45
- -
[H&M Second Draft April 7, 1997]
[Translation]
SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
SECURITIES REPORT
(the Second Term)
From: December 1, 1995
To: November 30, 1996
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
PUTNAM HIGH YIELD ADVANTAGE FUND
[H&M Second Draft April 7, 1997]
[Translation]
SECURITIES REGISTRATION STATEMENT
PUTNAM HIGH YIELD ADVANTAGE FUND
SECURITIES REGISTRATION STATEMENT
To: Minister of Finance
Filing
Date: April 15, 1997
Name of the Registrant Trust: PUTNAM HIGH YIELD ADVANTAGE FUND
Name and Official Title of Trustees:
George
Putnam
William
F. Pounds
Jameson
A. Baxter
Hans H.
Estin
John A.
Hill
Ronald J.
Jackson
Elizabeth
T. Kennan
Lawrence
J. Lasser
Robert E.
Patterson
Donald S.
Perkins
George
Putnam, III
A.J.C.
Smith
W.
Nicholas Thorndike
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
/S/
Harume Nakano
(Seal)
Ken Miura
Attorney-
at-Law
/S/ 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 HIGH YIELD
Offering or Sale of Foreign ADVANTAGE FUND
Investment Fund Securities:
Type and Aggregate Amount of Up to 250 million Class M
Shares
Foreign Investment Fund Securities Up to the total amount
aggregating the
to be Publicly Offered or Sold: amounts calculated by
multiplying the respective net
asset value per Class M Share by
the respective number of Class M
Shares in respect of 250 million
Class M Shares
(The
Maximum amount expected to be sold
is 2,455 billion U.S.
dollars ([Yen] 296.7
billion).
Note 1:U.S.$ amount is translated into Japanese Yen at the rate
of U.S.$l.00=[Yen] 120.85 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 February 28, 1997.
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 February 28 , 1997 (U.S.$9.82) by 250
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 sheets of this Securities Registration
Statement in Japanese is 7 including front and back pages.)
C O N T E N T S
Japanese This
OriginalEnglish
Translation
PART I. INFORMATION CONCERNING SECURITIES 1 1
PART II. INFORMATION CONCERNING ISSUER 3 4
I. DESCRIPTION OF THE FUND 3 4
l. GENERAL INFORMATION 3 4
2. INVESTMENT POLICY 3 4
3. MANAGEMENT STRUCTURE 3 4
4. INFORMATION CONCERNING THE EXERCISE
OF RIGHTS BY SHAREHOLDERS, ETC. 3 4
5. STATUS OF INVESTMENT PORTFOLIO 3 4
II. OUTLINE OF THE TRUST 3 4
III. OUTLINE OF THE OTHER RELATED COMPANIES 3 4
IV. FINANCIAL CONDITION OF THE FUND 3 4
V. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT FUND SECURITIES 3
4
VI. MISCELLANEOUS 3 4
PART III. SPECIAL INFORMATION 4 5
I. OUTLINE OF THE SYSTEM OF INVESTMENT
TRUSTS IN MASSACHUSETTS 4 5
II. FINANCIAL CONDITIONS OF THE INVESTMENT
ADVISER AND MANAGEMENT COMPANY 10
12
III. FORM OF FOREIGN INVESTMENT
FUND SECURITIES 10
12
PART I. INFORMATION CONCERNING SECURITIES
1. NAME OF FUND: PUTNAM
HIGH YIELD ADVANTAGE FUND
(hereinafter referred to as the
"Fund")
2. NATURE OF FOREIGN
Three classes of shares (Class A
shares,
INVESTMENT FUND SECU-
Class B shares and Class M Shares)
RITIES CERTIFICATES:
Registered share certificate
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 250
million Shares
BE OFFERED FOR SALE
(IN JAPAN)
4. TOTAL AMOUNT OF Up
to the total amount aggregating
OFFERING PRICE: the
amounts calculated by multiplying
the respective net asset value per
Share by the respective number of
Shares in respect of 250 million
Shares
(The
maximum amount expected to be sold
is 2.455 billion U.S.
dollars ([Yen] 296.7
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 February 28 , 1997
($ 9.82) by the number of Shares to be offered (250
million).
Note 2: Dollar amount is translated for convenience at the
rate of $1.00=[Yen]1 20.85 (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 February 28, 1997).
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 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.
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:The "Business Day" means a day on which the New York
Stock Exchange is open for business.
6. SALES CHARGE: Sales
charge (in Japan) is 3.25% of the
Subscription Amount
7. MINIMUM AMOUNT OR The
minimum amount for purchase of
NUMBER OF SHARES
Shares is 100 shares and in
integral
FOR SUBSCRIPTION:
multiples of 10 shares.
8. PERIOD OF SUBSCRIPTION:
From: May 1,
1997 ( Thursday)
To:
October 31 , 1997
(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")
Tokyo-
Sumitomo Twin Bldg. 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
securities company.
11. DATE AND PLACE Investors
shall pay the Issue Price and
OF PAYMENT:
Sales Charge to KOKUSAI within 4
business days in Japan from the
day when KOKUSAI confirms the
execution of the order (the "Trade
Day") (see page 18).
The total
issue price for each Application
Day will be transferred by KOKUSAI
to the account of the Fund at
Putnam Fiduciary Trust Company,
the transfer agent, within 4 Fund
Business Days (hereinafter
referred to as "Payment Date")
from (and including) the
Application Day.
12. OUTLINE OF UNDERWRITING, ETC.:
(A) KOKUSAI has entered into an agreement dated
6th September,
1996 with Putnam Mutual Funds Corp. (hereinafter referred
to as the "Fund") in connection with the sale and
repurchase of the Shares in Japan, and has
undertaken to make a public offering of Shares.
(B) During the offering period, KOKUSAI will execute or
forward the purchase orders and repurchase requests of the
Shares received directly or indirectly through other
Handling Securities Companies to the Fund.
(C) The Fund has appointed KOKUSAI as the Agent Securities
Company in Japan.
Note:"The Agent Securities Company" shall mean a securities
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 other
handling securities companies (the "Handling Securities
Companies") rendering such other services.
13. MISCELLANEOUS:
(A) Method of Subscription:
Investors who subscribe to Shares shall submit to a
Handling Securities Company an Agreement Concerning the
Opening of a Foreign Securities Transactions Account
("Account Agreement") or, in case of investors who shall
not entrust the custody of Shares with a Handling
Securities Company shall submit to it an Agreement
Concerning Foreign Securities Transactions ("Transactions
Agreement"). The subscription amount shall be paid in yen
in principle and the yen exchange rate shall be the forward
cable exchange rate in Tokyo on the Trade Day fixed on each
Payment Date.
The subscription amount shall be paid in dollars to
the account of the Fund with Putnam Fiduciary Trust Company
as transfer agent for the Fund by Kokusai on the Payment
Date.
(B) 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 Securities Report set
forth below (the Securities Report mentioned below, from
page 1 to page 34)
II. OUTLINE OF THE TRUST
The description in this item is same as the description in
II. OUTLINE OF THE FUND of the Securities Report set forth
below (Ditto, from page 35 to page 66)
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
Securities Report set forth below (Ditto, from page 67 to
page 69)
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 Securities
Report set forth below (Ditto, from page 70 to page 72)
V. SUMMARY OF INFORMATION CONCERNING THE EXERCISE OF RIGHTS
BY HOLDERS OF FOREIGN INVESTMENT FUND SECURITIES
The description in this item is same as the description in
V. SUMMARY OF INFORMATION CONCERNING THE EXERCISE OF RIGHTS
BY HOLDERS OF FOREIGN INVESTMENT FUND SECURITIES of the
Securities Report set forth below (Ditto, page 73)
VI. MISCELLANEOUS
The description in this item is same as the description
inVII. REFERENCE INFORMATION of the Securities Report set
forth below (Ditto, from page 73 to page 74)
PART III. SPECIAL INFORMATION
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 entirely 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 ant 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.
B. 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 194o 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.
C. Ongoing Requirements
Under U.S. law, a fund is subject to numerous ongoing
requirements, including, but not limited to;
1. Updating its registration statement 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) each day the Exchange is open.
B. Redemption
Shareholders may generally sell shares of a 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 says, 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 the
net assets of a fund which were liquidated in accordance
with the proportion of the fund's outstanding shares he
owns.
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 securities loans, gains from the sale or other dispositions
of stock, securities, or foreign currencies, and other income
(including gains from options, futures, or forward contracts)
derived with respect to its business of investing in such stock,
securities, or currencies; (b) derive less than 30% of its gross
income from the sale or other disposition of certain assets
(including stock and securities) held less than three months;
(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,
and other securities limited generally with respect to any one
issuer to not more than 5% of the total assets of a 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 of any issuer (other than U.S.
Government Securities). In order to receive the favorable tax
treatment accorded regulated investment companies and their
shareholders, moreover, a fund must in general distribute with
respect to each taxable year at least 90% of the sum of its
taxable net investment income, its net tax-exempt income (if
any), and the excess, if any, of its net short-term capital
gains over net long-term capital losses for such year. To
satisfy these requirements, a fund may engage in investment
techniques that affect the amount, timing and character of its
income and distributions.
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
so 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 of net long-term
capital gains 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.
The Fund's transactions in foreign currencies, foreign
currency-denominated debt securities and certain foreign
currency options, futures contracts and forward contracts (and
similar instruments) may give rise to ordinary income or loss to
the extent such income or loss results from fluctuations in the
value of the foreign currency concerned.
Investment by the Fund in "passive foreign 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 foreign investment company as a "qualified electing
fund".
A "passive foreign investment company" is any foreign
corporation: (i) 75 percent of 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 foreign
currency gains. Passive income for this purpose does not
include rents and royalties received by the foreign 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 ruled apply to investments though 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. Shareholders who fail to furnish their
correct TIN are subject to a penalty of $50 for each such
failure unless the failure is due to reasonable cause and not
wilful neglect. An individual's taxpayer identification number
is his or her social security number.
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).
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 principally 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 CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY
[Omitted, in Japanese version, financial statements of the
Investment Management Company and Japanese translations
thereof are incorporated here.]
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
[H&M Second Draft April 7, 1997]
SECURITIES REPORT
(the Second Term)
From: December 1, 1995
To: November 30, 1996
PUTNAM HIGH YIELD ADVANTAGE FUND
SECURITIES REPORT
(the Second Term)
From: December 1, 1995
To: November 30, 1996
To: Minister of Finance
Filing Date: April 15, 1997
Name of the Registrant Trust: PUTNAM HIGH YIELD ADVANTAGE FUND
Name and Official Title of Trustees: George Putnam
William F. Pounds
Jameson A. Baxter
Hans
H. Estin
John
A. Hill
Ronald J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W.
Nicholas Thorndike
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
/s/
Harume Nakano
(Seal)
Ken
Miura
Attorney-at-Law
/s/
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
Places where a copy of this Securities Report is available for
Public Inspection.
Not applicable.
(Total number of pages of this Securities Report in Japanese is
43 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 6
3. MANAGEMENT STRUCTURE 12 17
4. INFORMATION CONCERNING THE EXERCISE
OF RIGHTS BY SHAREHOLDERS 19 27
5. STATUS OF INVESTMENT PORTFOLIO 21 31
II. OUTLINE OF THE TRUST 23 35
III. OUTLINE OF THE OTHER RELATED COMPANIES 58 67
IV. FINANCIAL CONDITIONS OF THE FUND 60 70
V. FINANCIAL CONDITIONS OF THE INVESTMENT ADVISER
142
AND MANAGEMENT COMPANY (translated from the English
source: omitted in English Translation)
VI. SUMMARY OF INFORMATION CONCERNING THE
EXERCISE OF RIGHTS BY HOLDERS OF
FOREIGN INVESTMENT FUND SECURITIES 165 73
VII. REFERENCE INFORMATION 165 73
Note 1: The exchange rate of U.S. Dollars ("dollar"
or "$") into Japanese Yen is [Yen]120.85 for one U.S.
Dollar, which is the actual middle point between the
selling and buying currency rate by telegraphic
transfer on the February 28, 1997 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 done simply by multiplying
the corresponding amount by the conversion rate
specified and rounded 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 December 1 to November 30 of the following
year. However, the first fiscal year refers to a
period from December 8, 1987 (Incorporation of the
Fund) to December 31, 1988.
PART II. INFORMATION CONCERNING ISSUER
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 High Yield Advantage Fund
(the "Fund")
(2) Form of the Fund
Putnam High Yield Advantage Fund is a Massachusetts
business trust organized on January 13, 1986. 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. Prior to April 1,
1992 the Fund was known as Putnam High Yield Trust II.
The Fund is an open-end, diversified management
investment company with an unlimited number of authorized
shares of beneficial interest. The Trustees may, without
shareholder approval, create two or more series of shares
representing separate investment portfolios.
Any such series of shares may be divided without
shareholder approval into two or more classes 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 series. Only the Fund's
class A, B and M shares are currently offered. The Fund
may also offer 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 shareholders own fewer shares than a minimum amount
set by the Trustees (presently 20 shares), the Fund may
choose to redeem shareholdersO shares. Shareholders will
receive at least 30 days' written notice before the Fund
redeems shareholdersO 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 establish one at
any time, which could apply to both present and future
shareholders.
