[H &M Final]
[Translation]
SECURITIES REGISTRATION STATEMENT
(FOR NAV SALE)
ANNUAL SECURITIES REPORT
(THE FOURTH FISCAL YEAR)
FROM: OCTOBER 1, 1997
TO: SEPTEMBER 30, 1998
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(FOR NAV SALE)
PUTNAM U.S. GOVERNMENT INCOME TRUST
SECURITIES REGISTRATION STATEMENT
PUTNAM U.S. GOVERNMENT INCOME TRUST
SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date: March 16, 1999
Name of the Registrant Trust: PUTNAM U.S. GOVERNMENT INCOME TRUST
Name and Official Title of Trustees: George Putnam
John A. Hill
William F. Pounds
Jameson A. Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin, III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U.S.A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM U.S. GOVERNMENT INCOME
Offering or Sale of Foreign TRUST
Investment Fund Securities:
Type and Aggregate Amount of Up to 65.6 million Class M Shares
Foreign Investment Fund Securities Up to the total amount obtained by
to be Publicly Offered or Sold: aggregating the amounts calculated
by multiplying the respective
net asset value per Class M
Share the respective number of
Class M Shares in respect of
65.6 million Class M Shares
(The maximum amount expected to be
sold is 860 million U.S. dollars
(yen100 billion).
Note 1: U.S.$ amount is translated into Japanese Yen at the
rate of U.S.$l.00=yen116.35 the mean of the exchange rate
quotations by The Bank of Tokyo-Mitsubishi, Ltd. for
buying and selling spot dollars by telegraphic transfer
against yen on January 29, 1999.
Note 2: The maximum amount expected to be sold is an amount
calculated by multiplying the net asset value per Class M
Share as of January 29, 1999 (U.S.$13.11) by 65.6 million
Class M Shares for convenience.
Places where a copy of this Securities Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Securities Registration
Statement is 19 pages.)
C O N T E N T S
Japanese This
Original English
Translation
PART I. INFORMATION CONCERNING SECURITIES 1 1
PART II. INFORMATION CONCERNING ISSUER 4 7
I. DESCRIPTION OF THE FUND 4 7
II. OUTLINE OF THE FUND 4 7
III. OUTLINE OF THE OTHER RELATED COMPANIES 4 7
IV. FINANCIAL CONDITIONS OF THE FUND 4 7
V. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT TRUST SECURITIES 4 7
VI. MISCELLANEOUS 4 5
PART III. SPECIAL INFORMATION 6 9
I. OUTLINE OF THE SYSTEM OF INVESTMENT
TRUSTS IN MASSACHUSETTS 6 9
II. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY 12 17
III. FORM OF FOREIGN INVESTMENT
FUND SECURITIES 12 17
PART I. INFORMATION CONCERNING SECURITIES
1. NAME OF FUND: PUTNAM U.S. GOVERNMENT INCOME TRUST
(hereinafter referred to as the "Fund")
2. NATURE OF FOREIGN Four classes of shares (Class A shares, Class
INVESTMENT FUND SECU- B shares, Class M shares and Class Y shares)
RITIES CERTIFICATES: Registered shares without par value.
In Japan, Class M Shares (hereinafter referred
to as the "Shares") are for public offering.
No rating has been acquired.
3. NUMBER OF SHARES TO Up to 65.6 million Shares
BE OFFERED FOR SALE
(IN JAPAN)
4. TOTAL AMOUNT OF Up to the total amount obtained by aggregating
OFFERING PRICE: the amounts calculated by multiplying the
respective net asset value per Share by the
respective number of Shares in
respect of 65.6 million Shares
(The maximum amount expected to be
sold is 860 million U.S. dollars
(yen100 billion).
Note 1: The maximum amount expected to be sold is the
amount calculated, for convenience, by multiplying
the net asset value per Share as of January 29, 1999
($13.11) by the number of Shares to be offered (65.6
million).
Note 2: Dollar amount is translated for convenience at
the rate of $1.00=yen116.35 (the mean of the exchange
rate quotations by The Bank of Tokyo-Mitsubishi,
Ltd. for buying and selling spot dollars by
telegraphic transfer against yen on January 29,
1999). The same applies hereinafter.
Note 3: In this document, money amounts and percentages
have been rounded. Therefore, there are cases in
which the amount of the "total column" is not equal
to the aggregate amount. Also, translation
conversion into yen is made simplycalculated by
multiplying the corresponding dollar amount by the
conversion rate specified and rounded rounding up
when necessary. As a result, in this document,
there are cases in which Japanese yen figures for
the same information differ from each other.
5. ISSUE PRICE: The Net Asset Value per Share next
calculated on a Fund Business
Day after the application for
purchase is received by the
Fund.
Note:A "Fund Business Day" means a day on which the New
York Stock Exchange is open for business.
6. SALES CHARGE: The sales charge in Japan shall be
3% of the amount obtained by
deduction of the amount
equivalent to 3% of the public
offering price from such price
(hereinafter referred to as the
"Sales Price"). Any amount,
which is over the net asset
value, of the Sales Price shall
be retained by Putnam Mutual
Funds Corp., principal
underwriter of the Fund.
The public offering price means the
amount calculated by dividing
the net asset value (by (1-
0.0325), and rounded to three
decimal places.
7. MINIMUM AMOUNT OR The minimum amount for purchase of
NUMBER OF SHARES Shares is 100 shares, and in shares may be
FOR SUBSCRIPTION: purchased in integral multiples of 100 shares.
8. PERIOD OF SUBSCRIPTION: From: April 1, 1999 (Thursday)
To: March 31, 2000 (Friday)
Provided that the subscription is handled only
on a Fund Business Day and a business day
when securities companies are open for business
in Japan.
9. DEPOSIT FOR SUBSCRIPTION: None.
10. PLACE OF SUBSCRIPTION: Kokusai Securities Co., Ltd.
(hereinafter referred to as "Kokusai" or the
"Distributor")
Tokyo Sumitomo Twin Building, East 27-1,
Shinkawa 2-chome Chuo-ku, Tokyo
Note:The subscription is handled at the head office and
the branch offices in Japan of the above-mentioned
distributor.
11. DATE AND PLACE Investors shall pay the Issue Price and Sales
OF PAYMENT: Charge to the Distributor or the sales
handling companies within 4
business days in Japan from the
day when Distributor or the
sales handling companies
confirms the execution of the
order (the "Trade Day").
The total issue price for each
Application Day will be
transferred by the Distributor
to the account of the Fund at
Putnam Fiduciary Trust Company,
the transfer agent, within 3
Fund Business Days (hereinafter
referred to as "Payment Date")
from (and including) the
Application Day.
12. OUTLINE OF UNDERWRITING, ETC.:
(A) Kokusai undertakes to make a public offering of the
Shares in accordance with an agreement dated November 25,
1997 with Putnam Mutual Funds Corp. in connection with
the sale of the Shares in Japan.
(B) Kokusai will execute or forward the purchase orders
and repurchase requests relating to the Shares received
directly or indirectly through other sales and repurchase
handling companies (hereinafter referred to as the "Sales
Handling Company") to the Fund.
Note: "The Sales Handling Company" mean a
securities agent company and/or registration agent
financial institution which shall conclude the
agreement with a Distributor concerning agency
business of shares of the Fund, act as agent for a
Distributor for subscription or repurchase of shares
of the Fund from investors and handle the business,
etc, concerning receipt of subscription money from
investors or payment of repurchase proceeds to
investors, etc.
(C) The Fund has appointed Kokusai as the Agent Company
in Japan.
Note:"The Agent Company" shall mean a company which,
under a contract made with a foreign issuer of
investment securities, makes public the net asset
value per Share and submits or forwards the
financial reports or other documents to the Japan
Securities Dealers Association ("JSDA") and the
Sales Handling Companies rendering such other
services.
13. MISCELLANEOUS:
(A) Method of Subscription:
Investors who subscribe to Shares shall enter into
an agreement with the Distributor or the Sales Handling
Company concerning transactions of foreign securities.
The Distributor or the Sales Handling Company shall
provide to the investors an Agreement Concerning a
Foreign Securities Transactions Account and other
agreements ("Account Agreement") and the investors shall
submit to the Distributor or the Sales Handling Company
an application for requesting the opening of a
transactions account under the Account Agreement. The
subscription amount shall be paid in yen in principal and
the yen exchange rate shall be the exchange rate which
shall be based on the foreign exchange rate quoted in the
Tokyo Foreign Exchange Market on the Trade Day of each
subscription and which shall be determined by such
Distributor or the Sales Handling Company.
The subscription amount shall be paid in dollars to
the account of the Fund with Putnam Fiduciary Trust
Company as custodian for the Fund by Kokusai on the
Payment Date.
(B) Performance Information
The following information provides some indication
of the Fund's risks. The chart shows year-to-year
changes in the performance of class M shares. The table
following the chart compares the Fund's performance to
that of a broad measure of market performance. Of course,
the Fund's past performance is not an indication of
future performance.
Calendar year total returns for Class M shares
Class M
1989 12/21%
1990 9.59%
1991 11.53%
1992 6.42%
1993 5.35%
1994 -2.77%
1995 16.06%
1996 3.62%
1997 8.24%
1998 6.60%
Performance figures in the bar chart do not reflect the
impact of sales charges. If they did, performance would
be less than that shown. During the period shown in the
bar chart, the highest return for a quarter was 6.31%
(quarter ending 6/30/89) and the lowest return for a
quarter was 2.84% (quarter ending 3/31/94).
Average annual total returns (for periods ending 12/31/98)
Past 1 Past 5 Past 10
year years years
Class M 3.13% 5.48% 7.22%
Lehman Brothers 6.97% 7.23% 9.13%
Mortgage-Backed
Securities Index
Unlike the bar chart, this performance information
reflects the impact of sales charges. Class M share
performance reflects the current maximum initial sales
charges. For periods before the inception of class M
shares (2/6/95), performance information shown for class
M shares is based on the performance of the Fund's class
A shares (not offered in Japan), adjusted to reflect the
appropriate sales charge and the higher 12b-1 fees paid
by class M shares. The Fund's performance is compared to
the Lehman Brothers Mortgage-Backed Securities Index, an
unmanaged list of GNMA bonds.
(C) Fees and Expenses
This table summarizes the fees and expenses
investors may pay if investors invest in the Fund.
Except as noted, expenses are based on the Fund's last
fiscal year.
Shareholder fees (fees paid directly from investors'
investment)
Maximum sales charge (load) imposed on 3.25%
purchases (as a percentage of the offering
price)
Maximum deferred sales charge (load) (as a
percentage of the original purchase price or None
redemption proceeds, whichever is lower)
Annual fund operating expenses (expenses that are deducted from fund assets)
Management Distribution Other Total fund
fees (12b-1) fees expenses operating
expenses
Class M 0.43% 0.50% 0.19% 1.12%
(D) Example
This example translates the "total annual fund
operating expenses" shown in the preceding table into
dollar amounts. By doing this, investors can more easily
compare the cost of investing in the Fund to the cost of
investing in other mutual funds. The example makes
certain assumptions. It assumes that an investor invests
$10,000 in the Fund for the time periods shown and then,
redeems all shares at the end of those periods. It
assumes a 5% return on an investor's investment each year
and that the Fund's operating expenses remain the same.
The example is hypothetical; an investor's actual costs
and returns may be higher or lower.
1 year 3 years 5 years 10 years
Class M $436 $670 $924 $1,647
(E) Offerings other than in Japan:
Shares are simultaneously offered in the United
States of America.
PART II. INFORMATION CONCERNING ISSUER
I. DESCRIPTION OF THE FUND
The description in this item is same as the description
in I. DESCRIPTION OF THE FUND of the Annual Securities
Report (The Fourth Fiscal Year) attached hereafter.
II. OUTLINE OF THE FUND
The description in this item is same as the description
in II. OUTLINE OF THE FUND of the Annual Securities
Report (The Fourth Fiscal Year) attached hereafter.
III. OUTLINE OF THE OTHER RELATED COMPANIES
The description in this item is same as the description
in III. OUTLINE OF THE OTHER RELATED COMPANIES of the
Annual Securities Report (The Fourth Fiscal Year)
attached hereafter.
IV. FINANCIAL CONDITIONS OF THE FUND
The description in this item is same as the description
in IV. FINANCIAL CONDITIONS OF THE FUND of the Annual
Securities Report (The Fourth Fiscal Year) attached
hereafter.
V. SUMMARY OF INFORMATION CONCERNING FOREIGN INVESTMENT FUND
SECURITIES
The description in this item is same as the description
in V. SUMMARY OF INFORMATION CONCERNING FOREIGN
INVESTMENT FUND SECURITIES of the Annual Securities
Report (The Fourth Fiscal Year) attached hereafter.
VI. MISCELLANEOUS
The following documents concerning the Fund were
filed with the Minister of Finance or with the Director
of Kanto Local Finance Bureau (since June 22, 1998).
(1) March 16, 1998: Securities Registration Statement
Annual Securities Report (The Third Fiscal Year)
Amendment to Securities Registration Statement
June 15, 1998: Semi-annual Report (during the fourth term)
Amendment to Securities Registration Statement
September 14, 1998: Securities Registration Statement
September 21, 1998: Amendment to Securities Registration Statement
September 22, 1998: Amendment to Securities Registration Statement
December 1, 1998: Amendment to Securities Registration Statement
(2) The ornamental design is used in cover page of the Japanese Prospectus.
(3) The following must be set forth in the Prospectus.
Outline of the Prospectus will be included at the
beginning of the Prospectus, summarizing the content of
Part I., Information on the securities, "I. Descriptions
of the Fund", "III. Outline of Other Related Companies"
and "IV. Financial Condition of the Fund" in Part II,
Information on the Issuer, of the SRS.
(4) Summarized Preliminary Prospectus will be used.
The attached document (Summarized Preliminary Prospectus)
will be used pursuant to as set forth at Item 1.(1)(b),
of Article 12 of the Ordinance Concerning the Disclosure
of the Content, etc. of the Specified Securities.
For performance information, the average of the annual
yield calculated in respect of immediately preceding
seven days and/or any one month may be added in
percentage up to one decimal places (rounding down to
second decimal places).
PART III. SPECIAL INFORMATION
I. OUTLINE OF THE SYSTEM OF INVESTMENT TRUSTS IN
MASSACHUSETTS
Below is an outline of certain general information about open-
end U.S. investment companies. This outline is not intended
to provide comprehensive information about such investment
companies or the various laws, rules or regulations applicable
to them, but provides only a brief summary of certain
information which may be of interest to investors. The
discussion below is qualified in its entity by the complete
registration statement of the fund and the full text of any
referenced statutes and regulations.
I. Massachusetts Business Trusts
A. General Information
Many investment companies are organized as
Massachusetts business trusts. A Massachusetts business
trust is organized pursuant to a declaration of trust,
setting out the general rights and obligations of the
shareholders, trustees, and other related parties.
Generally, the trustees of the trust oversee its
business, and its officers and agents manage its day-to-
day affairs.
Chapter 182 of the Massachusetts General Laws
applies to certain "voluntary associations", including
many Massachusetts business trusts. Chapter 182 provides
for, among other things, the filing of the declaration of
trust with the Secretary of State of the Commonwealth of
Massachusetts and the filing by the trust of an annual
statement regarding, among other things, the number of
its shares outstanding and the names and addresses of its
trustees.
B. Shareholder Liability
Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of a trust. Typically, a declaration of
trust disclaims shareholder liability for acts or
obligations of the trust and provides for indemnification
out of trust property for all loss and expense of any
shareholder held personally liable for the obligations of
a trust. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is
limited to circumstances in which a particular trust
would be unable to meet its obligations.
II. United States Investment Company Laws and Enforcement
A. General
In the United States, pooled investment management
arrangements which offer shares to the public are
governed by a variety of federal statutes and
regulations. Most mutual funds are subject to these
laws. Among the more significant of these statutes are:
1. Investment Company Act of 1940
The Investment Company Act of 1940, as amended
(the "1940 Act"), in general, requires investment
companies to register as such with the U.S.
Securities and Exchange Commission (the "SEC"), and
to comply with a number of substantive regulations
of their operations. The 1940 Act requires an
investment company, among other things, to provide
periodic reports to its shareholders.
2. Securities Act of 1933
The Securities Act of 1933, as amended (the
"1933 Act"), regulates many sales of securities.
The Act, among other things, imposes various
registration requirements upon sellers of securities
and provides for various liabilities for failures to
comply with its provisions or in respect of other
specified matters.
3. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended
(the "1934 Act"), regulates a variety of matters
involving, among other things, the secondary trading
of securities, periodic reporting by the issuers of
securities, and certain of the activities of
transfer agents and brokers and dealers.
4. The Internal Revenue Code
An investment company is an entity subject to
federal income taxation under the Internal Revenue
Code. However, under the Code, an investment
company may be relieved of federal taxes on income
and gains it distributes to shareholders if it
qualifies as a "regulated investment company" under
the Code for federal income tax purposes and meets
all other necessary requirements.
5. Other laws
The Fund is subject to the provisions of other
laws, rules, and regulations applicable to the Fund
or its operations, such as, for example, various
state laws regarding the sale of the Fund's shares.
B. Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction
over the Fund or certain of its operations are the SEC
and state regulatory agencies or authorities.
1. The SEC has broad authority to oversee the
application and enforcement of the federal
securities laws, including the 1940 Act, the 1933
Act, and the 1934 Act, among others, to the Fund.
The 1940 Act provides the SEC broad authority to
inspect the records of investment companies, to
exempt investment companies or certain practices
from the provisions of the Act, and otherwise to
enforce the provisions of the Act.
2. State authorities typically have broad authority
to regulate the offering and sale of securities to
their residents or within their jurisdictions and
the activities of brokers, dealers, or other persons
directly or indirectly engaged in related
activities.
C. Offering Shares to the Public
An investment company ("investment company" or fund)
offering its shares to the public must meet a number of
requirements, including, among other things, registration
as an investment company under the 1940 Act; registration
of the sale of its shares under the 1933 Act;
registration of the fund, the sale of its shares, or
both, with state securities regulators; delivery of a
current prospectus to current or prospective investors;
and so forth. Many of these requirements must be met not
only at the time of the original offering of the fund's
shares, but compliance must be maintained or updated from
time to time throughout the life of the fund.
D. Ongoing Requirements
Under U.S. law, a fund is subject to numerous
ongoing requirements, including, but not limited to;
1. Updating its prospectus if it becomes materially
inaccurate or misleading;
2. Annual update of its registration statement;
3. Filing semi-annual and annual financial reports
with the SEC and distributing them to shareholders;
4. Annual trustee approval of investment advisory
arrangements, distribution plans, underwriting
arrangements, errors and omissions/director and
officer liability insurance, foreign custody
arrangements, and auditors;
5. Maintenance of a code of ethics; and
6. Periodic board review of certain fund
transactions, dividend payments, and payments under
a fund's distribution plan.
III. Management of a Fund
The board of directors or trustees of a fund are
responsible for generally overseeing the conduct of a fund's
business. The officers and agents of a fund are generally
responsible for the day-to-day operations of a fund. The
trustees and officers of a fund may or may not receive a fee
for their services.
The investment adviser to a fund is typically responsible
for implementing the fund's investment program. The adviser
typically receives a fee for its services based on a
percentage of the net assets of a fund. Certain rules govern
the activities of investment advisers and the fees they may
charge. In the United States, investment advisers to
investment companies must be registered under the Investment
Advisers Act of 1940, as amended.
IV. Share Information
A. Valuation
Shares of a fund are generally sold at the net asset
value next determined after an order is received by a
fund, plus any applicable sales charges. A fund normally
calculates its net asset value per share by dividing the
total value of its assets, less liabilities, by the
number of its shares outstanding. Shares are typically
valued as of the close of regular trading on the New York
Stock Exchange (4:00 p.m.) each day the Exchange is open.
B. Redemption
Shareholders may generally sell shares of an open-
end fund to that fund any day the fund is open for
business at the net asset value next computed after
receipt of the shareholders' order. Under unusual
circumstances, a fund may suspend redemptions, or
postpone payment for more than seven days, if permitted
by U.S. securities laws. A fund may charge redemption
fees as described in its prospectus.
C. Transfer agency
The transfer agent for a fund typically processes
the transfer of shares, redemption of shares, and payment
and/or reinvestment of distributions.
V. Shareholder Information, Rights and Procedures for the
Exercise of Such Rights
A. Voting Rights
Voting rights vary from fund to fund. In the case
of many funds organized as Massachusetts business trusts,
shareholders are entitled to vote on the election of
trustees, approval of investment advisory agreements,
underwriting agreements, and distribution plans (or
amendments thereto), certain mergers or other business
combinations, and certain amendments to the declaration
of trust. Shareholder approval is also required to
modify or eliminate a fundamental investment policy.
