"[Translation]
SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
PUTNAM HIGH YIELD ADVANTAGE FUND
SECURITIES REGISTRATION STATEMENT
To: Minister of Finance
Filing
Date: October 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
Ronald
J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
John A.
Hill
Robert
E. Patterson
Donald
S. Perkins
George
Putnam, III
A.J.C.
Smith
W.
Thomas Stephens
W.
Nicholas Thorndike
Address of Principal Office: One Post Office Square
Boston,
Massachusetts 02109
U. S.
A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
(Seal)
Ken
Miura
Attorney-at-Law
Signature [Ken Miura]
(Seal)
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
- ii -
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 2.47 billion U.S.
dollars (Yen 295 billion).
Note 1: U.S.$ amount is translated into Japanese Yen at the
rate of U.S.$l.00=Yen 119.45 the mean of the exchange
rate quotations by The Bank of Tokyo-Mitsubishi, Ltd. for
buying and selling spot dollars by telegraphic transfer
against yen on August 29, 1997.
Note 2: The maximum amount expected to be sold is an amount
calculated by multiplying the net asset value per Class M
Share as of the end of August, 1997 (U.S.$ 9.88) 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
108 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 5
I. DESCRIPTION OF THE FUND 3 5
1. GENERAL INFORMATION 3 5
2. INVESTMENT POLICY 7
10
3. MANAGEMENT STRUCTURE 14 20
4. INFORMATION CONCERNING THE EXERCISE
OF RIGHTS BY SHAREHOLDERS, ETC. 20 30
5. STATUS OF INVESTMENT PORTFOLIO 23 34
II. OUTLINE OF THE TRUST 26 38
III. OUTLINE OF THE OTHER RELATED COMPANIES 62 69
IV. FINANCIAL CONDITION OF THE FUND 64 71
V. SUMMARY OF INFORMATION CONCERNING
FOREIGN TRUST SECURITIES 78 74
VI. MISCELLANEOUS 178 74
PART III. SPECIAL INFORMATION 180 75
I. OUTLINE OF THE SYSTEM OF INVESTMENT
TRUSTS IN MASSACHUSETTS 180 75
II. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY 186 82
III. FORM OF FOREIGN INVESTMENT FUND SECURITIES 211 82
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 s 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 2.47 billion U.S.
dollars (Yen 295 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 the end of
August, 1997 ($ 9.88) 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 119.45 (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 as of August 29,
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: "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:
November 4, 1997 (Tuesday)
To:
April 30, 1998 (Thursday)
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 17 of
this document).
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 for Shares shall enter with
the Handling Securities Company an agreement concerning
the foreign securities transactions. For this purpose,
the Handling Securities Company shall deliver to
investors an Agreement of Foreign Securities Transactions
Account and investors shall submit to the Handling
Securities Company an Application for Opening of
Transactions Account opened in accordance with such
Agreement. The subscription amount shall be paid in yen
in principle, and the exchange rate between Dollars and
Yen shall be determined by the Handling Securities
Company based upon the foreign exchange rate on the Tokyo
foreign exchange market as of the Trade Day for each
application.
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) Expenses summary:
Expenses are one of several factors to consider when
investing. The following table summarizes investor's
maximum transaction costs from investing in the Shares
and expenses based on the most recent fiscal year. The
example shows the cumulative expenses attributable to a
hypothetical $1,000 investment over the specified
periods.
Shareholder transaction expenses
Maximum sales charge imposed on purchases
(as a percentage of public offering price) 3.25%
Deferred sales charge None
Annual Fund operating expenses
(as a percentage of average net assets)
Management fees 0.61%
12b-1 fees 0.50%
Other expenses 0.25%
Total Fund operating expenses 1.36%
The table is provided to help you understand the
expenses of investing in the Shares and your share of the
operating expenses the Fund incurs. The expenses shown
in the table do not reflect the application of credits
that reduce fund expenses.
Example
An investment of $1,000 would incur the following
expenses, assuming 5% annual return and redemption at the
end of each period.
One year $46
3 years $74
5 years $105
10 years $191
The example does not represent past or future
expense levels. Actual expenses may be greater or less
than those shown. Federal regulations require the
example to assume a 5% annual return, but actual annual
return varies.
( C) 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
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 shareholders' shares.
Shareholders will receive at least 30 days' written
notice before the Fund redeems shareholders' shares, and
shareholders may purchase additional shares at any time
to avoid a redemption. The Fund may also redeem shares
if shareholders own shares above a maximum amount set by
the Trustees. There is presently no maximum, but the
Trustees may 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 Fund's shares is subject to, among other things, the
Securities Act of 1933, as amended, and certain state
securities laws. The Fund also attempts to qualify each
year and 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 "1940 Act"), in general, requires investment
companies to register as such with the U.S.
Securities and Exchange Commission (the "SEC"), and
to comply with a number of substantive regulations
of their operations. The 1940 Act requires an
investment company, among other things, to provide
periodic reports to its shareholders.
c. Securities Act of 1933
The Securities Act of 1933, as amended (the
"1933 Act"), regulates many sales of securities. The
Act, among other things, imposes various
registration requirements upon sellers of securities
and provides for various liabilities for failures to
comply with its provisions or in respect of other
specified matters.
d. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended
(the "1934 Act"), regulates a variety of matters
involving, among other things, the secondary trading
of securities, periodic reporting by the issuers of
securities, and certain of the activities of
transfer agents and brokers and dealers.
e. The Internal Revenue Code
The Fund intends to qualify as a "regulated
investment company" for federal income tax purposes
and to meet all other requirements necessary for
it
to be relieved of federal taxes on income and gains
it distributes to shareholders.
f. Other laws
The Fund is subject to the provisions of other
laws, rules, and regulations applicable to the Fund
or its operations, such as, for example, various
state laws regarding the sale of the Fund's shares.
