WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
Putnam Preferred Income Fund
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> CLASS M
<S> <C>
<PERIOD-TYPE> Annual
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-END> JUL-31-2000
<INVESTMENTS-AT-COST> 98,356,528
<INVESTMENTS-AT-VALUE> 88,464,810
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<ASSETS-OTHER> 90
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 423,976
<TOTAL-LIABILITIES> 423,976
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 102,855,979
<SHARES-COMMON-STOCK> 781,272
<SHARES-COMMON-PRIOR> 1,228,426
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (174,414)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (4,091,894)
<ACCUM-APPREC-OR-DEPREC> (9,891,718)
<NET-ASSETS> 88,697,953
<DIVIDEND-INCOME> 7,386,916
<INTEREST-INCOME> 43,559
<OTHER-INCOME> 0
<EXPENSES-NET> 874,076
<NET-INVESTMENT-INCOME> 6,556,399
<REALIZED-GAINS-CURRENT> (1,971,609)
<APPREC-INCREASE-CURRENT> (6,914,178)
<NET-CHANGE-FROM-OPS> (2,329,388)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (542,516)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (25,938)
<NUMBER-OF-SHARES-SOLD> 285,892
<NUMBER-OF-SHARES-REDEEMED> (784,891)
<SHARES-REINVESTED> 51,845
<NET-CHANGE-IN-ASSETS> (31,750,585)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (182,579)
<OVERDIST-NET-GAINS-PRIOR> (2,120,285)
<GROSS-ADVISORY-FEES> 687,502
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 898,767
<AVERAGE-NET-ASSETS> 9,204,167
<PER-SHARE-NAV-BEGIN> 8.56
<PER-SHARE-NII> .47
<PER-SHARE-GAIN-APPREC> (.67)
<PER-SHARE-DIVIDEND> (.48)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (0.02)
<PER-SHARE-NAV-END> 7.86
<EXPENSE-RATIO> 1.08
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
