Putnam
New York
Tax Exempt
Income Fund
SEMIANNUAL REPORT
May 31, 1997
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "Based on tax-equivalent yields alone, muni funds easily outshine
most taxable-bond funds."
-- Morningstar Mutual Funds, March 1997
* According to Lipper Analytical Services, Putnam New York
Tax Exempt Income Fund's total return for class A shares ranked 19 out of
91 New York municipal bond funds for the one-year period ended June 30,
l997, placing it in the top quartile of this category.*
CONTENTS
4 Report from Putnam Management
9 Fund performance summary
13 Portfolio holdings
19 Financial statements
*Lipper Analytical Services, an independent research organization, ranks
funds according to total return performance. Rankings vary over time and
do not reflect the effects of sales charges. For periods ended 6/30/97,
the fund's class A shares ranked 22 out of 43 and 10 out of 24 New York
municipal bond funds for 5- and 10-year performance, respectively. Past
performance is not indicative of future results. Please see pages 9 and 10
for complete performance.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
Putnam New York Tax Exempt Income Fund began fiscal 1997 on a hopeful, yet
cautious note in December 1996 after a somewhat tumultuous year for the
municipal bond market. The hope was warranted, since the market was well into
a rally when the period began. The caution was also justified, for the rally
ended abruptly in late winter, cut short by investor worries that inflation
and interest rates would both rise in the wake of an economy still growing too
fast.
From the vantage point of the close of the first half of the fiscal year on
May 31, 1997, we can see that volatility during the period, while somewhat
nerve-racking for many investors, was low by historical standards. By spring,
even the Federal Reserve Board's increase in the federal funds rate in late
March, the source of considerable earlier anxiety, caused little stir.
It is in these contexts that Fund Manager Howard Manning discusses your fund's
performance for the year's first half and his view of its prospects for the
remainder of the year. His report begins on the following page.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
July 16, 1997
Report from the Fund Manager
Howard K. Manning
A relatively calm interest-rate environment, benign inflation, and moderate
economic growth provided a favorable backdrop for fixed-income investors over
the past six months. For the semiannual period that ended May 31, l997, Putnam
New York Tax Exempt Income Fund's class A shares generated a total return of
1.56% at net asset value (NAV) and - 3.22% at public offering price (POP).
The fund's benchmark index, the Lehman Brothers Municipal Bond Index, returned
1.69% for the same period. For full performance information, please refer to
the tables that begin on page 9.
* MARKET CHARACTERIZED BY ABNORMALLY LOW VOLATILITY
In contrast to the stock market's ups and downs, the period was characterized
by abnormally low volatility in all sectors of the fixed-income market. This
covers not only interest-rate movements, but changes in bond spreads as well.
Even the Federal Reserve Board's long-awaited quarter-point increase in the
federal funds rate in late March was virtually a nonevent for the markets.
This passiveness can be attributed to Fed Chairman Alan Greenspan's
long-standing policy of gradualism, which helped keep interest rates moving up
and down within a narrow trading range. Municipal bonds behaved in a similar
manner.
At its May 20 policy setting meeting, the Fed took no action on interest
rates. Once again, the fixed-income market reaction appeared subdued, although
bond prices did respond favorably. Until there is more conclusive evidence of
inflation, we believe the markets will continue to play a waiting game
regarding further Fed action.
* NEW YORK FISCAL AND ECONOMIC IMPROVEMENT CONTINUES
Just as the country as a whole has benefited from a stronger economy, so has
New York. One positive factor in New York's credit picture has been the
outstanding performance on Wall Street. For more than two years, the U.S.
stock market has consistently set new highs. This market environment proved
especially beneficial for New York City. As taxpaying investors earned more
money, they contributed more to both city and state tax revenues.
Knowing that corporate earnings and the financial markets can experience
declines after such strong run-ups, New York City lawmakers have put together
a conservative budget for the fiscal year beginning June 30, l997. Because of
its restrained nature, the budget should provide some protection to the city
in the event of a downturn in Wall Street earnings. The budget has been
received favorably by the investment community and the bond-rating services.
We have not seen this kind of fiscal restraint in New York City for several
years.
The arduous process of negotiating both the New York state and New York City
budgets often results in seasonal yield swings for New York municipal bonds.
Over the past several years, bond yields have become attractive as investors
anticipate the difficulties of pending legislative negotiations. Yields have
continued to increase -- and prices to decline accordingly -- as budget
impasses give way to fiscal resolutions and a new supply of bonds. Once the
new supply subsides, prices generally improve, pushing yields lower on a
comparative basis.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Education 17.9%
Transportation 17.7%
Health care 6.6%
Utilities 6.4%
Water and sewerage 5.7%
Footnote reads:
*Based on net assets as of 5/31/97. Holdings will vary over time.
* EMPHASIS ON ESSENTIAL-SERVICE BONDS INCREASED
During the reporting period, we reduced the fund's holdings in New York state
and New York City bonds as their yields became less attractive. We began
rebuilding these positions, however, as we moved closer to the point in the
budget cycle when yields once again become more attractive. Nevertheless, we
tended to favor essential-service bonds over state-appropriated issues because
of their self-funding; that is, the income paid to investors comes from the
fees paid by users of these services.
Some of our investments in essential-service bonds include issues of Municipal
Assistance Corporation, New York City Water Authority, and the Metropolitan
Transit Authority. In addition, we increased the fund's exposure to Visy
Paper, Inc., a manufacturer of lightweight, high-performance linerboard. Its
BB+ rated bonds carry one of the highest yields available in the New York
municipal bond market. We consider the company's credit quality more than
sufficient to justify the risk of investing in these bonds, especially because
high-yield bonds that are attractive from a credit-quality perspective have
become increasingly scarce. Although these holdings, along with others
discussed in this report, were viewed favorably as of May 31, 1997, all
portfolio holdings are subject to review and adjustment in accordance with the
fund's investment strategy and may well vary in the future.
The number of new bonds coming to market in New York this year has been much
lower than in previous years. With refinancings sharply curtailed as a result
of relatively higher interest rates, a significant source of new bonds has all
but disappeared. In addition, issuance of New York debt is subject to annual
voter approval and New York City has reached its debt issuance ceiling for the
year. While supply was weak, demand was strong. This supply/demand imbalance
had the effect of boosting the value of the existing bonds in your fund's
portfolio.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
Aaa/VMIGI 43.9%
Aa 13.4%
A 15.5%
Baa 25.9%
Ba 1.3%
Footnote reads:
*As a percentage of market value as of 5/31/97. A bond rated Baa or higher is
considered investment grade. All ratings reflect Moody's descriptions, unless
noted otherwise; percentages may include unrated bonds considered by Putnam
Management to be of comparable quality. Ratings will vary over time.
