following a warning nies that sponsor the separate accounts. Some of the separate may lead to the termination of the transfer privilege for that accounts have adopted transfer fees, limits on exchange activity, contract holder or the insurance company separate account. or other measures to attempt to address the potential for exces- Putnam Management or the fund may determine that a contract sive short-term trading, while other separate accounts currently holder’s trading activity is excessive or otherwise potentially have not. For more information about any measures applicable harmful based on various factors, including trading history in to your investment, please see the prospectus of the separate the fund, other Putnam funds or other investment products, account of the specific insurance product that accompanies this and may aggregate activity in multiple accounts in the fund or prospectus. The measures used by Putnam Management or a other Putnam funds under common ownership or control for separate account may or may not be effective in deterring exces- purposes of determining whether the activity is excessive. If the sive short-term trading. In addition, the terms of the particular fund identifies a contract holder as a potential excessive trader, insurance contract may also limit the ability of the insurance depending on the capabilities of the intermediary, it may, among company to address excessive short-term trading. As a result, the other things, require future trades by the contract holder or the fund can give no assurances that market timing and excessive insurance company separate account to be submitted by mail short-term trading will not occur in the fund. rather than by phone or over the Internet, impose limitations on the amount, number, or frequency of future purchases or In compliance with Rule 22c-2 under the Investment Company exchanges, or temporarily or permanently bar the contract Act of 1940, as amended, Putnam Retail Management and holder or insurance company separate account from investing in Putnam Investor Services, on behalf of the fund, have entered the fund or other Putnam funds. The fund may take these steps into written agreements with the fund’s financial intermediaries, in its discretion even if the contract holder’s activity does not fall under which the intermediary must, upon request, provide the within the fund’s current monitoring parameters. fund with certain shareholder identity and trading information so that the fund can enforce its market timing policies. Fund distributions and taxes • Account monitoring. In instances where trading records of The fund normally distributes any net investment income and individual contract holders are made available to Putnam any net realized capital gains annually. Distributions will be Management, Putnam Management measures excessive short- reinvested in additional shares of the fund, unless an election is term trading by the number of “round trip” transactions above made on behalf of a separate account to receive some or all of the a specified dollar amount within a specified period of time. distributions in cash. A “round trip” transaction is defined as a transfer into a fund Distributions are reinvested without a sales charge, using the NAV followed, or preceded by, a transfer out of the same fund. A determined on the ex-dividend date. Distributions on each share transfer is defined as a transaction requested by the contract are determined in the same manner and are paid in the same owner to reallocate part or all of their contract value among the amount, regardless of class, except for such differences as are funds available in the contract. Generally, if a contract holder has attributable to different class expenses. been identified as having completed two “round trip” transac- tions with values above a specified amount within a rolling 90-day Generally, holders of variable annuity and variable life insurance period, Putnam Management will request that the separate contracts are not taxed currently on income or gains realized with account’s financial intermediary issue a written warning to the respect to such contracts. However, some distributions from contract holder. Putnam Management’s practices for measuring such contracts may be taxable at ordinary income tax rates. In excessive short-term trading activity and requesting warnings addition, distributions made to a contract holder who is younger to be issued may change from time to time. Certain types of than 591/2 may be subject to a 10% penalty tax. Investors should transactions are exempt from monitoring, such as transfers that ask their own tax advisors for more information on their own tax are executed automatically pursuant to a company-sponsored situation, including possible foreign, state or local taxes. contractual or systematic program such as transfer of assets In order for investors to receive the favorable tax treatment avail- as a result of “dollar cost averaging” programs, asset allocation able to holders of variable annuity and variable life insurance programs or automatic rebalancing programs. Also exempt are contracts, the separate accounts underlying such contracts,
10 Prospectus of the Trust as well as the funds in which such accounts invest, must meet Financial highlights certain diversification requirements. The fund intends to diver- The financial highlights tables are intended to help you sify its assets in accordance with these requirements. If the understand the fund’s recent financial performance. Certain fund does not meet such requirements, income allocable to information reflects financial results for a single fund share. the contracts would be taxable currently to the holders of such The total returns represent the rate that an investor would have contracts. In addition, if the Internal Revenue Service finds an earned or lost on an investment in the fund, assuming reinvest- impermissible level of “investor control” over the investment ment of all dividends and distributions. Total returns and expense options underlying variable annuity or variable life insurance ratios do not reflect insurance related charges or expenses; if contracts, the advantageous tax treatment provided with these charges and expenses were reflected, performance would respect to insurance company separate accounts under the be lower and expenses would be higher. This information has Internal Revenue Code of 1986, as amended, will no longer be been derived from the fund’s financial statements, which have available. Please see the SAI for further discussion. been audited by PricewaterhouseCoopers LLP. The Indepen- The fund intends to qualify as a “regulated investment company” dent Registered Public Accounting Firm’s report and the fund’s for federal income tax purposes and to meet all other require- financial statements are included in the fund’s annual report to ments necessary for it to be relieved of federal income taxes on shareholders, which is available upon request. income and gains it timely distributes to the separate accounts. For information concerning federal income tax consequences for the holders of variable annuity contracts and variable life insur- ance policies, contract holders should consult the prospectus of the applicable separate account. The fund’s investments in foreign securities may be subject to foreign withholding or other taxes. In that case, the fund’s return on those investments would be decreased. The fund’s use of derivatives, if any, may affect the amount and timing of distributions to shareholders, potentially requiring the fund to liquidate other investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements. The foregoing discussion is very general and is based on the assumption that the shareholders in the fund will be insurance company separate accounts. For further information, please see Taxes in the SAI.
