Putnam Municipal Opportunities Trust is a closed-end fund seeking high current tax-free income and capital preservation by investing primarily in levered portfolio of municipal bonds. The fund seeks a high level of current income exempt from federal income tax, consistent with the preservation of capital. It invests in a portfolio of investment-grade and some below investment-grade municipal bonds. The fund uses leverage by issuing preferred shares to enhance returns, which involves risk and may increase the volatility of the net asset value (nav).