* PORTFOLIO RESTRUCTURED TO REDUCE RISK EXPOSURE
We have continued to restructure the portfolio in an attempt to reduce
volatility, a process we began before the start of the current reporting
period. One of the most significant changes we made was to dismantle the
barbell configuration, a strategy that emphasizes bonds with maturities on the
long-term and short-term ends of the yield curve. We sold a considerable
portion of the portfolio's long-term bonds and redeployed assets into
securities with maturities in the 7- to 15-year range. These bonds offer both
attractive yields and the potential to increase in value as they draw closer
to maturity and move toward the shorter end of the yield curve, a phenomenon
known as "curve roll." By capitalizing on this appreciation potential, which
operates independently of changes in interest rates, we expect to build the
overall value of the portfolio over time.
We also reduced the number of zero-coupon bonds in the portfolio. Zero-coupon
bonds typically experience wider price swings in response to changing market
conditions, outperforming in periods of declining interest rates and
underperforming in periods of rising interest rates. By decreasing the number
of zero-coupon holdings, we have reduced the fund's interest-rate sensitivity
and provided some protection against potential market volatility.
Our securities selection over this time period emphasized coupon income, price
stability, and credit quality. In fact, we invested primarily in
higher-quality insured bonds and Aa-rated bonds. Because the difference in the
yields of higher-quality and lower-quality bonds was relatively small, we
believed higher-quality issues offered better relative value and saw no reason
to take on the additional risk of the lower-quality issues.
* OUTLOOK: CONTINUATION OF DEFENSIVE STRATEGIES
Looking ahead, we consider it unreasonable to expect a continuation of the
current low volatility in the bond market. In fact, unless the economy shows
more convincing signs of a slowdown, we expect another Fed tightening this
summer. However, investors should not let a small rise in interest rates keep
them from buying municipal bonds. Municipals still represent good after-tax
value against taxable investments and an excellent way to diversify a
stock-heavy portfolio.
We will also continue to monitor attractive issues and watch for potential
purchase opportunities. One situation we are watching closely is the merger of
Long Island Lighting Co. (LILCO) with Brooklyn Union Gas. The LILCO-Brooklyn
Union Gas merger is expected to generate enormous supply over the next five
years. Long Island Power Authority is anticipated to issue up to $7 billion
worth of bonds on behalf of this new entity. We are following this merger
carefully and currently expect to take positions in these bonds when we
determine that their potential for yield and improvement in their credit
quality creates compelling value.
The views expressed here are exclusively those of Putnam Management. They are
not meant as investment advice. Although the described holdings were viewed
favorably as of 5/31/97, there is no guarantee the fund will continue to hold
these securities in the future.
Performance summary
Performance should always be considered in light of a fund's investment
strategy. Putnam New York Tax Exempt Income Fund is designed for investors
seeking high current income free from federal, New York state and New York
City personal income taxes, consistent with capital preservation.
TOTAL RETURN FOR PERIODS ENDED 5/31/97
Class A Class B Class M
(inception date) (9/2/83) (1/4/93) (2/10/95)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 1.56% -3.22% 1.12% -3.82% 1.41% -1.89%
- ------------------------------------------------------------------------------
1 year 8.39 3.22 7.57 2.57 8.07 4.54
- ------------------------------------------------------------------------------
5 years 37.18 30.61 32.02 30.02 34.70 30.29
Annual average 6.53 5.49 5.71 5.39 6.14 5.43
- ------------------------------------------------------------------------------
10 years 115.94 105.75 99.02 99.02 106.51 99.86
Annual average 8.00 7.48 7.12 7.12 7.52 7.17
- ------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 5/31/97
Lehman Bros. Consumer
Municipal Bond Price
Index Index
- ------------------------------------------------------------------------------
6 months 1.69% 0.95%
- ------------------------------------------------------------------------------
1 year 8.29 2.23
- ------------------------------------------------------------------------------
5 years 41.80 14.60
Annual average 7.24 2.76
- ------------------------------------------------------------------------------
10 years 123.54 41.56
Annual average 8.38 3.54
- ------------------------------------------------------------------------------
Returns for class A and class M shares reflect the current maximum initial
sales charges of 4.75% for class A shares and 3.25% for class M shares.
One, five, and ten year fund returns for class B shares reflect the
applicable contingent deferred sales charges (CDSC), which is 5% in the
first year, declines each year to 1% in the sixth year, and is eliminated
thereafter. Returns shown for class B and class M shares for periods prior
to their inception are derived from the historical performance of class A
shares, adjusted to reflect both the initial sales charge or CDSC, if any,
currently applicable to each class and, in the case of class B and class M
shares, the higher operating costs applicable to such shares. All returns
assume reinvestment of distributions at NAV and represent past
performance; they do not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Returns
shown for class A shares have not been adjusted to reflect payments under
the class A distribution plan prior to its implementation.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 5/31/97
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 6 6 6
- ------------------------------------------------------------------------------
Income $0.235562 $0.206574 $0.222367
- ------------------------------------------------------------------------------
Capital gains1 -- -- --
- ------------------------------------------------------------------------------
Total $0.235562 $0.206574 $0.222367
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
11/30/96 $8.91 $9.35 $8.90 $8.91 $9.21
- ------------------------------------------------------------------------------
05/31/97 8.81 9.25 8.79 8.81 9.11
- ------------------------------------------------------------------------------
Current return (end of period)
- ------------------------------------------------------------------------------
Current dividend rate2 5.41% 5.15% 4.76% 5.12% 4.95%
- ------------------------------------------------------------------------------
Taxable equivalent3 9.62 9.15 8.46 9.10 8.80
- ------------------------------------------------------------------------------
Taxable equivalent4 10.03 9.55 8.83 9.50 9.18
- ------------------------------------------------------------------------------
Current 30-day SEC yield5 4.97 4.73 4.29 4.69 4.53
- ------------------------------------------------------------------------------
Taxable equivalent3 8.83 8.41 7.63 8.34 8.05
- ------------------------------------------------------------------------------
Taxable equivalent4 9.22 8.77 7.96 8.70 8.40
- ------------------------------------------------------------------------------
1Capital gains, if any, are taxable for federal and, in most cases, state
tax purposes. For some investors, investment income may also be subject to
the federal alternative minimum tax. Investment income may be subject to
state and local taxes.
2Income portion of most recent distribution, annualized and divided by NAV
or POP at end of period.
3Assumes maximum 43.74% combined federal and state tax rate. Results for
investors subject to lower tax rates would not be as advantageous.
4Based only on investment income, calculated using SEC guidelines.
TOTAL RETURNS FOR PERIODS ENDED 6/30/97
(most recent calendar quarter)
Class A Class B Class M
(inception date) (9/2/83) (1/4/93) (2/10/95)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 3.14% -1.76% 2.81% -2.19% 2.99% -0.40%
- ------------------------------------------------------------------------------
1 year 8.20 3.08 7.52 2.52 8.01 4.50
- ------------------------------------------------------------------------------
5 years 35.18 28.70 30.81 28.21 32.73 28.48
Annual average 6.21 5.18 5.42 5.10 5.83 5.14
- ------------------------------------------------------------------------------
10 years 114.92 104.85 98.06 98.06 105.57 99.02
Annual average 7.95 7.43 7.07 7.07 7.47 7.12
- ------------------------------------------------------------------------------
Performance data represent past results, do not reflect future
performance, and will differ for each share class. They do not take into
account any adjustment for taxes payable on reinvested distributions.