(3) Governing Laws
The Fund was created under, and is subject to, the
laws of the Commonwealth of Massachusetts. The sale of the
FundOs share s 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 elect 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 O1940 ActO), in general, requires investment
companies to register as such with the U.S. Securities
and Exchange Commission (the OSECO), 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 O1933
ActO), 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 O1934 ActO), 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 Oregulated
investment companyO for federal income tax purposes and
to meet all other requirements that are 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 FundOs 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) Objects and Basic Nature of the Fund:
The Fund seeks high current income. Capital growth is
a secondary objective when consistent with the objective of
high current income. The Fund is not intended to be a
complete investment program, and there is no assurance it
will achieve its objectives.
(D) History of the Fund:
January 13, 1986:
Organization of the Fund as a
Massachusetts business trust.
Adoption of the Agreement and
Declaration of Trust.
April, 1, 1992:
Change of the Fund's name.
May 5, 1994: 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
OInvestor Servicing AgentO) 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 Securities Company") engages in
forwarding the purchase or repurchase orders for the
Shares in Japan and also acts as the agent securities
company.
[Graphic showing related companies of the Fund]
2. INVESTMENT POLICY
(A) Basic Policy for Investment and Objects of Investment:
The Fund seeks high current income. Capital growth is
a secondary objective when consistent with the objective of
high current income. The Fund is not intended to be a
complete investment program, and there is no assurance it
will achieve its objectives.
Basic investment strategy
The Fund seeks high current income by investing
primarily in high-yielding, lower-rated fixed-income
securities, constituting a diversified portfolio which
Putnam Investment Management, Inc., the Fund's investment
management company (the "Investment Management Company"),
believes does not involve undue risk to income or
principal. Normally, at least 80% of the Fund's assets
will be invested in debt securities, convertible securities
or preferred stocks that are consistent with its primary
investment objective of high current income. The Fund's
remaining assets may be held in cash or money market
instruments, or invested in common stocks and other equity
securities when these types of investments are consistent
with the objective of high current income.
The Fund seeks its secondary objective of capital
growth, when consistent with its primary objective of high
current income, by investing in securities that Investment
Management Company expects to appreciate in value as a
result of declines in long-term interest rates or favorable
developments affecting the business or prospects of the
issuer which may improve the issuer's financial condition
and credit rating. Investment Management Company believes
that such opportunities for capital appreciation often
exist in the securities of smaller capitalization
companies. Although these smaller companies may present
greater opportunities for capital appreciation, they may
also include greater risks than larger, more established
issuers.
Differing yields on fixed-income securities of the
same maturity are a function of several factors, including
the relative financial strength of the issuers of such
securities. Higher yields are generally available from
lower-rated fixed income securities. Lower-rated fixed
income securities are generally regarded as those rated
below Baa or BBB by nationally recognized securities rating
agencies such as Moody's Investors Service, Inc.
("Moody's") or Standard & Poor's ("S&P"), or unrated
securities of comparable quality. Securities rated below
Baa or BBB are considered to be of poor standing and
predominantly speculative. The Fund may invest up to 15%
of its assets in securities rated, by each of the rating
agencies rating the security, below Caa or CCC, including
securities in the lowest rating category of each rating
agency, or in unrated securities determined by Investment
Management Company to be of comparable quality. Such
securities may be in default and are generally regarded by
the rating agencies as having extremely poor prospects of
ever attaining any real investment standing.
Securities ratings are based largely on the issuer's
historical financial condition and the rating agencies'
investment analysis at the time of rating. Consequently,
the rating assigned to any particular security is not
necessarily a reflection of the issuer's current financial
condition, which may be better or worse than the rating
would indicate. Although Investment Management Company
considers securities ratings when making investment
decisions, it performs its own investment analysis and does
not rely principally on the ratings assigned by the rating
services. Investment Management Company's analysis may
include consideration of the issuer's experience and
managerial strength, changing financial condition,
borrowing requirements or debt maturity schedules, and its
responsiveness to changes in business conditions and
interest rates. It also considers relative values based on
anticipated cash flow, interest or dividend coverage, asset
coverage and earnings prospects. Because of the greater
number of investment considerations involved in investing
in lower-rated securities, the achievement of the Fund's
objectives depends more on Investment Management Company's
analytical abilities than would be the case if the Fund
were investing primarily in securities in the higher rating
categories.
The Fund may invest in participations and assignments
of fixed and floating rate loans made by financial
institutions to governmental or corporate borrowers. In
addition to other risks associated with investments in debt
securities, participations and assignments involve the
additional risk that the institution's insolvency could
delay or prevent the flow of payments on the underlying
loan to the Fund. The Fund may have limited rights to
enforce the terms of the underlying loan, and the liquidity
of loan participations and assignments may be limited.
At times Investment Management Company may judge that
conditions in the securities markets make pursuing the
Fund's basic investment strategy inconsistent with the best
interests of its shareholders. At such times Investment
Management Company may temporarily use alternative
strategies primarily designed to reduce fluctuations in the
value of the Fund's assets.
In implementing these defensive strategies, the Fund
may increase the portion of its assets invested in money
market instruments and may invest in higher-rated fixed-
income securities, or other securities Investment
Management Company considers consistent with such defensive
strategies. The yield on these securities would generally
be lower than the yield on lower-rated fixed income
securities. It is impossible to predict when, or for how
long, the Fund will use these alternative strategies.
Non-U.S. Investments
The Fund may invest in securities of foreign issuers
that are not actively traded in U.S. markets. These
foreign investments involve certain special risks described
below.
Foreign securities are normally denominated and traded
in foreign currencies. As a result, the value of the
Fund's foreign investments and the value of its shares may
be affected favorably or unfavorably by changes in currency
exchange rates relative to the U.S. dollar. The Fund may
engage in a variety of foreign currency exchange
transactions in connection with its foreign investments,
including transactions involving futures contracts, forward
contracts and options.
Investments in foreign securities may subject the Fund
to other risks as well. For example, there may be less
information publicly available about a foreign issuer than
about a U.S. issuer, and foreign issuers are not generally
subject to accounting, auditing and financial reporting
standards and practices comparable to those in the United
States. The securities of some foreign issuers are less
liquid and at times more volatile than securities of
comparable U.S. issuers. Foreign brokerage commissions and
other fees are also generally higher than in the United
States. Foreign settlement procedures and trade
regulations may involve certain risks (such as delay in
payment or delivery of securities or in the recovery of the
Fund's assets held abroad) and expenses not present in the
settlement of investments in U.S. markets.
In, addition, the Fund's investments in foreign
securities may be subject to the risk of nationalization or
expororiation of assets, imposition of currency exchange
controls or restrictions on the repatriation of foreign
currency, confiscatory taxation, political or financial
instability and diplomatic developments which could affect
the value of the Fund's investments in certain foreign
countries. Dividends or interest on, or proceeds from the
sale of, foreign securities may be subject to foreign
withholding taxes, and special U.S. tax considerations may
apply.
Legal remedies available to investors in certain
foreign countries may be more limited than those available
with respect to investments in the United States or in
other foreign countries. The laws of some foreign
countries may limit the Fund's ability to invest in
securities of certain issuers organized under the laws of
those foreign countries.
The risks described above are typically increased in
connection with investments in less developed and
developing nations, which are sometimes referred to as
"emerging markets." For example, political and economic
structures in these countries maybe in their infancy and
developing rapidly, causing instability. High rates of
inflation or currency devaluations may adversely affect the
economies and securities markets of such countries.
Investments in emerging markets may be considered
speculative.
The Fund expects that its investments in foreign
securities generally will not exceed 20% of its total
assets, although the Fund's investments in foreign
securities may exceed this amount from time to time.
Certain of the foregoing risks may also apply to some
extent to securities of U.S. issuers that are denominated
in foreign currencies or that are traded in foreign
markets, or securities of U.S. issuers having significant
foreign operations.
For more information about foreign securities and the
risks associated with investment in such securities, see
the SAI.
Investments in premium securities
At times, the Fund may invest in securities bearing
coupon rates higher than prevailing market rates. Such
"premium" securities are typically purchased at prices
greater than the principal amounts payable on maturity.
The Fund does not amortize the premium paid for these
securities in calculating its net investment income. As a
result, the purchase of premium securities provides a
higher level of investment income distributable to
shareholders on a current basis than if the Fund purchased
securities bearing current market rates of interest.
Because the value of premium securities tends to approach
the principal amount as they approach maturity (or call
price in the case of securities approaching their first
call date), the purchase of such securities may increase
the risk of capital loss if such securities are held to
maturity (or first call date).
During a period of declining interest rates, many of
the Fund's portfolio investments will likely bear coupon
rates that are higher than the current market rates,
regardless of whether the securities were originally
purchased at a premium. These securities would generally
carry premium market values that would be reflected in the
net asset value of the Fund's shares. As a result, an
investor who purchases shares of the Fund during such
periods would initially receive higher taxable monthly
distributions (derived from the higher coupon rates payable
on the Fund's investments) than might be available from
alternative investments bearing current market interest
rates, but the investor may face an increased risk of
capital loss as these higher coupon securities approach
maturity (or first call date). In evaluating the potential
performance of an investment in the Fund, investors may
find it useful to compare the Fund's current dividend rate
with its "yield," which is computed on a yield-to-maturity
basis in accordance with SEC regulations and which reflects
amortization of market premiums.
Illiquid securities
The Fund may invest up to 15% of its assets in
illiquid securities. Investment Management Company
believes that opportunities to earn high yields may exist
from time to time in securities which are illiquid and
which may be considered speculative. The sale of these
securities is usually restricted under federal securities
laws. As a result of illliquidity, the Fund may not be
able to sell these securities when Investment Management
Company considers it desirable to do so or may have to sell
them at less than fair market value.
Portfolio turnover
The length of time the Fund has held a particular
security is not generally a consideration in investment
decisions. A change in the securities held by the Fund is
known as "portfolio turnover." As a result of the Fund's
investment policies, under certain market conditions its
portfolio turnover rate may be higher than that of other
mutual funds.
Portfolio turnover generally involves some expense,
including brokerage commissions or dealer markups and other
transaction costs on the sale of securities and
reinvestment in other securities. Such transactions may
result in realization of taxable capital gains.
Options and futures portfolio strategies
The Fund may engage in a variety of transactions
involving the use of options and futures contracts. The
Fund may purchase and sell futures contracts in order to
hedge against changes in the values of securities the Fund
owns or expects to purchase or to hedge against interest
rate changes. For example, if Investment Management
Company expected interest rates to increase, the Fund might
sell futures contracts on U.S. Government Securities. If
rates were to increase, the value of the Fund's fixed-
income securities would decline, but this decline might be
offset in whole or in part by an increase in the value of
the futures contracts. The Fund may also purchase and sell
call and put options on futures contracts or on securities
the Fund is permitted to purchase directly in addition to
or as an alternative to purchasing and selling futures
contracts. The Fund will not purchase put and call options
with respect to such securities if as a result more than 5%
of its assets would at the time be invested in such
options. The Fund may also buy and sell combinations of
put and call options on the same underlying security. The
Fund may also engage in futures and options transactions
for nonhedging purposes, such as to substitute for direct
investment or to manage its effective duration. Duration
is a commonly used measure of the longevity of the Fund's
debt instruments.
Options and futures transactions involve costs and may
result in losses. The effective use of options and futures
strategies depends on the Fund's ability to terminate
options and futures positions at times when Investment
Management Company deems it desirable to do so. Options on
certain U.S. government securities are traded in
significant volume on securities exchanges. However, other
options which the Fund may purchase or sell are traded in
the "over-the-counter" market rather than on an exchange.
This means that the Fund will enter into such option
contracts with particular securities dealers who make
markets in these options. The Fund's ability to terminate
options positions in the over-the-counter market may be
more limited than for exchange-traded options and may also
involve the risk that securities dealers participating in
such transactions might fail to meet their obligations to
the Fund.
The use of options and futures strategies also
involves the risk of imperfect correlation among movements
in the prices of the securities underlying the futures and
options purchased and sold by the Fund, of the option and
futures contracts themselves, and, in the case of hedging
transactions, of the securities which are the subject of a
hedge.
The Fund's ability to engage in options and futures
transactions and to sell related securities may be limited
by tax considerations and by certain regulatory
requirements.
Other investment practices.
The Fund may also engage in the following investment
practices, each of which involves certain special risks.
Securities loans, repurchase agreements and forward
commitments.
The Fund may lend portfolio securities amounting to
not more than 25% of its assets to broker-dealers and may
enter into repurchase agreements on up to 25% of its
assets. These transactions must be fully collateralized at
all times. The Fund may also purchase securities for
future delivery, which may increase its overall investment
exposure and involves a risk of loss if the value of the
securities declines prior to the settlement date. These
transactions involve some risk if the other party should
default on its obligation and the Fund is delayed or
prevented from recovering the collateral or completing the
transaction.
Derivatives
Certain of the instruments in which the Fund may
invest, such as options, futures contracts and forward
contracts are considered to be "derivatives." Derivatives
are financial instruments whose value depends upon, or is
derived from, the value of an underlying asset, such as a
security or an index.
(B) Restrictions of Investment:
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 federal securities laws.
( 3 ) Purchase or sell real estate, although
it may purchase securities of issuers which deal in real
estate, securities which are secured by interests in real
estate , and securities which represent
interests in real estate
, and it may acquire and dispose of real estate or interests
in real estate acquired through the exercise of its rights
as a holder of debt obligations secured by real estate or
interests therein.