B. Dividends
Shareholders are typically entitled to receive
dividends when and if declared by a fund's trustees. In
declaring dividends, the trustees will normally set a
record date, and all shareholders of record on that date
will be entitled to receive the dividend paid.
C. Dissolution
Shareholders would normally be entitled to receive a
pro rata portion of the net assets of a fund upon its
liquidation.
D. Transferability
Shares of a fund are typically transferable without
restriction.
E. Right to Inspection
Shareholders of a Massachusetts business trust have
the right to inspect the records of the trust as provided
in the declaration of trust or as otherwise provided by
applicable law.
VI. U.S. Tax Matters
The Fund intends to qualify each year as a regulated
investment company under Subchapter M of the United States
Internal Revenue Code of 1986, as amended (the "Code").
As a regulated investment company qualifying to have its
tax liability determined under Subchapter M, the Fund will not
be subject to U.S. federal income tax on any of its net
investment income or net realized capital gains that are
distributed to its shareholders. In addition, as a
Massachusetts business trust, the Fund under present
Massachusetts law is not subject to any excise or income taxes
in Massachusetts.
In order to qualify as a "regulated investment company",
the Fund must, among other things, (a) derive at least 90% of
its gross income from dividends, interest, payments with
respect to certain securities loans, and gains from the sale
of stock, securities and foreign currencies, or other income
(including but not limited to gains from options, futures, or
forward contracts) derived with respect to its business of
investing in such stock, securities, or currencies; (b)
distribute with respect to each taxable year at least 90% of
the sum of its taxable net investment income, its net tax-
exempt income, and the excess, if any, of its net short-term
capital gains over net long-term capital losses for such year;
(c) diversify its holdings so that, at the close of each
quarter of its taxable year, (i) at least 50% of the value of
its total assets consists of cash, cash items, U.S. Government
Securities, securities of other regulated investment companies
and other securities limited generally with respect to any one
issuer to not more than 5% of the total assets of the Fund and
not more than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25 % of the value of its assets
is invested in the securities (other than those of the U.S.
Government or other regulated investment companies) of any one
issuer or of two or more issuers which the Fund controls and
which are engaged in the same, similar or related trades or
businesses.
If the Fund qualifies as a regulated investment company
that is accorded special tax treatment, the Fund will not be
subject to federal income tax on income paid to its
shareholders in the form of dividends (including capital gain
dividends).
If the Fund failed to qualify as a regulated investment
company accorded special tax treatment in any taxable year,
the Fund would be subject to tax on its taxable income at
corporate rates, and all distributions from earnings and
profits, including any distributions of net tax-exempt income
and net long-term capital gains, would be taxable to
shareholders as ordinary income. In addition, the Fund could
be required to recognize unrealized gains, pay substantial
taxes and interest and make substantial distributions before
requalifying as a regulated investment company that is
accorded special tax treatment.
If the Fund fails to distribute in a calendar year
substantially all of its ordinary income for such year and
substantially all of its capital gain net income for the one-
year period ending October 31 (or later if the Fund is
permitted to elect and so elects), plus any retained amount
from the prior year, the Fund will be subject to a 4% excise
tax on the undistributed amounts. A dividend paid to
shareholders by the Fund in January of a year generally is
deemed to have been paid by the Fund on December 31 of the
preceding year, if the dividend was declared and payable to
shareholders of record on a date in October, November or
December of that preceding year. The Fund intends generally
to make distributions sufficient to avoid imposition of the 4%
excise tax.
Fund distributions will be taxable to shareholders as
ordinary income, except that any distributions designated by
the Fund as deriving from net gains on securities held for
more than one year will be taxable as such, regardless of how
long a shareholder has held shares in the Fund.
Distributions will be taxable as described above whether
received in cash or in shares through the reinvestment of
distributions. Shareholders who are not subject to U.S.
federal income tax on their income generally will not have to
pay such tax on amounts distributed to them.
Distributions from capital gains are made after applying
any available capital loss carryovers.
Investment by the Fund in "passive non-U.S. investment
companies" could subject the Fund to a U.S. federal income tax
or other charge on the proceeds from the sale of its
investment in such a company; however, this tax can be avoided
by making an election to mark such investments to market
annually or to treat the passive non-U.S. investment company
as a "qualified electing fund".
A "passive non-U.S. investment company" is any non-U.S.
corporation: (i) 75 percent or more of the income of which for
the taxable year is passive income, or (ii) the average
percentage of the assets of which (generally by value, but by
adjusted tax basis in certain cases) that produce or are held
for the production of passive income is at least 50 percent.
Generally, passive income for this purpose means dividends,
interest (including income equivalent to interest), royalties,
rents, annuities, the excess of gains over losses from certain
property transactions and commodities transactions, and non-
U.S. currency gains. Passive income for this purpose does not
include rents and royalties received by the non-U.S.
corporation from active business and certain income received
from related persons.
The sale, exchange or redemption of Fund shares may give
rise to a gain or loss. In general, any gain or loss realized
upon a taxable disposition of shares will be treated as long-
term capital gain or loss if the shares have been held for
more than 12 months, and otherwise as short-term capital gain
or loss. However, any loss realized upon a taxable
disposition of shares held for six months or less will be
treated as long-term, rather than short-term, to the extent of
any long-term capital gain distributions received by the
shareholder with respect to the shares. All or a portion of
any loss realized upon a taxable disposition of Fund shares
will be disallowed if other shares of the Fund are purchased
within 30 days before or after the disposition. In such a
case, the basis of the newly purchased shares will be adjusted
to reflect the disallowed loss.
Special tax rules apply to investments through defined
contribution plans and other tax-qualified plans.
Shareholders should consult their tax adviser to determine the
suitability of shares of the Fund as an investment through
such plans and the precise effect of an investment on their
particular tax situation.
The Fund generally is required to withhold and remit to
the U.S. Treasury 31% of the taxable dividends and other
distributions paid to any individual shareholder who fails to
furnish the Fund with a correct taxpayer identification number
(TIN), who has under-reported dividends or interest income, or
who fails to certify to the fund that he or she is not subject
to such withholding.
The Fund's investment in securities issued at a discount
and certain other obligations will (and investments in
securities purchased at a discount may) require the Fund to
accrue and distribute income not yet received. In order to
generate sufficient cash to make the requisite distributions,
the Fund may be required to sell securities in its portfolio
that it otherwise would have continued to hold.
The foregoing is a general and abbreviated summary of the
applicable provisions of the Code and related regulations
currently in effect. For the complete provisions, reference
should be made to the pertinent Code sections and regulations.
The Code and regulations are subject to change by legislative
or administrative actions. Dividends and distributions also
may be subject to state taxes. Shareholders are urged to
consult their tax advisers regarding specific questions as to
U.S. federal, state or local taxes. The foregoing discussion
relates solely to U.S. federal income tax law. Non-U.S.
investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the fund, including the
possibility that distributions may be subject to a 30% United
States withholding tax (or a reduced rate of withholding
provided by treaty), the possibility that a non-U.S. investor
may be subject to U.S. tax on capital gain distributions and
gains realized upon the sale of fund shares if the investor is
present in the United States for more than 182 days during the
taxable year (and certain other conditions apply), or the
possibility that a non-U.S. investor may be subject to U.S.
tax on income from the fund that is "effectively connected"
with a U.S. trade or business carried on by such an investor.
Shareholders residing in Japan should consult "Tax Treatment
of Shareholders in Japan", above.
VII. Important Participants in Offering of Mutual Fund Shares
A. Investment Company
Certain pooled investment vehicles qualify as
investment companies under the 1940 Act. There are open-
end investment companies (those which offer redeemable
securities) and closed-end investment companies (any
others).
B. Investment Adviser/Administrator
The investment adviser is typically responsible for
the implementation of an investment company's investment
program. It, or another affiliated or unaffiliated
entity, may also perform certain record keeping and
administrative functions.
C. Underwriter
An investment company may appoint one or more
principal underwriters for its shares. The activities of
such a principal underwriter are generally governed by a
number of legal regimes, including, for example, the 1940
Act, the 1933 Act, the 1934 Act, and state laws.
D. Transfer Agent
A transfer agent performs certain bookkeeping, data
processing, and administrative services pertaining to the
maintenance of shareholder accounts. A transfer agent
may also handle the payment of any dividends declared by
the trustees of a fund.
E. Custodian
A custodian's responsibilities may include, among
other things, safeguarding and controlling a fund's cash
and securities, handling the receipt and delivery of
securities, and collecting interest and dividends on a
fund's investments.
II. FINANCIAL CONDITION OF THE INVESTMENT MANAGEMENT COMPANY
The description in this item is same as the description
in II. FINANCIAL CONDITION OF THE INVESTMENT MANAGEMENT
COMPANY of the Annual Securities Report (The Fourth
Fiscal Year) attached hereafter.
III. FORM OF FOREIGN INVESTMENT FUND SECURITIES
Main items to be set forth on the share certificate of
the Fund (if issued) are as follows:-
(1) Front
a. Name of the Fund
b. Number of shares represented
c. Signatures of the Chairman and Transfer Agent
d. Description stating that the Declaration of Trust
applies to shareholders and assignees therefrom
(2) Back
a. Space for endorsement
b. Description concerning delegation of transfer agency
ANNUAL SECURITIES REPORT
(THE FOURTH FISCAL YEAR)
FROM: OCTOBER 1, 1997
TO: SEPTEMBER 30, 1998
PUTNAM U.S. GOVERNMENT INCOME TRUST
ANNUAL SECURITIES REPORT
(The Fourth Fiscal Year)
From: October 1, 1997
To: September 30, 1998
To: Director of Kanto Local Finance Bureau
Filing Date: March 16, 1999
Name of the Registrant Trust: PUTNAM U.S. GOVERNMENT INCOME TRUST
Name and Official Title of Trustees: George Putnam
John A. Hill
William F. Pounds
Jameson A. Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin, III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U.S.A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
- ii -
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Places where a copy of this Annual Securities Report
is available for Public Inspection
Not applicable.
(Total number of pages of this Annual Securities Report
is 75 including the front page)
C O N T E N T S
Japanese This
OriginalEnglish
Translation
I. DESCRIPTION OF THE FUND 1 1
1. GENERAL INFORMATION 1 1
2. INVESTMENT POLICY 5 7
3. MANAGEMENT STRUCTURE 8 11
4. INFORMATION CONCERNING THE EXERCISE
OF RIGHTS BY SHAREHOLDERS, ETC. 18 25
5. STATUS OF INVESTMENT PORTFOLIO 21 29
II. OUTLINE OF THE FUND 24 32
III. OUTLINE OF THE OTHER RELATED COMPANIES 53 64
IV. FINANCIAL CONDITIONS OF THE FUND 55 66
V. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY
(translated from the English source: omitted in
English Translation) 12072
VI. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT FUND SECURITIES 141 72
VII. REFERENCE INFORMATION 141 72
Note 1: The exchange rate of U.S. Dollars
("dollar" or "$") into Japanese Yen is yen116.35 for
one U.S. Dollar, which is the actual middle point
between the selling and buying currency rate by
telegraphic transfer on the January 29, 1999 quoted
by The Bank of Tokyo-Mitsubishi, Ltd. The same
applies hereinafter.
Note 2: In this report, money amounts and
percentages have been rounded. Therefore, there
are cases in which the amount for the "total"
column is not equal to the aggregate amount. Also,
conversion into other currencies is calculated by
multiplying the corresponding amount by the
conversion rate specified and rounding up when
necessary. As a result, in this report, there are
cases in which figures for the same information
differ from each other.
Note 3: In this report, "fiscal year" refers to a
year from October 1 to September 30 of the
following year. However, the first fiscal year
refers to a period from February 6, 1995
(Incorporation of the Fund) to September 30, 1995.
I. DESCRIPTION OF THE FUND
1. GENERAL INFORMATION
(A) Outline of Laws Regulating the Fund in the Jurisdiction
Where Established:
(1) Name of the Fund: Putnam U.S. Government Income
Trust (the "Fund")
(2) Form of the Fund
Putnam U.S. Government Income Trust is a
Massachusetts business trust organized on November 1,
1983. A copy of the Agreement and Declaration of Trust,
which is governed by Massachusetts law, is on file with
the Secretary of State of The Commonwealth of
Massachusetts.
The Fund is an open-end, diversified management
investment company with an unlimited number of authorized
shares of beneficial interest which may be divided
without shareholder approval into two or more series of
shares having such preferences and special or relative
rights and privileges as the Trustees determine. The
Fund's shares are not currently divided into any series.
Only the Fund's class M shares are currently offered in
Japan. The Fund may also offer in the United States of
America other classes of shares with different sales
charges and expenses. Because of these different sales
charges and expenses, the investment performance of the
classes will vary.
Each share has one vote, with fractional shares
voting proportionally. Shares of all classes will vote
together as a single class except when otherwise required
by law or as determined by the Trustees. Shares are
freely transferable, are entitled to dividends as
declared by the Trustees, and, if the Fund were
liquidated, would receive the net assets of the Fund.
The Fund may suspend the sale of shares at any time and
may refuse any order to purchase shares. Although the
Fund is not required to hold annual meetings of its
shareholders, shareholders holding at least 10% of the
outstanding shares entitled to vote have the right to
call a meeting to elect or remove Trustees, or to take
other actions as provided in the Agreement and
Declaration of Trust.
If a shareholder owns fewer shares than the minimum
set by the Trustees (presently 20 shares), the Fund may
choose to redeem the shareholders' shares. Shareholders
will receive at least 30 days' written notice before the
Fund redeems shareholders' shares, and shareholders may
purchase additional shares at any time to avoid a
redemption. The Fund may also redeem shares if
shareholders own shares above a maximum amount set by the
Trustees. There is presently no maximum, but the
Trustees may, at any time, establish one which could
apply to both present and future shareholders.
YEAR 2000 ISSUES: The Fund could be adversely
affected if the computer systems used by Putnam
Investment Management Inc. (the "Investment Management
Company") and the Fund's other service providers do not
properly process and calculate the date-related
information relating to the end of this century and the
beginning of the next. While year 2000-related computer
problems could have a negative effect on the Fund, both
in its operations and in its investment. Investment
Management Company is working to avoid such problems and
to obtain assurances from service providers that they are
taking similar steps. No assurances, though, can be
provided that the Fund will not be adversely impacted by
these matters.
(3) Governing Laws
The Fund was created under, and is subject to, the
laws of The Commonwealth of Massachusetts. The sale of
the Fund's shares is subject to, among other things, the
Securities Act of 1933, as amended, and certain state
securities laws. The Fund also attempts to qualify each
year and elects to be taxed as a regulated investment
company under the United States Internal Revenue Code of
1986, as amended.
The following is a broad outline of certain of the
principal statutes regulating the operations of the Fund
in the U.S.:
a. Massachusetts General Laws, Chapter 182 -
Voluntary Associations and Certain Trusts
Chapter 182 provides in part as follows:
A copy of the declaration of trust must be filed
with the Secretary of State of The Commonwealth of
Massachusetts and with the Clerk of the City of
Boston. Any amendment of the declaration of trust
must be filed with the Secretary and the Clerk
within thirty days after the adoption of such
amendment.
A trust must annually file with the Secretary of
State on or before June 1 a report providing the
name of the trust, its address, number of shares
outstanding and the names and addresses of its
trustees.
Penalties may be assessed against the trust for
failure to comply with certain of the provisions of
Chapter 182.
b. Investment Company Act of 1940
The Investment Company Act of 1940, as amended
(the "1940 Act"), in general, requires investment
companies to register as such with the U.S.
Securities and Exchange Commission (the "SEC"), and
to comply with a number of substantive regulations
of their operations. The 1940 Act requires an
investment company, among other things, to provide
periodic reports to its shareholders.
c. Securities Act of 1933
The Securities Act of 1933, as amended (the
"1933 Act"), regulates many sales of securities. The
Act, among other things, imposes various
registration requirements upon sellers of securities
and provides for various liabilities for failures to
comply with its provisions or in respect of other
specified matters.
d. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended
(the "1934 Act"), regulates a variety of matters
involving, among other things, the secondary trading
of securities, periodic reporting by the issuers of
securities, and certain of the activities of
transfer agents and brokers and dealers.
e. The Internal Revenue Code
The Fund intends to qualify as a "regulated
investment company" for federal income tax purposes
and to meet all other requirements necessary for it
to be relieved of federal taxes on income and gains
it distributes to shareholders.
f. Other laws
The Fund is subject to the provisions of other
laws, rules, and regulations applicable to the Fund
or its operations, such as, for example, various
state laws regarding the sale of the Fund's shares.
(B) Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction
over the Fund or certain of its operations are the SEC
and state regulatory agencies or authorities.
a. The SEC has broad authority to oversee the
application and enforcement of the federal
securities laws, including the 1940 Act, the 1933
Act, and the 1934 Act, among others, to the Fund.
The 1940 Act provides the SEC broad authority to
inspect the records of investment companies, to
exempt investment companies or certain practices
from the provisions of the Act, and otherwise to
enforce the provisions of the Act.
b. State authorities typically have broad authority
to regulate the offering and sale of securities to
their residents or within their jurisdictions and
the activities of brokers, dealers, or other persons
directly or indirectly engaged in related
activities.
(C) Objectives and Basic Nature of the Fund:
GOAL
The Fund seeks as high a level of current income as
Investment Management Company believes is consistent with
preservation of capital.
MAIN INVESTMENT STRATEGIES - U.S.GOVERNMENT SECURITIES
BACKED BY THE FULL FAITH AND CREDIT OF THE U.S.
The Fund invests exclusively in investments backed
by the full faith and credit of the Unites States, and
repurchase agreements and forward commitments relating to
those investments. This investment policy cannot be
changed without the approval of the Fund's shareholders.
The Fund's investments are generally long - or
intermediate-term (with maturities of more than 3 years).
The Investment Management Company currently expects
that the Fund will invest significantly in mortgage
participation certificates guaranteed by the Government
National Mortgage Association (GNMA, commonly known as
"Ginnie Mae"), and in Federal Housing Administration
debentures, for which the U.S. Treasury unconditionally
guarantees payment of principal and interest. These
investments are commonly known as mortgage-backed
securities.
MAIN RISKS
The main risks that could adversely affect the value
of this Fund's shares and the total return on investors'
investment include;
- The risk that movements in the securities
markets will adversely affect the value of the
Fund's investments. The values of the Fund's
investments are likely to fall if interest rates
rise. Interest rate risk is generally highest for
investments with long maturities.
- The risk that mortgages underlying the Fund's
investments may be prepaid faster than expected
during periods of falling interest rates. This
might force the Fund to reinvest the proceeds from
prepayments in investments offering a lower yield.
The Fund therefore might not benefit from any
increase in value as a result of declining interest
rates. Similarly, rising interest rates may reduce
the rate of prepayments. This would effectively
extend the Fund's maturity and increase its interest
rate risk when it is least desirable - during
periods of rising interest rates.
Investors can lose money by investing in the Fund.
The Fund may not achieve its goal, and is not intended as
a complete investment program. An investment in the Fund
is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation
or any other government agency.
(D) History of the Fund:
November 1, 1983: Organization of the Fund as a
Massachusetts business trust.
Adoption of the Agreement and
Declaration of Trust.
January 10, 1992: Adoption of the Amended and
Restated Agreement and
Declaration of Trust.
(E) Affiliated Companies of the Fund:
Names and related business of the affiliated
companies of the Fund are as follows:
(1) Putnam Investment Management, Inc. ("Investment
Management Company") renders investment management
services to the Fund.
(2) Putnam Fiduciary Trust Company (the "Custodian"
and "Investor Servicing Agent") acts as Custodian
and Investor Servicing Agent.
(3) Putnam Mutual Funds Corp. ("Principal
Underwriter") engages in providing marketing
services to the Fund.
(4) Kokusai Securities Co., Ltd. ("Distributor in
Japan" and "Agent Company") engages in forwarding
the purchase or repurchase orders for the Shares in
Japan and also acts as the agent company.
Related Companies of the Fund
Fund
Putnam U.S. Government Income Trust
Investor Servicing Agreement
Trustees (Agreement and
Declaration of Fund)
Distribution Agreement Custodian Agreement
Principal Underwriter Custodian Investor
Servicing Agent
Putnam Mutual Funds Corp. Putnam Fiduciary Trust Co.