Investment returns and principal value will fluctuate so that an
investor's shares, when sold, may be worth more or less than their
original cost. Please see the preceding page for the method of performance
calculation.
TERMS AND DEFINITIONS
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the maximum 4.75% sales charge for class A
shares and 3.25% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B shares and assumes redemption at the end of the
period. Your fund's CDSC declines from a 5% maximum during the first year
to 1% during the sixth year. After the sixth year, the CDSC no longer
applies.
COMPARATIVE BENCHMARKS
Lehman Brothers Municipal Bond Index is an unmanaged list of long-term
fixed-rate investment-grade tax-exempt bonds representative of the
municipal bond market. The index does not take into account brokerage
commissions or other costs, may include bonds different from those in the
fund, and may pose different risks than the fund. Securities in the fund
do not match those in the indexes and performance of the fund will differ.
It is not possible to invest directly in an index.
Consumer Price Index (CPI ) is a commonly used measure of inflation; it
does not represent an investment return.
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Global Natural Resources Fund *
Health Sciences Trust
International Growth Fund +
International New Opportunities Fund
Investors Fund
New Opportunities Fund
OTC & Emerging Growth Fund [DBL. DAGGERS]
Vista Fund
Voyager Fund
Voyager Fund II
PUTNAM GROWTH
AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Diversified Income Trust II
Federal Income Trust
Global Governmental Income Trust
High Yield Advantage Fund
High Yield Trust
Income Fund
Intermediate U.S. Government
Income Fund
Preferred Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New
Jersey, New York, Ohio and Pennsylvania
lifestageSM funds
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market
investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
MOST CONSERVATIVE
INVESTMENTS **
Putnam money market funds: ++
California Tax Exempt Money Market Fund
Money Market Fund
New York Tax Exempt Money Market Fund
Tax Exempt Money Market Fund
CDs and savings accounts [2 DBL. DAGGERS]
* Formerly Natural Resources Fund
+ Formerly Overseas Growth Fund
[DBL. DAGGER] Formerly OTC Emerging Growth Fund
[SECTION MARK] Not available in all states.
** Relative to above.
++ An investment in a money market fund is neither insured nor
guaranteed by the U.S. government. These funds are managed
to maintain a price of $1.00 per share, although there is no
assurance that this price will be maintained in the future.
[2 DBL. DAGGERS] Not offered by Putnam Investments. Certificates of
deposit offer a fixed rate of return and may be insured
up to certain limits by federal/state agencies. Savings
accounts may also be insured up to certain limits. Please
call your financial advisor or Putnam at 1-800-225-1581 to
obtain a prospectus for any Putnam fund. It contains more
complete information, including charges and expenses. Please
read it carefully before you invest or send money.
Portfolio of investments owned
May 31, 1997 (Unaudited)
Key to Abbreviations
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Financial Guaranty Insurance Company
FHA Insd. -- Federal Housing Administration Insured
FRB -- Floating Rate Bonds
FSA -- Financial Security Assurance
G.O. Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- Municipal Bond Investors Assurance Corporation
VRDN -- Variable Rate Demand Notes
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (98.8%) *
PRINCIPAL AMOUNT RATINGS** VALUE
New York (90.5%)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 3,000,000 Babylon, Indl. Dev. Agcy. Resource Recvy.
Rev. Bonds (Ogden Martin Syst. Babylon Inc.),
Ser. B, 8 1/2s, 1/1/19 AAA $ 3,222,420
14,500,000 Battery Park, City Auth. Rev. Bonds, 7.7s, 5/1/15 Aaa 15,696,250
845,000 Chemung Ctny., Indl. Dev. Agcy. Civic Fac. VRDN
(Arnot Ogden Med. Ctr.), Ser. A, 3.25s, 3/1/19 VMIGI 845,000
600,000 Glens Falls Indl. Dev. Agcy. VRDN (Broad St. Ctr.),
4s, 8/1/05 VMIGI 600,000
Metropolitan Trans. Auth. Rev. Bonds, Ser. A
15,400,000 MBIA, 6 1/4s, 4/1/14 Aaa 16,863,000
14,495,000 MBIA, 6 1/4s, 4/1/13 Aaa 15,908,263
Metropolitan Trans. Auth. Svcs. Contract Fac.
Rev. Bonds
3,750,000 (Trans. Fac.), Ser. 3, 7 3/8s, 7/1/08 Baa 4,359,375
3,000,000 (Trans. Fac.), Ser. 6, 7s, 7/1/09 Baa 3,243,750
14,750,000 (Trans. Fac.), Ser. O, 5 3/4s, 7/1/13 Baa 14,952,813
12,500,000 (Commuter Fac.), Ser. O, 5 1/2s, 7/1/17 Baa 12,125,000
24,345,000 (Trans. Fac), Ser. O, 5 1/2s, 7/1/17 Baa 23,614,650
12,000,000 Metropolitan Trans. Auth. Svcs. Contract
Rev. Bonds (Commuter Fac.),
Ser. O, 5 3/4s, 7/1/13 BBB 12,165,000
Metropolitan Trans. Auth. Rev. Bonds
5,000,000 Ser. O, MBIA, 6 3/8s, 7/1/20 Aaa 5,250,000
5,480,000 Ser. A, MBIA, 6s, 7/1/12 Aaa 5,870,450
6,000,000 NY & NJ Port Auth. Rev. Bonds
(Kennedy Intl. Arpt.), 6 3/4s, 10/1/19 AAA/P 6,247,500