( 4 ) Purchase or sell commodities or
commodity contracts, except that the fund may
purchase and sell financial futures contracts and
options and may enter into foreign exchange
contracts and other financial transactions not involving
physical commoditie s.
( 5 ) Make loans, except by purchase of debt
obligations in which the f
und 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
f und (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,
a cquire 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
fundO s total assets would be invested
in any one industry.
9 ) Issue any class of securities which is
senior to the fundO s shares of beneficial
interest , except for permitted borrowings .
It is contrary to the Fund's present policy, which may
be changed without shareholder approval, to:
(1) Invest in (a) securities which at the time of such
investment 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 15% of the
Fund's net assets (taken at current value) would then be
invested in securities described in (a), (b) and (c) above.
(2) Invest in warrants (other than warrants acquired by
the Fund as part of a unit or attached to securities at the
time of purchase).
(3) Invest in securities of an issuer which, together with
any predecessors, controlling persons, general partners and
guarantors, have a record of less than three years'
continuous business operation or relevant business
experience, if, as a result, the aggregate of such
investments would exceed 5% of the value of the Fund's net
assets; provided, however, that this restriction shall not
apply to any obligation of the U.S. government or its
instrumentalities or agencies.
(4) Invest in the securities of other registered open-end
investment companies, except as they may be acquired as
part of a merger, consolidation or acquisition of assets.
(5) Pledge, hypothecate, mortgage or otherwise encumber
its assets in excess of 33 1/3% of its total assets (taken
at cost) in connection with permitted borrowings.
(6) Purchase securities on margin, except such short-term
credits as may be necessary for the clearance of purchases
and sales of securities, and except that it may make margin
payments in connection with financial futures contracts or
options.
(7) Make short sales of securities or maintain a short
position for the account of the fund unless at all times
when a short position is open it owns an equal amount of
such securities or owns securities which, without payment
of any further consideration, are convertible into or
exchangeable for securities of the same issue as, and in
equal amount to, the securities sold short.
(8) Invest in securities of any issuer, if, to the
knowledge of the fund, officers and Trustees of the fund
and officers and directors of Putnam Management who
beneficially own more than 0.5% of the securities of that
issuer together own more than 5% of such securities.
(9) Buy or sell oil, gas or other mineral leases, rights
or royalty contracts, although it may purchase securities
which represent interests in, are secured by interests in,
or which are issued by issuers which deal in, such leases,
rights or contracts, and it may acquire and dispose of such
leases, rights or contracts acquired through the exercise
of its rights as a holder of debt obligations secured
thereby.
The Fund will, so long as shares of the Fund are being
offered for sale by the Fund in Japan, comply with the
following:
1. The Fund may not invest in the securities of other
registered open-end investment funds or companies, except
as they may be acquired as part of a merger, consolidation
or acquisition of assets.
2. The Fund may not invest more than 10% of the net
assets of the Fund in securities which are not traded on an
official stock exchange or other regulated market,
operating regularly and being recognized and open to the
public (which shall include, without limitation, the
National Association of Securities Dealers Quotation
System). This restriction shall not be applicable to bonds
determined by Putnam Investment Management, Inc. to be
liquid and for which a market price (including a dealer
quotation) is generally obtainable or determinable.
3. The Fund may not invest in 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 and principal by the U.S.
government or its agencies or instrumentalities.
4. The Fund may not acquire more than 10% of the voting
securities of any issuer and may not acquire more than 15%
of the voting securities of any issuer together with other
registered investment companies managed by Putnam
Investment Management, Inc.
If any violation of the foregoing four 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.
Although certain of the Fund's fundamental investment
restrictions permit the Fund to borrow money to a limited
extent, the fund does not currently intend to do so and did
not do so last year.
The Fund may invest without limitation in "premium
securities" as referred to in 2.(A) above.
All percentage limitations on investments 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.
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 are represented at the
meeting in person or by proxy.
(C) Risk Factors
The values of fixed-income securities fluctuate in
response to changes in interest rates. A decrease in
interest rates will generally result in an increase in the
value of Fund assets. Conversely, during periods of rising
interest rates, the value of Fund assets will generally
decline. The magnitude of these fluctuations generally is
greater for securities with longer maturities. However,
the yields on such securities are also generally higher.
In addition, the values of fixed-income securities are
affected by changes in general economic and business
conditions affecting the specific industries of their
issuers.
Changes by recognized rating services in their ratings
of a fixed-income security and changes in the ability of an
issuer to make payments of interest and principal may also
affect the value of these investments. Changes in the
value of portfolio securities generally will not affect
income derived from these securities, but will affect the
Fund's net asset value.
Investors should carefully consider their ability to
assume the risks of owning shares of a mutual fund that
invests in lower-rated securities before making an
investment.
The lower ratings of certain securities held by the
Fund reflect a greater possibility that adverse changes in
the financial condition of the issuer or in general
economic conditions, or both, or an unanticipated rise in
interest rates, may impair the ability of the issuer to
make payments of interest and principal.
The inability (or perceived inability) of issuers to
make timely payments of interest and principal would likely
make the values of securities held by the Fund more
volatile and could limit the Fund's ability to sell its
securities at prices approximating the values placed on
such securities. In the absence of a liquid trading market
for its portfolio securities the Fund at times may be
unable to establish the fair value of such securities.
The rating assigned to a security by a rating agency does
not reflect an assessment of the volatility of the
security's market value or of the liquidity of an
investment in the security.
The table below shows the percentages of the Fund assets invested
during fiscal 1996 in securities assigned to the various rating
categories by S&P, or, if unrated by S&P, assigned to comparable
rating categories by another rating agency, and in unrated
securities determined by Investment Management Company to be of
comparable quality:
Rated securities, Unrated securities of
as percentage of comparable quality, as
"AAA" - -
"AA" - -
"A" - 0.41%
"BBB" 1.86% -
"BB" 23.38% 2.15%
"B" 53.91% 1.15%
"CCC" 8.27% -
Investment Management Company seeks to minimize the
risks of investing in lower-rated securities through
careful investment analysis. When the Fund invests in
securities in the lower rating categories, the achievement
of the Fund's goals is more dependent on Investment
Management Company's ability than would be the case if the
Fund were investing in securities in the higher rating
categories.
The Fund will not necessarily dispose of a security
when its rating is reduced below its rating at the time of
purchase. However, Investment Management Company will
monitor the investment to determine whether continued
investment in the security will assist in meeting the
Fund's investment objectives.
At times, a substantial portion of Fund assets may be
invested in securities as to which the Fund, by itself or
together with other funds and accounts managed by
Investment Management Company and its affiliates, holds all
or a major portion. Under adverse market or economic
conditions or in the event of adverse changes in the
financial condition of the issuer, the Fund could find it
more difficult to sell these securities when Investment
Management Company believes it advisable to do so or may be
able to sell the securities only at prices lower than if
they were more widely held. Under these circumstances, it
may also be more difficult to determine the fair value of
such securities for purposes of computing the Fund's net
asset value.
In order to enforce its rights in the event of a
default of these securities, the Fund may be required to
participate in various legal proceedings or take possession
of and manage assets securing the issuer's obligations on
the securities. This could increase the Fund's operating
expenses and adversely affect the Fund's net asset value.
Certain securities held by the Fund may permit the
issuer at its option to "call," or redeem, its securities.
If an issuer were to redeem securities held by the Fund
during a time of declining interest rates, the Fund may not
be able to reinvest the proceeds in securities providing
the same investment return as the securities redeemed.
Certain of the lower-rated securities in which the
Fund invests are issued to raise funds in connection with
the acquisition of a company in so-called "leveraged buy-
out" transactions. The highly leveraged capital structure
of such issuers may make them especially vulnerable to
adverse changes in economic conditions.
The Fund at times may invest in so-called "zero-
coupon" bonds and "payment-in-kind" bonds. Zero-coupon
bonds are issued at a significant discount from their
principal amount and pay interest only at maturity rather
than at intervals during the life of the security. Payment-
in-kind bonds allow the issuer, at its option, to make
current interest payments on the bonds either in cash or in
additional bonds. Both zero-coupon bonds and payment-in-
kind bonds allow an issuer to avoid the need to generate
cash to meet current interest payments. Accordingly, such
bonds may involve greater credit risks than bonds paying
interest currently. The values of zero-coupon bonds and
payment-in-kind bonds are also subject to greater
fluctuation in response to changes in market interest rates
than bonds that pay interest in cash currently.
Even though such bonds do not pay current interest in
cash, the Fund nonetheless is required to accrue interest
income on these investments and to distribute the interest
income on a current basis. Thus, the Fund could be
required at times to liquidate other investments in order
to satisfy its distribution requirements.
Certain investment grade securities in which the Fund
may invest share some of the risk factors discussed above
with respect to lower-rated securities.
(D) Distribution Policy:
The Fund distributes any net investment income at
least monthly and any net realized capital gains at least
annually. Distributions from capital gains are made after
applying any available capital loss carryovers. A capital
loss carryover is currently available. The Fund normally
pays a distribution to Japanese investors who hold shares
as at 15th day of each month at the end of each month,
provided, however, the distribution may be paid at the
beginning of next month.
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, 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.
Portfolio securities for which market quotations are
readily available are valued at market value. Long-term
corporate bonds and notes for which market quotations are
not considered readily available are valued at fair value
on the basis of valuations furnished by a pricing service
approved by the Trustees which determines 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.
Short-term investments that will mature on 60 days or less
are valued at amortized cost, which approximates market
value. All other securities and assets are valued at their
fair value following procedures approved by the Trustees.
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 pursuant to 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
following procedures approved by the Trustees.
B. Management Fee, etc.:
(1) Management Fee:
(a) Management and Agent Securities Company Fees
Under a Management Contract dated May 6, 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 0.70% of the first $500
million of average net assets, 0.60% of the next $500
million, 0.55% of the next $500 million and 0.50% of
any amount over $1.5 billion.
For the fiscal year ending on November 30, 1996,
the Fund paid $9,236,284 as a management fee.
(b) Custodian Fee
The Custodian shall be 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 .
For the fiscal year ending on November 30, 1996,
the Fund paid $209,852 as a custodian fee.
(c) Charges of the Investor Servicing Agent
The Fund will pay to the Investor Servicing Agent
such fee, out of the assets of the Fund, as mutually
agreed upon in writing from time to time, in the
amount, the time and manner of payment.
For the fiscal year ending on November 30, 1996,
the Fund paid $1,859,347 as an investor servicing agent
fee.
(d) Fee on Class M Distribution Plan
The Class M distribution plan provides for
payments by the Fund to Putnam Mutual Funds 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.
Payments under the plan are intended to
compensate Putnam Mutual Funds Corp. for services
provided and expenses incurred by it as principal
underwriter of Fund shares, including the payments to
dealers mentioned above.
To compensate Kokusai and other dealers further
for services provided in connection with the sale of
Class M shares and the mainteneance of shareholder
accounts, Putnam Mutual Funds Corp. makes quarterly
payments to Kokusai and such other dealers.
The payments are based on 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. Putnam Mutual Funds Corp. makes
the payments at an annual rate of 0.25% of such average
net asset value of Class M shares.
Putnam Mutual Funds Corp. also pays to Kokusai and
other dealers, as additional compensation with respect
to the sale of Class M shares, 0.15% of such average
net asset value of Class M shares. For Class M shares,
the total annual payment to Kokusai and other dealers
equals 0.40% of such average net asset value. Putnam
Mutual Funds Corp. makes quarterly payments to
qualifying dealers.
For the fiscal year ending on November 30, 1996,
the Fund paid the fees on the distribution plan of
$2,412,906, $4,564,217 and $435,861 for the Class A
Shares, Class B Shares and Class M shares,
respectively.
(e) Other Expenses:
The Fund pays all of its expenses not assumed by
Putnam Investment Management, Inc. with respect to its
management services. In addition to the investment
management, distribution plan fees, shareholder
servicing agent expenses and custodian expenses
discussed herein, the principal expenses that the Fund
is expected to pay include, but are not limited to,
fees and expenses of certain of its Trustees; fees of
its independent auditors and legal counsel; fees
payable to government agencies, including registration
and qualification fees attributable to the Fund and its
shares under federal and state securities laws; and
certain extraordinary expenses. In addition, each
class will pay all of the expenses attributable to it.
The Fund also pays its brokerage commissions, interest
charges and taxes.
For the fiscal year ending on November 30, 1996,
the Fund paid $1,376,821 as other expenses.
C. Sales, Repurchases and Custody:
(1) Sales of Shares:
a. Sales in the United States. Investors residing
outside Japan can open a fund account with as little as
$500 and make additional investments at any time with
as little as $50. They can buy fund shares three ways
- through most investment dealers, through Putnam
Mutual Funds Corp. or through a systematic investment
plan.
Buying shares through Putnam Mutual Funds Corp.
Complete an order form and write a check for the amount
investors wish to invest, payable to the Fund. Return
the completed form and check to Putnam Mutual Funds
Corp., which will act as investor's agent in purchasing
shares through investor's designated investment dealer.
Buying shares through systematic investing.
Investors can make regular investments of $25 or more
per month through automatic deductions from investor's
bank checking or savings account. Application forms are
available from investor's investment dealer or through
Investor Servicing Agent.
Shares are sold at the public offering price based
on the net asset value next determined after Investor
Servicing Agent receives investorsO order. In most
cases, in order to receive that day's public offering
price, Investor Servicing Agent must receive
investorsOorder before the close of regular trading on
the New York Stock Exchange. If investors buy shares
through investorsO investment dealer, the dealer must
receive investorsOorder before the close of regular
trading on the New York Stock Exchange to receive that
day's public offering price.
