William N. Shiebler
Senior Managing Director
PUTNAM MUTUAL FUNDS
President
One Post Office Square
Boston, Massachusetts 02109
PUTNAM LOGO
Dear Investment Colleague:
Proxy ballots were recently mailed to shareholders of PUTNAM
EQUITY INCOME FUND asking them to vote on the following
proposals:
o Electing trustees for the fund.
o Ratifying the selection of Coopers and Lybrand L.L.P.
as the independent auditors of the fund for the current
fiscal year.
o Approving a new management contract between the fund
and Putnam Management that includes an increase in the
management fee payable by the fund.
o Approving a number of changes to the fund's fundamental
investment restrictions, including the elimination of
certain of these restrictions. The purpose of these
proposed changes is to increase the fund's investment
flexibility and to bring the fund's policies more in
line with those of many other Putnam funds.
A fee increase is proposed only after a great deal of
thought and analysis on the part of the Trustees. For
several years the Trustees have carefully studied the
management fees, investment performance, and expense ratios
of each of the Putnam funds and also of major competing
funds. This comprehensive review resulted in recommendations
for fee increases for some funds and decreases for others.
The new management fee for Putnam Equity Income Fund will
result in an increase of $0.04 in annual expenses for each
$100 invested. The Trustees believe that this increase is
fair and reasonable when compared with the fees paid to
other high-quality fund managers. Please encourage your
clients to support the Trustees' recommendations.
Please discuss these issues with your clients and encourage
them to vote. Should you have any questions, or if you would
like a copy of the proxy package, please call Putnam Broker
Operations at 1-800-354-2228.
Sincerely,
William N. Shiebler