NY & NJ Port Auth. Special Oblig. Rev. Bonds
(JFK Intl. Arpt.), MBIA
12,000,000 6 1/4s, 12/1/13 AAA 13,005,000
9,455,000 6 1/4s, 12/1/10 AAA 10,235,038
NY City G.O. Bonds
5,000,000 Ser. L, MBIA, 8s, 8/1/06 AAA 6,075,000
25,000,000 Ser. E, AMBAC, 6 1/2s, 2/15/05 AAA 27,468,750
8,955,000 Ser. F, 5 3/4s, 2/1/19 BBB 8,719,931
NY City, G.O. Bonds
4,180,000 Ser. D, 8 1/4s, 8/1/11 AAA 4,822,675
12,325,000 Ser. B, 8 1/4s, 6/1/05 Baa 14,574,313
20,195,000 Ser. A, 8s, 8/15/19 A 23,148,519
5,775,000 Ser. D, 8s, 8/1/03 A 6,424,688
4,225,000 Ser. D, 8s, 8/1/03, Prerefunded AAA 4,837,625
3,455,000 Ser. E, 7.6s, 2/1/05 A 3,835,050
4,730,000 Ser. F, 7.6s, 2/1/05 A 5,250,300
26,000,000 Ser. B, 7 1/2s, 2/1/06 BBB 28,730,000
20,000,000 Ser. B, 7 1/2s, 2/1/02 BBB 21,925,000
8,000,000 Ser. B, AMBAC, 7 1/4s, 8/15/07 AAA 9,360,000
18,675,000 Ser. B, MBIA, 6 1/2s, 8/15/11 AAA 20,612,531
21,495,000 Ser. D, 6 1/2s, 11/1/10 Baa 23,966,925
5,240,000 Ser. B, 6 1/2s, 8/15/10 Baa 5,809,850
2,500,000 NY City, Hlth. & Hosp. Corp. VRDN (Hlth. Syst.),
Ser. A, 3.6s, 2/15/26 VMIGI 2,500,000
300,000 NY City, Hsg. Dev. Corp. Special Obligation VRDN
(East 96th St. Project), Ser. A, 3.8s, 8/1/15 VMIGI 300,000
17,350,000 NY City, Indl. Dev. Agcy. (Paper Inc.), 7.95s, 1/1/28 BB/P 18,651,250
8,000,000 (Solid Waste Disp-Visy Paper), 7.8s, 1/1/16 BB/P 8,580,000
10,625,000 (American Airlines, Inc.), 6.9s, 8/1/24 Baa 11,514,844
22,000,000 (Terminal One Group Assn.), 6 1/8s, 1/1/24 A 22,082,500
18,250,000 (Terminal One Group Assn.), 6s, 1/1/19 AAA 18,227,188
NY City, Indl. Dev. Agcy. VRDN
1,500,000 (Stroheim & Romann, Inc.), 3.57s, 12/1/15 VMIGI 1,500,000
2,900,000 (Columbia Grammar School), 3.25s, 6/30/14 VMIGI 2,900,000
1,300,000 NY City, Indl. Dev. Agcy. Civil Fac. VRDN
(Berkeley Carroll School), 3 1/4s, 6/30/23 VMIGI 1,300,000
NY City, Muni. Assistance Corp. Rev. Bonds
14,455,000 6 1/4s, 7/1/08 AA 15,828,225
15,670,000 6 1/4s, 7/1/07 AA 17,178,238
19,435,000 6 1/4s, 7/1/06 AA 21,232,738
21,500,000 Ser. G, 6s, 7/1/08 AA 23,085,625
10,000,000 Ser. G, 6s, 7/1/07 AA 10,762,500
10,000,000 Ser. E, 6s, 7/1/06 AA 10,750,000
13,000,000 NY City, Muni. Fin. Auth. Wtr. and Swr. Syst. FRB,
10.619s, 6/15/11 (acquired 8/9/91,
cost $13,587,860) [DBL. DAGGERS]# AAA 18,720,000
NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds,
Ser. B
22,000,000 5 3/4s, 6/15/26 A 21,697,500
10,000,000 MBIA, 5 1/2s, 6/15/27 AAA 9,750,000
17,500,000 NY City, Muni. Wtr. Fin. Auth. IFB, MBIA,
6.1s, 6/15/08 AAA 17,434,375
NY State G.O. Bonds
9,500,000 Ser. B, 6 1/4s, 8/15/05 A 10,307,500
15,965,000 Ser. A, 6 1/8s, 6/15/14 A 16,643,513
7,500,000 Ser. A, 6s, 7/15/08 A 8,025,000
17,590,000 Ser. A, 6s, 7/15/07 A 18,865,275
11,550,000 Ser. C, 6s, 10/1/04 A 12,315,188
6,405,000 Ser. A, 5.7s, 3/15/11 A 6,541,106
NY State Dorm. Auth. Cap. Appn.
Rev. Bonds (State U.), Ser. B
23,864,000 MBIA, zero %, 5/15/10 AAA 12,021,490
48,000,000 MBIA, zero %, 5/15/09 AAA 25,980,000
53,490,000 MBIA, zero %, 5/15/08 AAA 30,756,750
13,000,000 NY State Dorm. Auth. IFB (Cornell U.),
10.241s, 7/1/30 (acquired 8/9/91,
cost $13,315,900) [DBL. DAGGERS] AA 15,226,250
5,700,000 NY State Dorm. Auth. Lease Rev. Bonds
(State U. Dorm Fac.), Ser. A, AMBAC,
5 3/4s, 7/1/07 Aaa 6,049,125
NY State Dorm. Auth. Rev. Bonds
5,000,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 Baa 5,675,000
9,000,000 (State U. Edl. Fac.), Ser. A, 7 5/8s, 5/15/05 AAA 9,956,250
18,800,000 (City U. Syst.), Ser. C, 7 1/2s, 7/1/10 A 22,137,000
4,000,000 (State U. Athletic Fac.), 7 1/4s, 7/1/21 Baa 4,355,000
8,950,000 (State U. Edl. Fac.), Ser. A, FSA, 5 7/8s, 5/15/17 AAA 9,341,563
13,200,000 (State U. Edl. Fac.), Ser. A, 5 7/8s, 5/15/11 Baa 13,497,000
42,910,000 (U. Syst. Construction), Ser. A, 5 3/4s, 7/1/18 Baa 43,285,463
26,500,000 (City U. Syst.), Ser. A, MBIA, 5 3/4s, 7/1/13 AAA 27,560,000
14,645,000 (U. Syst. Construction), Ser. A, 5 3/4s, 7/1/13 Baa 14,846,369
10,000,000 (Columbia U.), Ser. A, 5 3/4s, 7/1/10 Aaa 10,600,000
10,930,000 (City U. Syst.), Ser. A, FGIC, 5 3/4s, 7/1/09 AAA 11,421,850
15,600,000 (U. Syst. Construction), Ser. A, 5 5/8s, 7/1/16 Baa 15,366,000
16,055,000 (State U. Edl. Fac.), Ser. A, 5 1/2s, 5/15/13 Baa 15,834,244
9,000,000 (State U. Edl. Fac.), Ser. A, 5 1/2s, 5/15/10 Baa 8,988,750
5,000,000 (State U. Edl. Fac.), Ser. B, FGIC, 5 1/2s, 5/15/08 AAA 5,118,750
10,400,000 (Mental Hlth. Svcs.), Ser. E, AMBAC,
5 1/4s, 2/15/18 AAA 9,932,000
38,600,000 (State U. Edl. Fac.), Ser. A, 5 1/4s, 5/15/15 BBB 36,911,250
11,000,000 (City U. Syst.), Ser. C, 5s, 7/1/17 A 9,900,000
4,020,000 (Columbia U.), 5s, 7/1/15 Aaa 3,793,875
15,985,000 (Cornell U.), 5s, 7/1/15 Aa 15,085,844
NY State Energy Res. & Dev. Auth. Poll. Control
Rev. Bonds
10,000,000 (Niagara Mohawk Pwr. Corp.),
Ser. A, FGIC, 7.2s, 7/1/29 Aaa 11,325,000
12,500,000 FGIC, 6 5/8s, 10/1/13 Aaa 13,484,375
1,000,000 NY State Energy Res. & Dev. Auth. Poll. Control
VRDN, 3.55s, 10/1/14 VMIGI 1,000,000
5,000,000 NY State Energy Res. & Dev. Auth. Fac.