Class M Shares
The public offering price of class M shares is the
net asset value plus a sales charge that varies
depending on the size of investor's purchase. The Fund
receives the net asset value. The sales charge is
allocated between investor's investment dealer and
Putnam Mutual Funds Corp. as shown in the following
table, except when Putnam Mutual Funds Corp., at its
discretion, allocates the entire amount to investor's
investment dealer.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Sales charge as
a percentage of Amount of sales
-------------------- charge reallowed
Net to dealers as a
Amount of transaction amount Offering percentage of
at offering price ($) invested price offering price
Under 50,000 3.36 % 3.25 % 3.00 %
50,000 but under 100,000 2.30 % 2.25 % 2.00 %
100,000 but under 250,000 1.52 % 1.50 % 1.25 %
250,000 but under 500,000 1.01 % 1.00 % 1.00 %
500,000 and above None None None
</TABLE>
Sales charges will not apply to class M shares
purchased with redemption proceeds received within the
prior 90 days from non-Putnam mutual funds on which the
investor paid a front-end or a contingent deferred
sales charge. Participant-directed qualified
retirement plans with at least 50 eligible employees
and members of qualified groups may also purchase class
M shares without a sales charge.
b. Sales in Japan
In Japan, Shares of the Fund are offered on any
Valuation Date 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. Investors shall
submit an Account Agreement or Transaction Agreement
(together with the Account Agreement referred to herein
as the "Agreements") to the Handling Securities
Companies. The purchase shall be made in the minimum
investment amount of 100 shares and in integral
multiples of 10 shares.
The issue price for Shares during the Subscription
period shall be, in principle, the Net Asset Value per
Share next calculated on the day on which the Fund has
received such application. The Trade Day in Japan is
the day when the Handling Securities Company 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. Sales
charge shall be 3.25% of the amount of subscription all
of which may be retained by the selling dealer. 3%
consumption tax on the Sales charge will be added.
The investors having submitted the Account
Agreement will receive from the Handling Securities
Company a certificate of safekeeping in exchange for
the purchase price. In such case payment shall be made
in yen in principle and the exchange into dollars shall
be made at the forward cable exchange rate for the
payment day in Tokyo as of the Trade Day. The payment
may be made in dollars to the extent that the Handling
Securities Companies can agree.
In addition, Handling Securities Companies 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
[Yen]500,000,000 or the Shares otherwise cease to
comply with the "Standards of Selection of Foreign
Investment Fund Securities" established by the
Association.
(2) Repurchase of Shares:
a. Repurchase in overseas markets
A shareholder can sell his shares to the Fund any
day the New York Stock Exchange is open, either
directly to the Fund or through his investment dealer.
The Fund will only redeem shares for which it has
received payment.
Selling shares directly to the Fund. A
shareholder must send a signed letter of instruction or
stock power form to Investor Servicing Agent, along
with any certificates that represent shares a
shareholder wants to sell. The price a shareholder
will receive is the next net asset value calculated
after the Fund receives a shareholder's request in
proper form less any applicable CDSC. In order to
receive that day's net asset value, Investor Servicing
Agent must receive a shareholder's request before the
close of regular trading on the New York Stock
Exchange.
If a shareholder sells shares having a net asset
value of $100,000 or more, 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 a shareholder's investment dealer,
Investor Servicing Agent and many commercial banks.
If a shareholder wants his redemption proceeds
sent to an address other than his address as it appears
on records of the Investor Servicing Agent, a signature
guarantee is required. Investor Servicing Agent
usually requires additional documentation for the sale
of shares by a corporation, partnership, agent or
fiduciary, or a surviving joint owner.
The Fund generally sends shareholders payment for
shareholdersO shares the business day after
shareholdersO request is received. Under unusual
circumstances, the Fund may suspend redemptions, or
postpone payment for more than seven days, as permitted
by federal securities law.
A shareholder may use Investor Servicing AgentOs
Telephone Redemption Privilege to redeem shares valued
up to $100,000 from his account unless he has notified
Investor Servicing Agent of an address change within
the preceding 15 days. Unless an investor indicates
otherwise on the account application, Investor
Servicing Agent will be authorized to act upon
redemption and transfer instructions received by
telephone from a shareholder, or any person claiming to
act as his representative, who can provide Investor
Servicing Agent with his account registration and
address as it appears on Investor Servicing AgentOs
records.
Investor Servicing Agent will employ these and
other reasonable procedures to confirm that
instructions communicated by telephone are genuine; if
it fails to employ reasonable procedures, Investor
Servicing Agent may be liable for any losses due to
unauthorized or fraudulent instructions.
During periods of unusual market changes and
shareholder activity, a shareholder may experience
delays in contacting Investor Servicing Agent by
telephone. In this event, the shareholder may wish to
submit a written redemption request, as described
above, or contact shareholdersO investment dealer, as
described below. The Telephone Redemption Privilege is
not available if the shareholder was issued
certificates for shares that remain outstanding. The
Telephone Redemption Privilege may be modified or
terminated without notice.
Selling shares through investment dealers. A
shareholder's dealer must receive shareholdersO request
before the close of regular trading on the New York
Stock Exchange to receive that day's net asset value.
A shareholder's dealer will be responsible for
furnishing all necessary documentation to Investor
Servicing Agent, and may charge a shareholder for its
services.
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 Handling Securities Company
on a Fund Business Day and the business day of
securities companies in Japan without a contingent
deferred sales charge.
The price a shareholder in Japan will receive is
the next net asset value calculated after the Fund
receives the repurchase request from Kokusai, provided
the request is received before the close of regular
trading on the Exchange. The payment of the price
shall be made in yen through the Handling Securities
Companies pursuant to the Agreements or, in case the
Handling Securities Companies agree, in dollars.
(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 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
Commission for protection of investors.
(4) Custody of Shares:
In overseas markets where the Shares are offered,
the Share certificates shall be held by the
Shareholders at their own risk.
The custody of the Share certificates (if issued)
sold to Japanese Shareholders shall be held, in the
name of the custodian, by the custodian of KOKUSAI.
Certificates of custody for the Shares shall be
delivered by the Handling Securities Companies to the
Japanese Shareholders.
The foregoing does not apply to the cases in which
Japanese Shareholders keep the Shares in custody at
their own risk.
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 30th November.
(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 on file 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 Trust 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 or the notice
thereof shall be 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, etc.
(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
applicable law.
(2) Disclosure in Japan:
a. Disclosure to the Supervisory Authority:
When the Fund intend s to offer Shares
amounting to more than 500 million yen in Japan, it
shall submit to the Minister of Finance of Japan
securities registration statements together with the
copies of the Agreement and Declaration of Trust and
the agreements with major related companies as
attachments thereto. The said documents are made
available for public inspection for the investors and
any other persons who desire at the Ministry of
Finance.
The Handling Securities Companies of the Shares
shall deliver to the investors prospectuses or
explanatory brochures the contents of which are
substantially identical with Part I and Part II of the
securities registration statements. For the purpose of
disclosure of the financial conditions, etc., the Fund
shall submit to the Minister of Finance of Japan
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 year 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 Ministry of Finance.
b. Disclosure to Japanese Shareholders:
The Japanese Shareholders will be notified of the
material facts which would change their position,
including material amendments to the Agreement and
Declaration of Trust of the Fund, and of notices from
the Trustees, through the Handling Securities
Companies.
The financial statements shall be sent to the
Japanese Shareholders through the Handling Securities
Companies or the summary thereof shall be carried in
daily newspapers.
(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 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:
The Shareholders shall be registered in order to
exercise directly the rights of their Shares. Therefore,
the Shareholders in Japan who entrust the custody of their
Shares to the Handling Securities Company cannot exercise
directly their rights, because they are not registered.
Shareholders in Japan may have the Handling Securities
Companies exercise their rights on their behalf in
accordance with the Account Agreement with the Handling
Securities Companies.
The Shareholders in Japan who do not entrust the
custody of their Shares to the Handling Securities
Companies may exercise their rights in accordance with
their own arrangement under their own responsibility.
The major rights enjoyed by the investors 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
Distributions from net investment
income a re currently declared and paid at
least monthly and any net realized capital gains at
least annually. Distributions from capital gains are
made after applying any available capital loss
carryovers. A capital loss carryover is currently
available. Distributions paid on class A shares will
generally be greater than those paid on class B and
class M shares because expenses attributable to class B
and class M shares will generally be higher.
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 a 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 may inspect the
Agreement and Declaration of Trust as on file at
the offices of the Secretary of State of the
Commonwealth of Massachusetts.
(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
The 1933 Act provided s for the liability of
the Fund and certain other persons, subject to various
limitations and exceptions, in respect of materially
misleading disclosures made in the FundOs U.S.
registration statement.
(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 Handling Securities Companies
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.
d. 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 Japanese
Minister of Finance of the 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 :
Tokyo District Court
1-4, Kasumigaseki 1-chome
Chiyoda-ku, Tokyo
5. STATUS OF INVESTMENT FUND
(A) Diversification of Investment Fund:
5 (As of the end of February, 1997)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Types of Assets Name of Country Total
Investment
U.S. Dollars Ratio (%)
Corporate Bonds United States 2,013,500,123 71.83
Canada 103,186,125 3.68
United Kingdom 53,448,188 1.91
Mexico 17,098,074 0.61
Luxembourg 12,943,125 0.46
Bermuda 11,111,438 0.40
Australia 10,122,300 0.36
Indonesia 9,584,663 0.34
Netherlands 9,150,750 0.33
China 8,686,700 0.31
Brazil 8,395,450 0.30
Argentina 4,857,263 0.17
India 2,281,438 0.08
Malaysia 769,913 0.03
Sub-total 2,265,135,550 80.81
Preferred stock United States 137,028,626 4.89
Brady Bonds Argentina 39,260,200 1.40
Brazil 35,530,251 1.27
Mexico 28,081,750 1.00
Venezuela 6,125,625 0.22
Ecuador 4,914,870 0.18
Sub-total 113,912,696 4.06
Short-term
(Repurchase Agreement) United States 75,000,000 2.68
(Short-term Paper) United States 19,979,506 0.71
Sub-total 94,979,506 3.39
Units United States 60,537,525 2.16
Australia 4,668,300 0.17
United Kingdom 3,189,525 0.11
Sub-total 68,395,350 2.44
Convertible Bonds United States 43,593,211 1.56
Common Stock United States 38,836,779 1.39
Canada 1,208,925 0.04
Sub-total 40,045,704 1.43
Foreign Government Russia 24,183,145 0.86
South Africa 7,394,304 0.26
Morocco 2,239,600 0.08
Mexico 447,000 0.02
Sub-total 34,264,049 1.22
Convertible Pre-
ferred Stocks United States 4,307,445 0.15
Warrants United States 3,815,934 0.14
Options, Futures and Other Derivatives
Cash, Deposit and Other
Assets (After deduction of
liabilities) -2,490,046 -0.09
Total 2,802,988,025 100.00
(Net Asset Value) ([Yen]338,741
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.
</TABLE>
(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
February, 1997 is as follows:
<TABLE><CAPTION>
<S> <C> <C>
Total Net Asset Value Net Asset Value per
Share
<C> <C> <C> <C>
Dollar Yen Dollar Yen
(thousands) (millions)
1st Fiscal Year 20,077 2,426 9.51 1,149
(November 30, 1995)
2nd Fiscal Year 484,608 58,565 9.64
1,165
(November 30, 1996)
1996 End of March 30,990 3,745 9.56 1,155
April 35,022 4,232 9.55
1,154
May 37,256 4,502 9.53
1,152
June 39,357 4,756 9.44
1,141
July 42,099 5,088 9.35
1,130
August 43,724 5,284 9.43
1,140
September 191,881 23,189 9.63 1,164
October 348,092 42,067 9.54
1,153
November 464,506 56,136 9.64
1,165
December 664,695 80,328 9.68
1,170
1997 End of January 796,061 96,204 9.73
1,176
February 889,807 107,533 9.82
1,187
</TABLE>
(Note)Operations of Class M Shares were commenced on December 1, 1994.
(2) Record of Distributions Paid
Period Amount of Dividend paid per share
1st Fiscal Year (12/1/94 - 11/30/95) $0.98 ([Yen]
118.43 )
2nd Fiscal Year (12/1/95 - 11/30/96) $0.88 ([Yen]
106.35 )
(Note)Record of distribution paid from December 1996 to February 1997 are as
follows:
120.85 Dividend
Month/Year Dollar Yen
1996 End of December 0.071 8.58
1997 End of January 0.070 8.46
February 0.070 8.46
(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 each Fiscal Year
are as follows:
<TABLE><CAPTION>
<S> <C> <C> <C>
Number of Shares Number of Shares Number of
Sold Repurchased Outstanding Shares
1st Fiscal Year 2,370,932 259,901 2,111,031
(0) (0) (0)
2nd Fiscal Year 47,178,747 1,098,778 48,197,000
42,967,350 252,350 42,715,000
</TABLE>
Note: The number of Shares sold, repurchased and outstanding in the
parentheses represents those sold, repurchased and outstanding in Japan.
II. OUTLINE OF THE TRUST
1. Trust
(A) Law of Place of Incorporation
The Trusty is a Massachusetts business trust organized in
Massachusetts, U.S.A. on January 13, 1996.