(acts as a distributor) (acts as custodian and
investor servicing agent of
the fund)
Japan Dealer
Sales Agreement
Agent Company Management Contract
Agreement
Distributor in Japan Investment Management
Agent Company Company
Kokusai Securities Co., Ltd. Putnam Investment Management, Inc.
(forwarding of sales in Japan (acts as investment management
and rendering of service as the Fund and investment adviser
agent company) concerning the Fund's assets)
2. INVESTMENT POLICY
(A) Basic Policy for Investment and Objectives of Investment
(including risk factors):
Any investment carries with it some level of risk
generally reflecting its potential for reward. The Fund
pursues its goal of high current income consistent with
capital preservation by investing in U.S. Government
securities. At least 65% of the Fund's investments will
be derived from interest on U.S. Government securities.
The Investment Management Company will consider, among
other things, interest rate and prepayment risks, as well
as general market conditions when deciding whether to buy
or sell investments.
U.S. GOVERNMENT INVESTMENTS. These investments include
- U.S. TREASURY BILLS, NOTES AND BONDS. The U.S.
Treasury issues these obligations.
- OBLIGATIONS GUARANTEED BY THE U.S. TREASURY.
These include obligations issued by certain agencies
and instrumentalities of the U.S. Government that are
backed by the full faith and credit of the United
States, such as Ginnie Mae mortgage participation
certificates and Federal Housing Administration
debentures.
INTEREST RATE RISK. The values of debt investments
usually rise and fall in response to changes in interest
rates. Declining interest rates will generally raise the
value of existing debt investments, and rising interest
rates will generally lower the value of existing debt
investments. Changes in the values of debt investments
usually will not affect the amount of income the Fund
receives from them, but will affect the value of the
Fund's shares. Interest rate risk is often greater for
investments with longer maturities.
The Fund may invest in so-called "premium"
investments, which are securities, such as bonds, that
bear coupon rates (Interest rates) higher than prevailing
market rates. In addition, during times of declining
interest rates, many of the Fund's investments may offer
interest rates that are higher than current market rates.
When the Fund holds those premium investments,
shareholders are likely to receive higher dividends (but
will bear a greater risk that the value of the Fund's
shares will fall) than they would if the Fund held
investments that offered current market rates of
interest. Premium investments involve a greater risk of
loss, because their values tend to decline over time.
Investors may find it useful to compare the Fund's
yield, which factors out the effects of premium
securities, with its current dividend rate, which does
not factor out that effect.
CREDIT RISK. Although U.S. Government investments are
generally considered to have the least credit risk (the
risk that the issuer will fail to make timely payments of
interest and principal) of fixed income investments, they
are not entirely free of credit risk. Despite relatively
low credit risk, the values of U.S. Government
investments will still fluctuate in response to changes
in interest rates.
PREPAYMENT RISK. Traditional debt investments typically
pay a fixed rate of interest until maturity, when the
entire principal amount in due. By contrast, payments on
mortgage-backed investments typically include both
interest and a partial payment of principal. Principal
may also be prepaid voluntarily, or as a result of
refinancing or foreclosure. The Fund may have to invest
the proceeds from payments on less attractive terms and
yields.
Prepayments are particularly common during periods
of declining interest rates, when property owners seek to
refinance their mortgages on more favorable terms; the
reverse is true during periods of rising interest rates.
Mortgage-backed investments are therefore less
likely to increase in value during periods of declining
interest rates than other debt of comparable maturities.
In addition, they have a higher risk of decline during
periods of rising interest rates because declining
prepayment rates effectively increase the average
maturity of the Fund's investments (and, therefore, its
sensitivity to changes in interest rates) at times when
that is least desirable. These investments can increase
the volatility of the Fund.
FORWARD COMMITMENTS AND REPURCHASE AGREEMENTS. The
Fund's investments may often take the form of contracts
with dealers for future delivery, commonly known as
forward commitments. A forward commitment involves a
risk of loss if the value of the investment declines
before the delivery date. The Fund may also enter into
repurchase agreements, under which it buys and investment
from a firm that has an obligation to buy the investment
back from the Fund at a fixed price and time, typically
within one week. Forward commitments and repurchase
agreements involve the risk that the other party will
default on its obligations and that the Fund may find it
difficult to recover the value of its investments.
FREQUENT TRADING. The Fund may buy or sell investments
relatively often, which involves higher brokerage
commissions and other expenses, and may increase the
amount of taxes payable by shareholders.
OTHER INVESTMENTS. The Fund may also buy and sell other
types of investments, such as collateralized mortgage
obligations (CMOs) and interest-only (IO) and principal-
only (PO) stripped mortgage-backed investments that are
U.S. Government investments, and may be subject to other
risks.
CHANGES IN POLICIES. The Fund's Trustees may change the
Fund's goal, investment strategies and other policies
without shareholder approval, except as otherwise
indicated.
(B) Restrictions of Investment:
Except as otherwise specifically designated, the
investment restrictions described in this Securities
Registration Statement and the Japanese prospectus are
not fundamental investment restrictions. The Trustees
may change any non-fundamental restrictions without
shareholder approval. As fundamental investment
restrictions, which may not be changed without a vote of
a majority of the outstanding voting securities, the Fund
may not and will not:
(1) Borrow money in excess of 10% of the value (taken at
the lower of cost or current value) of its total assets
(not including the amount borrowed) at the time the
borrowing is made, and then only from banks as a
temporary measure to facilitate the meeting of redemption
requests (not for leverage) which might otherwise require
the untimely disposition of portfolio investments or for
extraordinary or emergency purposes. Such borrowings
will be repaid before any additional investments are
purchased.
(2) Underwrite securities issued by other persons except
to the extent that, in connection with the disposition of
its portfolio investments, it may be deemed to be an
underwriter under certain federal securities laws.
(3) Purchase or sell real estate, although it may
purchase securities which are secured by or represent
interests in real estate.
(4) Purchase or sell commodities or commodity contracts.
(5) Make loans, except by purchase of debt obligations
in which the fund may invest consistent with its
investment policies, by entering into repurchase
agreements, or by lending its portfolio securities.
(6) With respect to 75% of its total assets, invest in
the securities of any issuer if, immediately after such
investment, more than 5% of the total assets of the fund
(taken at current value) would be invested in the
securities of such issuer; provided that this limitation
does not apply to obligations issued or guaranteed as to
interest or principal by the U.S. government or its
agencies or instrumentalities.
(7) With respect to 75% of its total assets, acquire
more than 10% of the outstanding voting securities of any
issuer.
(8) Purchase securities (other than securities of the
U.S. government, its agencies or instrumentalities) if,
as a result of such purchase, more than 25% of the Fund's
total assets would be invested in any one industry.
(9) Purchase or sell options, or puts, calls, straddles,
spreads or combinations thereof, except that the Fund may
write covered call options with respect to any part or
all of its portfolio securities and enter into closing
purchase transactions with respect to such options.
(10) Issue any class of securities which is senior
to the Fund's shares of beneficial interest, except for
permitted borrowings.
Fundamental restrictions 6, 7 and 8 are by their
terms inapplicable to U.S. Government Securities and
consequently are not expected to have any significant
effect on the operations of the Fund, since it is the
Fund's fundamental policy to invest exclusively in U.S.
Government Securities and repurchase agreements and
forward commitments with respect to such securities.
Although certain of the Fund's fundamental
investment restrictions permit it to borrow money to a
limited extent, it does not currently intend to do so and
did not do so last year.
The Investment Company Act of 1940 provides that a
"vote of a majority of the outstanding voting securities"
of the Fund means the affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the Fund,
or (2) 67% or more of the shares present at a meeting if
more than 50% of the outstanding shares of the Fund are
represented at the meeting in person or by proxy.
IT IS CONTRARY TO THE FUND'S PRESENT POLICY, WHICH MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL, TO:
(1) Invest in (a) securities which are not readily
marketable, (b) securities restricted as to resale
(excluding securities determined by the Trustees of the
Fund (or the person designated by the Trustees of the
Fund to make such determinations) to be readily
marketable), and (c) repurchase agreements maturing in
more than seven days, if, as a result, more than 15% of
the Fund's net assets (taken at current value) would be
invested in securities described in (a), (b) and (c)
above.
(2) Write covered call options with respect to any part
or all of its portfolio securities.
In addition, the Fund will, so long as the Shares of
the Fund are being offered for sale by the Fund in Japan,
comply with the following standards of selection of the
Japan Securities Dealers Association:
(1) The Fund will not invest more than 15% of its net assets
in securities that are not traded on an official stock
exchange or other regulated market, including , without
limitation, the National Association of Securities Dealers
Automated Quotation System (this restriction shall not be
applicable to securities determined by the Investment
Management Company to be liquid and for which a market price
(including a dealer quotation) is generally obtainable or
determinable);
(2) The Fund will not borrow money in excess of 10% of the
value of its total assets;
(3) The Fund will not make short sales of securities in excess
of the Fund's net asset value; and
(4) The Fund will not , together with other mutual funds
managed by the Investment Management Company, acquire more
than 50% of the outstanding voting securities of any issuer.
If any violation of the foregoing standards occurs,
the Fund will, promptly after discovery of the violation,
take such action as may be necessary to cause the
violation to cease, which shall be the only obligation of
the Fund and the only remedy in respect of the violation.
All percentage limitations on investments (other
than pursuant to non-fundamental restriction (1)) will
apply at the time of the making of an investment and
shall not be considered violated unless an excess or
deficiency occurs or exists immediately after and as a
result of such investment.
(C) Distribution Policy:
The Fund distributes net investment income monthly
and any net realized capital gains at least annually.
The payment to Japanese investors may be made until the
end of each month by Kokusai.
3. MANAGEMENT STRUCTURE
(A) Outline of Management of Assets, etc.:
A. Valuation of assets:
The Fund determines the net asset value per share of
each class of shares once each day the New York Stock
Exchange (the "Exchange") is open. Currently, the
Exchange is closed Saturdays, Sundays and the following
U.S. holidays: New Year's Day, Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, the
Fourth of July, Labor Day, Thanksgiving and Christmas.
The Fund determines net asset value as of the close of
regular trading on the Exchange, currently 4:00 p.m.
However, equity options held by the Fund are priced as of
the close of trading at 4:10 p.m., and futures contracts
on U.S. government and other fixed-income securities and
index options held by the Fund are priced as of their
close of trading at 4:15 p.m.
Securities for which market quotations are readily
available are valued at prices which, in the opinion of
Investment Management Company, most nearly represent the
market values of such securities. Currently, such prices
are determined using the last reported sale price or, if
no sales are reported (as in the case of some securities
traded over-the-counter), the last reported bid price.
Short-term investments having remaining maturities of 60
days or less are valued at amortized cost, which
approximates market value. All other securities and
assets are valued at their fair value procedures approved
by the Trustees. Liabilities are deducted from the total
assets and resulting amount is divided by the number of
shares of the class outstanding.
Reliable market quotations are not considered to be
readily available for long-term corporate bonds and
notes, certain preferred stocks, tax-exempt securities,
and certain foreign securities. These investments are
valued at fair value on the basis of valuations furnished
by pricing services, which determine valuations for
normal, institutional-size trading units of such
securities using methods based on market transactions for
comparable securities and various relationships between
securities which are generally recognized by
institutional traders.
If any securities held by the Fund are restricted as
to resale, Investment Management Company determines their
fair value using procedures approved by the Trustees.
The fair value of such securities is generally determined
as the amount which the Fund could reasonably expect to
realize from an orderly disposition of such securities
over a reasonable period of time. The valuation
procedures applied in any specific instance are likely to
vary from case to case. However, consideration is
generally given to the financial position of the issuer
and other fundamental analytical data relating to the
investment and to the nature of the restrictions on
disposition of the securities (including any registration
expenses that might be borne by the Fund in connection
with such disposition). In addition, specific factors
are also generally considered, such as the cost of the
investment, the market value of any unrestricted
securities of the same class, the size of the holding,
the prices of any recent transactions or offers with
respect to such securities and any available analysts'
reports regarding the issuer.
Generally, trading in certain securities (such as
foreign securities) is substantially completed each day
at various times prior to the close of the Exchange. The
values of these securities used in determining the net
asset value of the Fund's shares are computed as of such
times. Also, because of the amount of time required to
collect and process trading information as to large
numbers of securities issues, the values of certain
securities (such as convertible bonds, U.S. government
securities, and tax-exempt securities) are determined
based on market quotations collected earlier in the day
at the latest practicable time prior to the close of the
Exchange. Occasionally, events affecting the value of
such securities may occur between such times and the
close of the Exchange which will not be reflected in the
computation of the Fund's net asset value. If events
materially affecting the value of such securities occur
during such period, then these securities will be valued
at their fair value using procedures approved by the
Trustees.
B. Management Fee, etc.:
(1) Management Fee:
(a) Management and Agent Association Member Fees
Under a Management Contract dated July 8, 1994,
the Fund pays a quarterly fee to Investment
Management Company based on the average net assets
of the Fund, as determined at the close of each
business day during the quarter, at an annual rate
of 0.57% of the first $500 million of average net
assets, 0.475% of the next $500 million, 0.4275% of
the next $500 million and 0.38% thereafter.
For the fiscal years ending on September 30,
1998, 1997 and 1996 the Fund paid $15,162,940,
$15,502,934 and $18,073,706, respectively as a
management fee.
(b) Custodian Fee and Charges of the Investor
Servicing Agent
Putnam Fiduciary Trust Company, the Fund's
Custodian, is entitled to receive, out of the assets
of the Fund, reasonable compensation for its
services and expenses as Custodian, as agreed from
time to time between the Fund and the Custodian, not
including fees paid by the Custodian to any sub-
custodian, payable monthly based on the average
daily total net assets of the Fund during the
relevant month. Any reasonable disbursements and
out-of-pocket expenses (including without limitation
telephone, telex, cable and postage expenses)
incurred by the Custodian, and any custody charges
of banks and financial institutions to whom the
custody of assets of the Fund is entrusted, are
borne by the Fund.
The Fund pays to Putnam Investor Services, a
division of Putnam Fiduciary Trust Company, the
Fund's Investor Servicing Agent, such fee, out of
the assets of the Fund, as is mutually agreed upon
in writing from time to time, in the amount, at the
time and in the manner of payment mutually agreed.
For the fiscal year ending on September 30,
1998, the Fund paid $5,987,761 as a custodian fee
and investor servicing agent fee.
(c) Fee on Class M Distribution Plan
The Class M distribution plan provides for
payments by the Fund to Putnam Mutual Funds Corp. at
the annual rate of up to 1.00% of average net assets
attributable to Class M shares. The Trustees
currently limit payments under the Class M plan to
the annual rate of 0.50% of such assets.
Putnam Mutual Funds Corp. makes quarterly
payments to Kokusai and other dealers at an annual
rate of 0.40% of the average net asset value of
Class M shares attributable to shareholders for whom
Kokusai and other dealers are designated as the
dealer of record.
Payments under the plan are intended to
compensate Putnam Mutual Funds Corp. for services
provided and expenses incurred by it as principal
underwriter of the Fund's shares, including the
payments to dealers mentioned above. Putnam Mutual
Funds Corp. may suspend or modify such payments to
dealers.
For the fiscal year ending September 30, 1998,
the Fund paid fees under the distribution plan of
$696,888 for Class M shares.
(d) Other Expenses:
The Fund pays all expenses not assumed by
Investment Management Company, including Trustees'
fees, auditing, legal, custodial, investor servicing
and shareholder reporting expenses, and payments
under its distribution plans (which are in turn
allocated to the relevant class of shares). The
Fund also reimburses Investment Management Company
for the compensation and related expenses of certain
Fund officers and their staff who provide
administrative services. The total reimbursement is
determined annually by the Trustees and was $31,593
for fiscal 1998.
Each Trustee receives a fee for his or her
services. Each Trustee also receives fees for
serving as Trustee of other Putnam funds. The
Trustees periodically review their fees to assure
that such fees continue to be appropriate in light
of their responsibilities as well as in relation to
fees paid to trustees of other mutual fund
complexes. The Trustees meet monthly over a two-day
period, except in August. The Board Policy
Committee, which consists solely of Trustees not
affiliated with the Investment Management Company
and is responsible for recommending Trustee
compensation, estimates that Committee and Trustee
meeting time together with the appropriate
preparation requires the equivalent of at least
three business days per Trustee meeting. The
following table shows the year each Trustee was
first elected a Trustee of the Putnam funds, the
fees paid to each Trustee by the Fund for fiscal
1998 and the fees paid to each Trustee by all of the
Putnam funds during calendar 1998:
<TABLE><CAPTION>
COMPENSATION TABLE
<S> <C> <C> <C> <C>
Pension on Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees/Year fund (1) fund expenses upon retirement(2) funds(3)
Jameson A. Baxter/1994 (4) $3,064 $722 $95,000 $207,000
Hans H. Estin/1972 2,711 1,467 95,000 182,500
John A. Hill/1985 (4) (5) 2,682 551 115,000 (5) 200,500
Ronald J. Jackson/1996 (4) 2,970 370 95,000 200,500
Paul L. Joskow/1997 2,483 43 95,000 180,500
Elizabeth T. Kennan/1992 2,970 786 95,000 200,500
Lawrence J. Lasser/1992 2,653 588 95,000 178,500
John H. Mullin, III/1997 2,453 67 95,000 180,500
Robert E. Patterson/1984 2,696 440 95,000 181,500
Donald S. Perkins/1982 2,711 1,586 95,000 182,500
William F. Pounds/1971 (5) 3,174 1,648 115,000 215,000
George Putnam/1957 2,668 1,676 95,000 179,500
George Putnam, III/1984 2,697 290 95,000 181,500
A.J.C. Smith/1986 2,625 987 95,000 176,500
W. Thomas Stephens/1997 (4) 2,703 62 95,000 181,500
W. Nicholas Thorndike/1992 2,711 1,129 95,000 182,500
</TABLE>
(1) Includes an annual retainer and an attendance fee for
each meeting attended.
(2) Assumes that each Trustee retires at the normal
retirement date. Estimated benefits for each Trustee are
based on Trustee fee rates in effect during calendar
1998.
(3) As of December 31, 1998, there were 113 funds in the
Putnam family.
(4) Includes compensation deferred pursuant to a Trustee
Compensation Deferral Plan. The total amounts of
deferred compensation payable by the Fund to Mrs. Baxter
and Messrs. Hill, Jackson, Joskow, Mullin and Stephens as
of September 30, 1998 were $5,772, $15,201, $8,802,
$2,019, $1,768, and $2,730, respectively, including
income earned on such amounts.
(5) Includes additional compensation for service as Vice
Chairman of the Board of Trustees.
Under a Retirement Plan for Trustees of the
Putnam funds (the "Plan") each Trustee who retires
with at least five years of service as a Trustee of
the funds is entitled to receive an annual
retirement benefit equal to one-half of the average
annual compensation paid to such Trustee for the
last three years of service prior to retirement.
This retirement benefit is payable during a
Trustee's lifetime, beginning the year following
retirement, for a number of years equal to such
Trustee's years of service. A death benefit is also
available under the Plan which assures that the
Trustee and his or her beneficiaries will receive
benefit payments for the lesser of an aggregate
period of (i) ten years or (ii) such Trustee's total
years of service.
The Plan Administrator (a committee comprised of
Trustees who are not "interested persons" of the
Fund, as defined in the Investment Company Act of
1940) may terminate or amend the Plan at any time,
but no termination or amendment will result in a
reduction in the amount of benefits (i) currently
being paid to a Trustee at the time of such
termination or amendment, or (ii) to which a current
Trustee would have been entitled had he or she
retired immediately prior to such termination or
amendment.
Investment Management Company places all orders
for purchases and sales of Fund securities. In
selecting broker-dealers, Investment Management
Company may consider research and brokerage services
furnished to it and its affiliates. Subject to
seeking the most favorable price and execution
available, Investment Management Company may
consider sales of Fund shares (and, if permitted by
law, of the other Putnam Funds) as a factor in the
selection of broker-dealers. During fiscal 1996,
1997 and 1998, the Fund paid $28,699, $28,500 and $0
in brokerage commissions, respectively. During
fiscal 1998 the Fund did not pay any fee to brokers
and dealers to recognize research, statistical and
quotation services provided to Investment Management
Company and its affiliates.
For the fiscal year ending on September 30,
1998, the Fund paid $19,469,365 in total other
expenses, including payments under its distribution
plans, but excluding management fees, investor
servicing agent expenses and custodian expenses.