Rev. Bonds (Cons. Edison Co. of NY, Inc.),
Ser. A, 7 1/8s, 12/1/29 A 5,568,750
10,000,000 NY State Energy Res. & Dev. Auth. Gas Fac. IFB
(Brooklyn Union Gas Co.),
Ser. B, 10 3/8s, 7/1/26 A 12,000,000
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
(State Wtr. Revolving Fund)
8,655,000 Ser. A, 7 1/2s, 6/15/12 Aa 9,455,588
5,050,000 Ser. E, 6 7/8s, 6/15/10 Aa 5,498,188
6,870,000 Ser. B, 6.65s, 9/15/13 Aaa 7,488,300
5,265,000 Ser. A, 6.55s, 9/15/10 Aaa 5,758,594
700,000 NY State Env. Fac. Corp. VRDN
(Hunington Offshore Equity), 4.1s, 11/1/14 VMIGI 700,000
NY State Hsg. Fin. Agcy. Rev. Bonds
4,790,000 8s, 11/1/08 Baa 5,304,925
9,440,000 (Multi-Fam. Hsg. Insd. Mtge. Program),
Ser. A, 7s, 8/15/22 AA 9,923,800
23,310,000 NY State Hsg. Fin. Agcy. Rev. Bonds
Prerefunded, 8s, 11/1/08 AAA 26,311,163
7,500,000 NY State Hsg. Fin. Agcy. Svcs. Contract Oblig.
Rev. Bonds, Ser. C, 7.3s, 3/15/21 AAA 8,437,500
NY State Hsg. Fin. Agcy. VRDN
300,000 (Special Surgery Hosp. Staff),
Ser. A, 3.85s, 11/1/10 VMIGI 300,000
300,000 (Normadie Court I), 3.9s, 5/15/15 VMIGI 300,000
2,300,000 (Normadie Court I), Ser. B, 3.8s, 4/1/23 VMIGI 2,300,000
1,100,000 NY State Local Govt. Assistance Corp.
VRDN, Ser. E, 3.9s, 4/1/25 VMIGI 1,100,000
NY State Local Govt. Assistance Corp. Rev. Bonds
3,000,000 Ser. A, 7 1/4s, 4/1/18 AAA 3,341,250
11,900,000 Ser. A, 6 1/2s, 4/1/20 A 12,524,750
12,510,000 Ser. E, 6s, 4/1/14 A 13,166,775
6,000,000 Ser. E, AMBAC, 6s, 4/1/14 AAA 6,345,000
3,000,000 NY State Local Govt. Assistance Corp.
VRDN, 3.8s, 4/1/22 VMIGI 3,000,000
24,700,000 NY State Med. Care Fac. Fin. Agcy. FRB
(Monterfiore Med. Ctr.), Ser. A, MBIA,
10.207s, 2/15/24 (acquired various dates
from 10/3/91 to 4/8/92, cost $26,795,648)
[DBL. DAGGERS] Aaa 28,065,375
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
11,000,000 (Hosp. & Nursing Home), Ser. B, FHA Insd.,
8s, 2/15/28 AAA 11,660,000
2,125,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/20 BBB 2,332,188
3,750,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 BBB 4,007,813
3,525,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 AAA 3,798,188
22,525,000 (Presbyterian Hosp.), Ser. A, FHA Insd.,
7.7s, 2/15/25 Aaa 25,087,219
5,000,000 (Hosp. & Nursing Home), Ser. C, FHA Insd.,
7.7s, 2/15/22 Aaa 5,306,250
24,775,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 Aaa 27,717,031
18,500,000 (St. Luke's Hosp.), Ser. B, FHA Insd.,
7.45s, 2/15/29 Aaa 20,257,500
3,000,000 (Hosp. & Nursing Home), Ser. A, FHA Insd.,
6 7/8s, 2/15/32 AA 3,183,750
6,625,000 (Methodist Hosp. & Nursing Home), Ser. A,
FHA Insd., 6.7s, 8/15/23 AA 7,005,938
12,325,000 Ser. A, AMBAC, 6 1/2s, 8/15/29 Aaa 13,357,219
11,625,000 NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
Refunded (Mental Hlth. Svcs. Fac.),
Ser. B, 7 7/8s, 8/15/20 AAA 13,005,469
NY State Med. Care Fac. Fin. Agcy. VRDN
2,800,000 (Children's Hosp. - Buffalo), Ser. A, 3.3s, 11/1/05 VMIGI 2,800,000
2,200,000 (Lenox Hill Hosp.), Ser. A, 3.8s, 11/1/08 VMIGI 2,200,000
NY State Med. Care Fac.Fin. Agcy. Rev. Bonds
(Mental Hlth. Svc. Fac.)
1,900,000 Ser. B, 7 5/8s, 8/15/17 BBB 2,109,000
4,165,000 Ser. B, Prerefunded, 7 5/8s, 8/15/17 BBB 4,722,069
4,250,000 NY State Muni. Bond Bank Agcy. Special Program
Rev. Bonds (Rochester), Ser. A, 6 3/4s, 3/15/11 A 4,536,875
5,000,000 NY State Pwr. Auth. Gen. Purpose Rev. Bonds,
Ser. AA, 6 3/8s, 1/1/12 Aa 5,275,000
8,400,000 NY State Pwr. Auth. Rev. Bonds, Ser. Y,
6 3/4s, 1/1/18 Aa 9,009,000
NY State Thruway Auth. Svcs. Contract Rev. Bonds
13,300,000 (Local Hwy. & Bridge), 7 1/4s, 1/1/10 Baa 14,679,875
16,385,000 6.45s, 4/1/15 BBB 16,937,994
6,500,000 (Local Hwy. & Bridge), 6 1/4s, 4/1/07 BBB 6,743,750
14,425,000 NY State Thruway Auth. Hwy. & Bridge Trans. Fund
Rev. Bonds, Ser. A, AMBAC, 6 1/4s, 4/1/04 AAA 15,633,094
NY State Urban Dev. Corp. Rev. Bonds
9,000,000 (Onondaga Cnty. Convention), 7 7/8s, 1/1/20 AAA 10,147,500
33,250,000 (Correctional Fac.), Ser. 2, 7 1/2s, 1/1/18 AAA 37,115,313
10,000,000 (Correctional Cap. Fac.), Ser. A, FSA,
6 1/2s, 1/1/11 AAA 11,250,000
6,000,000 (Correctional Fac.), 6 1/2s, 1/1/10 AAA 6,735,000
5,250,000 (State Fac.), 5 3/4s, 4/1/12 BBB 5,309,063
11,225,000 (State Fac.), 5.7s, 4/1/10 BBB 11,505,625
16,500,000 5.6s, 4/1/15 BBB 16,252,500
7,710,000 (Correctional Cap. Fac.), Ser. A, 5 1/2s, 1/1/09 BBB 7,825,650
7,775,000 (Correctional Cap. Fac.), Ser. A, FSA,
5 1/2s, 1/1/08 AAA 7,979,094
8,600,000 Port Auth. NY & NJ Cons. Rev. IFB, 9.303s,
8/1/26 (acquired 8/29/91, cost $8,814,828)
[DBL. DAGGERS] AA 9,578,250
Suffolk Cnty., G.O. Bonds (Southwest Swr. Dist.)