Chapter 182 of the Massachusetts General Laws prescribes
the fundamental matters in regard to the operations of
certain business trusts constituting voluntar y
associations under that chapter.
The Trust is an open-end , deversified 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 Trust
The purpose of the Trust 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 Trust
January 13, 1986: Date
of initial Agreement and
Declaration of Trust
April 1, 1992: Change of
the Trust's name
May 5, 1994: Date of
Amended and Restated Agreement and
Declaration of Trust
(E) Amount of Capital Stock
Not applicable.
(F) Structure of the management of the Trust
The Trustees are responsible for generally overseeing
the conduct of the FundOs 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 Trust. 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 Trustee s of the Trust are authorized by the
Agreement and Declaration of Trust to issue shares of the
Trust 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 Trust, 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 Trust or the shareholders, and (vii) with respect to
such additional matters relating to the Trust as may be
required by the Agreement and Declaration of Trust, the
Bylaws of the Trust, or any registration of the Trust with
the 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 Trust.
On any matter submitted to a vote of shareholders, all
shares of the Trust 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 veto 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 Trust. The Bylaws
contemplate that the Trustees shall elect a Chairman of the
Trustees, the President, the Treasurer, and the Clerk of
the Trust, 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 Trust under the circumstances and
on the terms specified therein.
The Trust 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 Trust, 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) Trustee s and Officers of the Trust
<TABLE><CAPTION>
<S> <C> <C> <C>
Name Office and Title Resume Shares Owned
George Putnam Chairman and President present:
Chairman and Director of
Putnam
Management and
Putnam Mutual
Funds Corp.
Director, Marsh
&
McLennan
Companies, Inc. Class A
65,048.978
William F. Pounds Vice Chairman present:
Professor of Management,
Alfred P. Sloan
School of
Management,
Massachusetts Institute of
Technology Class A
16,580.596
Jameson Adkins Baxter Trustee present:
President, Baxter
Associates,
Inc. Class A
3,475.282
Hans H. Estin Trustee present: Vice
Chairman, North
American
Management Corp. Class A
171.510
John A. Hill Trustee present:
Chairman and Managing
Director, First
Reserve
Corporation Class A
169.792
Ronald J. Jackson Trustee present:
Former Chairman,
President and
Chief
Executive
Officer of
Fisher-Price,
Inc.,
Director of
Safety 1st,
Inc.,
Trustee of
Salem Hospital
and the
Peabody Essex Museum Class A
109.433
Elizabeth T. Kennan Trustee present:
President Emeritus
and Professor,
Mount Holyoke College Class A
2,426.045
Lawrence J. LasserTrustee and Vice President present:
President, Chief Executive
Officer and
Director
of Putnam
Investments, Inc.
and Putnam
Director, Marsh
& McLennan Companies,
Inc. Class A
63,917.892
Robert E. Patterson Trustee present:
Executive Vice President
and Director of
Acquisitions, Cabot
Partners
Limited
Partnership Class A
15,655.911
Donald S. Perkins Trustee present:
Director of various
corporations,
including Cummins Engine
Company, Lucent
Technologies,
Inc.,
Springs
Industries, Inc.
and Time Warner
Inc. Class A
6,158.799
George Putnam, III Trustee present:
President, New
Generation
Research, Inc. Class A
2,694.630
A.J.C. Smith Trustee present:
Chairman and Chief
Executive
Officer, Marsh
& McLennan
Companies, Inc. Class A
286.126
W. Nicholas Thorndike Trustee present:
Director of various
corporations
and charitable
organizations,
including
Data General
Corporation,
Bradley Real
Estate, Inc.
and Providence
Journal
Co. Trustee of
Massachusetts
General
Hospital and
Eastern
Utilities
Associations Class A
137.531
Charles E. Porter Executive Vice President present:
Managing Director of
Putnam
Investments, Inc.
and Putnam
Management 0
Patricia C. FlahertySenior Vice President present:
Senior Vice President
of Putnam
Investments, Inc.
and Putnam
Management 0
William N. Shiebler Vice President present:
Director and Senior
Managing
Director of Putnam
Investments,
Inc. President
and Director of
Putnam Mutual Funds 0
Gordon H. Silver Vice President present:
Director and Senior
Managing
Director of Putnam
Investments,
Inc. and Putnam ManagementClass A
2,565.262
Paul M. O'Neil Vice President present:Vice
President of Putnam
Investments,
Inc. and Putnam Management 0
John D. Hughes Vice President and Treasurer present:
Senior Vice President
of Putnam
Management Class A
104.925
Beverly Marcus Clerk and Assistant Treasurer N/A Class A
1,597.005
</TABLE>
(2) Employees of the Trust
The Trust does not have any employees.
(I) Description of Business and Outline of Operation
The Trust 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 Trust has retain ed Putnam
Investment Management, Inc., the investment adviser, to
render investment advisory services and
Putnam Fiduciary Trust Company, to keep the assets of
the Fund in custody and 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 Trust has occurred which has not
been disclosed. The fiscal year end of the Trust is
November 30. The Trust 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. Putnam is regulated under the Investment Advisers
Act.
(C) Purpose of the Company
Investment Management CompanyOs 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
CompanyOs 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 $96 billion in assets in nearly 5
million shareholder accounts at the end of February, 1997.
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 wholly 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 (as of the end of February, 1997)
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):
Amount of Capital
Year (Total Stockholders'Equity in
Thousands
End of 1991 $46,068,726
End of 1992 $42,618,341
End of 1993 $49,847,760
End of 1994 $48,149,491
End of 1995 $45,521,351
End of 1996 $45,817,658
(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 of Investment Management Company 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 High
Yield Securities 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 high yield bonds 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 debt
securities in the United States. The High Yield Bond Group
comprises 17 investment professionals.
(G) Information Concerning Major Stockholders
As of the end of February, 1997, 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
CompanyOs funds) with which the officer and/or director
has recently had or has substantial involvement; and (ii)
positions held with such organization:
<TABLE><CAPTION>
List of Officers and Directors of Putnam Investment Management, Inc. ( as
of the filing date)Name
<S> <C> <C>
Position with
Putnam Investment Management, Inc. Other Business
Affiliation
Putnam, George Chairman Chairman of
Putnam Mutual
Funds Corp.
Lasser, Lawrence J. President and Director
Silver, Gordon H. Director and Senior Managing Director Putnam
Fiduciary Trust Company
Senior
Administrative Officer and Director of
Putnam Mutual Funds Corp.
Jamieson, Douglas B. Director and Senior Managing Director Treasurer
of Putnam Mutual Funds Corp.
Moran, Timothy P. Managing Director Treasurer,
Director and Security
Officer of Putnam Fiduciary
Trust Company
Burke, Robert W. Director and Senior Managing Director Senior
Managing Director of Putnam Mutual
Funds Corp.
Carman, Peter Director and Senior Managing Director
Coburn, Gary N. Senior Managing Director
Ferguson, Ian C. Senior Managing Director
Spiegel, Steven Director and Senior Managing Director Senior
Managing Director of Putnam Mutual
Funds Corp.
Anderson, Blake E. Managing Director
Bankart, Alan J. Managing Director
Bogan, Thomas Managing Director
Browchuk, Brett Managing Director
Collman, Kathleen M. Managing Director Managing
Director of Putnam Mutual Funds Corp.
Curtin,
William J.
Managing Director
D'Alelio, Edward H. Managing Director
DeTore, John A. Managing Director Managing
Director of Putnam Fiduciary Trust
Company
Durgarian, Karnig H. Managing Director Director and
Managing Director of Putnam
Fiduciary Trust Company
Estevens, Irene M. Managing Director
Ho, Jin W. Managing Director
Hurley, William J. Managing Director Managing
Director of Putnam Mutual Funds Corp.
Jacobs, Jerome J. Managing Director
Kearney, Mary E. Managing Director Managing
Director of Putnam Mutual Funds
Corp.
Kohli, D. William Managing Director
Kreisel, Anthony I. Managing Director
Landes, William J. Managing Director
Maloney, Kevin J. Managing Director
Martino, Michael Managing Director
Maxwell, Scott M. Managing Director
McGue, William F. Managing Director
McMullen, Carol Managing Director
Miller, Daniel L. Managing Director
Montgomery, Kenneth Managing Director
Morgan Jr., John J. Managing Director Managing
Director of Putnam Fiduciary Trust
Company
Mullaney, Michael A. Managing Director
O'Donnell Jr., C. Patrick Managing Director
Peacher, Stephen C. Managing Director
Porter, Charles E. Managing Director
Reilly, Thomas V. Managing Director
Scott, Justin M. Managing Director Managing
Director of Putnam Fiduciary Trust
Company
Talannian, John C. Managing Director Managing
Director of Putnam Mutual Funds Corp.
Woolverton, William H. Managing Director Managing
Director of Putnam Mutual Funds
Corp.
Asher, Steven E. Senior Vice President Senior Vice
President of Putnam
Mutual Funds Corp.
Baumback, Robert K. Senior Vice President
Beck, Robert R. Senior Vice President
Bousa, Edward P. Senior Vice President
Bresnahan, Leslee R. Senior Vice President Senior Vice
President of Putnam
Mutual Funds Corp.
Burns, Cheryl A. Senior Vice President
Cassaro, Joseph A. Senior Vice President
Chapman, Susan Senior Vice President
Cotner, Beth C. Senior Vice President
Curran, Peter J. Senior Vice President Senior Vice
President of Putnam
Mutual Funds Corp.
Dalferro, John R. Senior Vice President
Daly, Kenneth L. Senior Vice President Senior Vice
President of Putnam
Mutual Funds Corp.
England, Richard B. Senior Vice President
Fitzgerald, Michael T. Senior Vice President
Flaherty, Patricia C. Senior Vice President Senior Vice
President of Putnam
Mutual Funds Corp.
Francis, Jonathan H. Senior Vice President
Frucci, Richard M. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Fullerton, Brian J. Senior Vice President Senior Vice
President of Putnam
Mutual Funds Corp.
Gillis, Roland Senior Vice President
Goodwin, Kim C. Senior Vice President
Grant, Peter J. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Grim, Daniel J. Senior Vice President
Haagensen, Paul E. Senior Vice President
Halperin, Matthew C. Senior Vice President
Han, Billy P. Senior Vice President
Healey, Deborah R. Senior Vice President
Joseph, Joseph P. Senior Vice President
Joyce, Kevin M. Senior Vice President Senior Vice
President of Putnam
Mutual Funds Corp.
Kamshad, Omid Senior Vice President
Kay, Karen R. Senior Vice President Clerk, Director
and Senior Vice
President of Putnam Fiduciary
Trust Company
King, David L. Senior Vice President
Kirson, Steven L. Senior Vice President
Leichter, Jennifer E. Senior Vice President
Lindsey, Jeffrey R. Senior Vice President
Lukens, James W. Senior Vice President
Manning, Howard K. Senior Vice President
Matteis, Andrew S. Senior Vice President
McAuley, Alexander J. Senior Vice President
McDonald, Richard E. Senior Vice President
Meehan, Thalia Senior Vice President
Mikami, Darryl Senior Vice President
Mockard, Jeanne L. Senior Vice President
Mufson, Michael J. Senior Vice President
Mullin, Hugh H. Senior Vice President
Netols, Jeffrey W. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Nguyen, Triet M. Senior Vice President
Paine, Robert M. Senior Vice President
Pohl, Charles G. Senior Vice President
Pollard, Mark D. Senior Vice President
Powers, Neil J. Senior Vice President
Quinton, Keith P. Senior Vice President
Ray, Christopher A. Senior Vice President
Reeves, William H. Senior Vice President
Regan, Anthony W. Senior Vice President
Rosalanko, Thomas J. Senior Vice President
Ruys de Perez, Charles A. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Schwister, Jay E. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Senter, Max S. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Siegel, Mark J. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Silver, Jennifer K. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Simon, Sheldon N. Senior Vice President
Smith Jr., Leo J. Senior Vice President
Smith, Margaret D. Senior Vice President
Soja, Joanne Senior Vice President
Storkerson, John K. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Strumpf, Casey Senior Vice President
Sullivan, Roger R. Senior Vice President
Swanberg, Charles H. Senior Vice President
Swift, Robert Senior Vice President
Taubes, Kenneth J. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Thomas, David K. Senior Vice President
Thomsen, Rosemary H. Senior Vice President Senior Vice
President of Putnam Fiduciary Trust Company
Tibbetts, Richard B. Senior Vice President Senior Vice
President of Putnam
Mutual Funds Corp.