C. Sales, Repurchases and Custody:
(1) Sales of Shares:
a. Sales in the United States
Investors residing in the United States can open
a Fund account with as little as $500 and make
additional investments at any time with as little as
$50. The Fund sells its shares at the offering
price, which is the NAV plus any applicable sales
charge. Investors' financial advisor or Putnam
Investor Services generally must receive investor's
completed buy order before the close of regular
trading on the exchange for investors' shares to be
bought at that day's offering price.
* THROUGH A FINANCIAL ADVISOR Investors' advisor
will be responsible for furnishing all necessary
documents to Putnam Investor Services, and may
charge investors for his or her services.
* THROUGH SYSTEMATIC INVESTING Investors can make
regular investments of $25 or more per month through
automatic deductions from investors' bank checking
or savings account. Application forms are available
through investors' advisor or Putnam Investor
Services at 1-800-225-1581.
Investors may also complete an order form and
write a check for the amount investors wish to
invest, payable to the Fund. Return the check and
completed form to Putnam Mutual Funds Corp.
The Fund may periodically close to new purchases
of shares or refuse any order to buy shares if the
Fund determines that doing so would be in the best
interests of the Fund and its shareholders.
CLASS M SHARES
- Initial sales charge of up to 3.25%
- Lower sales charges for larger investments
of $50,000 or more
- No deferred sales charge
- Lower annual expenses, and higher
dividends, than Class B shares because of lower
12b-1 fee
- Higher annual expenses, and lower
dividends, than Class A shares because of higher
12b-1 fee
- No conversion to Class A shares, so future
12b-1 fee does not decrease
INITIAL SALES CHARGES FOR CLASS M SHARES
Class M sales charge
as a percentage of:
Amount of purchase Net amount Offering
at offering price ($) invested price *
Under 50,000 3.36% 3.25%
50,000 but under 100,000 2.30 2.25
100,000 but under 250,000 1.52 1.50
250,000 but under 500,000 1.01 1.00
500,000 but under 1,000,000 None None
1,000,000 and above None None
* Offering price includes sales charge.
DISTRIBUTION (12B-1) PLANS. The Fund has adopted
distribution plans to pay for the marketing of Fund
shares and for services provided to shareholders.
The plans provide for payments at annual rates
(based on average net assets) of up to 1.00% on
Class M shares. Because these fees are paid out of
the Fund's assets on an ongoing basis, they will
increase the cost of investors' investment. The
higher fees for Class M may cost investors more than
paying the initial sales charge for Class A shares.
Because Class M shares, unlike Class B shares, do
not convert to Class A shares, Class M shares may
cost investors more over time than Class B shares.
An investor may be eligible to buy class M
shares at reduced sales charges. For fiscal
1996,1997 and 1998, Putnam Mutual Funds Corp.
received $69,481, $25,529 and $8,127,400,
respectively, in sales charges for Class M shares,
of which it retained $6,928, $2,522 and $635,378,
respectively.
b. Sales in Japan
In Japan, Shares of the Fund are offered on any
Business Day and any business day of the Distributor
in Japan during the Subscription Period mentioned in
"8. Period of Subscription, Part I Information
concerning Securities" of a securities registration
statement pursuant to the terms set forth in "Part
I. Information concerning Securities" of the
relevant securities registration statement. The
Distributor or the Sales Handling Company shall
provide to the investors an Agreement Concerning a
Foreign Securities Transactions Account and other
agreements (the "Account Agreement") and receive
from such investors an application for requesting
the opening of a transactions account under the
Account Agreement. Purchases may be made in the
minimum investment amount of 100 shares and in
integral multiples of 100 shares.
The issue price for Shares shall be, in
principal, the Net Asset Value per Share next
calculated on the day on which the Fund receives
such application. The Trade Day in Japan is the day
when the Distributor confirms the execution of the
order (ordinarily the business day in Japan next
following the placement of orders), and the payment
and delivery shall be made on the fourth Business
Day after and including the Trade Day. The sales
charge in Japan shall be 3% of the amount obtained
by deduction of the amount equivalent to 3% of the
public offering price from such price (hereinafter
referred to as the "Sales Price"). Any amount,
which is over the net asset value, of the Sales
Price shall be retained by Putnam Mutual Fund Corp.,
principal underwriter of the Fund. The public
offering price means the amount calculated by
dividing the net asset value by (1- 0.0325) and
rounded to three decimal places.
The Investors having entrusted the Distributor
or the Sales Handling Company with safekeeping of
the certificates for Fund shares will receive a
certificate of safekeeping in exchange for the
purchase price. In such case payment shall be made
in yen in principal and the applicable exchange rate
shall be the exchange rate which shall be based on
the foreign exchange rate quoted in the Tokyo
Foreign Exchange Market on the Trade Day and which
shall be determined by such Distributor or Sales
Handling Company. The payment may be made in
dollars to the extent that the Distributor or the
Sales Handling Company can agree.
In addition, the Distributor or the Sales
Handling Company in Japan who are members of the
Japan Securities Dealers' Association cannot
continue sales of the Shares in Japan when the net
assets of the Fund are less than yen100,000,000 or the
Shares otherwise cease to comply with the "Standards
of Selection of Foreign Investment Fund Securities"
contained in the "Regulations Concerning the
Transactions of Foreign Securities" established by
the Association.
(2) Repurchase of Shares:
a. Repurchase in the United States
Investors residing in the U.S. can sell
investors' shares back to the Fund any day the New
York Stock Exchange is open, either through
investors' financial advisor or directly to the
Fund. Payment for redemptions may be delayed until
the Fund collects the purchase price of shares,
which may take up to 15 calendar days after the
purchase date.
* SELLING SHARES THROUGH INVESTORS' FINANCIAL
ADVISOR. Investors' advisor must receive investors'
request in proper form before the close of regular
trading on the New York Stock Exchange to receive
that day's NAV, less any applicable deferred sales
charge. Investors' advisor will be responsible for
furnishing all necessary documents to Putnam
Investor Services on a timely basis and may charge
investors for his or her services.
* SELLING SHARES DIRECTLY TO THE FUND. Putnam
Investor Services must receive investors' request in
proper form before the close of regular trading on
the New York Stock Exchange in order to receive that
day's NAV, less any applicable sales charge.
By mail. Send a signed letter of instruction to
Putnam Investor Services. If investors have
certificates for the shares investors want to sell,
investors must include them along with completed
stock power forms.
By telephone. Investors may use Putnam's
Telephone Redemption Privilege to redeem shares
valued at less than $100,000 unless investors have
notified Putnam Investor Services of an address
change within the preceding 15 days. Unless
investors indicate otherwise on the account
application, Putnam Investor Services will be
authorized to accept redemption and transfer
instructions received by telephone.
The Telephone Redemption Privilege is not
available if there are certificates for investors'
shares. The Telephone Redemption Privilege may be
modified or terminated without notice.
* ADDITIONAL DOCUMENTS. If investors
*sell shares with a value of $100,000 or more,
*want redemption proceeds sent to an address
other than investors' address as it appears on
Putnam's records, or
*have notified Putnam of a change in address
within the preceding 15 days,
the signatures of registered owners or their legal
representatives must be guaranteed by a bank, broker-
dealer or certain other financial institutions.
Stock power forms are available from investors'
financial advisor, Putnam Investor Services and many
commercial banks.
Putnam Investor Services usually requires
additional documents for the sale of shares by a
corporation, partnership, agent or fiduciary, or a
surviving joint owner. Contact Putnam Investor
Services for details.
* WHEN WILL THE FUND PAY INVESTORS? The Fund
generally sends investors payment for investors'
shares the business day after investors' request is
received. Under unusual circumstances, the Fund may
suspend redemptions, or postpone payment for more
than seven days as permitted by federal securities
laws.
* REDEMPTION BY THE FUND. If investors own fewer
shares than the minimum set by the Trustees
(presently 20 shares), the Fund may redeem
investors' shares without investors' permission and
send investors the proceeds. The Fund may also
redeem shares if investors own shares more than a
maximum amount set by the Trustees. There is
presently no maximum, but the Trustees could set a
maximum that applies to both present and future
shareholders.
b. Repurchase in Japan
Shareholders in Japan may at any time request
repurchase of their Shares. Repurchase requests in
Japan may be made to Investor Servicing Agent
through the Distributor or the Sales Handling
Company on a Fund Business Day that is business day
of the Distributor in Japan without a contingent
deferred sales charge. The repurchase shall be made
is integral multiples of 1 shares.
The price a shareholder in Japan will receive is
the next net asset value calculated after the Fund
receives the repurchase request from the
Distributor, provided the request is received before
the close of regular trading on the New York Stock
Exchange. The payment of the price shall be made in
yen through the Distributor or the Sales Handling
Company pursuant to the Account Agreement or, if the
Distributor or the Sales Handling Company agree, in
dollars. The payment for repurchase proceeds shall
be made on the fourth business day of securities
companies in Japan after and including the Trade
Day.
(3) Suspension of Repurchase:
The Fund may suspend shareholders' right of
redemption, or postpone payment for more than seven
days, if the New York Stock Exchange is closed for
other than customary weekends or holidays, or if
permitted by the rules of the U.S. Securities and
Exchange Commission during periods when trading on
the Exchange is restricted or during any emergency
which makes it impracticable for the Fund to dispose
of its securities or to determine fairly the value
of its net assets, or during any other period
permitted by order of the U.S. Securities and
Exchange Commission for protection of investors.
(4) Custody of Shares:
Share certificates shall be held by Shareholders
at their own risk.
The custody of the Share certificates (if
issued) representing Shares sold to Japanese
Shareholders shall, unless otherwise instructed by
the Shareholder, be held, in the name of the
custodian, by the custodian of Kokusai.
Certificates of custody for the Shares shall be
delivered by the Distributor or the Sales Handling
Company to the Japanese Shareholders.
D. Miscellaneous:
(1) Duration and Liquidation:
Unless terminated, the Fund shall continue
without limitation of time. The Fund may be
terminated at any time by vote of Shareholders
holding at least 66 2/3% of the Shares entitled to
vote or by the Trustees of the Fund by written
notice to the Shareholders.
(2) Accounting Year:
The accounts of the Fund will be closed each
year on September 30.
(3) Authorized Shares:
There is no prescribed authorized number of
Shares, and Shares may be issued from time to time.
(4) Agreement and Declaration of Trust:
Originals or copies of the Agreement and
Declaration of Trust, as amended, are maintained in
the office of the Fund and are made available for
public inspection for the Shareholders. Originals
or copies of the Agreement and Declaration of Trust,
as amended, are on file in the United States with
the Secretary of State of The Commonwealth of
Massachusetts and with the Clerk of the City of
Boston.
The Agreement and Declaration of Trust may be
amended at any time by an instrument in writing
signed by a majority of the then Trustees when
authorized to do so by vote of Shareholders holding
a majority of the Shares entitled to vote, except
that an amendment which shall affect the holders of
one or more series or classes of Shares but not the
holders of all outstanding series and classes shall
be authorized by vote of the Shareholders holding a
majority of the Shares entitled to vote of each
series and class affected and no vote of
Shareholders of a series or class not affected shall
be required. Amendments having the purpose of
changing the name of the Fund or of supplying any
omission, curing any ambiguity or curing, correcting
or supplementing any defective or inconsistent
provision contained herein shall not require
authorization by Shareholder vote.
In Japan, material changes in the Agreement and
Declaration of Trust shall be published and sent to
the Japanese Shareholders.
(5) Issue of Warrants, Subscription Rights, etc.:
The Fund may not grant privileges to purchase
shares of the Fund to shareholders or investors by
issuing warrants, subscription rights or options, or
other similar rights.
(6) How Performance Is Shown:
FUND ADVERTISEMENTS MAY, FROM TIME TO TIME,
INCLUDE PERFORMANCE INFORMATION. "Yield" is
calculated by dividing the annualized net investment
income per share during a recent 30-day period by
the maximum public offering price per share on the
last day of that period.
For purposes of calculating yield, net
investment income is calculated in accordance with
U.S. Securities and Exchange Commission regulations
and may differ from net investment income as
determined for tax purposes. U.S. Securities and
Exchange Commission regulations require that net
investment income be calculated on a "yield-to-
maturity" basis, which has the effect of amortizing
any premiums or discounts in the current market
value of fixed-income securities. The current
dividend rate is based on net investment income as
determined for tax purposes, which may not reflect
amortization in the same manner.
Yield is based on the price of the shares,
including the maximum initial sales charge.
"Total return" for the one-, five- and ten-year
periods (or for the life of the Fund, if shorter)
through the most recent calendar quarter represents
the average annual compounded rate of return on an
investment of $1,000 in the Fund invested at the
maximum public offering price. Total return may
also be presented for other periods or based on
investment at reduced sales charge levels. Any
quotation of investment performance not reflecting
the maximum initial sales charge or contingent
deferred sales charge would be reduced if the sales
charge were used. For the one-year, five-year and
ten-year periods ended September 30, 1998, the
average annual total return for Class M shares of
the Fund was 4.83%, 5.49%, and 7.22%, respectively.
Returns for Class M shares reflect the deduction of
the current maximum initial sales charge of 3.25%
for Class M shares. Returns shown for Class M
shares for periods prior to February 6, 1995 are
derived from the historical performance of Class A
shares, adjusted to reflect both the deduction of
the initial sales charge and the higher operating
expenses applicable to Class M shares. The 30-day
yield for the Class M shares of the Fund for the
period ended September 30, 1998 was 5.55%.
ALL DATA ARE BASED ON PAST INVESTMENT RESULTS
AND DO NOT PREDICT FUTURE PERFORMANCE. Investment
performance, which will vary, is based on many
factors, including market conditions, portfolio
composition, Fund operating expenses and the class
of shares the investor purchases. Investment
performance also often reflects the risks associated
with the Fund's investment objective and policies.
These factors should be considered when comparing
the Fund's investment results with those of other
mutual funds and other investment vehicles.
Quotations of investment performance for any
period when an expense limitation was in effect will
be greater than if the limitation had not been in
effect. Fund performance may be compared to that of
various indexes.
(B) Outline of Disclosure System:
(1) Disclosure in U.S.A.:
(i) Disclosure to shareholders
In accordance with the Investment Company Act of
1940, the Fund is required to send to its
shareholders annual and semi-annual reports
containing financial information.
(ii)Disclosure to the SEC
The Fund has filed a registration statement with
the SEC on Form N-1A; the Fund updates that
registration statement periodically in accordance
with the Investment Company Act of 1940.
(2) Disclosure in Japan:
a. Disclosure to the Supervisory Authority:
(i)Disclosure Required under the Securities and
Exchange Law
When the Fund intends to offer the Shares
amounting to more than certain specific amount in
yen in Japan, it shall submit to the Director of
Kanto Local Finance Bureau securities registration
statements together with the copies of the Agreement
and Declaration of the Fund and the agreements with
major related companies as attachments thereto. The
said documents are made available for public
inspection for investors and any other persons who
desire at Kanto Local Finance Bureau of the Ministry
of Finance.
The Distributor or the Sales Handling Company of
the Shares shall deliver to the investors
prospectuses the contents of which are substantially
identical to Part I and Part II of the securities
registration statements. For the purpose of
disclosure of the financial conditions, etc., the
Trustees shall submit to the Director of Kanto Local
Finance Bureau of the Ministry of Finance securities
reports within 6 months of the end of each fiscal
year, semi-annual reports within 3 months of the end
of each semi-annual period and extraordinary reports
from time to time when changes occur as to material
subjects of the Fund. These documents are available
for public inspection for the investors and any
other persons who desire at the Kanto Local Finance
Bureau of the Ministry of Finance.
(ii)Notifications, etc. under the Law
Concerning Securities Investment Trusts and
Securities Investment Companies
If the Investment Management Company conducts
the business of offering for sale of shares of the
Fund, it must file in advance certain information
relating to the Fund with the Commissioner of
Financial Supervisory Agent under the Law Concerning
Securities Investment Trusts and Securities
Investment Companies (the Law No. 198, 1951)
(hereinafter referred to the "Investment Trusts
Law"). In addition, if the Investment Management
Company amends the Agreement and Declaration of
Trust of the Fund, it must file in advance such
amendment and the details thereof with the
Commissioner of Financial Supervisory Agent.
Further, the Investment Management Company must
prepare the Management Report on the described
matters concerning the assets of the Fund under the
Investment Trusts Law immediately after the end of
each calculation period of the Fund and must file
such Report with the Commissioner of Financial
Supervisory Agent.
b. Disclosure to Japanese Shareholders:
If the Investment Management Company makes any
amendment to the Agreement and Declaration of Trust
of the Fund, the substance of which is important, it
must give in advance public notice concerning its
intention to make such amendment and the substance
of such amendment at least 30 days prior to such
amendment, and must deliver written documents
containing the amendment to the shareholders known
in Japan. Provided, however, that if the said
written documents are delivered to all the
shareholders in Japan, the relevant public notice is
not required to be given.
The Japanese Shareholders will be notified of
the material facts which would change their position
through the Distributor or the Sales Handling
Company.
The above described Management Report on the
Fund will be sent to the shareholders known in
Japan.
(C) Restrictions on Transactions with Interested Parties:
Portfolio securities of the Fund may not be
purchased from or sold or loaned to any Trustee of the
Fund, Putnam Investment Management, Inc., acting as
investment adviser of the Fund, or any affiliate thereof
or any of their directors, officers, or employees, or any
major shareholder thereof (meaning a shareholder who
holds to the actual knowledge of Investment Management
Company, on his own account whether in his own or other
name (as well as a nominee's name), 10% or more of the
total issued outstanding shares of such a company) acting
as principal or for their own account unless the
transaction is made within the investment restrictions
set forth in the Fund's prospectus and statement of
additional information and either (i) at a price
determined by current publicly available quotations
(including a dealer quotation) or (ii) at competitive
prices or interest rates prevailing from time to time on
internationally recognized securities markets or
internationally recognized money markets (including a
dealer quotation).
4. INFORMATION CONCERNING THE EXERCISE OF RIGHTS BY
SHAREHOLDERS, ETC.
(A) Rights of Shareholders and Procedures for Their Exercise:
Shareholders must register their shares in their own
name in order to exercise directly their rights as
Shareholders. Therefore, the Shareholders in Japan who
entrust the custody of their Shares to the Distributor or
the Sales Handling Company cannot exercise directly their
Shareholder rights, because their Shares are registered
in the name of the custodian. Shareholders in Japan may
have the Distributor or the Sales Handling Company
exercise their rights on their behalf in accordance with
the Account Agreement with t the Distributor or the Sales
Handling Company.
Shareholders in Japan who do not entrust the custody
of their Shares to the Distributor or the Sales Handling
Company may exercise their rights in accordance with
their own arrangement under their own responsibility.
The major rights enjoyed by Shareholders are as
follows:
(i) Voting rights
Each share has one vote, with fractional shares
voting proportionally. Shares of each class will
vote together as a single class except when
otherwise required by law or as determined by the
Trustees. Although the Fund is not required to hold
annual meetings of its shareholders, shareholders
holding at least 10% of the outstanding shares
entitled to vote have the right to call a meeting to
elect or remove Trustees, or to take other actions
as provided in the Agreement and Declaration of
Trust.
(ii)Repurchase rights
Shareholders are entitled to request repurchase
of Shares at their Net Asset Value at any time.
(iii) Rights to receive dividends
Shareholders are entitled to receive any
distribution from net investment income monthly and
any net realized capital gains at least annually.
Distributions from capital gains are made after
applying any available capital loss carryovers.
Shareholders may choose three distribution
options, though investors in Japan may only choose
the last alternative.
- Reinvest all distributions in additional
shares without a sales charge;
- Receive distributions from net investment
income in cash while reinvesting capital gains
distributions in additional shares without a sales
charge; or
- Receive all distributions in cash.
(iv)Right to receive distributions upon dissolution
Shareholders of the Fund are entitled to receive
distributions upon dissolution in proportion to the
number of shares then held by them, except as
otherwise required.
(v) Right to inspect accounting books and the like
Shareholders are entitled to inspect the
Agreement and Declaration of Trust, the accounting
books at the discretion of the Court and the minutes
of any shareholders' meetings.
(vi)Right to transfer shares
Shares are transferable without restriction except
as limited by applicable law.
(vii) Rights with respect to the U.S.
registration statement
If, under the 1933 Act, there is, at the time it
became effective, any false statement concerning a
material fact in the U.S. registration statement, or
any omission of any statement of a material fact
required to be stated therein or necessary in order
to make the statements made therein not misleading,
shareholders are generally entitled to institute a
lawsuit, against the person who had signed the
relevant Registration Statement, the trustees of the
issuer (or any person placed in the same position),
any person involved in preparing such Statement or
any underwriter of the relevant shares.