5,815,000 MBIA, 6s, 2/1/08 Aaa 6,251,125
5,000,000 MBIA, 6s, 2/1/06 Aaa 5,356,250
5,000,000 Suffolk Cnty., Indl. Dev. Agcy. Rev. Bonds
(Southwest Swr. Syst.), FGIC, 6s, 2/1/08 AAA 5,381,250
2,500,000 Suffolk Cnty., Indl. Dev. Agy. VRDN
(Target Rock Corp.), 3 3/4s, 2/1/07 VMIGI 2,500,000
Triborough Bridge & Tunnel Auth. General
Purpose Rev. Bonds
38,750,000 (Convention Ctr.), Ser. E, 7 1/4s, 1/1/10 Baa 44,078,783
7,000,000 Ser. A, 6 1/2s, 1/1/09 Aa 7,805,000
17,700,000 Ser. Y, 6s, 1/1/12 Aa 18,916,875
9,915,000 Ser. A, 6s, 1/1/10 Aa 10,571,869
17,745,000 Ser. B, 5.2s, 1/1/22 Aa 16,791,206
Triborough Bridge & Tunnel Auth. Rev. Bonds
18,850,000 Ser. X, MBIA, 6 5/8s, 1/1/12 AA 21,347,625
12,500,000 (Convention Ctr.), Ser. E, 6s, 1/1/11 Baa 12,921,875
18,000,000 Triborough Bridge & Tunnel Auth. Special Oblig.
IFB, 8.328s, 1/1/12 (acquired 7/10/92,
cost $18,135,000) [DBL. DAGGERS] AAA 19,912,500
2,100,000 Triborough Bridge & Tunnel Auth. Special Oblig.
VRDN, FGIC, 3.85s, 1/1/24 VMIGI 2,100,000
--------------
1,801,793,962
Puerto Rico (8.3%)
- ------------------------------------------------------------------------------------------------------------
Cmnwlth. of PR, G.O. Bonds
15,750,000 MBIA, 6 1/2s, 7/1/23 A 16,931,250
3,915,000 6 1/2s, 7/1/13 A 4,375,000
11,110,000 6 1/2s, 7/1/12 A 12,415,425
20,500,000 Cmnwlth. of PR, Aqueduct & Swr. Auth.
Rev. Bonds, Ser. A, 7 7/8s, 7/1/17 AAA 21,735,330
Cmnwlth. of PR, Hwy. & Trans. Auth. Rev. Bonds
3,000,000 Ser. V, 6 5/8s, 7/1/12 A 3,225,000
7,000,000 Ser. Z, FSA, 6 1/4s, 7/1/16 AAA 7,717,500
9,000,000 Ser. X, MBIA, 5 1/2s, 7/1/13 AAA 9,213,750
PR Elec. Pwr. Auth. Rev. Bonds
33,000,000 Ser. W, MBIA, 7s, 7/1/07 AAA 38,610,000
10,315,000 Ser. R, 6 1/4s, 7/1/17 A 10,727,600
12,775,000 Ser. S, MBIA, 6 1/8s, 7/1/09 A 13,908,781
9,000,000 Ser. BB, MBIA, 6s, 7/1/11 AAA 9,708,750
11,350,000 PR Tel. Auth. Tel. Auth. IFB, 8.324s, 1/1/20
(acquired 9/25/92, cost $10,981,125) [DBL. DAGGERS] A 11,889,125
5,000,000 PR Aqueduct & Swr. Auth. Rev. Bonds,
MBIA, 6s, 7/1/06 Aaa 5,437,500
--------------
165,895,011
- ------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,859,392,617) *** $1,967,688,973
- ------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $1,990,607,712.
** The Moody's or Standard & Poor's ratings indicated are
believed to be the most recent ratings available at May 31, 1997 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 May 31, 1997. Securities rated by Putnam are indicated by
"/P" and are not publicly rated.
*** The aggregate identified cost on a tax basis is $1,862,290,727,
resulting in gross unrealized appreciation and depreciation of
$108,584,906 and $3,186,660, respectively, or net unrealized
appreciation of $105,398,246.
[DBL. DAGGER] Restricted, excluding 144A securities, as to public resale.
The total market value of restricted securities held at May 31, 1997
was $103,391,500 or 5.2% of net assets.
# A portion of this security was pledged and segregated with the
custodian to cover margin requirements for futures contracts at
May 31, 1997.
The rates shown on IFB's, which are securities paying interest
rates that vary inversely to changes in the market interest rates, and
VRDN's are the current interest rates at May 31, 1997.
The fund had the following industry group concentrations greater
than 10% at Report May 31, 1997 (as a percentage of net assets):
Education 17.9%
Transportation 17.7
The fund had the following insurance concentration greater than
10% at Report May 31, 1997 (as a percentage of net assets):
MBIA 17.5%
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Futures Contracts Outstanding at May 31, 1997
Aggregate Face Expiration Unrealized
Total Value Value Date Depreciation
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Municipal Bond
Index Future (short) $89,505,000 $86,940,904 Jun 97 ($2,564,096)
- ----------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
May 31, 1997 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $1,859,392,617) (Note 1) $1,967,688,973
- ---------------------------------------------------------------------------------------------------
Interest and other receivables 37,425,758
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 629,938
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 12,363,360
- ---------------------------------------------------------------------------------------------------
Total assets 2,018,108,029
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable to subcustiodian (Note 2) 55,559
- ---------------------------------------------------------------------------------------------------
Payable for variation margin 239,063
- ---------------------------------------------------------------------------------------------------
Distributions payable to shareholders 4,228,158
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 18,111,697
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 1,239,318
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 2,447,668
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 268,904
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 25,854
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 3,640
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 749,994
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 130,462
- ---------------------------------------------------------------------------------------------------
Total liabilities 27,500,317
- ---------------------------------------------------------------------------------------------------
Net assets $1,990,607,712
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $1,900,980,765
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 2,418,775
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments
(Note 1) (18,524,088)
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 105,732,260
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $1,990,607,712
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($1,763,996,781 divided by 200,250,275 shares) $8.81
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $8.81)* $9.25
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($224,631,004 divided by 25,549,974 shares)+ $8.79
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($1,979,927 divided by 224,796 shares) $8.81
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $8.81)** $9.11
- ---------------------------------------------------------------------------------------------------
* On single retail sales of less than $25,000. On sales of $25,000 or more and on group sales the
offering price is reduced.
+ Redemption price per share is equal to net asset value less any applicable contingent deferred
sales charge.