Till, Hilary F. Senior Vice President
Van Vleet, Charles C. Senior Vice President
Verani, John R. Senior Vice President Senior Vice
President of Putnam
Fiduciary Trust Company
Weinstein, Michael R. Senior Vice President
Weiss, Man u el Senior Vice President
Wheeler, Diane D.F. Senior Vice President
Wyke, Richard P. Senior Vice President
Zukowski, Gerald S. Senior Vice President
Lucey, Robert F. Direcor and Senior Managing Director
Lucey, Thomas J. Direcor and Senior Managing Director
Shiebler, Williams N. Direcor and Senior Managing Director
Boneparth, John F. Managing Director
Eisenkraft, Gail A. Managing Director
Erickson, James E. Managing Director
Esposito, Vincent Managing Director
Goodman, Robert Managing Director
Haslett, Thomas Managing Director
Littauer, Thomas W. Managing Director
Miller, Janis E. Managing Director
Miller, Jeffrey M. Managing Director
Nelson, Alexander L. Managing Director
Palombo, Joseph R. Managing Director
Sharpless, Kathy G. Managing Director
Tambone, James S. Managing Director
Tasiopoulos, Louis Managing Director
Turpin, Thomas M. Managing Director
Watanabe, Takehiko Managing Director
Zieff, William Managing Director
Abbott, Christopher C. Senior Vice President
Alders, Christopher A. Senior Vice President
Avery, Scott A. Senior Vice President
Bacon, James R. Senior Vice President
Bartlett, John L. Senior Vice President
Bearden, Dale Senior Vice President
Brockelman, James D. Senior Vice President
Buckner, Gail D. Senior Vice President
Connelly, Donald A. Senior Vice President
Corvinus, F. Nicholas Senior Vice President
Crain, Kevin, F. Senior Vice President
Craven, Joseph P. Senior Vice President
Demmler, Joseph L. Senior Vice President
Dolan, Marjorie A. Senior Vice President
Edlin, David B. Senior Vice President
English, James M. Senior Vice President
Eurkus, David J. Senior Vice President
Feldman, Susan H. Senior Vice President
Fichera, Paul F. Senior Vice President
Fisher, C. Nancy Senior Vice President
Fishman, Mitchell B. Senior Vice President
Geissler, Mauricia A. Senior Vice President
Gennaco, Joseph P. Senior Vice President
George, Bruce D. Senior Vice President
Gould, Jeffrey L. Senior Vice President
Halloran, Thomas W. Senior Vice President
Hearns, Dennis P. Senior Vice President
Hill, Donald R. Senior Vice President
Hochstein, Bess J.M. Senior Vice President
Hughes, Carolyn Senior Vice President
Jacobsen, Dwight D. Senior Vice President
Kirk, Deborah H. Senior Vice President
Knutzen, Erik L. Senior Vice President
Kondracki, Alexander A. Senior Vice President
Kreutzberg, Howard H. Senior Vice President
Lathrop, James D. Senior Vice President
Lewandowski, Edward V. Senior Vice President
Lucas, Peter V. Senior Vice President
McKenna, Mark J. Senior Vice President
Miller, Bart D. Senior Vice President
Moret, Mitchell L. Senior Vice President
Morgan, Kelly A. Senior Vice President
Morrice, Mary Ann Senior Vice President
O'Brien, Kristen P. Senior Vice President
O'Shea, Kevin L. Senior Vice President
Olson, Charles R. Senior Vice President
Phoenix, Joseph Senior Vice President
Picher, Suzanne N. Senior Vice President
Present, Howard B. Senior Vice President
Puddle, David G. Senior Vice President
Rio, George A. Senior Vice President
Rowe, Robert B. Senior Vice President
Rowell, Kevin A. Senior Vice President
Rudinoff, Paul J. Senior Vice President
Saunders, Catherine A. Senior Vice President
Schultz, Mitchell D. Senior Vice President
Soester, Tricia Senior Vice President
Stanojev, Nicholas T. Senior Vice President
Sullivan , Guy Senior Vice President
Svensson, Lisa A. Senior Vice President
Unger, Larry R. Senior Vice President
Vander Linde, Douglas J. Senior Vice President
Whiston, Sandra C. Senior Vice 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 February, 1997, Investment Management Company
managed, advised, and/or administered the following 211 funds and
fund portfolios (having an aggregate net asset value of approximately
$ 184 billion):
</TABLE>
<TABLE>
<CAPTION> (As of the end of February, 1997)
<S> <C> <C> <C>
<C>
Name Month/Date Principal Total Net
Net Asset
Year Est. Characteristics Asset Value
Value per
share ($)
The George Putnam Fund of Boston; A 11/5/37 Open/Equity 2,065.95
17.06
The George Putnam Fund of Boston; B 4/24/92 Open/Equity 668.36
16.97
The George Putnam Fund of Boston; M 12/1/94 Open/Equity 119.35
16.96
The George Putnam Fund of Boston; Y 1/1/94 Open/Equity 287.72
17.08
Putnam AZ Tax Exempt Income Fund; A 1/30/91 Open/Bond 123.89
9.10
Putnam AZ Tax Exempt Income Fund; B 7/15/93 Open/Bond 27.17
9.08
Putnam AZ Tax Exempt Income Fund; M 7/3/95 Open/Bond 0.47
9.11
Putnam American Govern- ment Income Fund; A 3/1/85Open/Bond
1,677.54 8.50
Putnam American Govern- ment Income Fund; B 5/20/94 Open/Bond
26.54 8.46
Putnam American Govern- ment Income Fund; M 2/14/95 Open/Bond
1.20 8.50
Putnam Asia Pacific Growth Fund; A 2/20/91 Open/Equity 321.42
13.27
Putnam Asia Pacific Growth Fund; B 6/1/93 Open/Equity 210.73
13.09
Putnam Asia Pacific Growth Fund; M 2/1/95 Open/Equity 9.51
13.19
Putnam Asset Allocation Balanced Portfolio; A 2/7/94Open/Balanced
459.76 10.80
Putnam Asset Allocation Balanced Portfolio; B 2/11/94 Open/Balanced
327.69 10.74
Putnam Asset Allocation Balanced Portfolio; C 9/1/94Open/Balanced
44.06 10.70
Putnam Asset Allocation Balanced Portfolio; M 2/6/95Open/Balanced
24.85 10.79
Putnam Asset Allocation Balanced Portfolio; Y 7/14/94 Open/Balanced
194.11 10.81
Putnam Asset Allocation Conservative Portfolio; A 2/7/94Open/Balanced
254.28 9.76
Putnam Asset Allocation Conservative Portfolio; B 2/18/94 Open/Balanced
110.75 9.72
Putnam Asset Allocation Conservative Portfolio; C 9/1/94Open/Balanced
21.45 9.71
Putnam Asset Allocation Conservative Portfolio; M 2/7/95Open/Balanced
6.92 9.74
Putnam Asset Allocation Conservative Portfolio; Y 7/14/94 Open/Balanced
12.87 9.77
Putnam Asset Allocation Growth Portfolio; A 2/8/94Open/Balanced
285.76 11.61
Putnam Asset Allocation Growth Portfolio; B 2/16/94 Open/Balanced
253.76 11.51
Putnam Asset Allocation Growth Portfolio; C 9/1/94Open/Balanced
42.82 11.43
Putnam Asset Allocation Growth Portfolio; M 2/1/95Open/Balanced
21.37 11.51
Putnam Asset Allocation Growth Portfolio; Y 7/14/94 Open/Balanced
192.05 11.66
Putnam Balanced Retirement Fund; A 4/19/85 Open/Balanced 541.17
10.65
Putnam Balanced Retirement Fund; B 2/1/94 Open/Balanced 51.85
10.59
Putnam Balanced Retirement Fund; M 3/17/95 Open/Balanced 4.75
10.62
Putnam CA Tax Exempt Income Fund; A 4/29/83 Open/Bond 3,143.80
8.54
Putnam CA Tax Exempt Income Fund; B 1/4/93 Open/Bond 540.83
8.53
Putnam CA Tax Exempt Income Fund; M 2/14/95 Open/Bond 12.19
8.53
Putnam VT: Asia Pacific 5/1/95 Open/Equity 130.36
10.92
Putnam VT: Diversified 9/15/93 Open/Bond 515.55
11.33
Putnam VT: Glb Gr 5/1/90Open/Equity
1,413.19 17.34
Putnam VT: Global AA 2/1/88Open/Balanced
794.64 17.97
Putnam VT: Gr and Inc 2/1/88 Open/Balanced
6,317.30 24.21
Putnam VT: HY 2/1/88 Open/Bond 838.76
13.34
Putnam VT: MM 2/1/88 Open/Bond 446.13
1.00
Putnam VT: New Opportunities 5/2/94Open/Equity
1,777.57 17.33
Putnam VT: U.S. Govmt and H. Qual. 2/1/88 Open/Bond 774.72
13.28
Putnam VT: Util G&I 5/1/92Open/Balanced
672.62 15.05
Putnam VT: Voyager 2/1/88Open/Equity
3,397.46 32.89
Putnam Capital Appreciation Fund; A 8/5/93 Open/Equity 386.91
17.66
Putnam Capital Appreciation Fund; B 11/2/94 Open/Equity 372.00
17.54
Putnam Capital Appreciation Fund; M 1/22/96 Open/Equity 22.20
17.55
Putnam Convertible Income-Growth Trust; A 6/29/72 Open/Balanced
996.13 21.09
Putnam Convertible Income-Growth Trust; B 7/15/93 Open/Balanced
181.61 20.90
Putnam Convertible Income-Growth Trust; M 3/13/95 Open/Balanced
10.67 20.96
Putnam Diversified Equity Trust; A 7/1/94 Open/Equity 199.33
11.85
Putnam Diversified Equity Trust; B 7/2/94 Open/Equity 232.03
11.77
Putnam Diversified Equity Trust; M 7/3/95 Open/Equity 14.78
11.80
Putnam Diversified Income Trust; A 10/3/88 Open/Bond 1,994.60
12.43
Putnam Diversified Income Trust; B 3/1/93 Open/Bond 2,266.08
12.38
Putnam Diversified Income Trust; M 12/1/94 Open/Bond 62.81
12.41
Putnam Equity Income; A 6/15/77 Open/Balanced 648.02
13.96
Putnam Equity Income; B 9/13/93 Open/Balanced 273.10
13.88
Putnam Equity Income; M 12/2/94 Open/Balanced 29.02
13.89
Putnam Europe Growth; A 9/7/90 Open/Equity 218.33
17.05
Putnam Europe Growth; B 2/1/94 Open/Equity 175.14
16.74
Putnam Europe Growth; M 12/1/94 Open/Equity 10.49
16.98
Putnam FL Tax Exempt Income Fund; A 8/24/90 Open/Bond 242.90
9.18
Putnam FL Tax Exempt Income Fund; B 1/4/93 Open/Bond 57.35
9.17
Putnam FL Tax Exempt Income Fund; M 5/1/95 Open/Bond 1.22
9.17
Putnam Federal Income Trust; A 6/2/86Open/Bond 362.29
9.96
Putnam Federal Income Trust; B 6/6/94Open/Bond 8.95
9.92
Putnam Federal Income Trust; M 4/12/95 Open/Bond
1.01 9.96
Putnam Global Governmental Income Trust; A 6/1/87Open/Bond 333.17
14.29
Putnam Global Governmental Income Trust; B 2/1/94Open/Bond 42.20
14.24
Putnam Global Governmental Income Trust; M 3/17/95 Open/Bond
2.16 14.23
Putnam Global Growth Fund; A 9/1/67Open/Equity
2,390.83 11.09
Putnam Global Growth Fund; B 4/27/92 Open/Equity
1,476.04 10.79
Putnam Global Growth Fund; M 3/1/95Open/Equity 31.46
11.04
Putnam Global Growth Fund; Y 6/15/94 Open/Equity
74.03 11.22
Putnam Growth and Income Fund II; A 1/5/95 Open/Balanced 744.33
13.03
Putnam Growth and Income Fund II; B 1/5/95 Open/Balanced 887.51
12.95
Putnam Growth and Income Fund II; M 1/5/95 Open/Balanced 111.22
12.98
The Putnam Fund for Growth and Income; A 11/6/57 Open/Balanced 13,640.90
19.22
The Putnam Fund for Growth and Income; B 4/27/92 Open/Balanced 10,729.64
19.01
The Putnam Fund for Growth and Income; M 5/1/95 Open/Balanced 199.96
19.14
The Putnam Fund for Growth and Income; Y 6/15/94 Open/Balanced 429.79
19.25
Putnam High Yield Advantage Fund; A 3/25/86 Open/Bond 1,170.72 9.83
Putnam High Yield Advantage Fund; B 5/16/94 Open/Bond 743.47 9.79