(B) Tax Treatment of Shareholders in Japan:
The tax treatment of Shareholders in Japan shall be
as follows:
(1) The distributions to be made by the Fund will be
treated as distributions made by a domestic investment
trust.
a. The distributions to be made by the Fund to
Japanese individual shareholders will be subject to
separate taxation from other income (i.e.
withholding of income tax at the rate of 15% and
withholding of local taxes at the rate of 5% in
Japan). In this case, no report concerning
distributions will be filed with the Japanese tax
authorities.
b. The distributions to be made by the Fund to
Japanese corporate shareholders will be subject to
withholding of income tax at the rate of 15% and to
withholding of local taxes at the rate of 5% in
Japan. In certain cases, the Distributor or the
Sales Handling Company will prepare a report
concerning distributions and file such report with
the Japanese tax authorities.
c. Net investment returns such as dividends, etc.
and distributions of short-term net realized capital
gain, among distributions on Shares of the Fund,
will be, in principle, subject to withholding of U.
S. federal income tax at the rate of 15% and the
amount obtained after such deduction will be paid in
Japan.
Distributions of long-term net realized capital
gain will not be subject to withholding of U. S.
federal income tax and the full amount thereof will
be paid in Japan. The amount subject to withholding
of U. S. federal income tax may be deducted from the
tax levied on a foreign entity in Japan.
The Japanese withholding tax imposed on
distributions as referred to in a. and b. above will
be collected by way of so-called "difference
collecting method." In this method only the
difference between the amount equivalent to 20% of
the distributions before U.S. withholding tax and
the amount of U.S. withholding tax withheld in the
U.S. will be collected in Japan.
(2) The provisions of Japanese tax laws giving the
privilege of a certain deduction from taxable income to
corporations, which may apply to dividends paid by a
domestic corporation, shall not apply.
(3) Capital gains and losses arising from purchase and
repurchase of the Shares shall be treated in the same way
as those arising from purchase and sale of a domestic
investment trust. The distribution of the net
liquidation assets shall be also treated in the same way
as those arising from liquidation of a domestic
investment trust.
(4) The Japanese securities transaction tax will not be
imposed so far as the transactions concerned are
conducted outside Japan. Such tax, however, is
applicable to dealers' transactions for their own account
and to privately negotiated transactions conducted in
Japan.
(C) Foreign Exchange Control in U.S.A.:
In U.S.A., there are no foreign exchange control
restrictions on remittance of dividends, repurchase
money, etc. of the Shares to Japanese Shareholders.
(D) Agent in Japan:
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
The foregoing law firm is the true and lawful agent
of the Fund to represent and act for the Fund in Japan
for the purpose of;
(1) the receipt of any and all communications, claims,
actions, proceedings and processes as to matters
involving problems under the laws and the rules and
regulations of the JSDA and
(2) representation in and out of court in connection
with any and all disputes, controversies or differences
regarding the transactions relating to the public
offering, sale and repurchase in Japan of the Shares of
the Fund.
The agent for the registration with the Director of
Kanto Local Finance Bureau of the Ministry of Finance of
the initial public offering concerned as well as for the
continuous disclosure is each of the following persons:
Harume Nakano
Ken Miura
Attorneys-at-law
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki, 3-chome
Chiyoda-ku, Tokyo
(E) Jurisdiction:
Limited only to litigation brought by Japanese
investors regarding transactions relating to (D)(2)
above, the Fund has agreed that the following court has
jurisdiction over such litigation and the Japanese law is
applicable thereto:
Tokyo District Court
1-4, Kasumigaseki 1-chome
Chiyoda-ku, Tokyo
5. STATUS OF INVESTMENT FUND
(A) Diversification of Investment Portfolio
(As of January 31, 1999)
Name of Investment
Types of Assets Country Total U.S. Dollar Ratio(%)
U.S. Government Agency United States 3,027,950,270 85.66
Mortgages
U.S. Treasury Obligations United States 308,616,448 8.73
Cash, Deposit, and Other Assets 198,104,920 5.60
(After deduction of liabilities)
Total 3,534,671,638 100.00
(Net Asset Value) (yen411,259 million)
Note:Investment ratio is calculated by dividing each
asset at its market value by the total Net Asset
Value of the Fund. The same applies hereinafter.
(B) Results of Past Operations
(1) Record of Changes in Net Assets (Class M Shares)
Record of changes in net assets at the end of the
following fiscal years and at the end of each month
within one year prior to the end of January 1999 is as
follows:
Total Net Asset Value Net Asset Value per Share
Dollar Yen
(thousands) (millions) Dollar Yen
1st Fiscal Year 2,609 304 12.96 1,508
(September 30, 1995)
2nd Fiscal Year 6,116 712 12.63 1,470
(September 30, 1996)
3rd Fiscal Year 7,850 913 13.00 1,513
(September 30, 1997)
4th Fiscal Year 163,076 18,974 13.25 1,542
(September 30, 1998)
1998 End of February 178,538 20,773 13.06 1,520
March 192,135 22,355 13.03 1,516
April 201,942 23,496 13.05 1,518
May 197,107 22,933 13.08 1,522
June 185,874 21,626 13.07 1,521
July 175,798 20,454 13.04 1,517
August 169,907 19,769 13.11 1,525
September 163,076 18,974 13.25 1,542
October 162,507 18,908 13.15 1,530
November 157,969 18,380 13.12 1,527
December 159,194 18,522 13.10 1,524
1999 End of January 156,613 18,222 13.11 1,525
(Note) Operations of Class M Shares were commenced on
February 6, 1995.
(2) Record of Distributions Paid
Amount of Dividend paid
Period per share
1st Fiscal Year (2/6/95-9/30/95) $0.60 (yen69.81)
2nd Fiscal Year (10/1/95-9/30/96) $0.83 (yen96.57)
3rd Fiscal Year (10/1/96-9/30/97) $0.78 (yen90.75)
4th Fiscal Year (10/1/97-9/30/98) $0.80 (yen93.08)
(Note) Record of distribution paid during the
period from January 1997 through January 1999 are as
follows:
Ex-dividend Date Dividend NAV per Share
Dollar Dollar
1997 January 8 0.064 12.73
February 7 0.065 12.82
March 7 0.065 12.75
April 8 0.064 12.57
May 12 0.064 12.73
June 10 0.066 12.78
July 11 0.066 12.90
August 11 0.067 12.85
September 10 0.066 12.86
October 10 0.066 12.93
November 10 0.067 12.96
December 10 0.070 13.01
1998 January 12 0.068 13.12
February 10 0.067 13.03
March 10 0.067 13.01
April 13 0.066 12.99
May 11 0.066 12.97
June 10 0.066 13.04
July 10 0.066 13.03
August 10 0.066 13.01
September 11 0.066 13.10
October 12 0.066 13.08
November 10 0.066 13.02
December 10 0.066 13.08
1999 January 11 0.066 13.01
(C) Record of Sales and Repurchases
Record of sales and repurchases during the following
fiscal years and number of outstanding Shares of the Fund as
of the end of such fiscal years are as follows:
Number of Number of Number of
Shares Sold Shares Outstanding
Repurchased Shares
1st Fiscal 217,478 16,150 201,328
Year (0) (0) (0)
(2/6/95-9/30/95)
2nd Fiscal 509,261 226,315 484,274
Year (0) (0) (0)
(10/1/95-9/30/96)
3rd Fiscal 702,884 583,426 603,732
Year (0) (0) (0)
(10/1/96-9/30/97)
4th Fiscal 19,422,018 7,720,736 12,305,014
Year (18,344,600) (7,230,200) (11,114,400)
(10/1/97-9/30/98)
Note: The number of Shares sold, repurchased and
outstanding in the parentheses represents those sold,
repurchased and outstanding in Japan. The Shares have
been sold in Japan since December 4, 1997.
II. OUTLINE OF THE FUND
1. Fund
(A) Law of Place of Incorporation
The Fund is a Massachusetts business trust organized
in Massachusetts, U.S.A. on November 1, 1983.
Chapter 182 of the Massachusetts General Laws
prescribes the fundamental matters in regard to the
operations of certain business trusts constituting
voluntary associations under that chapter.
The Fund is an open-end, diversified management
company under the Investment Company Act of 1940.
(B) Outline of the Supervisory Authority
Refer to I - l (B) Outline of the Supervisory
Authority.
(C) Purpose of the Fund
The purpose of the Fund is to provide investors a
managed investment primarily in securities, debt
instruments and other instruments and rights of a
financial character.
(D) History of the Fund
November 1, 1983: Organization of the Fund as a
Massachusetts business trust.
Adoption of the Agreement and
Declaration of Trust.
January 10, 1992: Adoption of the Amended and
Restated Agreement and
Declaration of Trust.
(E) Amount of Capital Stock
Not applicable.
(F) Structure of the management of the Fund
The Trustees are responsible for generally
overseeing the conduct of the Fund's business. The
Agreement and Declaration of Trust provides that they
shall have all powers necessary or convenient to carry
out that responsibility. The number of Trustees is fixed
by the Trustees and may not be less than three. A
Trustee may be elected either by the Trustees or by the
shareholders. At any meeting called for the purpose, a
Trustee may be removed by vote of two-thirds of the
outstanding shares of the Fund. Each Trustee elected by
the Trustees or the shareholders shall serve until he or
she retires, resigns, is removed, or dies or until the
next meeting of shareholders called for the purpose of
electing Trustees and until the election and
qualification of his or her successor.
The Trustees of the Fund are authorized by the
Agreement and Declaration of Trust to issue shares of the
Fund in one or more series, each series being preferred
over all other series in respect of the assets allocated
to that series. The Trustees may, without shareholder
approval, divide the shares of any series into two or
more classes, with such preferences and special or
relative rights and privileges as the Trustees may
determine.
Under the Agreement and Declaration of Trust the
shareholders shall have power, as and to the extent
provided therein, to vote only (i) for the election of
Trustees, to the extent provided therein (ii) for the
removal of Trustees, to the extent provided therein (iii)
with respect to any investment adviser, to the extent
provided therein (iv) with respect to any termination of
the Fund, to the extent provided therein (v) with respect
to certain amendments of the Agreement and Declaration of
Trust, (vi) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a
court action, proceeding, or claim should or should not
be brought or maintained derivatively or as a class
action on behalf of the Fund or the shareholders, and
(vii) with respect to such additional matters relating to
the Fund as may be required by the Agreement and
Declaration of Trust, the Bylaws of the Fund, or any
registration of the Fund with the U.S. Securities and
Exchange Commission (or any successor agency) or any
state, or as the Trustees may consider necessary or
desirable. Certain of the foregoing actions may, in
addition, be taken by the Trustees without vote of the
shareholders of the Fund.
On any matter submitted to a vote of shareholders,
all shares of the Fund then entitled to vote are voted in
the aggregate as a single class without regard to series
or classes of shares, except (1) when required by the
Investment Company Act of 1940, as amended, or when the
Trustees hall have determined that the matter affects one
or more series or classes of shares materially
differently, share are voted by individual series or
class; and (2) when the Trustees have determined that the
matter affects on the interests of one or more series or
classes, then only shareholders of such series or classes
are entitled to vote thereon. There is no cumulative
voting.
Meetings of shareholders may be called by the Clerk
whenever ordered by the Trustees, the Chairman of the
Trustees, or requested in writing by the holder or
holders of at least one-tenth of the outstanding shares
entitled to vote at the meeting. Written notice of any
meeting of shareholders must be given by mailing the
notice at least seven days before the meeting. Thirty
percent of shares entitled to vote on a particular matter
is a quorum for the transaction of business on that
matter at a shareholders' meeting, except that, where any
provision of law or of the Agreement and Declaration of
Trust permits or requires that holders of any series or
class vote as an individual series or class, then thirty
percent of the aggregate number of shares of that series
or class entitled to vote are necessary to constitute a
quorum for the transaction of business by that series or
class. For the purpose of determining the shareholders
of any class or series of shares who are entitled to vote
or act at any meeting, or who are entitled to receive
payment of any dividend or other distribution, the
Trustees are authorized to fix record dates, which may
not be more then 90 days before the date of any meeting
of shareholders or more than 60 days before the date of
payment of any dividend or other distribution.
The Trustees are authorized by the Agreement and
Declaration of Trust to adopt Bylaws not inconsistent
with the Agreement and Declaration of Trust providing for
the conduct of the business of the Fund. The Bylaws
contemplate that the Trustees shall elect a Chairman of
the Trustees, the President, the Treasurer, and the Clerk
of the Fund, and that other officers, if any, may be
elected or appointed by the Trustees at any time. The
Bylaws may be amended or repealed, in whole or in part,
by a majority of the Trustees then in office at any
meeting of the Trustees, or by one or more writings
signed by such a majority.
Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the
Trustees may from time to time determine. It shall be
sufficient notice to a Trustee of a special meeting to
send notice by mail at least forty-eight hours or by
telegram at least twenty-four hours before the meeting or
to give notice to him or her in person or by telephone at
least twenty-four hours before the meeting.
At any meeting of Trustees, a majority of the
Trustees then in office shall constitute a quorum.
Except as otherwise provided in the Agreement and
Declaration of Trust or Bylaws, any action to be taken by
the Trustees may be taken by a majority of the Trustees
present at a meeting (a quorum being present), or by
written consents of a majority of the Trustees then in
office.
Subject to a favorable majority shareholder vote (as
defined in the Agreement and Declaration of Trust), the
Trustees may contract for exclusive or nonexclusive
advisory and/or management services with any corporation,
trust, association, or other organization.
The Agreement and Declaration of Trust contains
provisions for the indemnification of Trustees, officers,
and shareholders of the Fund under the circumstances and
on the terms specified therein.
The Fund may be terminated at any time by vote of
shareholders holding at least two-thirds of the shares
entitled to vote or by the trustees by written notice to
the shareholders. Any series of shares may be terminated
at any time by vote of shareholders holding at least two-
thirds of the shares of such series entitled to vote or
by the Trustees by written notice to the shareholders of
such series.
The foregoing is a general summary of certain
provisions of the Agreement and Declaration of Trust and
Bylaws of the Fund, and is qualified in its entirety by
reference to each of those documents.
(G) Information Concerning Major Shareholders
Not applicable.
(H) Information Concerning Directors, Officers and Employees
(1) Trustees and Officers of the Fund
(as of January 31, 1999)
Shares
Name Office and Resume Owned
Title
George Putnam Chairman and present: Chairman and 11,656.338
President Director of
Putnam Investment
Management and
Putnam Mutual
Funds Corp.
Director, Marsh &
McLennan
Companies, Inc.
William F. Vice present: Professor
Pounds Chairman Emeritus of 1,396.573
Management,
Alfred P. Sloan
School of
Management,
Massachusetts
Institute of
Technology
John A. Hill Vice present: Chairman and
Chairman Managing 511.118
Director, First
Reserve
Corporation
Jameson Adkins Trustee present: President,
Baxter Baxter 138.319
Associates, Inc.
Hans H. Estin Trustee present: Vice Chairman,
North American 191.003
Management Corp.
Ronald J. Trustee present: Former
Jackson Chairman, 138.569
President and
Chief Executive
Officer of Fisher-
Price, Inc.,
Trustee of Salem
Hospital and the
Peabody Essex
Museum
Paul. L. Trustee present: Professor
Joskow Emeritus of 121.611
Economics and
Management and
former Chairman
of the Department
of Economics at
the Massachusetts
Institute of
Technology,
Director, New
England Electric
System, State
Farm Indemnity
Company and
Whitehead
Institute for
Biomedical
Research
Elizabeth T. Trustee present: President
Kennan Emeritus and 473.202
Professor, Mount
Holyoke College
Lawrence J. Trustee and present: President,
Lasser Vice Chief Executive 157.340
President Officer and
Director of
Putnam
Investments, Inc.
and Putnam
Investment
Management
Director, Marsh &
McLennan
Companies, Inc.
John H. Trustee present: Chairman and
Mullin, III Chief Executive 413.114
Officer of
Ridgeway Farm,
Director of ACX
Technologies,
Inc., Alex. Brown
Realty, Inc., and
The Liberty
Corporation
Robert E. Trustee present: President and
Patterson Trustee of Cabot 999.345
Industrial Trust
and Trustee of
SEA Education
Association
Donald S. Trustee present: Director of
Perkins various 1,177.385
corporations,
including Cummins
Engine Company,
Lucent
Technologies,
Inc., Nanophase
Technologies,
Inc. and Springs
Industries, Inc.
George Putnam, Trustee present: President, New
III Generation 2,000.268
Research, Inc.
A.J.C. Smith Trustee present: Chairman and
Chief Executive 717.196
Officer, Marsh &
McLennan
Companies, Inc.
W. Thomas Trustee present: President and
Stephens Chief Executive 109.474
Officer of
Macmillan Bloedel
Ltd., Director of
Mail-well Inc.,
Qwest
Communications,
The Eagle Picher
Trust and New
Century Energies
W. Nicholas Trustee present: Director of
Thorndike various 157.340
corporations and
charitable
organizations,
including Data
General
Corporation,
Bradley Real
Estate, Inc. and
Providence
Journal Co.
Trustee of Cabot
Industrial Trust,
Massachusetts
General Hospital
and Eastern
Utilities
Associations
Charles E. Executive present: Managing 0
Porter Vice Director of
President Putnam
Investments, Inc.
and Putnam
Investment
Management
Patricia C. Senior Vice present: Senior Vice 0
Flaherty President President of
Putnam
Investments, Inc.
and Putnam
Investment
Management
Richard A. Vice present: Managing 0
Monaghan President Director of
Putnam
Investments,
Inc., Putnam
Investment
Management and
Putnam Mutual
Funds Corp.
Ian C. Vice present: Senior 0
Ferguson President Managing Director
of Putnam
Investments, Inc.
and Putnam
Investment
Management
Gordon H. Vice present: Director and 0
Silver President Senior Managing
Director of
Putnam
Investments, Inc.
and Putnam
Investment
Management
John D. Hughes Senior Vice present Senior Vice 0
President President of
and Putnam Investment
Treasurer Management
Beverly Marcus Clerk and N/A 0
Assistant
Treasurer
John R. Verani Vice present: Senior Vice 0
President President of
Putnam
Investment, Inc.
and Putnam
Investment
Management
Michael Vice present: Managing 0
Martino President Director of
Putnam
Investments, Inc.
Kevin M. Vice present: Managing 0
Cronin President Director of
Putnam
Investments, Inc.
Edward H. Vice present: Managing 0
D'Alelio President Director of
Putnam
Investments, Inc.
and Putnam
Investment
Management
(2) Employees of the Fund
The Fund does not have any employees.
(I) Description of Business and Outline of Operation
The Fund may carry out any administrative and
managerial act, including the purchase, sale,
subscription and exchange of any securities, and the
exercise of all rights directly or indirectly pertaining
to the Fund's assets. The Fund has retained Putnam
Investment Management, Inc., the investment adviser, to
render investment advisory services and Putnam Fiduciary
Trust Company, to hold the assets of the Fund in custody
and act as Investor Servicing Agent.
(J) Miscellaneous
(1) Changes of Trustees and Officers
Trustees may be removed or replaced by, among
other things, a resolution adopted by a vote of two-
thirds of the outstanding shares at a meeting called
for the purpose. In the event of vacancy, the
remaining Trustees may fill such vacancy by
appointing for the remaining term of the predecessor
Trustee such other person as they in their
discretion shall see fit. The Trustees may add to
their number as they consider appropriate. The
Trustees may elect and remove officers as they
consider appropriate.
(2) Amendment to the Agreement and Declaration of Trust
Generally, approval of shareholders is required
to amend the Agreement and Declaration of Trust,
except for certain matters such as change of name,
curing any ambiguity or curing any defective or
inconsistent provision.
(3) Litigation and Other Significant Events
Nothing which has or which would have a material
adverse effect on the Fund has occurred which is
required to be disclosed and has not been disclosed.
The fiscal year end of the Fund is September 30.
The Fund is established for an indefinite period and
may be dissolved at any time by vote of the
shareholders holding at least two-thirds of the
shares entitled to vote or by the Trustees by
written notice to shareholders.
2. Putnam Investment Management, Inc. (Investment Management
Company)
(A) Law of Place of Incorporation
Putnam is incorporated under the General Corporation
Law of The Commonwealth of Massachusetts, U.S.A. Its
investment advisory business is regulated under the
Investment Advisers Act of 1940.