** On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the
offering price is reduced.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended May 31, 1997 (Unaudited)
<S> <C>
Tax exempt interest income: $61,665,123
- --------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 4,903,112
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 855,773
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 37,951
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 10,781
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 1,790,052
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 949,066
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 3,557
- --------------------------------------------------------------------------------------------------
Reports to shareholders 77,267
- --------------------------------------------------------------------------------------------------
Registration fees 100
- --------------------------------------------------------------------------------------------------
Auditing 35,910
- --------------------------------------------------------------------------------------------------
Legal 58,444
- --------------------------------------------------------------------------------------------------
Postage 53,288
- --------------------------------------------------------------------------------------------------
Other 42,927
- --------------------------------------------------------------------------------------------------
Total expenses 8,818,228
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (286,299)
- --------------------------------------------------------------------------------------------------
Net expenses 8,531,929
- --------------------------------------------------------------------------------------------------
Net investment income 53,133,194
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 35,026,987
- --------------------------------------------------------------------------------------------------
Net realized gain on futures contracts (Note 1) 1,484,518
- --------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments and futures during the period (61,176,109)
- --------------------------------------------------------------------------------------------------
Net loss on investments (24,664,604)
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 28,468,590
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
May 31 November 30
1997* 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Decrease in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $ 53,133,194 $ 114,783,195
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 36,511,505 28,864,977
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (61,176,109) (44,401,444)
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 28,468,590 99,246,728
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income
Class A (48,170,146) (104,395,042)
- ----------------------------------------------------------------------------------------------------------------------
Class B (5,274,027) (10,533,538)
- ----------------------------------------------------------------------------------------------------------------------
Class M (36,428) (49,718)
- ----------------------------------------------------------------------------------------------------------------------
Decrease from capital share transactions (Note 4) (86,700,062) (111,172,908)
- ----------------------------------------------------------------------------------------------------------------------
Total decrease in net assets (111,712,073) (126,904,478)
- ----------------------------------------------------------------------------------------------------------------------
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 2,102,319,785 2,229,224,263
- ----------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $2,418,775 and $2,766,182, respectively) $1,990,607,712 $2,102,319,785
- ----------------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- --------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share May 31
operating performance (Unaudited) Year ended November 30
- --------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.91 $8.97 $8.05 $9.38 $8.98 $8.75
- --------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------
Net investment income .23 .48 .49 .53 .53 .57
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.09) (.06) .92 (1.24) .52 .32
- --------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .14 .42 1.41 (.71) 1.05 .89
- --------------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------------
From net
investment income (.24) (.48) (.49) (.51) (.53) (.58)
- --------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (.05) (.10) (.08)
- --------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- -- (.06) (.02) --
- --------------------------------------------------------------------------------------------------------------------------
Total distributions (.24) (.48) (.49) (.62) (.65) (.66)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.81 $8.91 $8.97 $8.05 $9.38 $8.98
- --------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(b) 1.56* 4.92 17.95 (8.02) 12.02 10.60
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,763,997 $1,873,649 $2,013,022 $1,901,901 $2,280,604 $1,960,500
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .40* .81 .78 .75 .76 .66
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.67* 5.47 5.63 5.82 5.67 6.44
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 47.38* 59.60 73.85 47.56 26.60 20.13
- --------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income has been determined on the basis of the weighted average
number of shares outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charge.
(c) The ratio of expenses to average net assets for the year ended November 30, 1995 and thereafter,
includes amounts paid through expense offset arrangements and brokerage service arrangements.
Prior period ratios exclude these amounts. (Note 2).
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- -------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share May 31 Jan. 4, 1993+
operating performance (Unaudited) Year ended November 30 to Nov. 30
- --------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.90 $8.95 $8.02 $9.37 $8.95
- --------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------
Net investment income .21 .42 .43 .46 .40
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.11) (.05) .93 (1.24) .42
- --------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .10 .37 1.36 (.78) .82
- --------------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------------
From net
investment income (.21) (.42) (.43) (.46) (.40)
- --------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (.05) --
- --------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- -- (.06) --
- --------------------------------------------------------------------------------------------------------------------------
Total distributions (.21) (.42) (.43) (.57) (.40)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.79 $8.90 $8.95 $8.02 $9.37
- --------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(b) 1.12* 4.35 17.26 (8.75) 9.25*
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $224,631 $227,405 $215,614 $173,213 $146,665
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .73* 1.46 1.43 1.39 1.28*
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.34* 4.81 4.95 5.16 4.29*
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 47.38* 59.60 73.85 47.56 26.60
- --------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income has been determined on the basis of the weighted average
number of shares outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charge.
(c) The ratio of expenses to average net assets for the year ended November 30, 1995 and thereafter,
includes amounts paid through expense offset arrangements and brokerage service arrangements.
Prior period ratios exclude these amounts. (Note 2).
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ---------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share May 31 Year ended Apr. 10, 1995+
operating performance (Unaudited) Nov. 30 to Nov. 30
- --------------------------------------------------------------------------------------------------------------------
1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $8.91 $8.97 $8.79
- ---------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------
Net investment income .22 .45 .26(a)
- ---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.10) (.06) .21
- ---------------------------------------------------------------------------------------------------------------------
Total from
investment operations .12 .39 .47
- ---------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------
From net
investment income (.22) (.45) (.29)
- ---------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- --
- ---------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- --
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (.22) (.45) (.29)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.81 $8.91 $8.97
- ---------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(b) 1.41* 4.59 5.44*
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,980 $1,266 $588
- ---------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .55* 1.11 .65*
- ---------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.52* 5.17 3.30*
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 47.38* 59.60 73.85
- ---------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income has been determined on the basis of the weighted average
number of shares outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charge.
(c) The ratio of expenses to average net assets for the year ended November 30, 1995 and thereafter,
includes amounts paid through expense offset arrangements and brokerage service arrangements.
Prior period ratios exclude these amounts. (Note 2).
</TABLE>
Notes to financial statements
May 31, 1997 (Unaudited)
Note 1
Significant accounting policies
The fund is a portfolio of Putnam New York Tax Exempt Income Trust, "the
trust", registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The fund seeks as high a
level of current income exempt from federal income tax and New York State and
City personal income tax as Putnam Investment Management, Inc. ("Putnam
Management"), the fund's Manager, a wholly-owned subsidiary of Putnam
Investments, Inc. believes is consistent with preservation of capital by
investing primarily in a portfolio of longer-term New York tax exempt
securities.
The fund offers class A, class B and class M shares. Class A shares are sold
with a maximum front-end sales charge of 4.75%. Class B shares, which convert
to class A shares after approximately eight years, do not pay a front-end
sales charge, but pay a higher ongoing distribution fee than class A shares,
and are subject to a contingent deferred sales charge, if those shares are
redeemed within six years of purchase. Class M shares are sold with a maximum
front-end sales charge of 3.25% and pay an ongoing distribution fee that is
lower than class B shares and higher than class A shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
the distribution fees applicable to such class). 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. Shares of each
class would receive their pro-rata share of the net assets of the fund, if the
fund were liquidated. In addition, the Trustees declare separate dividends on
each class of shares.
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 generally accepted
accounting principles and requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities. Actual
results could differ from those estimates.
A) Security valuation Tax-exempt bonds and notes are stated on the basis of
valuations provided by a pricing service, approved by the Trustees, which uses
information with respect to transactions in bonds, quotations from bond
dealers, market transactions in comparable securities and various
relationships between securities in determining value. The fair value of
restricted securities is determined by Putnam Management following procedures
approved by the Trustees.
B) Security transactions and related investment income Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Interest income is recorded on the accrual basis.