Putnam High Yield Advantage Fund; M 12/1/94 Open/Bond 885.87 9.82
Putnam High Yield Trust; A 2/14/78 Open/Bond 3,292.79 12.70
Putnam High Yield Trust; B 3/1/93 Open/Bond 1,263.96 12.65
Putnam High Yield Trust; M 7/3/95 Open/Bond 25.03
12.69
Putnam Health Sciences Trust; A 5/28/82 Open/Equity
1,438.51 49.74
Putnam Health Sciences Trust; B 3/1/93Open/Equity 395.10
48.79
Putnam Health Sciences Trust; M 7/3/95Open/Equity 13.74
49.55
Putnam Income Fund; A 11/1/54 Open/Bond 1,117.43 7.01
Putnam Income Fund; B 3/1/93 Open/Bond 359.23 6.98
Putnam Income Fund; M 12/14/94 Open/Bond 22.85
6.98
Putnam Income Fund; Y 2/12/94 Open/Bond 136.39 7.01
Putnam Intermediate US Government Income Fund; A 2/16/93 Open/Bond135.20
4.83
Putnam Intermediate US Government Income Fund; B 2/16/93 Open/Bond59.54
4.83
Putnam Intermediate US Government Income Fund; M 4/3/95Open/Bond4.20
4.84
Putnam International New Opportunities Fund; A 1/3/95Open/Equity 686.15
12.72
Putnam International New Opportunities Fund; B 7/21/95 Open/Equity
827.28 12.63
Putnam International New Opportunities Fund; M 7/21/95 Open/Equity
73.78 12.67
Putnam Investors Fund; A 12/1/25 Open/Equity1,443.24 9.73
Putnam Investors Fund; B 3/1/93 Open/Equity188.75 9.47
Putnam Investors Fund; M 12/2/94 Open/Equity12.61
9.65
Putnam MA Tax Exempt Income Fund; A 10/23/89 Open/Bond 276.35 9.36
Putnam MA Tax Exempt Income Fund; B 7/15/93 Open/Bond 81.91
9.35
Putnam MA Tax Exempt Income Fund; M 5/12/95 Open/Bond 2.89 9.35
Putnam MI Tax Exempt Income Fund; A 10/23/89 Open/Bond 142.86 9.16
Putnam MI Tax Exempt Income Fund; B 7/15/93 Open/Bond 33.89
9.14
Putnam MI Tax Exempt Income Fund; M 4/17/95 Open/Bond 0.67 9.16
Putnam MN Tax Exempt Income Fund; A 10/23/89 Open/Bond 97.87
9.00
Putnam MN Tax Exempt Income Fund; B 7/15/93 Open/Bond 34.42
8.97
Putnam MN Tax Exempt Income Fund; M 4/3/95 Open/Bond 1.10 8.99
Putnam Money Market Fund; A 10/1/76 Open/Bond
2,184.40 1.00
Putnam Money Market Fund; B 4/27/92 Open/Bond468.66
1.00
Putnam Money Market Fund; M 12/8/94 Open/Bond43.82
1.00
Putnam Municipal Income Fund; A 5/22/89 Open/Bond810.74
9.01
Putnam Municipal Income Fund; B 1/4/93Open/Bond481.94
9.00
Putnam Municipal Income Fund; M 12/1/94 Open/Bond11.39
9.00
Putnam NJ Tax Exempt Income Fund; A 2/20/90 Open/Bond 229.55 9.07
Putnam NJ Tax Exempt Income Fund; B 1/4/93 Open/Bond 81.06
9.06
Putnam NJ Tax Exempt Income Fund; M 5/1/95 Open/Bond 0.37 9.07
Putnam NY Tax Exempt Income Fund; A 9/2/83 Open/Bond 1,802.77 8.84
Putnam NY Tax Exempt Income Fund; B 1/4/93 Open/Bond 226.31 8.82
Putnam NY Tax Exempt Income Fund; M 4/10/95 Open/Bond 1.37 8.84
Putnam NY Tax Exempt Opportunities Fund; A 11/7/90 Open/Bond162.53
8.94
Putnam NY Tax Exempt Opportunities Fund; B 2/1/94Open/Bond47.23
8.93
Putnam NY Tax Exempt Opportunities Fund; M 2/10/95 Open/Bond1.65
8.92
Putnam Global Natual Resources Fund; A 7/24/80 Open/Equity206.30 19.04
Putnam Global Natual Resources Fund; B 2/1/94 Open/Equity106.21 18.80
Putnam Global Natual Resources Fund; M 7/3/95 Open/Equity5.13 18.97
Putnam New Opportunities Fund; A 8/31/90 Open/Equity
6,429.84 40.79
Putnam New Opportunities Fund; B 3/1/93Open/Equity
5,666.32 39.62
Putnam New Opportunities Fund; M 12/1/94 Open/Equity
307.67 40.34
Putnam New Opportunities Fund; Y 7/19/94 Open/Equity
190.87 41.07
Putnam OH Tax Exempt Income Fund; A 10/23/89 Open/Bond 188.37 9.03
Putnam OH Tax Exempt Income Fund; B 7/15/93 Open/Bond 46.15
9.02
Putnam OH Tax Exempt Income Fund; M 4/3/95 Open/Bond 0.67 9.03
Putnam OTC & Emerging Growth Fund; A 11/1/82 Open/Equity1,768.09 13.50
Putnam OTC & Emerging Growth Fund; B 7/15/93 Open/Equity845.69 13.05
Putnam OTC & & Emerging Growth Fund; M 12/2/94 Open/Equity109.75 13.32
Putnam International Growth Fund; A 2/28/91 Open/Equity74.30
15.42
Putnam International Growth Fund; B 6/1/94 Open/Equity76.00
15.24
Putnam International Growth Fund; M 12/1/94 Open/Equity7.77 15.37
Putnam PA Tax Exempt Income Fund; A 7/21/89 Open/Bond 189.85 9.25
Putnam PA Tax Exempt Income Fund; B 7/15/93 Open/Bond 75.97
9.24
Putnam PA Tax Exempt Income Fund; M 7/3/95 Open/Bond 0.69 9.26
Putnam Preferred Income Fund; A 1/4/84Open/Bond111.66
8.70
Putnam Preferred Income Fund; M 4/20/95 Open/Bond5.83
8.68
Putnam Tax Free Income Fund HY; A 9/20/93 Open/Bond 576.65 14.27
Putnam Tax Free Income Fund HY; B 9/9/85 Open/Bond 1,427.75 14.28
Putnam Tax Free Income Fund HY; M 12/29/94 Open/Bond 16.18
14.26
Putnam Tax Free Income Fund Insured; A 9/30/93 Open/Bond 205.20 15.13
Putnam Tax Free Income Fund Insured; B 9/9/85 Open/Bond 344.42 15.15
Putnam Tax Free Income Fund Insured; M 6/1/95 Open/Bond 0.68 15.13
Putnam Tax Exempt Income Fund; A 12/31/76 Open/Bond
2,065.38 8.91
Putnam Tax Exempt Income Fund; B 1/4/93Open/Bond245.92
8.91
Putnam Tax Exempt Income Fund; M 2/16/95 Open/Bond6.65
8.93
Putnam Tax Exempt Money Market Fund 10/26/87 Open/Bond 124.01 1.00
Putnam US Government Income Trust; A 2/8/84 Open/Bond 2,312.90 12.81
Putnam US Government Income Trust; B 4/27/92 Open/Bond 1,393.30 12.77
Putnam US Government Income Trust; M 2/6/95 Open/Bond 7.40 12.81
Putnam US Government Income Trust; Y 4/11/94 Open/Bond 3.42 12.81
Putnam Utilities Growth and Income Fund; A 11/19/90 Open/Balanced
628.89 11.56
Putnam Utilities Growth and Income Fund; B 4/27/92 Open/Balanced
642.21 11.49
Putnam Utilities Growth and Income Fund; M 3/1/95Open/Balanced 6.71
11.61
Putnam Vista Fund; A 6/3/68Open/Equity
1,931.69 10.59
Putnam Vista Fund; B 3/1/93Open/Equity 898.27
10.26
Putnam Vista Fund; M 12/1/94 Open/Equity
59.75 10.46
Putnam Vista Fund; Y 3/28/95 Open/Equity
185.83 10.66
Putnam Voyager Fund II; A 4/14/93 Open/Equity373.71 15.33
Putnam Voyager Fund II; B 10/2/95 Open/Equity344.45 15.17
Putnam Voyager Fund II; M 10/2/95 Open/Equity39.97 15.24
Putnam Voyager Fund; A 4/1/96 Open/Equity8,923.71 16.30
Putnam Voyager Fund; B 4/27/92 Open/Equity4,509.04 15.58
Putnam Voyager Fund; M 12/1/94 Open/Equity141.93 16.11
Putnam Voyager Fund; Y 4/1/94 Open/Equity922.09 16.45
Putnam CA Inv GD Muni 11/27/92 Closed/Bond85.31 15.04
Putnam Convertible Opportunity and Income Fund 6/29/95 Closed/Bond
97.79 28.14
Putnam Dividend Income Fund 9/28/89 Closed/Bond
179.25 11.02
Putnam High Income Convertible and Bond 7/9/87 Closed/Bond132.72 9.96
Putnam Intermediate Government Income Fund 6/27/88 Closed/Bond
538.24 8.39
Putnam Investment GD Municipal I 10/26/89 Closed/Bond
382.80 11.84
Putnam Investment GD Municipal II 11/27/92 Closed/Bond248.93 13.92
Putnam Investment GD Municipal III 11/29/93 Closed/Bond62.53 13.10
Putnam Managed High Yield 6/25/93 Closed/Bond106.48 14.18
Putnam Managed Municipal Income Fund 2/24/89 Closed/Bond625.35 9.87
Putnam Master Income Trust 12/28/87 Closed/Bond489.21 9.21
Putnam Master Intermediate Income Fund 4/29/88 Closed/Bond332.98 8.09
Putnam Municipal Opportunity Trust 5/28/93 Closed/Bond263.49 13.83
Putnam NY Investment GD Municipal 11/27/92 Closed/Bond49.06 13.71
Putnam Premier Income Trust 2/29/88 Closed/Bond
1,234.90 8.81
Putnam Tax Free Heath Care Fund 6/29/92 Closed/Bond
201.29 14.58
Putnam American Renaissance Fund A 10/2/95 Open/Equity3.3411.01
Putnam Conv. Opp. and Income Trust 6/26/95 Closed/Bond97.79 26.40
Putnam Diversified Income Trust II A 2/19/95 Open/Bond 36.43 8.58
Putnam Diversified Income Trust II B 2/19/96 Open/Bond 55.81 8.58
Putnam Diversified Income Trust II M 2/19/96 Open/Bond 5.798.58
Putnam Diversified Income Trust Y 7/1/96 Open/Bond 3.1212.43
Putnam Equity Fund 97 12/30/96 Open/Equity2.768.04
Putnam High Yield Total Return Fund A 1/1/97 Open/Bond 3.998.56
Putnam High Yield Total Return Fund B 1/1/97 Open/Bond 5.828.55
Putnam High Yield Total Return Fund M 1/1/97 Open/Bond 0.448.55
Putnam VT Interl. Growth and Income 1/1/97 Open/Balanced 24.45
10.29
Putnam VT Interl. New Opprotunities 1/1/97 Open/Equity31.81 10.24
Putnam VT Interl. Growth 1/1/97 Open/Equity16.48 10.22
Putnam Balanced Fund 10/2/95 Open/Balanced
2.37 8.35
Putnam Emging Mkts Fd A 10/2/95 Open/Equity22.78 8.88
Putnam Emging Mkts Fd B 10/2/95 Open/Equity16.51 8.88
Putnam Emging Mkts Fd M 10/2/95 Open/Equity1.348.88
</TABLE>
(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. Results of operations
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
Putnam 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.
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 past 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.$26,379,342 as of the end of February, 1997
(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.$107,383,002 as of the end of February, 1997
(2) Description of Business
Putnam Mutual Funds Corp. is the Principal Underwriter
of the shares of Putnam Funds indluding 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
Securities Company)
(1) Amount of Capital
[Yen]55.5 billion as of the end of February,
1997
(2) Description of Business
KOKUSAI Securities Co., Ltd. is a diversified
securities company in Japan. Also, it engages in
handling the sales and repurchase of the Fund Units as
the Designated Securities Company for the investment
trust funds of Kokusai Investment Trust Management Co.,
Ltd., and as the Underwriting Company and the Agent
Securities Company for International Bond Index Fund,
Fidelity Special Growth Fund, Alliance International
Healthcare Fund, European and Asian Fund, Alliance
Global Leisure Fund, High Life Fund, Alliance American
Fund, Keystone Small Company Growth Fund (S-4) and Asia
Network Growth Fund, Korea Sunrise Fund, Keystone Fund
of the Americas, Keystone Asia Small Cap Fund, Keystone
Bond Fund '95, Keystone Bond Fund II '95, Keystone Bond
Fund III '95, and Keystone Global Trust - Keystone Bond
Fund IV '95 and as the Underwriting Company for AGF
Growth Equity Fund Limited, G.T. Investment Fund,
Sci/Tech and Fidelity World Fund.
(3) The Company acts as a Distributor in Japan and Agent
Securities Company for the Fund in connection with the
offering of shares in Japan.