Under the Investment Advisers Act of 1940, an
investment adviser means, with certain exceptions, any
person who, for compensation, engages in the business of
advising others, either directly or through publications
or writings, as to the value of securities or as to the
advisability of investing in, purchasing or selling
securities, or who, for compensation and as part of a
regular business, issues analyses or reports concerning
securities. Investment advisers under the Act may not
conduct their business unless they are registered with
the SEC.
(B) Outline of the Supervisory Authority
Investment Management Company is registered as an
investment adviser under the Investment Advisers Act of
1940.
(C) Purpose of the Company
Investment Management Company's sole business is
investment management, which includes the buying,
selling, exchanging and trading of securities of all
descriptions on behalf of mutual funds in any part of the
world.
(D) History of the Company
Investment Management Company is one of America's
oldest and largest money management firms. Investment
Management Company's staff of experienced portfolio
managers and research analysts selects securities and
constantly supervises the fund's portfolio. By pooling
an investor's money with that of other investors, a
greater variety of securities can be purchased than would
be the case individually: the resulting diversification
helps reduce investment risk. Investment Management
Company has been managing mutual funds since 1937.
Today, the firm serves as the Investment Management
Company for the funds in the Putnam Family, with over
$228 .45 billion in assets in over 9 million shareholder
accounts at January 31, 1999. An affiliate, The Putnam
Advisory Company, Inc., manages domestic and foreign
institutional accounts and mutual funds, including the
accounts of many Fortune 500 companies. Another
affiliate, Putnam Fiduciary Trust Company, provides
investment advice to institutional clients under its
banking and fiduciary powers as well as shareholder and
custody services to the Putnam Funds.
Putnam Investment Management Inc., Putnam Mutual
Funds and Putnam Fiduciary Trust Company are subsidiaries
of Putnam Investments, Inc., which is located at One Post
Office Square, Boston, Massachusetts 02109 and except for
a minority stake owned by employees, is owned by Marsh &
McLennan Companies, Inc., a publicly-owned holding
company whose principal businesses are international
insurance and reinsurance brokerage, employee benefit
consulting and investment management.
(E) Amount of Capital Stock $462,028,873 (as of January 31,
1999)
1. Amount of Capital (issued capital stock at par
value):
Common Stock 1,000 shares at $1 par value
2. Number of authorized shares of capital stock:
Common Stock 1,000 shares
3. Number of outstanding shares of capital stock:
Common Stock 1,000 shares
4. Amount of capital (for the purposes of this Item,
"Amount of Capital" means total stockholders' equity
for the past five years:
Year Amount of Capital
(Total Stockholders'
Equity)
End of 1994 $48,149,491
End of 1995 $45,521,351
End of 1996 $45,817,658
End of 1997 $48,617,160
End of 1998 $425,782,007
(F) Structure of the Management of the Company
Investment Management Company is ultimately managed
by its Board of Directors, which is elected by its
shareholders.
Each fund managed by Investment Management Company
is managed by one or more portfolio managers. These
managers, in coordination with analysts who research
specific securities and other members of the relevant
investment group (in the case of the Fund, Investment
Management Company's Fixed Income Investments Group),
provide a continuous investment program for the Fund and
place all orders for the purchase and sale of portfolio
securities.
The investment performance and portfolio of each
Fund is overseen by its Board of Trustees, a majority of
whom are not affiliated with Investment Management
Company. The Trustees meet 11 times a year and review
the performance of each fund with its manager at least
quarterly.
In selecting portfolio securities for the Fund,
Investment Management Company looks for securities that
represent attractive values based on careful issue-by-
issue credit analysis and hundreds of onsite visits and
other contacts with issuers every year. Investment
Management Company is one of the largest managers of high
yield and other debt securities in the United States.
The following officer of Investment Management
Company has had primary responsibility for the day-to-day
management of the Fund's portfolio since the years stated
below. Their experience as portfolio managers or
investment advisors at least the last five years is also
shown:
(as of January 31,1999)
Manager Experience
Kevin M. Cronin -1998 Employed by Putnam Management since 1997.
Managing Prior to February 1997, Mr. Cronin was
Director employed at MFS Investment Management.
Michael Martino 1994 Employed by Putnam Management since January
Managing 1994.
Director
(G) Information Concerning Major Stockholders
As of January 31, 1999, all the outstanding shares
of capital stock of Investment Management Company were
owned by Putnam Investments, Inc. See subsection D above.
(H) Information Concerning Officers and Employees
The following table lists the names of various
officers and directors of Investment Management Company
and their respective positions with Investment Management
Company. For each named individual, the table lists: (i)
any other organizations (excluding other Investment
Management Company's funds) with which the officer
and/or director has recently had or has substantial
involvement; and (ii) positions held with such organization:
List of Officers and Directors of Putnam Investment Management, Inc.
List of Officers and Directors of Putnam Investment Management, Inc.
(as at January 31, 1999)
Position
with Putnam
Name Investment Other Business Affiliation
Management,
Inc.
1 Putnam, George Chairman Director of Putnam Mutual
Funds Corp.
2 Lasser, Lawrence President
J. and
Director
3 Silver, Gordon Director Director of Putnam
H. and Senior Fiduciary Trust Company and
Managing Senior Managing Director of
Director Putnam Mutual Funds Corp.
4 Burke, Robert W. Senior Senior Managing Director of
Managing Putnam Mutual Funds Corp.
Director
5 Coburn, Gary N. Senior
Managing
Director
6 Collman, Senior Senior Managing Director of
Kathleen M. Managing Putnam Mutual Funds Corp.
Director
7 Ferguson, Ian C. Senior
Managing
Director
8 Regan, Anthony Senior
W. Managing
Director
9 Spiegel, Steven Senior Senior Managing Director of
Managing Putnam Mutual Funds Corp.
Director
10 Anderson, Blake Managing
E. Director
11 Antill, Jennifer Managing
Director
12 Beck, Robert R. Managing
Director
13 Browchuk, Brett Managing
Director
14 Cassaro, Joseph Managing
A. Director
15 Cotner, C. Beth Managing
Director
16 Cronin, Kevin M. Managing Managing Director of Putnam
Director Fiduciary Trust Company
17 D'Alelio, Edward Managing
H. Director
18 Daly, Kenneth L. Managing Managing Director of Putnam
Director Mutual Funds Corp.
19 DeTore, John A. Managing Managing Director of Putnam
Director Fiduciary Trust Company
20 Durgarian, Managing Director and Managing
Karnig H. Director Director of Putnam
and Chief Fiduciary Trust Company
Financial
Officer
21 Esteves, Irene Managing Treasurer of Putnam
M. Director Fiduciary Trust Company
and Chief
Financial
Officer
22 Gillis, Roland Managing
Director
23 Haslett, Thomas Managing
R. Director
24 Hurley, William Managing Managing Director and CFO
J. Director of Putnam Mutual Funds
Corp.
25 Jacobs, Jerome Managing
J. Director
26 Joseph, Joseph Managing
P. Director
27 Kamshad, Omid Managing
Director
28 King, David L. Managing Managing Director of Putnam
Director Mutual Funds Corp.
29 Kohli, D. Managing
William Director
30 Kreisel, Anthony Managing
I. Director
31 Kuenstner, Managing
Deborah F. Director
32 Landes, William Managing
J. Director
33 Leichter, Managing
Jennifer Director
34 Maloney, Kevin Managing
J. Director
35 Martino, Michael Managing Managing Director of Putnam
Director Fiduciary Trust Company
36 Maxwell, Scott Managing
M. Director
37 McGue, William Managing
F. Director
38 McMullen, Carol Managing
C. Director
39 Mcmani, Krisha Managing
Director
40 Miller, Daniel Managing
L. Director
41 Morgan Jr., John Managing Managing Director of Putnam
J. Director Fiduciary Trust Company
42 Oristaglio, Managing
Stephen Director
43 Peacher, Stephen Managing
C. Director
44 Porter, Charles Managing
E. Director
45 Reilly, Thomas Managing
V. Director
46 Schultz, Managing Managing Director of Putnam
Mitchell D. Director Mutual Funds Corp.
47 Scott, Justin M. Managing Managing Director of Putnam
Director Fiduciary Trust Company
48 Shadek Jr., Managing Managing Director of Putnam
Edward T. Director Fiduciary Trust Company
49 Starr, Loren Managing Managing Director of Putnam
Director Mutual Funds Corp.
50 Swift, Robert Managing
Director
51 Talanian, John Managing Managing Director of Putnam
C. Director Mutual Funds Corp.
52 Tibbetts, Managing Managing Director of Putnam
Richard B. Director Mutual Funds Corp.
53 Waldman, David Managing
L. Director
54 Wetlaufer, Eric Managing
Director
55 Woolverton, Managing Managing Director of Putnam
William H. Director Mutual Funds Corp.
56 Zieff, William Managing
E. Director
57 Arends, Michael Senior Vice Senior Vice President of
K. President Putnam Mutual Funds Corp.
58 Asher, Steven E. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
and Senior Vice President
of Putnam Fiduciary Trust
Company
59 Atkin, Michael Senior Vice
J. President
60 Attridge, Gail Senior Vice Senior Vice President of
S. President Putnam Fiduciary Trust
Company
61 Augustine, Senior Vice
Jeffrey B. President
62 Bakshi, Manjit Senior Vice
S. President
63 Bamford, Dolores Senior Vice
Snyder President
64 Baumbach, Robert Senior Vice
K. President
65 Berka, Sharon A. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
66 Block, Richard Senior Vice
L. President
67 Boselli, John A. Senior Vice
President
68 Bousa, Edward P. Senior Vice
President
69 Bresnahan, Senior Vice Senior Vice President of
Leslee R. President Putnam Mutual Funds Corp.
70 Burke, Andrea Senior Vice
President
71 Burns, Cheryl A. Senior Vice
President
72 Byrne, Joshua L. Senior Vice
President
73 Callahan, Ellen Senior Vice
S. President
74 Carlson, David Senior Vice
G. President
75 Chrostowski, Senior Vice Senior Vice President of
Louis F. President Putnam Mutual Funds Corp.
76 Curran, Peter J. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
77 Dalferro, John Senior Vice
R. President
78 Derbyshire, Senior Vice
Ralph C. President
79 England, Richard Senior Vice
B. President
80 Farrell, Deborah Senior Vice Senior Vice President of
S. President Putnam Mutual Funds Corp.
81 Finch, Edward R. Senior Vice
President
82 Flaherty, Senior Vice Senior Vice President of
Patricia C. President Putnam Mutual Funds Corp.
83 Fontana, Forrest Senior Vice
N. President
84 Francis, Senior Vice
Jonathan H. President
85 Frost, Karen T. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
86 Frucci, Richard Senior Vice Senior Vice President of
M. President Putnam Fiduciary Trust
Company
87 Fullerton, Brian Senior Vice Senior Vice President of
J. President Putnam Mutual Funds Corp.
88 Grant, Peter J. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
89 Graviere, Senior Vice
Patrice President
90 Grim, Daniel J. Senior Vice
President
91 Haagensen, Paul Senior Vice
E. President
92 Hadden, Peter J. Senior Vice
President
93 Halperin, Senior Vice
Matthew C. President
94 Healey, Deborah Senior Vice
R. President
95 Holding, Pamela Senior Vice
President
96 Hotchkiss, Senior Vice
Michael F. President
97 Kaufman, Jeffrey Senior Vice
President
98 Kay, Karen R. Senior Vice Clerk, Director and Senior
President Vice President of Putnam
Fiduciary Trust Company and
Senior Vice President of
Putnam Mutual Funds Corp.
99 Kirson, Steven Senior Vice
L. President
100 Knight, Jeffrey Senior Vice
L. President
102 Koontz, Jill A. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
103 Korn, Karen R. Senior Vice
President
104 Lannum III, Senior Vice
Coleman N. President
105 Lindsey, Jeffrey Senior Vice
R. President
106 Lomba, Rufino R. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
107 MacElwee, Jones, Senior Vice
Elizabeth M. President
108 Madore, Robert Senior Vice Senior Vice President of
A. President Putnam Fiduciary Trust
Company
109 Malloy, Julie M. Senior Vice
President
110 Marrkand, Paul Senior Vice
E. President
111 Matteis, Andrew Senior Vice
S. President
112 McDonald, Senior Vice
Richard E. President
113 Meehan, Thalia Senior Vice
President
114 Mehta, Sandeep Senior Vice
President
115 Miller, William Senior Vice
H. President
116 Mockard, Jeanne Senior Vice
L. President
117 Morgan, Kelly A. Senior Vice
President
118 Mufson, Michael Senior Vice
J. President
119 Mullen, Donald Senior Vice Senior Vice President of
E. President Putnam Mutual Funds Corp.
120 Mullin, Hugh H. Senior Vice
President
121 Netols, Jeffrey Senior Vice Senior Vice President of
W. President Putnam Fiduciary Trust
Company
122 Oler, Stephen S. Senior Vice
President
123 Paine, Robert M. Senior Vice
President
124 Parker, Margery Senior Vice
C. President
125 Perry, William Senior Vice
President
126 Peters, Carmel Senior Vice
President
127 Petralia, Senior Vice Senior Vice President of
Randolph S. President Putnam Mutual Funds Corp.
128 Plapinger, Keith Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
129 Pohl, Charles G. Senior Vice
President
130 Pollard, Mark D. Senior Vice
President
131 Prusko, James M. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
132 Quistberg, Paul Senior Vice
T. President
133 Ray, Christopher Senior Vice
A. President
134 Reeves, William Senior Vice
H. President
135 Rogers, Kevin J. Senior Vice
President
136 Ruys de Perez, Senior Vice Senior Vice President of
Charles A. President Putnam Fiduciary Trust
Company and Senior Vice
President of Putnam Mutual
Funds Corp.
137 Santos, David J. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
138 Santosus, Senior Vice
Anthony C. President
139 Schwister, Jay Senior Vice Senior Vice President of
E. President Putnam Fiduciary Trust
Company
140 Scordato, Senior Vice Senior Vice President of
Christine A. President Putnam Mutual Funds Corp.
141 Sievert, Jean I. Senior Vice
President
142 Simon, Sheldon Senior Vice
N. President
143 Simozar, Saied Senior Vice
President
144 Smith Jr., Leo Senior Vice
J. President
145 Smith, Margaret Senior Vice
D. President
146 Spatz, Erin J. Senior Vice
President
147 Stack, Michael Senior Vice Senior Vice President of
P. President Putnam Mutual Funds Corp.
148 Stairs, George Senior Vice
W. President
149 Strumpf, Casey Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
150 Sugimoto, Senior Vice Senior Vice President of
Toshifumi President Putnam Mutual Funds Corp.
