PUTNAM TAX-FREE INCOME TRUST
Supplement dated July 14, 1997 to the
Statement of Additional Information dated November 30, 1996
The section entitled "Investment Performance" is supplemented by
the following:
INVESTMENT PERFORMANCE
STANDARD PERFORMANCE MEASURES
(for periods ended May 31, 1997)
PUTNAM TAX-FREE HIGH YIELD FUND
CLASS A CLASS B CLASS M
Inception date: 9/20/93 9/9/85 12/24/94
Average annual return:
1 year 2.70% 2.11% 3.97%
5 years 5.93 6.13 5.89
10 years 7.16 7.42 7.14
Yield
30-day yield 5.69% 5.32% 5.49%
Tax-equivalent yield* 9.42% 8.81% 9.09%
PUTNAM TAX-FREE INSURED YIELD FUND
CLASS A CLASS B CLASS M
Inception date: 9/20/93 9/9/85 6/1/95
Average annual return:
1 year 2.64% 2.38% 3.95%
5 years 5.31 5.58 5.27
10 years 6.93 7.23 6.90
Yield
30-day yield 4.88% 5.02% 4.66%
Tax-equivalent yield* 8.08% 8.31% 7.72%
* Assumes the maximum federal tax rate of 39.6%. Results for
investors subject to lower tax rates would not be as
advantageous.
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Returns for class A and class M shares reflect the deduction of
the current maximum initial sales charge of 4.75% for class A
shares and 3.25% for class M shares.
Returns for class B shares reflect the deduction of the
applicable contingent deferred sales charge ("CDSC"), which is 5%
in the first year, declining to 1% in the sixth year, and is
eliminated thereafter.
Returns shown for class A and class M shares for periods prior to
their inceptions are derived from the historical performance of
class B shares, adjusted to reflect the deduction of the initial
sales charge applicable to each class but has not been adjusted
to reflect the operating expenses applicable to class B shares.
All returns assume reinvestment of distributions at net asset
value and represent past performance; they do not guarantee
future results. Investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
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