C) Futures and options contracts The fund may use futures and options
contracts to hedge against changes in the values of securities the fund owns
or expects to purchase. The fund may also write options on securities it owns
or in which it may invest to increase its current returns.
The potential risk to the fund is that the change in value of futures and
options 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, or if the counterparty to the contract is unable to perform.
Futures contracts are valued at the quoted daily settlement prices established
by the exchange on which they trade. Exchange traded options are valued at the
last sale price, or if no sales are reported, the last bid price for purchased
options and the last ask price for written options. Options traded
over-the-counter are valued using prices supplied by dealers.
D) Federal taxes It is the policy of the fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the
Internal Revenue 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 Internal Revenue Code
of 1986, as amended. Therefore, 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.
At November 30, 1996, the fund had a capital loss carryover of approximately
$32,518,000 available to offset future capital gains, if any. The amount of
the carryover and the expiration dates are:
Loss Carryover Expiration
-------------- ----------------------
$ 5,000 November 30, 2001
$27,938,000 November 30, 2002
$ 4,575,000 November 30, 2003
E) Distributions to shareholders Income dividends are recorded daily by the
fund and are distributed monthly. Capital gain distributions 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. 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.
F) Amortization of bond premium and accretion of bond discount Any premium
resulting from the purchase of securities in excess of maturity value is
amortized on a yield-to-maturity basis. The premium in excess of the call
price, if any, is amortized to the call date; thereafter, the remaining excess
premium is amortized to maturity. Discounts on zero coupon bonds and original
issue discount are accreted according to the effective yield method.
Note 2
Management fee, administrative services and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund. Such
fee is based on the following annual rates: 0.60% of the first $500 million of
average net assets, 0.50% of the next $500 million, 0.45% of the next $500
million and 0.40% of the next $5 billion, 0.375% of the next $5 billion,
0.355% of the next $5 billion, 0.340% of the next $5 billion, 0.330% of any
excess thereafter. Prior to January 20, 1997, any amount over $1.5 billion was
based on 0.40%.
As part of the custodian contract between the subcustodian bank and PFTC, the
subcustodian bank has a lien on the securities of the fund to the extent
permitted by the funds investment restrictions to cover any advances made by
the subcustodian bank for the settlement of securities purchased by the fund.
At May 31, 1997, the payable to the subcustodian bank represents the amount
due for cash advance for the settlement of a security purchased.
The fund reimburses Putnam Management 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 Putnam Fiduciary
Trust Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the six months ended May 31, 1997, fund expenses were reduced by $286,299
under expense offset arrangements with PFTC. Investor servicing and custodian
fees reported in the Statement of operations exclude these credits. The fund
could have invested a portion of the assets utilized in connection with the
expense offset arrangements in an income producing asset if it had not entered
into such arrangements.
Trustees of the fund receive an annual Trustees fee of $1,720 and an
additional fee for each Trustee's meeting attended. Trustees who are not
interested persons of Putnam Management and who serve on committees of the
Trustees receive additional fees for attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Plan") which allows the
Trustees to defer the receipt of all or a portion of Trustees Fees payable on
or after July 1, 1995. The deferred fees remain in the fund and are invested
in certain Putnam funds until distribution in accordance with the 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
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments
Inc., for services provided and expenses incurred by it in distributing shares
of the fund. The Plans provide for payments by the fund to Putnam Mutual Funds
Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets
attributable to class A, class B and class M shares, respectively. The
Trustees have approved payment by the fund at an annual rate of 0.20%, 0.85%
and 0.50% of the average net assets attributable to class A, class B and class
M shares respectively.
For the six months ended May 31, 1997, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $49,621 and $23,363 from the sale of
class A and class M shares, respectively and $254,091 in contingent deferred
sales charges from redemptions of class B shares. A deferred sales charge of
up to 1% is assessed on certain redemptions of class A shares. For the six
months ended May 31, 1997, Putnam Mutual Funds Corp., acting as underwriter
received $13,492 on class A redemptions.
Note 3
Purchase and sales of securities
During the six months ended May 31, 1997, purchases and sales of investment
securities other than short-term investments aggregated $939,788,806 and
$971,051,122, respectively. There were no purchases and sales of U.S.
government obligations. In determining the net gain or loss on securities
sold, the cost of securities has been determined on the identified cost basis.
Note 4
Capital shares
At May 31, 1997, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were
as follows:
Six months ended
May 31, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 20,656,006 $181,076,151
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,165,293 27,796,220
- ------------------------------------------------------------
23,821,299 208,872,371
Shares
repurchased (33,743,040) (296,247,560)
- ------------------------------------------------------------
Net decrease (9,921,741) $(87,375,189)
- ------------------------------------------------------------
Year ended
November 30, 1996
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 49,874,885 $435,955,284
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 6,955,843 61,013,314
- ------------------------------------------------------------
Shares issued in
connection with
the merger of
Putnam New York
Intermediate Tax
Exempt Income
Fund 262,921 2,303,192
- ------------------------------------------------------------
57,093,649 499,271,790
Shares
repurchased (71,315,173) (624,195,830)
- ------------------------------------------------------------
Net decrease (14,221,524) $(124,924,040)
- ------------------------------------------------------------
Six months ended
May 31, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 1,782,110 $15,618,283
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 391,738 3,432,731
- ------------------------------------------------------------
2,173,848 19,051,014
Shares
repurchased (2,181,522) (19,098,746)
- ------------------------------------------------------------
Net decrease (7,674) $(47,732)
- ------------------------------------------------------------
Year ended
November 30, 1996
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 4,772,161 $41,813,876
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 780,326 6,829,056
- ------------------------------------------------------------
Shares issued in
connection with
the merger of
Putnam New York
Intermediate Tax
Exempt Income
Fund 193,968 1,695,279
- ------------------------------------------------------------
5,746,455 50,338,211
Shares
repurchased (4,269,501) (37,263,730)
- ------------------------------------------------------------
Net increase 1,476,954 $13,074,481
- ------------------------------------------------------------
Six months ended
May 31 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 83,635 $730,789
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,778 33,173
- ------------------------------------------------------------
87,413 763,962
Shares
repurchased (4,681) (41,103)
- ------------------------------------------------------------
Net increase 82,732 $722,859
- ------------------------------------------------------------
Year ended
November 30, 1996
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 89,297 $787,821
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 4,984 43,584
- ------------------------------------------------------------
94,281 831,405
Shares
repurchased (17,785) (154,754)
- ------------------------------------------------------------
Net increase 76,496 $676,651
- ------------------------------------------------------------
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Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Gary N. Coburn
Vice President
William J. Curtin
Vice President
Jerome J. Jacobs
Vice President
Howard K. Manning
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New York Tax
Exempt Income Fund. It may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details of sales charges,
investment objectives, and operating policies of the fund, and the most recent
copy of Putnam's Quarterly Performance Summary. For more information, or to
request a prospectus, call toll free: 1-800-225-1581. You can also learn more
at Putnam Investments' website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed or
endorsed by, any financial institution; are not insured by the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board or any other agency;
and involve risk, including the possible loss of principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- --------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- --------------------
34418-030/345/681 7/97