151 Sullivan, Roger Senior Vice
R. President
152 Svensson, Lisa Senior Vice
H. President
153 Swanberg, Senior Vice
Charles H. President
154 Thomsen, Senior Vice Senior Vice President of
Rosemary H. President Putnam Fiduciary Trust
Company
155 Troped, Bonnie Senior Vice Senior Vice President of
L. President Putnam Mutual Funds Corp.
156 Verani, John R. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
157 Walsh, Francis Senior Vice
P. President
158 Warren, Paul C. Senior Vice
President
159 Weinstein, Senior Vice
Michael R. President
160 Weiss, Manuel Senior Vice
President
161 Whalen, Edward Senior Vice Senior Vice President of
F. President Putnam Mutual Funds Corp.
162 Wheeler, Diane Senior Vice
D.F. President
163 Wyke, Richard P. Senior Vice
President
164 Yogg, Michael R. Senior Vice
President
165 Zukowski, Gerald Senior Vice
S. President
(I) Summary of Business Lines and Business Operation
Investment Management Company is engaged in the business
of providing investment management and investment
advisory services to mutual funds. As of the end of
January 1999, Investment Management Company managed,
advised, and/or administered the following 113 funds and
fund portfolios (having an aggregate net asset value of
approximately $228.45 billion):
Name Month/Date Principal Total Net
/Year Characteri Net Asset
Established stics Asset Value
hed Value per
($ share
million) ($)
1 The George Putnam Fund of 11/5/37 Open/Equity 3822.28 18.22
Boston; A
2 The George Putnam Fund of 32256 Open/Equity 1494.05 18.06
Boston; B
3 The George Putnam Fund of 33207 Open/Equity 284.64 18.06
Boston; M
4 The George Putnam Fund of 32873 Open/Equity 535.50 18.25
Boston; Y
5 Putnam American Government 29645 Open/Bond 1450.70 9.00
Income Fund; A
6 Putnam American Government 33012 Open/Bond 104.51 8.97
Income Fund; B
7 Putnam American Government 33282 Open/Bond 4.05 9.02
Income Fund; M
8 Putnam Asia Pacific Growth 31827 Open/Equity 121.94 9.13
Fund; A
9 Putnam Asia Pacific Growth 32659 Open/Equity 113.32 8.97
Fund; B
10 Putnam Asia Pacific Growth 33269 Open/Equity 6.74 9.06
Fund; M
11 Putnam Asia Pacific Fund II 34415 Open/Equity 1.91 7.35
12 Putnam Asset Allocation: 32910 Open/Balan 1025.18 12.25
Balanced Portfolio; A ced
13 Putnam Asset Allocation: 32914 Open/Balan 564.75 12.18
Balanced Portfolio; B ced
14 Putnam Asset Allocation: 33116 Open/Balan 113.13 12.11
Balanced Portfolio; C ced
15 Putnam Asset Allocation: 33274 Open/Balan 67.22 12.22
Balanced Portfolio; M ced
16 Putnam Asset Allocation: 33067 Open/Balan 282.75 12.26
Balanced Portfolio; Y ced
17 Putnam Asset Allocation : 32910 Open/Balan 412.34 10.56
Conservative Portfolio; A ced
18 Putnam Asset Allocation : 32921 Open/Balan 183.22 10.52
Conservative Portfolio; B ced
19 Putnam Asset Allocation : 33116 Open/Balan 55.99 10.49
Conservative Portfolio; C ced
20 Putnam Asset Allocation : 33275 Open/Balan 22.47 10.53
Conservative Portfolio; M ced
21 Putnam Asset Allocation : 33067 Open/Balan 47.22 10.57
Conservative Portfolio; Y ced
22 Putnam Asset Allocation: 32911 Open/Balan 752.65 13.98
Growth Portfolio; A ced
23 Putnam Asset Allocation: 32919 Open/Balan 472.51 13.82
Growth Portfolio; B ced
24 Putnam Asset Allocation: 33116 Open/Balan 106.97 13.72
Growth Portfolio; C ced
25 Putnam Asset Allocation: 33269 Open/Balan 63.25 13.83
Growth Portfolio; M ced
26 Putnam Asset Allocation: 33067 Open/Balan 264.53 14.05
Growth Portfolio; Y ced
27 Putnam Arizona Tax Exempt 31806 Open/Bond 116.52 9.44
Income Fund; A
28 Putnam Arizona Tax Exempt 32703 Open/Bond 34.14 9.42
Income Fund; B
29 Putnam Arizona Tax Exempt 33421 Open/Bond 0.51 9.47
Income Fund; M
30 Putnam Balanced Fund 33512 Open/Balan 3.79 12.52
ced
31 Putnam Balanced Retirement 29694 Open/Balan 669.77 10.90
Fund; A ced
32 Putnam Balanced Retirement 32904 Open/Balan 170.31 10.81
Fund; B ced
33 Putnam Balanced Retirement 33313 Open/Balan 13.73 10.85
Fund; M ced
34 Putnam California 32473 Closed/Bon 72.55 15.75
Investment Grade Municipal d
Trust
35 Putnam California Tax 28973 Open/Bond 3077.11 8.85
Exempt Income Fund; A
36 Putnam California Tax 32511 Open/Bond 661.65 8.85
Exempt Income Fund; B
37 Putnam California Tax 33282 Open/Bond 21.18 8.84
Exempt Income Fund; M
38 Putnam California Tax 30614 Open/Bond 32.86 1.00
Exempt Money Market Fund
39 Putnam Capital 32724 Open/Equit 53.71 8.02
Opportunities Fund; A y
40 Putnam Capital 33178 Open/Equit 73.48 8.01
Opportunities Fund; B y
41 Putnam Capital 33624 Open/Equit 4.72 8.02
Opportunities Fund; M y
42 Putnam Capital Appreciation 32724 Open/Equit 1539.13 23.23
Fund; A y
43 Putnam Capital Appreciation 33178 Open/Equit 1711.08 22.98
Fund; B y
44 Putnam Capital Appreciation 33624 Open/Equit 113.99 23.02
Fund; M y
45 Putnam Convertible 33417 Closed/Bon 87.46 23.56
Opportunity and Income d
Trust
46 Putnam Convertible Income- 6/29/72 Open/Balan 1064.98 19.89
Growth Trust; A ced
47 Putnam Convertible Income- 32703 Open/Balan 303.47 19.67
Growth Trust; B ced
48 Putnam Convertible Income- 33309 Open/Balan 18.38 19.77
Growth Trust; M ced
49 Putnam Diversified Equity 33054 Open/Equit 316.36 14.15
Trust; A y
50 Putnam Diversified Equity 33055 Open/Equit 395.36 13.92
Trust; B y
51 Putnam Diversified Equity 33421 Open/Equit 30.68 14.00
Trust; M y
52 Putnam Dividend Income Fund 31317 Closed/Bon 124.74 11.52
d
53 Putnam Diversified Income 30957 Open/Bond 1827.83 11.51
Trust; A
54 Putnam Diversified Income 32567 Open/Bond 2081.29 11.46
Trust; B
55 Putnam Diversified Income 33207 Open/Bond 1040.00 11.47
Trust; M
56 Putnam Diversified Income 33795 Open/Bond 15.62 11.52
Trust ; Y
57 Putnam Emerging Markets 33512 Open/Equit 34.89 7.00
Fund; A y
58 Putnam Emerging Markets 33512 Open/Equit 25.05 6.96
Fund; B y
59 Putnam Emerging Markets 33512 Open/Equit 2.07 6.98
Fund; M y
60 Putnam Equity Fund 98 34332 Open/Equit 6.11 11.44
y
61 Putnam Equity Income Fund; 26829 Open/Balan 1141.35 15.76
A ced
62 Putnam Equity Income Fund; 32763 Open/Balan 658.14 15.66
B ced
63 Putnam Equity Income Fund; 33208 Open/Balan 62.37 15.67
M ced
64 Putnam Europe Growth Fund; 31661 Open/Equit 934.77 22.17
A y
65 Putnam Europe Growth Fund; 32904 Open/Equit 817.49 21.65
B y
66 Putnam Europe Growth Fund; 33207 Open/Equit 140.92 21.97
M y
67 Putnam Florida Tax Exempt 31647 Open/Bond 246.49 9.57
Income Fund; A
68 Putnam Florida Tax Exempt 32511 Open/Bond 82.48 9.57
Income Fund; B
69 Putnam Florida Tax Exempt 33358 Open/Bond 1.85 9.56
Income Fund; M
70 Putnam Global Natural 27964 Open/Equit 153.56 15.09
Resources Fund; A y
71 Putnam Global Natural 32904 Open/Equit 106.74 14.88
Resources Fund; B y
72 Putnam Global Natural 33421 Open/Equit 5.49 15.02
Resources Fund; M y
73 Putnam Global Equity Fund 34459 Open/Equit 3.18 12.23
y
74 Putnam Global Growth and 33240 Open/Equit 27.08 13.10
Income Fund; A y
75 Putnam Global Growth and 33240 Open/Equit 20.91 13.02
Income Fund; B y
76 Putnam Global Growth and 33240 Open/Equit 2.23 13.05
Income Fund; M y
77 Putnam Global Governmental 30467 Open/Bond 249.00 12.99
Income Trust; A
78 Putnam Global Governmental 32904 Open/Bond 36.72 12.95
Income Trust; B
79 Putnam Global Governmental 33313 Open/Bond 226.30 12.93
Income Trust; M
80 Putnam Global Growth Fund; 9/1/67 Open/Equit 3487.37 12.97
A y
81 Putnam Global Growth Fund; 32259 Open/Equit 2051.12 12.49
B y
82 Putnam Global Growth Fund; 33297 Open/Equit 64.86 12.88
M y
83 Putnam Global Growth Fund; 33038 Open/Equit 88.13 13.17
Y y
84 Putnam Growth and Income 33242 Open/Balan 1287.76 14.21
Fund II; A ced
85 Putnam Growth and Income 33242 Open/Balan 1529.73 14.09
Fund II; B ced
86 Putnam Growth and Income 33242 Open/Balan 173.67 14.14
Fund II; M ced
87 The Putnam Fund for Growth 11/6/57 Open/Balan 21088.8 20.82
and Income; A ced 4
88 The Putnam Fund for Growth 32259 Open/Balan 16364.5 20.54
and Income; B ced 9
89 The Putnam Fund for Growth 33358 Open/Balan 464.75 20.69
and Income; M ced
90 The Putnam Fund for Growth 33038 Open/Balan 911.59 20.85
and Income; Y ced
91 Putnam Growth Fund 34454 Open/Equit 2.53 10.41
y
92 Putnam Growth 33512 Open/Equit 682.13 21.24
Opportunities; A y
93 Putnam Growth 34181 Open/Equit 763.01 21.02
Opportunities; B y
94 Putnam Growth 34181 Open/Equit 56.90 21.10
Opportunities; M y
95 Putnam High Income 30505 Closed/Bon 116.08 8.55
Convertible and Bond Fund d
96 Putnam High Yield Advantage 30034 Open/Bond 1202.40 8.24
Fund; A
97 Putnam High Yield Advantage 33008 Open/Bond 1006.42 8.21
Fund; B
98 Putnam High Yield Advantage 33207 Open/Bond 926.04 8.23
Fund; M
99 Putnam High Yield Total 33969 Open/Bond 50.18 7.51
Return Fund; A
100 Putnam High Yield Total 33969 Open/Bond 58.07 7.44
Return Fund; B
101 Putnam High Yield Total 33969 Open/Bond 3.75 7.45
Return Fund; M
102 Putnam High Quality Bond 30103 Open/Bond 339.53 10.20
Fund; A
103 Putnam High Quality Bond 33029 Open/Bond 42.74 10.16
Fund; B
104 Putnam High Quality Bond 33339 Open/Bond 2.74 10.21
Fund; M
105 Putnam High Yield Fund II; 34333 Open/Bond 456.79 7.88
A
106 Putnam High Yield Fund II; 34333 Open/Bond 651.93 7.88
B
107 Putnam High Yield Fund II; 34333 Open/Bond 35.59 7.88
M
108 Putnam High Yield Trust; A 27073 Open/Bond 2657.56 10.90
109 Putnam High Yield Trust; B 32567 Open/Bond 916.14 10.85
110 Putnam High Yield Trust; M 33421 Open/Bond 18.20 10.90
111 Putnam Health Sciences 28637 Open/Equit 2984.13 63.77
Trust; A y
112 Putnam Health Sciences 32567 Open/Equit 2063.97 61.29
Trust; B y
113 Putnam Health Sciences 33421 Open/Equit 90.92 62.82
Trust; M y
114 Putnam High Yield Municipal 31191 Closed/Bon 203.62 9.24
Trust d
115 Putnam Income Fund; A 11/1/54 Open/Bond 1445.39 6.95
116 Putnam Income Fund; B 32567 Open/Bond 514.65 6.91
117 Putnam Income Fund; M 33220 Open/Bond 1523.22 6.91
118 Putnam Income Fund; Y 32915 Open/Bond 257.92 6.95
119 Putnam Intermediate U.S. 32554 Open/Bond 228.36 5.00
Government Income Fund; A
120 Putnam Intermediate U.S. 32554 Open/Bond 140.23 5.01
Government Income Fund; B
121 Putnam Intermediate U.S. 33330 Open/Bond 10.19 5.01
Government Income Fund; M
122 Putnam Intermediate U.S. 34242 Open/Bond 119.78 5.00
Government Income Fund; Y
123 Putnam International Fund 33599 Open/Equit 4.57 10.99
y
124 Putnam International Growth 33816 Open/Equit 409.47 11.10
and Income Fund; A y
125 Putnam International Growth 33816 Open/Equit 401.86 11.02
and Income Fund; B y
126 Putnam International Growth 33816 Open/Equit 34.15 11.07
and Income Fund; M y
127 Putnam International Growth 31835 Open/Equit 2370.93 20.02
Fund; A y
128 Putnam International Growth 33024 Open/Equit 1530.16 19.68
Fund; B y
129 Putnam International Growth 33207 Open/Equit 168.85 19.89
Fund; M y
130 Putnam International Growth 33796 Open/Equit 162.36 20.08
Fund; Y y
131 Putnam International New 33240 Open/Equit 768.08 13.82
Opportunities Fund; A y
132 Putnam International New 33439 Open/Equit 958.83 13.52
Opportunities Fund; B y
133 Putnam International New 33439 Open/Equit 74.86 13.65
Opportunities Fund; M y
134 Putnam International 33599 Open/Equit 120.37 14.04
Voyager Fund; A y
135 Putnam International 33906 Open/Equit 96.15 13.94
Voyager Fund; B y
136 Putnam International 33906 Open/Equit 11.02 13.99
Voyager Fund; M y
137 Putnam Investment Grade 31345 Closed/Bon 250.46 12.00
Municipal Trust d
138 Putnam Investment Grade 32473 Closed/Bon 190.04 14.23
Municipal Trust II d
139 Putnam Investment Grade 32840 Closed/Bon 54.18 13.52
Municipal Trust III d
140 Putnam Investors Fund; A 8005 Open/Equit 4751.05 15.53
y
141 Putnam Investors Fund; B 32567 Open/Equit 1984.86 14.88
y
142 Putnam Investors Fund; M 33208 Open/Equit 149.63 15.25
y
143 Putnam Investors Fund; Y 33975 Open/Equit 356.86 15.57
y
144 Putnam Japan Fund 33599 Open/Equit 2.12 5.59
y
145 Putnam Latin America Fund 34415 Open/Equit 1.18 4.47
y
146 Putnam Massachusetts Tax 31342 Open/Bond 305.93 9.69
Exempt Income Fund; A
147 Putnam Massachusetts Tax 32703 Open/Bond 119.94 9.68
Exempt Income Fund; B
148 Putnam Massachusetts Tax 33369 Open/Bond 3.42 9.68
Exempt Income Fund; M
149 Putnam Master Income Trust 30800 Closed/Bon 444.57 8.37
d
150 Putnam Managed High Yield 32683 Closed/Bon 93.58 12.47
Trust d
151 Putnam Michigan Tax Exempt 31342 Open/Bond 148.19 9.39
Income Fund; A
152 Putnam Michigan Tax Exempt 32703 Open/Bond 46.32 9.38
Income Fund; B
153 Putnam Michigan Tax Exempt 33344 Open/Bond 1.72 9.39
Income Fund; M
154 Putnam Minnesota Tax Exempt 31342 Open/Bond 104.39 9.26
Income Fund; A
155 Putnam Minnesota Tax Exempt 32703 Open/Bond 49.74 9.23
Income Fund; B
156 Putnam Minnesota Tax Exempt 33330 Open/Bond 1.42 9.26
Income Fund; M
157 Putnam Managed Municipal 31101 Closed/Bon 453.88 9.80
Income Trust d
158 Putnam Money Market Fund; A 26572 Open/Bond 2934.12 1.00
159 Putnam Money Market Fund; B 32259 Open/Bond 707.12 1.00
160 Putnam Money Market Fund; M 33214 Open/Bond 85.97 1.00
161 Putnam Master Intermediate 30800 Closed/Bon 804.27 8.04
Income Trust d
162 Putnam Municipal Income 31188 Open/Bond 826.65 9.39
Fund; A
163 Putnam Municipal Income 32511 Open/Bond 511.17 9.38
Fund; B
164 Putnam Municipal Income 33207 Open/Bond 15.62 9.39
Fund; M
165 Putnam Municipal 32655 Closed/Bon 230.91 14.29
Opportunities Trust d
166 Putnam New Opportunities 31654 Open/Equit 11177.3 61.50
Fund; A y 6
167 Putnam New Opportunities 32567 Open/Equit 8236.26 58.74
Fund; B y
168 Putnam New Opportunities 33207 Open/Equit 474.22 60.18
Fund; M y
169 Putnam New Opportunities 33072 Open/Equit 695.64 62.26
Fund; Y y
170 Putnam New Value Fund; A 33605 Open/Equit 399.86 13.92
y
171 Putnam New Value Fund; B 33659 Open/Equit 408.64 13.80
y
172 Putnam New Value Fund; M 33659 Open/Equit 40.13 13.86
y
173 Putnam New Jersey Tax 31462 Open/Bond 219.50 9.42
Exempt Income Fund; A
174 Putnam New Jersey Tax 32511 Open/Bond 102.08 9.41
Exempt Income Fund; B
175 Putnam New Jersey Tax 33358 Open/Bond 0.94 9.42
Exempt Income Fund; M
176 Putnam New York Investment 32473 Closed/Bon 40.59 14.26
Grade Municipal Trust d
177 Putnam New York Tax Exempt 29099 Open/Bond 1616.83 9.04
Income Fund; A
178 Putnam New York Tax Exempt 32511 Open/Bond 232.13 9.02
Income Fund; B
179 Putnam New York Tax Exempt 33337 Open/Bond 2.30 9.04
Income Fund; M
180 Putnam New York Tax Exempt 30614 Open/Bond 39.50 1.00
Money Market Fund
181 Putnam New York Tax Exempt 31722 Open/Bond 165.93 9.25
Opportunities Fund; A
182 Putnam New York Tax Exempt 32904 Open/Bond 70.09 9.24
Opportunities Fund; B
183 Putnam New York Tax Exempt 33278 Open/Bond 2.53 9.23
Opportunities Fund; M
184 Putnam Ohio Tax Exempt 31342 Open/Bond 187.36 9.22
Income Fund; A
185 Putnam Ohio Tax Exempt 32703 Open/Bond 57.26 9.21
Income Fund; B
186 Putnam Ohio Tax Exempt 33330 Open/Bond 2.02 9.22
Income Fund; M
187 Putnam OTC & Emerging 28794 Open/Equit 2680.36 18.44
Growth Fund; A y
188 Putnam OTC & Emerging 32703 Open/Equit 1337.00 17.56
Growth Fund; B y
189 Putnam OTC & Emerging 33208 Open/Equit 272.69 18.00
Growth Fund; M y
190 Putnam OTC & Emerging 33796 Open/Equit 105.78 18.59
Growth Fund; Y y
191 Putnam Pennsylvania Tax 31248 Open/Bond 187.54 9.35
Exempt Income Fund; A
192 Putnam Pennsylvania Tax 32703 Open/Bond 98.68 9.34
Exempt Income Fund; B
193 Putnam Pennsylvania Tax 33421 Open/Bond 2.65 9.35
Exempt Income Fund; M
194 Putnam Preferred Income 29223 Open/Bond 117.57 8.87
Fund; A
195 Putnam Preferred Income 33347 Open/Bond 13.09 8.84
Fund; M
196 Putnam Premier Income Trust 2/29/95 Closed/Bon 1129.16 8.03
d
197 Putnam Research Fund; A 33512 Open/Equit 272.86 15.81
y
198 Putnam Research Fund; B 34499 Open/Equit 278.92 15.74
y
199 Putnam Research Fund; M 34499 Open/Equit 25.87 15.76
y
200 Putnam Strategic Income 33287 Open/Bond 76.50 7.77
Fund; A
201 Putnam Strategic Income 33652 Open/Bond 120.61 7.77
Fund; B
202 Putnam Strategic Income 33652 Open/Bond 9.33 7.76
Fund; M
203 Putnam Tax Exempt Income 26663 Open/Bond 1954.86 9.26
Fund; A
204 Putnam Tax Exempt Income 32511 Open/Bond 247.68 9.26
Fund; B
205 Putnam Tax Exempt Income 33284 Open/Bond 10.23 9.28
Fund; M
206 Putnam Tax Exempt Money 30614 Open/Bond 77.16 1.00
Market Fund
207 Putnam Tax - Free Health 32322 Closed/Bon 205.82 14.91
Care Fund d
208 Putnam Tax - Free Income 32770 Open/Bond 1072.91 14.73
Trust
Tax - Free High Yield Fund;
A
209 Putnam Tax - Free Income 29837 Open/Bond 938.32 14.75
Trust
Tax - Free High Yield Fund
B
210 Putnam Tax - Free Income 33235 Open/Bond 22.37 14.73
Trust
Tax - Free High Yield Fund
M
211 Putnam Tax - Free Income 32780 Open/Bond 245.74 15.55
Trust
Tax - Free Insured Fund; A
212 Putnam Tax - Free Income 29837 Open/Bond 358.45 15.57
Trust
Tax - Free Insured Fund; B
213 Putnam Tax - Free Income 33389 Open/Bond 2.47 15.54
Trust
Tax - Free Insured Fund; M
214 Putnam U.S. Core Fund 34454 Open/Equit 2.60 10.21
y
215 Putnam U.S. Government 29258 Open/Bond 2081.53 13.13
Income Trust; A
216 Putnam U.S. Government 32259 Open/Bond 1284.45 13.07
Income Trust; B
217 Putnam U.S. Government 33274 Open/Bond 156.61 13.11
Income Trust; M
218 Putnam U.S. Government 32973 Open/Bond 12.08 13.13
Income Trust; Y
219 Putnam Utilities Growth and 31734 Open/Balan 878.21 13.63
Income Fund; A ced
220 Putnam Utilities Growth and 32259 Open/Balan 704.31 13.55
Income Fund; B ced
221 Putnam Utilities Growth and 33297 Open/Balan 14.44 13.61
Income Fund; M ced
222 Putnam Value Fund 34454 Open/Balan 2.06 8.47
ced
223 Putnam Vista Fund; A 6/3/68 Open/Equit 3634.75 13.68
y
224 Putnam Vista Fund; B 32567 Open/Equit 1738.77 12.97
y
225 Putnam Vista Fund; M 33207 Open/Equit 142.19 13.35
y
226 Putnam Vista Fund; Y 33324 Open/Equit 328.84 13.87
y
227 Putnam Voyager Fund II; A 32611 Open/Equit 798.75 23.95
y
228 Putnam Voyager Fund II; B 33512 Open/Equit 739.68 23.34
y
229 Putnam Voyager Fund II; M 33512 Open/Equit 89.00 23.57
y
230 Putnam Voyager Fund; A 33694 Open/Equit 16311.2 23.02
y 5
231 Putnam Voyager Fund; B 32259 Open/Equit 8257.86 21.51
y
232 Putnam Voyager Fund; M 33207 Open/Equit 357.40 22.47
y
233 Putnam Voyager Fund; Y 32963 Open/Equit 1773.10 23.40
y
234 Putnam VT Asia Pacific 33358 Open/Equit 90.10 8.25
Growth Fund; A y
235 Putnam VT Asia Pacific 34453 Open/Equit 0.15 8.25
Growth Fund; B y
236 Putnam VT Diversified 32765 Open/Bond 669.34 10.55
Income Fund; A
237 Putnam VT Diversified 34429 Open/Bond 2.46 10.54
Income Fund; B
238 Putnam VT Global Asset 30712 Open/Balan 1032.02 19.31
Allocation Fund; A ced
239 Putnam VT Global Asset 34453 Open/Balan 1.56 19.32
Allocation Fund; B ced
240 Putnam VT George Putnam 34453 Open/Equit 130.88 10.37
Fund; A y
241 Putnam VT George Putnam 34453 Open/Equit 2.69 10.37
Fund; B y
242 Putnam VT Global Growth 31532 Open/Equit 2061.05 21.14
Fund; A y
243 Putnam VT Global Growth 34453 Open/Equit 1.11 21.13
Fund; B y
244 Putnam VT Growth and Income 30712 Open/Balan 10090.5 29.24
Fund; A ced 1
245 Putnam VT Growth and Income 34429 Open/Balan 9.95 29.21
Fund; B ced
246 Putnam VT U.S. Government 30712 Open/Bond 1020.00 13.86
and High Quality Bond Fund;
A
247 Putnam VT U.S. Government 34453 Open/Bond 2.75 13.85
and High Quality Bond Fund;
B
248 Putnam VT High Yield Fund; 30712 Open/Bond 1041.19 11.87
A
249 Putnam VT High Yield Fund; 34453 Open/Bond 2.49 11.87
B
250 Putnam VT Health and 34453 Open/Equit 150.56 10.90
Sciences Fund; A y
251 Putnam VT Health and 34453 Open/Equit 2.45 10.89
Sciences Fund; B y
252 Putnam VT International 33969 Open/Balan 304.21 12.25
Growth and Income; A ced
253 Putnam VT International 34429 Open/Balan 1.03 12.25
Growth and Income; B ced
254 Putnam VT International New 33969 Open/Equit 139.98 12.32
Opportunities Fund; A y
255 Putnam VT International New 34453 Open/Equit 0.12 12.31
Opportunities Fund; B y
256 Putnam VT International 33969 Open/Equit 338.71 14.07
Growth Fund; A y
257 Putnam VT International 34453 Open/Equit 1.57 14.06
Growth Fund; B y
258 Putnam VT Investors Fund; 34453 Open/Equit 289.99 12.20
A y
259 Putnam VT Investors Fund; 34453 Open/Equit 3.55 12.19
B y
260 Putnam VT Money Market 30712 Open/Bond 604.28 1.00
Fund; A
261 Putnam VT Money Market 34453 Open/Bond 5.28 1.00
Fund; B
262 Putnam VT New Opportunities 32994 Open/Equit 3791.89 27.43
Fund; A y
263 Putnam VT New Opportunities 34453 Open/Equit 1.76 27.41
Fund; B y
264 Putnam VT New Value Fund; A 33970 Open/Equit 262.34 12.44
y
265 Putnam VT New Value Fund; B 34453 Open/Equit 0.54 12.43
y
266 Putnam VT OTC & Emerging 34453 Open/Equit 33.43 10.94
Growth Fund; A y
267 Putnam VT OTC & Emerging 34453 Open/Equit 0.75 10.94
Growth Fund; B y
268 Putnam VT Research A 34607 Open/Equit 31.00 12.45
y
269 Putnam VT Research B 34607 Open/Equit 0.29 12.45
y
270 Putnam VT Utilities Growth 32263 Open/Balan 995.22 17.72
and Income Fund; A ced
271 Putnam VT Utilities Growth 34453 Open/Balan 1.96 17.72
and Income Fund; B ced
272 Putnam VT Vista Fund; A 33970 Open/Equit 330.67 15.43
y
273 Putnam VT Vista Fund; B 34453 Open/Equit 1.07 15.43
y
274 Putnam VT Voyager Fund; A 30712 Open/Equit 6093.39 48.19
y
275 Putnam VT Voyager Fund; B 34453 Open/Equit 5.46 48.15
y
(J) Miscellaneous
1. Election and Removal of Directors
Directors of Investment Management Company are
elected to office or removed from office by vote of
either stockholders or directors, in accordance with
Articles of Organization and By-Laws of Investment
Management Company.