(D) Capital Relationships
<TABLE><CAPTION>
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 the filing date)
<S> <C> <C>
Name of Officer or Trustee Fund Investment
Management Company Transfer Agent
and Shareholder Service Agent
George Putnam Chairman and Trustee Chairman and
Director None
Charles E. Porter Executive Vice President Managing Director
None
Patricia C. Flaherty Senior Vice President Senior Vice
President None
Lawrence J. Lasser Trustee and Vice President President and CEO
None
Gordon H. Silver Vice President Senior Managing
Director Director
Gary N. Coburn Vice President Senior Managing
Director None
Edward H. D'Alelio Vice President Managing Director
None
Jin W. Ho Vice President Managing Director
None
John R. Verani Vice President Senior Vice
President None
Paul M. O'Neil Vice President Vice President
None
</TABLE>
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]
2. CONDITION OF THE FUND
(a) Statement of Net Assets
(As of the end
of February, 1997)
$ [Yen]
(in thousands)
a. Total Assets 2,917,231,995 352,547,487
b. Total Liabilities 114,243,970
13,806,384
c. Total Net Assets 2,802,988,025
338,741,103
(a-b)
d. Total Number of Shares Class A. 118,822,307
Shares
Outstanding Class B. 76,074,287 Shares
Class M. 90,612,650 Shares
e. Net Asset Value Class A. 9.83 [Yen]1,188
per Share (c/d) Class B. 9.79 [Yen]1,183
Class M. 9.82 [Yen]1,187
'0
b. Names of Major Portfolio Securities Shares (Top 30 Shares)
Not applicable; provided, however, that major portfolio securities other
than shares, are as follows:
(As of the end of February 1997)
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S.$
Investment
Name of Interest Maturity Acquisition CurrentRatio
Name of Issue Country Kind of Issue Rate (%) Date Par
Value Cost Value (%)
1. Cencall Comm U.S.A. Corporate 0 1/15/04 55,970,000 21,636,292
42,537,200 1.5
2. Argentina Argentina Brady 4 3/31/23 43,441,440 39,574,751
39,260,201 1.4
3. Time Warner Inc PFD U.S.A. Preferred 10 1/4 25,665
26,319,233 28,488,150 1.0
4. United Mexican States Mexico Brady 6 1/4 6/15/19 36,889,000 26,792,951
28,081,751 1.0
5. Adelphia Communication U.S.A. Corporate 9 7/8
3/1/07 27,150,000 26,937,416 28,267,625 1.0
6. ICG Holdings Inc U.S.A. Corporate 0 5/1/06 34,500,000 18,807,749
25,616,250 0.9
7. Diamond Cable Comm United Kingdom Corporate 0
12/15/05 36,775,000 24,183,341 25,374,750 0.9
8. Russia (Goverment of) Russia Foreign 0 5/15/00 30,685,000 16,639,716
24,183,145 0.9
9. MFS Communications U.S.A. Corporate 0 1/15/06 31,500,000 23,538,125
24,018,750 0.9
10. Teleport Comm Corp. U.S.A. Corporate 0 7/1/07
30,250,000 17,681,313 21,326,250 0.8
11. Cablevision Sys. Corp. U.S.A. Preferred 11
1/8 5/15/16 231,805 22,287,896 21,326,060 0.8
12. Intl Cabletel U.S.A. Corporate 0 2/1/06
31,750,000 18,710,088 21,272,500 0.8
13. Brazil (Republic of) Brazil Brady 4
4/15/14 26,356,886 19,309,301 20,887,802 0.7
14. Transtexas Gas Corp. U.S.A. Corporate 11
1/2 6/15/02 18,750,000 19,338,750 20,789,063 0.7
15. Vincom Inc. U.S.A. Corporate 8 7/7/06
20,750,000 19,252,656 20,490,625 0.7
U.S.$
Investment
Name of Interest Maturity Acquisition CurrentRatio
Name of Issue Country Kind of Issue Rate (%) Date Par
Value Cost Value (%)
16. Terex Corp. U.S.A. Corporate 13
1/4 5/15/02 17,710,000 17,829,565 19,658,100 0.7
17. Intercel Inc U.S.A. Unit 0
2/1/06 2,785,000 16,399,563 19,007,625 0.7
18. Midland Cogeneration U.S.A. Corporate 11
3/4 7/23/05 1,660,000 16,343,000 18,757,494 0.7
19. Revlon Worldwide Corp. U.S.A. Corporate 0 3/15/01
27,890,000 18,293,051 18,293,051 0.7
20. Repap New Brunswick Canada Corporate 10
5/8 4/15/05 18,135,000 18,052,700 18,225,675 0.7
21. Computerbision Corp. U.S.A. Corporate 11
3/8 8/15/99 17,140,000 16,395,913 17,825,600 0.6
22. Riverwood Intl. Corp. U.S.A. Corporate 10
7/8 4/1/08 19,350,000 18,716,500 16,592,625 0.6
23. GST Telecommunications U.S.A. Corporate 0 12/15/05
24,848,000 13,803,934 16,026,960 0.6
24. Florida Coast paper U.S.A. Corporate 12
3/4 6/1/03 14,650,000 15,065,375 15,822,000 0.6
25. Trump A.C. U.S.A. Corporate 11
1/4 6/15/06 16,000,000 15,890,000 15,440,000 0.6
26. International Semi-Tech Canada Corporate 0 8/15/03
26,260,000 14,724,752 15,099,500 0.5
27. Host Marriott Travel Plaz U.S.A. Corporate 9 1/2 5/15/05
14,105,000 13,951,969 14,845,513 0.5
28. Casino America, Inc. U.S.A. Corporate 12
1/2 8/1/03 14,440,000 14,812,281 14,801,000 0.5
29. Marcus Cable U.S.A. Corporate 0 8/1/04
17,700,000 10,909,125 14,779,500 0.5
30. Brazil (Republic of) Brazil Brady 7 1/3 4/15/12 18,105,000 14,391,538
14,642,419 0.5
</TABLE>
V. 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 a Handling Securities 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.
VI. REFERENCE INFORMATION
1. The following documents concerning the Fund have been
filed with the Ministry of Finance of Japan.
August 30, 1996 Securities Registration
Statement
September 10, 1996 Amendment to Securities
Regiatration Statement
November 15, 1996 Securities Registration
Statement
November 22, 1996 Amendment to Securities
Regiatration Statement
December 16, 1996 Amendment to Securities
Regiatration Statement
2. (1) The ornamental design is used in cover page of
the Japanese Prospectus.
(2) The following must be set forth in the Prospectus.
- Outline of the Prospectus will be included at the
beginning of the Prospectus, summarising the content of
Part I., Information on the securities, "I. Descriptions of
the Fund" and "III. Outline of Other Related Companies" in
Part II, Information on the Issuer, of the SRS and
Agreement Concerning the Opening of a Foreign Securities
Transaction Account, and the internal rules of a
distributor in respect of the subscription and payment.
(3) Summarized Preliminary Prospectus will be used.
- Attached document (Summarized Preliminary Prospectus)
will be used pursuant to the below, as the document
(Summarized Preliminary Prospectus) 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 information of the achievement, 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).
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(NAV Sale)
PUTNAM HIGH YIELD ADVANTAGE FUND
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
To: Minister of FinanceFiling Date : April 15, 1997
Name of the Registrant Trust: PUTNAM HIGH YIELD ADVANTAGE
FUND
Name and Official Title of Trustees:George Putnam
William
F. Pounds
Jameson
A. Baxter
Hans H.
Estin
John A.
Hill
Ronald
J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert
E. Patterson
Donald
S. Perkins
George
Putnam, III
A.J.C.
Smith
W.
Nicholas Thorndike
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
/s/
Harume Nakano
(Seal)
Ken
Miura
Attorney-at-Law
/s/ Ken
Miura
(Seal)
Address or Place of Business Kasumigaseki Building
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.
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 HIGH YIELD ADVANTAGE
FUND
Offering or Sale of Foreign Investment
Fund Securities:
Type and Aggregate Amount of Up to 250 million Class M
Shares
Foreign Investment Fund Securities Up to the total amount
aggregating the
to be Publicly Offered or Sold: amounts calculated by
multiplying the respective net
asset value per Class M Share by
the respective number of Class M
Shares in respect of 250
million Class M Shares
(The
Maximum amount expected to be
sold is 2,455 billion
U.S. dollars ([Yen] 296.7
billion).
Note: U.S.$ amount is translated into Japanese Yen at the rate
of U.S.$l=[Yen]120.85, the mean of the exchange rate
quotations by The Bank of Tokyo-Mitsubishi, Ltd. for
buying and selling spot U.S. Dollar by telegraphic
transfer against yen on February 28, l997.
Places where a copy of this Amendment to Securities
Registration
Statement is available for Public Inspection
Not applicable.
(Total number of sheets of this Securities Registration
Statement [in Japanese] is 2 including Front Page)
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
("SRS") filed on November 15, 1996 due to the fact that
the aforementioned 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
those of the Japanese original)
PART II. INFORMATION CONCERNING ISSUER
(page 3 of the original Japanese 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 Securities
Report:
Before amendment After amendment
[Original Japanese SRS] [Aforementioned Annual
Securities Report]
I. DESCRIPTION OF THE
FUNDI. DESCRIPTION OF
THE FUND (the
aforementioned Japanese
Annual Securities Report,
from page 1 to page 22)
II. OUTLINE OF THE FUND
II. OUTLINE OF THE FUND
(Ditto, from page 23 to
page 57)
III.OUTLINE OF THE OTHER
III.OUTLINE OF THE OTHER
RELATED COMPANIES
RELATED COMPANIES (Ditto,
from page 58 to page 59)
IV. FINANCIAL CONDITIONS
OF IV. FINANCIAL
CONDITIONS OF
THE FUND THE
FUND (Ditto, from page 60
to page 141)
V. SUMMARY OF INFORMATION
VI. SUMMARY OF INFORMATION
CONCERNING THE
EXERCISE OF
CONCERNING THE EXERCISE OF
RIGHTS BY HOLDERS OF
FOREIGN RIGHTS BY
HOLDERS OF FOREIGN
INVESTMENT FUND
SECURITIES
INVESTMENT FUND SECURITIES
(Ditto, page
165)
VI. MISCELLANEOUS VII. REFERENCE INFORMATION
(Ditto, page 165)
Note 1: U.S.$ amount is translated into Japanese
Yen at the rate of U.S.$1 = [Yen]120.85, 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 February 28,
1997, 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 December 1 to November 30 of the following year.
PART III. SPECIAL INFORMATION
(Ditto, page 182)
II. FINANCIAL CONDITIONS OF THE INVESTMENT ADVISER AND
MANAGEMENT COMPANY of the Original SRS is ammended to to
have the same contents as those provided in V. FINANCIAL
CONDITIONS OF THE INVESTMENT ADVISER AND MANAGEMENT
COMPANY of the aforementioned Securities Report:
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(NAV Sale)
PUTNAM HIGH YIELD ADVANTAGE FUND
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
To: Minister of FinanceFiling Date : April 23, 1997
Name of the Registrant Trust: PUTNAM HIGH YIELD ADVANTAGE
FUND
Name and Official Title of Trustees:George Putnam
William
F. Pounds
Jameson
A. Baxter
Hans H.
Estin
John A.
Hill
Ronald
J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert
E. Patterson
Donald
S. Perkins
George
Putnam, III
A.J.C.
Smith
W.
Nicholas Thorndike
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
/s/
Harume Nakano
(Seal)
Ken
Miura
Attorney-at-Law
/s/ Ken
Miura
(Seal)
Address or Place of Business Kasumigaseki Building
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.
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 HIGH YIELD ADVANTAGE
FUND
Offering or Sale of Foreign Investment
Fund Securities:
Type and Aggregate Amount of Up to 250 million Class M
Shares
Foreign Investment Fund Securities Up to the total amount
aggregating the
to be Publicly Offered or Sold: amounts calculated by
multiplying the respective net
asset value per Class M Share by
the respective number of Class M
Shares in respect of 250
million Class M Shares
(The
Maximum amount expected to be
sold is 2,455 billion
U.S. dollars ([Yen] 296.7
billion).
Note: U.S.$ amount is translated into Japanese Yen at the rate
of U.S.$l=[Yen]120.85, the mean of the exchange rate
quotations by The Bank of Tokyo-Mitsubishi, Ltd. for
buying and selling spot U.S. Dollar by telegraphic
transfer against yen on February 28, l997.
Places where a copy of this Amendment to Securities
Regisration
Statement is available for Public Inspection
Not applicable.
(Total number of sheets of this Securities Registration
Statement [in Japanese] is 3 including Front Page)
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
("SRS") filed on April 15, 1997 due to the fact that the
contents of the Summarized Preliminary Prospectus had
been revised.
II. PLACE AND DESCRIPTION TO BE AMENDED
PART II. INFORMATION CONCERNING ISSUER
VI. MISCELLANEOUS
The revised parts are indicated with underlines.
PART II. INFORMATION CONCERNING ISSUER
VI. MISCELLANEOUS
<BEFORE AMENDMENT>
The description is this item is same as description in
VII REFERENCE INFORMATION of the Securities Report set
forth below (Ditto, from page 73 to page 74)
<AFTER AMENDMENT>
(1) The ornamental design is used in cover page of the
Japanese Prospectus.
(2) 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" and "III. Outline of Other Related
Companies" in Part II, Information on the Issuer, of the
SRS and Agreement Concerning the Opening of a Foreign
Securities Transaction Account, and the internal rules of
the distributor (i.e.: subscription is accepted until
3:00 p.m. of the day; etc.) in respect of the
subscription and payment.
- With respect to Part II. INFORMATION CONCERNING
ISSUER, I. DESCRIPTION OF THE FUND, 5. STATUS OF
INVESTMENT PORTFOLIO ((A) Diversification of Investment
Fund, (B) Results of Past Operations) and the entire part
of IV. FINANCIAL CONDITIONS OF THE FUND of the SRS, the
Prospectus may present the relevant information shown in
the graphs in addition to the text and tables of the said
information acquired any time after the SRS is filed.
The Prospectus may also set forth the exchange rates
relevant to the Fund.
(3) Summarized Preliminary Prospectus will be used.
- - Attached document (Summarized Preliminary Prospectus) will
be used pursuant to the below, as the document
(Summarized Preliminary Prospectus) 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.
(a) The content of the summarized Preliminary Prospectus may
be publicized by leaflets, pamphlets, direct mails (post
cards and mails in envelopes) or at newspapers, magazines
and other books.
(b) The layout, quality of papers, printing colour, design
etc. of the Summarized Preliminary Prospectus may vary
etc. of the Summarized Preliminary Prospectus may vary
depending on manner of usage. Photos and illustrations
set forth in the attached may be used.
(c) For information of the Fund's achievements, the changes of
the net asset value per share and the fluctuation rates
since the establishment of the Fund or for the latest 3
months, 6 months, one year, two years, three years or
five years may be set out in the figures or graphs. Such
information regarding the Fund's achievement may be
converted into and presented in yen.