Information about the Summary Prospectus, Prospectus, and SAI The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any infor- mation provided in a summary prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and the SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.
Prospectus of the Trust 11
Financial highlights (For a common share outstanding throughout the period)
INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: RATIOS AND SUPPLEMENTAL DATA: b,c ) a ) ) ) ) b,d ) bu tions tri
Period ended period of beginning value, asset Net Net investment income (loss Net realized and unrealized gain (loss) on investments operations investment from Total netFrom investment income From net realized gain on investments Total dis period of end value, asset Net returnTotal at net asset value (% period of end assets, Net (in thousands Ratio of expenses to average net assets (% Ratio of net investment income (loss) to average net assets (% Portfolio turnover (% Class IA 12/31/19 $12.31 .29 2.82 3.11 (.23) (.02) (.25) $15.17 25.55 $82,625 .85 2.11 80 12/31/18 15.43 .26 (3.14) (2.88) (.24) — (.24) 12.31 (18.95) 73,880 .85 1.78 68 12/31/17 12.47 .23 3.07 3.30 (.34) — (.34) 15.43 26.93 99,907 .84 1.61 61 12/31/16 13.22 .23 (.52) (.29) (.46) — (.46) 12.47 (2.21) 88,088 .86e 1.85e 66 12/31/15 13.35 .22 (.15) .07 (.20) — (.20) 13.22 .41 102,596 .84 1.61 66 Class IB 12/31/19 $12.17 .25 2.78 3.03 (.19) (.02) (.21) $14.99 25.15 $154,343 1.10 1.86 80 12/31/18 15.25 .22 (3.10) (2.88) (.20) — (.20) 12.17 (19.11) 130,896 1.10 1.52 68 12/31/17 12.33 .19 3.04 3.23 (.31) — (.31) 15.25 26.58 171,901 1.09 1.37 61 12/31/16 13.07 .20 (.52) (.32) (.42) — (.42) 12.33 (2.45) 155,404 1.11e 1.60e 66 12/31/15 13.20 .19 (.16) .03 (.16) — (.16) 13.07 .14 182,248 1.09 1.37 66
a Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period. b The charges and expenses at the insurance company separate account level are not reflected. c Total return assumes dividend reinvestment. d Includes amounts paid through expense offset arrangements and/or brokerage/service arrangements, if any). Also excludes acquired fund fees and expenses, if any. e Reflects a voluntary waiver of certain fund expenses in effect during the period. As a result of such waivers, the expenses of each class reflect a reduction of less than 0.01% as a percentage of average net assets.
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For more information about Putnam VT International Equity Fund The fund’s SAI and annual and semiannual reports to share- holders include additional information about the fund. The SAI, and the auditor’s report and the financial statements included in the fund’s most recent annual report to share- holders, are incorporated by reference into this prospectus, which means they are part of this prospectus for legal purposes. The fund’s annual report discusses the market conditions and investment strategies that significantly affected the fund’s performance during its last fiscal year. You may get free copies of these materials, request other information about any Putnam fund, or make shareholder inquiries, by contacting your financial representative, by visiting Putnam’s website at putnam.com/individual/annuities, or by calling Putnam toll-free at 1-800-225-1581. You may access reports and other information about the fund on the EDGAR Database on the Securities and Exchange Commis- sion’s website at http://www.sec.gov. You may get copies of this information, with payment of a duplication fee, by electronic request at the following E-mail address: [email protected]. You may need to refer to the fund’s file number.
Putnam Investments 100 Federal Street Boston, MA 02110 1-800-225-1581 Address correspondence to: Putnam Investments PO Box 219697 Kansas City, MO 64121-9697 putnam.com
File No. 811-05346 VTSP009 321269 4/20