2. Election and Removal of Officers
Officers are elected by the Board of Directors. The
Board of Directors may remove any officer without cause.
3. Supervision by SEC of Changes in Directors and
Certain Officers
Investment Management Company files certain reports
with the SEC in accordance with Sections 203 and 204 of
the Investment Advisers Act of 1940, which reports list
and provide certain information relating to directors and
officers of Investment Management Company.
Under Section 9 (b) of the Investment Company Act of
1940 SEC may prohibit the directors and officers from
remaining in office, if SEC will judge that such
directors and officers have willfully violated any
provision of the federal securities law.
4. Amendment to the Articles of Organization, Transfer
of Business and Other Important Matters.
a. Articles of Organization of Investment
Management Company may be amended, under the
General Corporation Law of The Commonwealth of
Massachusetts, by appropriate shareholders'
vote.
b. Under the General Corporation Law of The
Commonwealth of Massachusetts, transfer of
business requires a vote of 2/3 of the
stockholders entitled to vote thereon.
c. Investment Management Company has no direct
subsidiaries.
5. Litigation, etc.
There are no known facts, such as legal proceedings,
which are expected to materially affect the Fund and/or
Investment Management Company within the six-month period
preceding the filing of this Registration Statement.
III. OUTLINE OF THE OTHER RELATED COMPANIES
(A) Putnam Fiduciary Trust Company (the Transfer Agent,
Shareholder Service Agent and Custodian)
(1) Amount of Capital
U.S.$32,578,770 (yen3.8 billion) as of January 31,
1999
(2) Description of Business
Putnam Fiduciary Trust Company is a Massachusetts
trust company and is a wholly-owned subsidiary of
Putnam Investments, Inc., parent of Putnam. Putnam
Fiduciary Trust Company has been providing paying
agent and shareholder service agent services to
mutual funds, including the Fund, since its
inception and custody services since 1990.
(3) Outline of Business Relationship with the Fund
Putnam Fiduciary Trust Company provides transfer
agent services, shareholder services and custody
services to the Fund.
(B) Putnam Mutual Funds Corp. (the Principal Underwriter)
(1) Amount of Capital
U.S.$116,101,386 (yen13.5 billion) as of January 31,
1999
(2) Description of Business
Putnam Mutual Funds Corp. is the Principal
Underwriter of the shares of Putnam Funds including
the Fund.
(3) Outline of Business Relationship with the Fund
Putnam Mutual Funds Corp. engages in providing
marketing services to the Fund.
(C) Kokusai Securities Co., Ltd. (Distributor in Japan and
Agent Association Member)
(1) Amount of Capital
yen55.5 billion as of the end of January 1999
(2) Description of Business
Kokusai Securities Co., Ltd. is a diversified
securities company in Japan. Also, it engages in
handling the sales and redemption of the Fund Shares
as the Designated Securities Company for the
investment trust funds of Kokusai Securities
Investment Trust Management Co., Ltd., and as the
Underwriting Company and the Agent Company for Fresh
Korea Fund, Keystone Bond Fund II '95, Keystone Bond
Fund III '95, Keystone Global Trust-Keystone Bond
Fund IV '95, International Bond Index Fund, Fidelity
Special Growth Fund, ACM International Health Care
Fund, European and Asian Fund, Putnam High Yield
Advantage Fund, ACM American Growth Fund, ACM Global
Growth Trend Portfolio, Evergreen Small Company
Growth Fund, Asia Network Growth Fund, Evergreen
Global Opportunities Fund, Super Phoenix Fund, Super
Phoenix Fund II, Solomon Euro Bond Fund A/B and
Putnam U.S. Government Income Trust, and as the
Underwriting Company for AGF Growth Equity Fund
Limited, G.T. Investment Fund, Sci Tech, Morgan
Stanley Money Market Family.
(3) The Company acts as a Distributor in Japan and Agent
Association Member for the Fund in connection with
the offering of shares in Japan.
(D) Capital Relationships
100% of the shares of Putnam Investment Management,
Inc. are held by Putnam Investments, Inc.
(E) Interlocking Directors and Auditors
Names and functions of officers of the Fund who also
are officers of the related companies are as follows:
(as of January
31, 1999)
Name of Investment Transfer Agent
Officer Management and
or Fund Company Shareholder
Trustee Service Agent
George Chairman, Chairman and None
Putnam Trustee and Director
President
Charles Executive Vice Managing None
E. Porter President Director
Patricia Senior Vice Senior Vice None
C. President President
Flaherty
John D. Senior Vice Senior Vice None
Hughes President and President
Treasurer
Lawrence Trustee and President and None
J. Lasser Vice President CEO
Gordon H. Vice President Senior Director
Silver Managing
Director
Ian C. Vice President Senior None
Ferguson Managing
Director
Richard Vice President Senior None
A. Managing
Monaghan Director
Michael Vice President Managing None
Martino Director
John R. Vice President Senior Vice None
Verani President
Edward H. Vice President Managing None
D'Alelio Director
Kevin M. Vice President Managing None
Cronin Director
IV. FINANCIAL CONDITION OF THE FUND
1. FINANCIAL STATEMENTS
[Omitted, in Japanese version, financial statements of
the Fund and Japanese translations thereof are
incorporated here]
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help
investors understand the Fund's recent financial
performance. Certain information reflects financial
results for a single fund share. The total returns
represent the rate that an investor would have earned or
lost on an investment in the Fund, assuming reinvestment
of all dividends and distributions. This information has
been derived from the Fund's Financial Statements, which
have been audited by PricewaterhouseCoopers LLP. Its
report and the Fund's financial statements are included
in the Fund's annual report to shareholders, which is
available upon request.
FINANCIAL HIGHLIGHTS (For a share outstanding throughout the
period)
CLASS M
YEAR ENDED SEPTEMBER 30
1998 1997 1996 1995 +
NET ASSET VALUE, $13.00 $12.63 $12.96 $12.29
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS .80(c) .80 .82(c) .61
NET INVESTMENT INCOME
NET GAIN OR LOSSES
(BOTH REALIZED AND .25 .35 (.32) .66
UNREALIZED) ON
INVESTMENTS
TOTAL FROM INVESTMENT
OPERATIONS 1.05 1.15 .50 1.27
LESS DISTRIBUTIONS
FROM: (.77) (.78) (.78) (.55)
NET INVESTMENT INCOME
IN EXCESS OF NET
INVESTMENT (.03) -- -- --
INCOME
FROM RETURN OF CAPITAL -- -- (.05) (.05)
TOTAL DISTRIBUTIONS (.80) (.78) (.83) (.60)
NET ASSET VALUE (NAV) $13.25 $13.00 $12.63 $12.96
RATIOS / SUPPLEMENTAL
DATA
TOTAL RETURN AT NAV 8.38 9.39 3.99 10.54 *
(%)(A)
NET ASSETS, END OF $163,076 $7,850 $6,116 $2,609
PERIOD
RATIO OF EXPENSES TO 1.12 1.14 1.14 .79 *
AVERAGE NET ASSETS
(%)(B)
RATIO OF NET INVESTMENT 5.91 6.32 6.37 4.14 *
INCOME TO AVERAGE NET
ASSETS (%)
PORTFOLIO TURNOVER RATE 294.74 125.80 138.97 195.45
(%)
+ From the period from the commencement of operations on
February 6, 1995 through September 30, 1995
* Not annualized.
(a) Total return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for periods
ended on or after September 30, 1995 includes amounts
paid through expense offset arrangements. Prior period
ratios exclude these amounts.
(c) Per share net investment income has been determined on
the basis of the weighted average number of shares
outstanding during the period.
The following financial documents are omitted here.
Statement of assets and liabilities September 30, 1998
Statement of operations Year ended September 30, 1998
Statement of changes in net assets
Financial highlights (For a share outstanding throughout the
period)
Notes to financial statements September 30, 1998
Portfolio of investments owned September 30, 1998
Statement of assets and liabilities September 30, 1997
Statement of operations Year ended September 30, 1997
Statement of changes in net assets
Financial highlights (For a share outstanding throughout the
period)
Notes to financial statements September 30, 1997
Report of independent accountants for the fiscal year ended
September 30, 1998
Report of independent accountants for the year ended
September 30, 1997
2. CONDITION OF THE FUND
(a) Statement of Net Assets
(As of th end of January 1999)
$ Yen (in thousands)
a. Total Assets 3,663,565,719 426,255,871
b. Total Liabilities 128,894,081 14,996,826
c. Total Net Assets (a-b) 3,534,671,638 411,259,045
d. Total Number of Shares
Outstanding Class A. 158,521,507 Shares
Class B. 98,254,114 Shares
Class M. 11,948,789 Shares
Class Y. 920,057 Shares
e. Net Asset Value
per Share (c/d) Class A. 13.13 yen1,528
Class B. 13.07 yen1,521
Class M. 13.11 yen1,525
Class Y. 13.13 yen1,528
(b) Names of Major Portfolio Holdings other than Equity Shares (Top 30 Holdings)
<TABLE><CAPTION>
(As of the end of January 1999)
U.S. Dollar
<S> <C> <C> <C> <C> <C> <C> <C>
Par
Kind of Interest Value Acquisition Current Investment
Name of Issue Maturity Rate (1,000) Cost Value Ratio
Securities (%) (%)
1. GNMA U.S. 2002- 7 922,419 930,902,05 945,008,73 26.7
Government 2028 9 3 4
2. GNMA U.S. 2023- 6 1/2 707,059 708,468,59 682,569,48 19.3
Government 2028 3 3 1
3. GNMA U.S. 2001- 7 1/2 463,896 448,192,15 479,491,14 13.5
Government 2027 1 0 7
4. GNMA U.S. 2001- 8 388,743 396,388,27 405,891,43 11.4
Government 2028 8 7 8
5. GNMA - Midget U.S. 2007- 7 119,637 122,888,48 122,890,12 3.48
Government 2022 0 7
6. GNMA U.S. 2004- 8 1/2 112,223 117,317,83 119,627,42 3.38
Government 2027 2 6
7. U.S. Treasury U.S. 2003 5 1/2 100,000 99,623,796 103,141,00 2.92
Notes Government 0
8. GNMA U.S. 2004- 9 79,668 81,550,557 85,242,096 2.41
Government 2025
9. U.S. Treasury U.S. 2008 5 5/8 54,630 55,177,169 58,249,238 1.65
Notes Government
10 U.S. Treasury U.S. 2027 6 1/8 50,000 51,187,500 54,695,500 1.55
Notes Government
11 GNMA U.S. 2028 6 50,438 50,193,504 50,027,755 1.42
Government
12 U.S. Treasury U.S. 2000 4 5/8 50,000 50,089,844 50,000,000 1.41
Notes Government
13 GNMA - Midget U.S. 2008- 8 31,765 32,316,936 32,786,986 0.93
Government 2009
14 GNMa - TBA U.S. 2029 6 1/2 32,185 32,420,545 32,547,081 0.92
Government
15 GNMA U.S. 2009- 9 1/2 27,286 29,243,193 29,331,413 0.83
Government 2023
16 U.S. Treasury U.S. 2002 5 3/4 22,500 22,549,219 23,343,750 0.66
Notes Government
17 U.S. Treasury U.S. 2000 5 3/8 19,000 18,978,443 19,186,960 0.54
Notes Government
18 GNMA U.S. 2010- 10 17,250 19,258,221 18,882,136 0.53
Government 2021 1/2
19 GNMA - Midget U.S. 2001- 8 1/2 8,997 9,622,206 9,463,555 0.27
Government 2008
20 GNMA U.S. 2013- 11 2,062 2,277,432 2,249,651 0.06
Government 2019
21 GNMA U.S. 2010- 11 1,987 2,243,274 2,224,102 0.06
Government 2019 1/2
22 GNMA U.S. 2009- 10 1,594 1,659,645 1,740,348 0.05
Government 2021
23 GNMA U.S. 2013- 11 1,127 1,222,459 1,234,662 0.03
Government 2016 1/4
24 GNMA U.S. 2011- 13 968 1,089,021 1,122,002 0.03
Government 2015 1/2
25 GNMA U.S. 2016- 9 1/4 1,044 1,026,204 1,092,343 0.03
Government 2019
26 GNMA U.S. 2010- 13 738 801,623 847,257 0.02 2015
27 GNMA U.S. 2013- 12 604 643,540 688,839 0.02
Government 2015 3/4
28 GNMA U.S. 2013- 12 603 651,699 680,279 0.02
Government 2015 1/4
29 GNMA U.S. 2010- 12 384 404,088 434,423 0.01
Government 2015 1/2
30 GNMA U.S. 2014- 12 373 418,634 415,712 0.01
Government 2016
</TABLE>
V. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY
Deloitte & Touche LLP is responsible for this part.
Japanese translation of fiscal 1998 and 1997 are attached
to the Japanese version of the Annual Securities Report.
VI. SUMMARY OF INFORMATION CONCERNING FOREIGN
INVESTMENT TRUST SECURITIES
1. Transfer of the Shares
The transfer agent for the registered share
certificates is Putnam Fiduciary Trust Company, P.O. Box
41203, Providence, RI 02940-1203, U. S. A.
The Japanese investors who entrust the custody of
their shares to the Distributor or the Sales Handling
Company shall have their shares transferred under the
responsibility of such company, and the other investors
shall make their own arrangements.
No fee is chargeable for the transfer of shares.
2. The Closing Period of the Shareholders' Book
No provision is made.
3. There are no annual shareholders' meetings. Special
shareholders' meeting may be held from time to time as
required by the Agreement and Declaration of Trust and
the Investment Company Act of 1940.
4. No special privilege is granted to Shareholders.
The acquisition of Shares by any person may be
restricted.
VII. REFERENCE INFORMATION
The following documents concerning the Fund were filed
with the Minister of Finance or with the Director of
Kanto Local Finance Bureau (since June 22, 1998) of
Japan.
November 18, 1998: Securities Registration Statement
November 28, 1998: Amendment to Securities Registration Statement
March 16, 1998: Securities Registration Statement
Annual Securities Report (The Third Fiscal Year)
Amendment to Securities Registration Statement
June 15, 1998: Semi-annual Report (during the fourth term)
Amendment to Securities Registration Statement
September 14, 1998: Securities Registration Statement
September 21, 1998: Amendment to Securities Registration Statement
September 22, 1998: Amendment to Securities Registration Statement
December 1, 1998: Amendment to Securities Registration Statement
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(NAV SALE)
PUTNAM U.S. GOVERNMENT INCOME TRUST
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date : March 16, 1999
Name of the Registrant Fund: PUTNAM U.S. GOVERNMENT INCOME TRUST
Name and Official Title of Trustees: George Putnam
John A. Hill
William F. Pounds
Jameson A. Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Robert E. Patterson
Donald S. Perkins
Georg
W. Nicholas Thorndike
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U.S.A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM U.S. GOVERNMENT INCOME TRUST
Offering or Sale of Foreign
Investment Fund Securities:
Type and Aggregate Amount of Up to 76.5 million Class M Shares
Foreign Investment Fund Securities Up to the total amount obtained by
to be Publicly Offered or Sold: aggregating the respective net
asset value per Class M Share in
respect of 76.5 million Class M Shares
(The maximum amount expected to be
sold is 1 billion U.S. dollars
(yen116.1 billion).
Note 1: U.S.$ amount is translated into Japanese Yen at the
rate of U.S.$l.00=yen116.35 the mean of the exchange rate
quotations by The Bank of Tokyo-Mitsubishi, Ltd. for
buying and selling spot dollars by telegraphic transfer
against yen on January 29, 1998.
Note 2: The maximum amount expected to be sold is an amount
calculated by multiplying the net asset value per Class M
Share as of July 31, 1998 (U.S.$13.04) by 76.5 million
Class M Shares for convenience.
Places where a copy of this Amendment to Securities
Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Amendment to Securities
Registration
Statement e is 3 including front and back pages.)
I. REASON FOR FILING THIS AMENDMENT TO SECURITIES
REGISTRATION STATEMENT:
This statement purports to amend and update the relevant
information of the Securities Registration Statement
("Original SRS") filed on September 14, 1998 due to the
fact that the aforementioned Annual Securities Report was
filed today.
The exchange rates used in this statement to translate
the amended amounts of foreign currencies are different
from those used before these amendments, as the latest
exchange rates are used in this statement.
II. CONTENTS OF THE AMENDMENTS (the page numbers refer to in the Original SRS)
Part II. INFORMATION CONCERNING ISSUER (page 5 of the Original SRS)
The following matters in the original Japanese SRS are
amended to have the same contents as those provided in
the following items of the aforementioned Annual
Securities Report:
Before amendment After amendment
[Original SRS] [Aforementioned Annual Securities Report]
I. DESCRIPTION OF THE FUND I. DESCRIPTI
aforementioned Japanese
Annual Securities Report,
from page 1 to page 31)
II. OUTLINE OF THE FUND II. OUTLINE OF THE FUND
(Ditto, from page 32 to
page 63)
III.OUTLINE OF THE OTHER III.OUTLINE OF THE OTHER
RELATED COMPANIES RELATED COMPANIES (Ditto,
from page 64 to page 65)
IV. FINANCIAL CONDITIONS OF IV. FINANCIAL CONDITIONS OF
THE FUND THE FUND (Ditto, from page 66
to page 71)
V. SUMMARY OF INFORMATION VI. SUMMARY OF INFORMATION
CONCERNING FOREIGN CONCERNING FOREIGN
INVESTMENT FUND SECURITIES INVESTMENT FUND SECURITIES
(Ditto, page 72)
VI. MISCELLANEOUS VII. REFERENCE INFORMATION
(Ditto, page72)
Note 1: U.S.$ amount is translated into Japanese
Yen at the rate of U.S.$1 = yen116.35 the mean of the
exchange rate quotations at The Bank of Tokyo-
Mitsubishi, Ltd. for buying and selling spot dollars
by telegraphic transfer against yen on January 29,
1999, for convenience.
Note 2: In this document, money amounts and
percentages have been rounded. Therefore, there are
cases in which the amount of the "total column" is not
equal to the aggregate amount. Also, translation into
yen is made simply by multiplying the corresponding
amount by the conversion rate specified and rounded up
when necessary. As a result, in this document, there
are cases in which Japanese yen figures for the same
information differ from each other.
Note 3:In this Report, "fiscal year" refers to a year
from October 1 to September 30 of the following year.
Part III. SPECIAL INFORMATION (Ditto, page 79)
II. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT
COMPANY of the Original SRS is amended to have the same
contents as those provided in V. FINANCIAL CONDITIONS OF
THE INVESTMENT MANAGEMENT COMPANY of the aforementioned
Annual Securities Report:
