PUTNAM EQUITY INCOME FUND
Prospectus Supplement dated July 15, 1996
to Prospectus dated April 1, 1996
At a meeting on July 11, 1996, shareholders of the fund recently
approved a number of changes to the fundamental investment
restrictions of the fund. The fund may now:
o acquire more than 10% of the voting securities of any
issuer with respect to 25% of its total assets; and
o invest more than 5% of its total assets in securities
of any issuer (other than obligations issued or
guaranteed as to interest or principal by the U.S.
government or its agencies or instrumentalities) with
respect to 25% of its total assets.
The policies set forth above are fundamental and may not be
changed without shareholder approval. See the Statement of
Additional Information of the fund for the full text of these
policies as well as the fund's other fundamental policies, some
of which were also changed by vote of shareholders.
To the extent the fund invests a significant portion of its
assets in the securities of a particular issuer, such fund will
be subject to an increased risk of loss if the market value of
such issuer's securities decline.
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