(B) Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction
over the Fund or certain of its operations are the SEC
and state regulatory agencies or authorities.
a. The SEC has broad authority to oversee the
application and enforcement of the federal
securities laws, including the 1940 Act, the 1933
Act, and the 1934 Act, among others, to the Fund.
The 1940 Act provides the SEC broad authority to
inspect the records of investment companies, to
exempt investment companies or certain practices
from the provisions of the Act, and otherwise to
enforce the provisions of the Act.
b. State authorities typically have broad authority to
regulate the offering and sale of securities to
their residents or within their jurisdictions and
the activities of brokers, dealers, or other persons
directly or indirectly engaged in related
activities.
(C) 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 "Investor Servicing Agent") acts as Custodian
and Investor Servicing Agent.
(3) Putnam Mutual Funds Corp. ("Principal
Underwriter") engages in providing marketing
services to the Fund.
(4) KOKUSAI Securities Co., Ltd. ("Distributor in
Japan" and "Agent Securities Company") engages in
forwarding the purchase or repurchase orders for the
Shares in Japan and also acts as the agent
securities company.
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 non-U.S.
issuers that are not actively traded in U.S. markets.
These non-U.S. investments involve certain special risks
described below.
Non-U.S. securities are normally
denominated and traded in foreign currencies. As a
result, the value of the Fund's non-U.S. 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 non-U.S. currency exchange transactions in
connection with its non-U.S. investments, including
transactions involving futures contracts, forward
contracts and options.
Investments in non-U.S. securities may subject the
Fund to other risks as well. For example, there may be
less information publicly available about a non-U.S.
issuer than about a U.S. issuer, and non-U.S. 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 non-
U.S. issuers are less liquid and at times more volatile
than securities of comparable U.S. issuers. Non-U.S.
brokerage commissions and other fees are also generally
higher than in the United States. Non-U.S. 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 non-U.S.
securities may be subject to the risk of nationalization
or expororiation of assets, imposition of currency
exchange controls or restrictions on the repatriation of
non-U.S. currency, confiscatory taxation, political or
financial instability and diplomatic developments which
could affect the value of the Fund's investments in
certain non-U.S. countries. Dividends or interest on, or
proceeds from the sale of, non-U.S. securities may be
subject to foreign withholding taxes, and special U.S.
tax considerations may apply.
Legal remedies available to investors in certain non-
U.S. countries may be more limited than those available
with respect to investments in the United States or in
other non-U.S. countries. The laws of some non-U.S.
countries may limit the Fund's ability to invest in
securities of certain issuers organized under the laws
of those non-U.S. 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
non-U.S.
securities generally will not exceed 20% of its total
assets, although the Fund's investments in non-U.S.
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 non-U.S. currencies or that are traded in
non-U.S.
markets, or securities of U.S. issuers having significant
foreign operations.
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 in connection with the sale
of
securities and reinvestment in other securities.
These
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 may be traded in the "over-the-counter" market
rather than on an exchange. This means that the Fund
w ould 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:
Except for the policies designated as fundamental
below, the investment policies described in this document
are not fundamental policies. The Trustees may not
change any non-fundamental policy without shareholders'
approval. As fundamental investment restrictions, which
may not be changed without a vote of a majority of the
outstanding voting securities, the Fund may not and will
not:
(1) Borrow money in excess of 10% of the value (taken at
the lower of cost or current value) of its total assets
(not including the amount borrowed) at the time the
borrowing is made, and then only from banks as a
temporary measure to facilitate the meeting of redemption
requests (not for leverage) which might otherwise require
the untimely disposition of portfolio investments or for
extraordinary or emergency purposes. Such borrowings
will be repaid before any additional investments are
purchased.
( 2) Underwrite securities issued by other persons
except
to the extent that, in connection with the disposition of
its portfolio investments, it may be deemed to be an
underwriter under 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 commodities.
( 5) Make loans, except by purchase of debt
obligations
in which the fund may invest consistent with its
investment policies, by entering into repurchase
agreements , or by lending its portfolio
securities.
( 6) With respect to 75% of its total assets, invest
in
the securities of any issuer if, immediately after such
investment, more than 5% of the total assets of
the fund
(taken at current value) would be invested in the
securities of such issuer,; provided that this limitation
does not apply to obligations issued or guaranteed as to
interest or principal by the U.S. government or its
agencies or instrumentalities.
( ) With respect to 75% of its total assets, acquire
more than 10% of the outstanding voting securities of any
issuer.
( 8) Purchase securities (other than securities of the
U.S. government, its agencies or instrumentalities) if,
as a result of such purchase, more than 25% of the fund's
total assets would be invested in any one industry.
( 9) Issue any class of securities which is senior to
the
fund'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 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.
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 other than
non-fundamental limitation (1) above, 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
Rating net assets percentage of net assets
"AAA" - -
"AA" - -
"A" - 0.41%
"BBB" 1.86% -
"BB" 23.38% 2.15%
"B" 53.91% 1.15%
"CCC" 8.27% -
_________________________________________________________________
______
__
Total 87.42% 3.71%
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 of which the Fund, by
itself or together with other funds and accounts managed
by Investment Management Company or 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, it may be 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, Rev. Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, the
Fourth of July, Labor Day, Thanksgiving and Christmas.
The Fund determines net asset value as of the close of
regular trading on the Exchange, currently 4:00 p.m.
However, equity options held by the Fund are priced as of
the close of trading at 4:10 p.m., and futures contracts
on U.S. government and other fixed-income securities and
index options held by the Fund are priced as of their
close of trading at 4:15 p.m.
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 Ma rch 20,
1997, the Fund pays a following 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.
Fee amount as a
percentage of
Average net assets of the Fund the average
net assets of the Fund
$500 million or less 0.70%
more than $500 million up to and including $1
billion 0.60%
more than $1 billion up to and including $1.5
billion 0.55%
more than $1.5 billion up to and including $6.5
billion 0.50%
more than $6.5 billion up to and including $11.5
billion 0.475%
more than $11.5 billion up to and including $16.5
billion 0.455%
more than $16.5 billion up to and including $21.5
billion 0.44%
more than $21.5 0.43%
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 .
Buying shares through systematic investing.
Investors can make regular investments of $25 or
more per month through automatic deductions from
investor's bank checking or savings account.
Application forms are available from investor's
investment dealer or through Investor Servicing
Agent.
Shares are sold at the public offering price
based on the net asset value next determined after
Investor Servicing Agent receives investors' order.
In most cases, in order to receive that day's public
offering price, Investor Servicing Agent must
receive investors'order before the close of regular
trading on the New York Stock Exchange. If investors
buy shares through investors' investment dealer, the
dealer must receive investors'order before the close
of regular trading on the New York Stock Exchange to
receive that day's public offering price.
Class M Shares
The public offering price of class M shares is
the net asset value plus a sales charge that varies
depending on the size of investor's purchase. The
Fund receives the net asset value. The sales charge
is allocated between investor's investment dealer
and Putnam Mutual Funds Corp. as shown in the
following table, except when Putnam Mutual Funds
Corp., at its discretion, allocates the entire
amount to investor's investment dealer.
Sales charge as
Amount of sales
a percentage of:
charge reallowed
Net to dealers as
a
Amount of transactionamount Offering percentage
of
at offering price ($) 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
Sales charges will not apply to class M shares
purchased on or before October 31, 1997, 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. Class M qualified retirement plans
(retirement plans for which the Investor
Servicing
Agent or its affiliates provide recordkeeping or
other services in connection with Class M Shares)
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.
The Handling Securities Company shall deliver to
investors Agreement of Foreign Securities
Transactions Account and investors shall submit to
the Handling Securities Company an Application for
Opening of Transactions Account opened in accordance
with such Agreement. 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. 5%
consumption tax on the Sales charge will be added.
The investors having entrusted the Handling
Securities Copany with custody of the Shares 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 exchange rate to be determined
by the Handling Securities Company based upon the
foreign exchange rate on the Tokyo foreign Exchange
market 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 Yen500,000,000 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 shareholders' shares the business day after
shareholders' 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 Agent's
Telephone Redemption Privilege to redeem shares
valued up to $100,000 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 Agent's 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 shareholders' 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 shareholders'
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 Agreement of
Foreign Securities Transactions Account 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 intends 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 Agreement of Foreign
Securities Transactions Account 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 provide 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 Fund's 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 Portfolio:
(As of the end of August,
1997)
Types of Name of TotalU.S. Investm
Assets Country Dollars ent
Ratio
(%)
Corporate United 2,826,460, 76.33
Bonds States 092
Canada 93,933,434 2.54
United 54,100,937 1.46
Kingdom
Mexico 36,698,040 0.99
Indonesia 29,792,350 0.81
Luxembour 21,226,594 0.57
g
Australia 17,421,700 0.47
Bermuda 13,460,175 0.36
China 8,932,550 0.24
Brazil 8,125,750 0.22
Netherlan 5,946,625 0.16
ds
Greece 4,452,300 0.12
Argentina 3,870,200 0.11
Ecuador 2,658,338 0.07
Sub-total 3,127,079, 84.45
085
0.00
United 215,132,81 5.81
States 8
Preferred Canada 6,223,000 0.17
Stock
Germany 5,467,625 0.15
Sub-total 226,823,44 6.13
3
0.00
Units United 57,304,206 1.55
States
Australia 15,891,600 0.43
Brazil 6,833,750 0.18
United 3,765,400 0.10
Kingdom
Sub-total 83,794,956 2.26
Convertible United 50,694,541 1.37
Bonds States
United 8,726,400 0.23
Kingdom
Sub-total 59,420,941 1.60
0.00
Common Stock United 42,945,827 1.16
States
Canada 1,194,000 0.03
Sub-total 44,139,827 1.19
Brady Bonds Argentina 9,196,799 0.25
Mexico 9,162,579 0.25
Brazil 6,542,184 0.18
Venezuela 3,042,813 0.08
Bulgaria 2,203,200 0.06
Ecuador 536,475 0.01
Sub-total 30,684,050 0.83
0.00
Short-term U.S.A. 30,000,000 0.81
0.00
Convertible- U.S.A. 7,838,238 0.21
Preferred
Stocks
U.S.A. 0.00
Warrants U.S.A. 5,242,616 0.14
0.00
Foreign Russia 4,518,038 0.12
Government
Bonds
South 363,808 0.00
Africa
Peru 337,325 0.00
Sub-total 5,219,171 0.14
Options,
Futures and
Other
Derivatives
Cash, Deposit 82,572,602 2.24
and Other
Assets (After
deduction of
liabilities)
Total 3,702,814, 100.00
929
(Net Asset (\442,301
Value) million)
Note:
Investment
ratio is
calculated by
dividing each
asset at its
market value
by the
total Net
Asset Value of
the Fund. The
same applies
hereinafter.
(B) Results of Past Operations
(1) Record of Changes in Net Assets (Class M Shares)
Record of changes in net assets at the end of the
following fiscal years and at the end of each month
within one year prior to the end of August, 1997 is
as
follows:
(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 117)
2nd Fiscal Year (12/1/95 - 11/30/96) $0.88
(Yen 105)
Record of distribution paid from December 1996 to August
1997 are as follows:
(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:
Number of Number of Number of
Shares Sold Shares Outstanding
Repurchased Shares
2,370,932 259,901 2,111,031
1st Fiscal (0) (0) (0)
Year
47,178,747 1,098,778 48,197,000
2nd Fiscal 42,967,350 252,350 42,715,000
Year
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
voluntary 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 Fund's business. The
Agreement and Declaration of Trust provides that they
shall have all powers necessary or convenient to carry
out that responsibility. The number of Trustees is fixed
by the Trustees and may not be less than three. A
Trustee may be elected either by the Trustees or by the
shareholders. At any meeting called for the purpose, a
Trustee may be removed by vote of two-thirds of the
outstanding shares of the 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 Trusteesof 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) Trustees and Officers of the Trust
Shares
Name Office and Resume Owned
Title
George Putnam Chairman present: Chairman and Class A
and Director of Putnam
70,198.8
President Management and 39
Putnam Mutual Funds
Corp.
Director, Marsh &
McLennan Companies,
Inc.
William F. Vice present: Professor of Class A
Pounds Chairman Management, Alfred 17,
P. Sloan School of
893.266
Management,
Massachusetts
Institute of
Technology
Jameson Adkins Trustee present: President, Baxter Class A
Baxter Associates, Inc. 5,
404.051
Hans H. Estin Trustee present: Vice Chairman, Class A
North American 18
Management Corp. .088
Elizabeth T. Trustee present: President Class A
Kennan Emeritus and 36
Professor, Mount
9.273
Holyoke College
Lawrence J. Trustee present: President, Chief 0
Lasser and Vice Executive Officer
President and Director of
Putnam Investments,
Inc. and Putnam
Director, Marsh &
MclLennan Companies,
Inc.
John A. Hill Trustee present: Chairman and Class A
Managing Director, 18
First Reserve
3.235
Corporation
Ronald J. Trustee present: Former Chairman, Class A
Jackson President and Chief 11
Executive Officer of
8.096
Fisher-Price, Inc.,
Director of Safety
1st, Inc.,
Trustee of Salem
Hospital and the
Peabody Essex Museum
Robert E. Trustee present: Executive Vice Class A
Patterson President and 16,
Director of
895.670
Acquisitions, Cabot
Partners Limited
Partnership
Donald S. Trustee present: Director of Class A
Perkins various 3,
corporations,
900.636
including Cummins
Engine Company,
Lucent Technologies,
Inc., Springs
Industries, Inc. and
Time Warner Inc.
George Putnam, Trustee present: President, New Class A
III Generation Research, 2,
Inc.
907.961
A.J.C. Smith Trustee present: Chairman and Class A
Chief Executive 308.777
Officer, Marsh &
McLennan Companies,
Inc.
W. Thomas Trustee present: President and 0
Stephens Chief Executive
Officer of MacMillan
Bloedel Ltd.
Director of Mail-
Well Inc. Qwest
Communications, The
Eagle Picher Trust
and Public Service
Company of Colorado
W. Nicholas Trustee present: Director of Class A
Thorndike various corporations 14
and charitable
8.420
organizations,
including Data
General Corporation,
Bradley Real Estate,
Inc. and Providence
Journal Co. Trustee
of Massachusetts
General Hospital and
Eastern Utilities
Associations
Charles E. Executive present: Managing Director 0
Porter Vice of Putnam
President Investments, Inc.
and Putnam
Management
Patricia C. Senior present: Senior Vice 40
Flaherty Vice President of Putnam
President Investments, Inc.
and Putnam
Management
William N. Vice present: Director and 0
Shiebler President Senior Managing
Director of Putnam
Investments, Inc.
President and
Director of Putnam
Mutual Funds
Gordon H. Vice present: Director and Class A
Silver President Senior Managing 2,
Director of Putnam 7
Investments, Inc.
68.346
and Putnam
Management
Paul M. O'Neil Vice present: Vice President of 0
President Putnam Investments,
Inc. and Putnam
Management
John D. Hughes Vice present Senior Vice 0
President President of Putnam
and Management
Treasurer
Beverly Marcus Clerk and N/A 0
Assistant
Treasurer
(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 retained Putnam
Investment Management, Inc., the Fund's investment
management company, to render investment management
services, and Putnam Fiduciary Trust Company, to keep the
assets of the Fund in custody and to act as the 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 Company's sole business is
investment management, which includes the buying,
selling, exchanging and trading of securities of all
descriptions on behalf of mutual funds in any part of the
world.
(D) History of the Company
Investment Management Company is one of America's oldest
and largest money management firms. Investment
Management Company's staff of experienced portfolio
managers and research analysts selects securities and
constantly supervises the fund's portfolio. By pooling
an investor's money with that of other investors, a
greater variety of securities can be purchased than would
be the case individually: the resulting diversification
helps reduce investment risk Investment Management
Company has been managing mutual funds since 1937.
Today, the firm serves as the Investment Management
Company for the funds in the Putnam Family, with over
$177.3 billion in assets in nearly 9 million shareholder
accounts at the end of August, 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 August, 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 Shareholders
As of the end of August, 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
Company's funds) with which the officer and/or director
has recently had or has substantial involvement; and (ii)
positions held with such organization:
List of Officers and Directors of Putnam Investment
Management, Inc. ( as of the filing date)
Position with
Name Putnam Other Business
Investment Affiliation
Management,
Inc.
Putnam, George Chairman Chairman of Putnam Mutual
Funds Corp.
Lasser, President and
Lawrence J. Director
Silver, Gordon Director and Putnam Fiduciary Trust
H. Senior Company
Managing Senior Administrative
Director Officer and Director of
Putnam Mutual Funds Corp.
Burke, Robert Director and Senior Managing Director of
W. Senior Putnam Mutual Funds Corp.
Managing
Director
Carman, Peter Director and
Senior
Managing
Director
Coburn, Gary N. Senior
Managing
Director
Ferguson, Ian Senior
C. Managing
Director
Spiegel, Steven Director and Senior Managing Director of
Senior Putnam Mutual Funds Corp.
Managing
Director
Anderson, Blake Managing
E. Director
Bankart, Alan Managing
J. Director
Bogan, Thomas Managing
Director
Browchuk, Brett Managing
Director
Collman, Managing Managing Director of Putnam
Kathleen M. Director Mutual Funds Corp.
Curtin, William Managing
J. Director
D'Alelio, Managing
Edward H. Director
DeTore, John A. Managing Managing Director of Putnam
Director Fiduciary Trust Company
Durgarian, Managing Director and Managing
Karnig H. Director Director of Putnam Fiduciary
Trust Company
Estevens, Irene Managing
M. Director
Ho, Jin W. Managing
Director
Hurley, William Managing Managing Director of Putnam
J. Director Mutual Funds Corp.
Jacobs, Jerome Managing
J. Director
Kearney, Mary Managing Managing Director of Putnam
E. Director Mutual Funds Corp.
Kohli, D. Managing
William Director
Kreisel, Managing
Anthony I. Director
Landes, William Managing
J. Director
Maloney, Kevin Managing
J. Director
Martino, Managing
Michael Director
Maxwell, Scott Managing
M. Director
McGue, William Managing
F. Director
McMullen, Carol Managing
Director
Miller, Daniel Managing
L. Director
Montgomery, Managing
Kenneth Director
Morgan Jr., Managing Managing Director of Putnam
John J. Director Fiduciary Trust Company
Mullaney, Managing
Michael A. Director
O'Donnell Jr., Managing
C. Patrick Director
Peacher, Managing
Stephen C. Director
Porter, Charles Managing
E. Director
Reilly, Thomas Managing
V. Director
Scott, Justin Managing Managing Director of Putnam
M. Director Fiduciary Trust Company
Talannian, John Managing Managing Director of Putnam
C. Director Mutual Funds Corp.
Woolverton, Managing Managing Director of Putnam
William H. Director Mutual Funds Corp.
Asher, Steven Senior Vice Senior Vice President of
E. President Putnam Mutual Funds Corp.
Baumback, Senior Vice
Robert K. President
Beck, Robert R. Senior Vice
President
Bousa, Edward Senior Vice
P. President
Bresnahan, Senior Vice Senior Vice President of
Leslee R. President Putnam Mutual Funds Corp.
Burns, Cheryl Senior Vice
A. President
Cassaro, Joseph Senior Vice
A. President
Chapman, Susan Senior Vice
President
Cotner, Beth C. Senior Vice
President
Curran, Peter Senior Vice Senior Vice President of
J. President Putnam Mutual Funds Corp.
Dalferro, John Senior Vice
R. President
Daly, Kenneth Senior Vice Senior Vice President of
L. President Putnam Mutual Funds Corp.
England, Senior Vice
Richard B. President
Fitzgerald, Senior Vice
Michael T. President
Flaherty, Senior Vice Senior Vice President of
Patricia C. President Putnam Mutual Funds Corp.
Francis, Senior Vice
Jonathan H. President
Frucci, Richard Senior Vice Senior Vice President of
M. President Putnam Fiduciary Trust
Company
Fullerton, Senior Vice Senior Vice President of
Brian J. President Putnam Mutual Funds Corp.
Gillis, Roland Senior Vice
President
Goodwin, Kim C. Senior Vice
President
Grant, Peter J. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
Grim, Daniel J. Senior Vice
President
Haagensen, Paul Senior Vice
E. President
Halperin, Senior Vice
Matthew C. President
Han, Billy P. Senior Vice
President
Healey, Deborah Senior Vice
R. President
Joseph, Joseph Senior Vice
P. President
Joyce, Kevin M. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
Kamshad, Omid Senior Vice
President
Kay, Karen R. Senior Vice Clerk, Director and Senior
President Vice President of Putnam
Fiduciary Trust Company
King, David L. Senior Vice
President
Kirson, Steven Senior Vice
L. President
Lindsey, Senior Vice
Jeffrey R. President
Lukens, James Senior Vice
W. President
Manning, Howard Senior Vice
K. President
Matteis, Andrew Senior Vice
S. President
McAuley, Senior Vice
Alexander J. President
McDonald, Senior Vice
Richard E. President
Meehan, Thalia Senior Vice
President
Mikami, Darryl Senior Vice
President
Mockard, Jeanne Senior Vice
L. President
Mufson, Michael Senior Vice
J. President
Mullin, Hugh H. Senior Vice
President
Netols, Jeffrey Senior Vice Senior Vice President of
W. President Putnam Fiduciary Trust
Company
Nguyen, Triet Senior Vice
M. President
Paine, Robert Senior Vice
M. President
Pohl, Charles Senior Vice
G. President
Pollard, Mark Senior Vice
D. President
Powers, Neil J. Senior Vice
President
Quinton, Keith Senior Vice
P. President
Ray, Senior Vice
Christopher A. President
Reeves, William Senior Vice
H. President
Rosalanko, Senior Vice
Thomas J. President
Ruys de Perez, Senior Vice Senior Vice President of
Charles A. President Putnam Fiduciary Trust
Company
Schwister, Jay Senior Vice Senior Vice President of
E. President Putnam Fiduciary Trust
Company
Senter, Max S. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
Simon, Sheldon Senior Vice
N. President
Smith Jr., Leo Senior Vice
J. President
Smith, Margaret Senior Vice
D. President
Storkerson, Senior Vice Senior Vice President of
John K. President Putnam Fiduciary Trust
Company
Strumpf, Casey Senior Vice
President
Sullivan, Roger Senior Vice
R. President
Swanberg, Senior Vice
Charles H. President
Swift, Robert Senior Vice
President
Taubes, Kenneth Senior Vice Senior Vice President of
J. President Putnam Fiduciary Trust
Company
Thomas, David Senior Vice
K. President
Thomsen, Senior Vice Senior Vice President of
Rosemary H. President Putnam Fiduciary Trust
Company
Tibbetts, Senior Vice Senior Vice President of
Richard B. President Putnam Mutual Funds Corp.
Till, Hilary F. Senior Vice
President
Van Vleet, Senior Vice
Charles C. President
Verani, John R. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
Weinstein, Senior Vice
Michael R. President
Weiss, Man Senior Vice
vuel President
Wheeler, Diane Senior Vice
D.F. President
Wyke, Richard Senior Vice
P. President
Zukowski, Senior Vice
Gerald S. President
Lucey, Robert Direcor and
F. Senior
Managing
Director
Lucey, Thomas Direcor and
J. Senior
Managing
Director
Shiebler, Direcor and
Williams N. Senior
Managing
Director
Boneparth, John Managing
F. Director
Eisenkraft, Managing
Gail A. Director
Erickson, James Managing
E. Director
Esposito, Managing
Vincent Director
Goodman, Robert Managing
Director
Haslett, Thomas Managing
Director
Littauer, Managing
Thomas W. Director
Miller, Janis Managing
E. Director
Miller, Jeffrey Managing
M. Director
Nelson, Managing
Alexander L. Director
Palombo, Joseph Managing
R. Director
Sharpless, Managing
Kathy G. Director
Tambone, James Managing
S. Director
Tasiopoulos, Managing
Louis Director
Turpin, Thomas Managing
M. Director
Watanabe, Managing
Takehiko Director
Zieff, William Managing
Director
Abbott, Senior Vice
Christopher C. President
Alders, Senior Vice
Christopher A. President
Avery, Scott A. Senior Vice
President
Bacon, James R. Senior Vice
President
Bartlett, John Senior Vice
L. President
Bearden, Dale Senior Vice
President
Brockelman, Senior Vice
James D. President
Buckner, Gail Senior Vice
D. President
Connelly, Senior Vice
Donald A. President
Corvinus, F. Senior Vice
Nicholas President
Crain, Kevin, Senior Vice
F. President
Craven, Joseph Senior Vice
P. President
Demmler, Joseph Senior Vice
L. President
Dolan, Marjorie Senior Vice
A. President
Edlin, David B. Senior Vice
President
English, James Senior Vice
M. President
Eurkus, David Senior Vice
J. President
Feldman, Susan Senior Vice
H. President
Fichera, Paul Senior Vice
F. President
Fisher, C. Senior Vice
Nancy President
Fishman, Senior Vice
Mitchell B. President
Geissler, Senior Vice
Mauricia A. President
Gennaco, Joseph Senior Vice
P. President
George, Bruce Senior Vice
D. President
Gould, Jeffrey Senior Vice
L. President
Halloran, Senior Vice
Thomas W. President
Hearns, Dennis Senior Vice
P. President
Hill, Donald R. Senior Vice
President
Hochstein, Bess Senior Vice
J.M. President
Hughes, Carolyn Senior Vice
President
Jacobsen, Senior Vice
Dwight D. President
Kirk, Deborah Senior Vice
H. President
Knutzen, Erik Senior Vice
L. President
Kondracki, Senior Vice
Alexander A. President
Kreutzberg, Senior Vice
Howard H. President
Lathrop, James Senior Vice
D. President
Lewandowski, Senior Vice
Edward V. President
Lucas, Peter V. Senior Vice
President
McKenna, Mark Senior Vice
J. President
Miller, Bart D. Senior Vice
President
Moret, Mitchell Senior Vice
L. President
Morgan, Kelly Senior Vice
A. President
Morrice, Mary Senior Vice
Ann President
O'Brien, Senior Vice
Kristen P. President
O'Shea, Kevin Senior Vice
L. President
Olson, Charles Senior Vice
R. President
Phoenix, Joseph Senior Vice
President
Picher, Suzanne Senior Vice
N. President
Present, Howard Senior Vice
B. President
Puddle, David Senior Vice
G. President
Rio, George A. Senior Vice
President
Rowe, Robert B. Senior Vice
President
Rowell, Kevin Senior Vice
A. President
Rudinoff, Paul Senior Vice
J. President
Saunders, Senior Vice
Catherine A. President
Schultz, Senior Vice
Mitchell D. President
Soester, Tricia Senior Vice
President
Stanojev, Senior Vice
Nicholas T. President
Sullivan , Guy Senior Vice
President
Svensson, Lisa Senior Vice
A. President
Vander Linde, Senior Vice
Douglas J. President
Whiston, Sandra Senior Vice
C. President
(I) Description of Business and Outline of 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
August, 1997, Investment Management Company managed,
advised, and/or administered the following 101 funds
and
fund portfolios (having an aggregate net asset value of
approximately $ 177.3 billion):
(As of the end of August,
1997
Name Month/Da Principa Total Net
te/Year l Net Asset
Establis Characte Asset Value
hed ristics Value per
($ share
millio ($)
n)
1 The George Putnam 11/5/37 Open/Equ 2,548. 18.20
Fund of Boston; A ity 60
2 The George Putnam 4/24.92 Open/Equ 883.10 18.09
Fund of Boston; B ity
3 The George Putnam 12/1/94 Open/Equ 182.20 18.08
Fund of Boston; M ity
4 The George Putnam 1/1/94 Open/Equ 346.60 18.22
Fund of Boston; Y ity
5 Putnam AZ Tax Exempt 1/30/91 Open/Bon 123.20 9.14
Income Fund; A d
6 Putnam AZ Tax Exempt 7/15/93 Open/Bon 29.10 9.13
Income Fund; B d
7 Putnam AZ Tax Exempt 7/3/95 Open/Bon 0.60 9.15
Income Fund; M d
8 Putnam American 3/1/85 Open/Bon 1,560. 8.59
Government Income d 20
Fund; A
9 Putnam American 5/20/94 Open/Bon 3.50 8.54
Government Income d
Fund; B
10 Putnam American 2/14/95 Open/Bon 0.10 8.59
Government Income d
Fund; M
11 Putnam Asia Pacific 2/20/91 Open/Equ 466.90 13.08
Growth Fund; A ity
12 Putnam Asia Pacific 6/1/93 Open/Equ 195.80 12.86
Growth Fund; B ity
13 Putnam Asia Pacific 2/1/95 Open/Equ 9.70 12.97
Growth Fund; M ity
14 Putnam Asset 2/7/94 Open/Bal 631.40 11.75
Allocation Balanced anced
Portfolio; A
15 Putnam Asset 2/11/94 Open/Bal 411.00 11.68
Allocation Balanced anced
Portfolio; B
16 Putnam Asset 9/1/94 Open/Bal 65.00 11.63
Allocation Balanced anced
Portfolio; C
17 Putnam Asset 2/6/95 Open/Bal 40.60 11.73
Allocation Balanced anced
Portfolio; M
18 Putnam Asset 7/14/94 Open/Bal 221.90 11.75
Allocation Balanced anced
Portfolio; Y
19 Putnam Asset 2/7/94 Open/Bal 286.10 10.28
Allocation anced
Conservative
Portfolio; A
20 Putnam Asset 2/18/94 Open/Bal 130.80 10.23
Allocation anced
Conservative
Portfolio; B
21 Putnam Asset 9/1/94 Open/Bal 27.50 10.22
Allocation anced
Conservative
Portfolio; C
22 Putnam Asset 2/7/95 Open/Bal 18.10 10.29
Allocation anced
Conservative
Portfolio; M
23 Putnam Asset 7/14/94 Open/Bal 11.90 10.25
Allocation anced
Conservative
Portfolio; Y
24 Putnam Asset 2/8/94 Open/Bal 439.00 12.91
Allocation Growth anced
Portfolio; A
25 Putnam Asset 2/16/94 Open/Bal 330.00 12.75
Allocation Growth anced
Portfolio; B
26 Putnam Asset 9/1/94 Open/Bal 62.00 12.67
Allocation Growth anced
Portfolio; C
27 Putnam Asset 2/1/95 Open/Bal 31.00 12.77
Allocation Growth anced
Portfolio; M
28 Putnam Asset 7/14/94 Open/Bal 221.00 12.98
Allocation Growth anced
Portfolio; Y
29 Putnam Balanced 4/19/85 Open/Bal 574.40 11.27
Retirement Fund; A anced
30 Putnam Balanced 2/1/94 Open/Bal 73.40 11.20
Retirement Fund; B anced
31 Putnam Balanced 3/17/95 Open/Bal 7.10 11.23
Retirement Fund; M anced
32 Putnam CA Tax Exempt 4/29/83 Open/Bon 3,092. 8.63
Income Fund; A d 00
33 Putnam CA Tax Exempt 1/4/93 Open/Bon 566.90 8.62
Income Fund; B d
34 Putnam CA Tax Exempt 2/14/95 Open/Bon 13.80 8.62
Income Fund; M d
35 Putnam VT: Asia 5/1/95 Open/Equ 133.60 10.48
Pacific ity
36 Putnam VT: 9/15/93 Open/Bon 571.10 10.91
Diversified d
37 Putnam VT: Glb Gr 5/1/90 Open/Equ 1,595. 18.06
ity 70
38 Putnam VT: Global AA 2/1/88 Open/Bal 902.80 17.96
anced
39 Putnam VT: Gr and Inc 2/1/88 Open/Bal 7,597. 26.71
anced 80
40 Putnam VT: HY 2/1/88 Open/Bon 926.70 13.05
d
41 Putnam VT: MM 2/1/88 Open/Bon 500.50 1.00
d
42 Putnam VT: New 5/2/94 Open/Equ 2,247. 19.76
Opportunities ity 20
43 Putnam VT: U.S. Govmt 2/1/88 Open/Bon 762.00 12.94
and H. Qual. d
44 Putnam VT: Util G&I 5/1/92 Open/Bal 690.90 14.49
anced
45 Putnam VT: Voyager 2/1/88 Open/Equ 4,086. 36.28
ity 90
46 Putnam Capital 8/5/93 Open/Equ 733.50 20.86
Appreciation Fund; A ity
47 Putnam Capital 11/2/94 Open/Equ 752.80 20.64
Appreciation Fund; B ity
48 Putnam Capital 1/22/96 Open/Equ 53.10 20.68
Appreciation Fund; M ity
49 Putnam Convertible 6/29/72 Open/Bal 1,129. 23.05
Income-Growth Trust; anced 60
A
50 Putnam Convertible 7/15/93 Open/Bal 239.80 22.83
Income-Growth Trust; anced
B
51 Putnam Convertible 3/13/95 Open/Bal 14.50 22.91
Income-Growth Trust; anced
M
52 Putnam Diversified 7/1/94 Open/Equ 233.90 13.51
Equity Trust; A ity
53 Putnam Diversified 7/2/94 Open/Equ 282.70 13.38
Equity Trust; B ity
54 Putnam Diversified 7/3/95 Open/Equ 20.60 13.43
Equity Trust; M ity
55 Putnam Diversified 10/3/88 Open/Bon 2.043 12.44
Income Trust; A d
56 Putnam Diversified 3/1/93 Open/Bon 2.32 12.39
Income Trust; B d
57 Putnam Diversified 12/1/94 Open/Bon 4.28 12.41
Income Trust; M d
58 Putnam Equity Income; 6/15/77 Open/Bal 782.20 15.22
A anced
59 Putnam Equity Income; 9/13/93 Open/Bal 406.20 15.13
B anced
60 Putnam Equity Income; 12/2/94 Open/Bal 43.40 15.14
M anced
61 Putnam Europe Growth; 9/7/90 Open/Equ 348.50 18.71
A ity
62 Putnam Europe Growth; 2/1/94 Open/Equ 284.60 18.30
B ity
63 Putnam Europe Growth; 12/1/94 Open/Equ 16,536 18.39
M ity .00
64 Putnam FL Tax Exempt 8/24/90 Open/Bon 233.20 9.29
Income Fund; A d
65 Putnam FL Tax Exempt 1/4/93 Open/Bon 62.00 9.28
Income Fund; B d
66 Putnam FL Tax Exempt 5/1/95 Open/Bon 1.50 9.28
Income Fund; M d
67 Putnam Federal Income 6/2/86 Open/Bon 347.00 10.02
Trust; A d
68 Putnam Federal Income 6/6/94 Open/Bon 12.20 9.98
Trust; B d
69 Putnam Federal Income 4/12/95 Open/Bon 0.90 10.02
Trust; M d
70 Putnam Global 6/1/87 Open/Bon 316.30 13.78
Governmental Income d
Trust; A
71 Putnam Global 2/1/94 Open/Bon 41.10 13.73
Governmental Income d
Trust; B
72 Putnam Global 3/17/95 Open/Bon 2.50 13.72
Governmental Income d
Trust; M
73 Putnam Global Growth 9/1/67 Open/Equ 2,635. 12.10
Fund; A ity 90
74 Putnam Global Growth 4/27/92 Open/Equ 1,669. 11.73
Fund; B ity 60
75 Putnam Global Growth 3/1/95 Open/Equ 41.00 12.01
Fund; M ity
76 Putnam Global Growth 6/15/94 Open/Equ 46.40 12.27
Fund; Y ity
77 Putnam Growth and 1/5/95 Open/Bal 958.70 14.38
Income Fund II; A anced
78 Putnam Growth and 1/5/95 Open/Bal 1,144. 14.27
Income Fund II; B anced 90
79 Putnam Growth and 1/5/95 Open/Bal 140.80 14.31
Income Fund II; M anced
80 The Putnam Fund for 11/6/57 Open/Bal 16,051 20.87
Growth and Income; A anced .10
81 The Putnam Fund for 4/27/92 Open/Bal 13,137 20.64
Growth and Income; B anced .20
82 The Putnam Fund for 5/1/95 Open/Bal 320.90 20.77
Growth and Income; M anced
83 The Putnam Fund for 6/15/94 Open/Bal 436.50 20.90
Growth and Income; Y anced
84 Putnam High Yield 3/25/86 Open/Bon 1,322. 9.89
Advantage Fund; A d 00
85 Putnam High Yield 5/16/94 Open/Bon 984.90 9.85
Advantage Fund; B d
86 Putnam High Yield 12/1/94 Open/Bon 1.389 9.88
Advantage Fund; M d
87 Putnam High Yield 12/14/78 Open/Bon 3,258. 12.89
Trust; A d 20
88 Putnam High Yield 3/1/93 Open/Bon 1,226. 12.84
Trust; B d 40
89 Putnam High Yield 7/3/95 Open/Bon 24.30 12.88
Trust; M d
90 Putnam Health 5/28/82 Open/Equ 1,679. 55.83
Sciences Trust; A ity 60
91 Putnam Health 3/1/93 Open/Equ 567.90 54.00
Sciences Trust; B ity
92 Putnam Health 7/3/95 Open/Equ 23.60 55.48
Sciences Trust; M ity
93 Putnam Income Fund; A 11/1/54 Open/Bon 1,227. 7.05
d 90
94 Putnam Income Fund; B 3/1/93 Open/Bon 386.10 7.02
d
95 Putnam Income Fund; M 12/14/94 Open/Bon 28.90 7.02
d
96 Putnam Income Fund; Y 2/12/94 Open/Bon 137.70 7.06
d
97 Putnam Intermediate 2/16/93 Open/Bon 134.00 4.86
US Government Income d
Fund; A
98 Putnam Intermediate 2/16/93 Open/Bon 64.70 4.86
US Government Income d
Fund; B
99 Putnam Intermediate 4/3/95 Open/Bon 4.90 4.87
US Government Income d
Fund; M
10 Putnam International 1/3/95 Open/Equ 784.90 12.64
New Opportunities ity
Fund; A
10 Putnam International 7/21/95 Open/Equ 990.50 12.51
New Opportunities ity
Fund; B
10 Putnam International 7/21/95 Open/Equ 84.00 12.57
New Opportunities ity
Fund; M
10 Putnam Investors 12/1/95 Open/Equ 1,727. 11.31
Fund; A ity 10
10 Putnam Investors 3/1/93 Open/Equ 27.20 10.96
Fund; B ity
10 Putnam Investors 12/2/94 Open/Equ 28.60 11.18
Fund; M ity
10 Putnam MA Tax Exempt 10/23/89 Open/Bon 284.50 9.47
Income Fund; A d
10 Putnam MA Tax Exempt 7/15/93 Open/Bon 90.90 9.46
Income Fund; B d
10 Putnam MA Tax Exempt 5/12/95 Open/Bon 2.70 9.46
Income Fund; M d
10 Putnam MI Tax Exempt 10/23/89 Open/Bon 144.70 9.24
Income Fund; A d
11 Putnam MI Tax Exempt 7/15/93 Open/Bon 36.00 9.22
Income Fund; B d
11 Putnam MI Tax Exempt 4/17/95 Open/Bon 1.00 9.23
Income Fund; M d
11 Putnam MN Tax Exempt 10/23/89 Open/Bon 100.30 9.08
Income Fund; A d
11 Putnam MN Tax Exempt 7/15/93 Open/Bon 37.10 9.05
Income Fund; B d
11 Putnam MN Tax Exempt 4/3/95 Open/Bon 1.40 9.07
Income Fund; M d
11 Putnam Money Market 10/1/76 Open/Bon 2,231. 1.00
Fund; A d 50
11 Putnam Money Market 4/27/92 Open/Bon 479.70 1.00
Fund; B d
11 Putnam Money Market 12/8/94 Open/Bon 64.70 1.00
Fund; M d
11 Putnam Municipal 5/22/89 Open/Bon 813.30 9.12
Income Fund; A d
11 Putnam Municipal 1/4/93 Open/Bon 486.30 9.11
Income Fund; B d
12 Putnam Municipal 12/1/94 Open/Bon 12.70 9.11
Income Fund; M d
12 Putnam NJ Tax Exempt 2/20/90 Open/Bon 225.80 9.14
Income Fund; A d
12 Putnam NJ Tax Exempt 1/4/93 Open/Bon 9.50 9.13
Income Fund; B d
12 Putnam NJ Tax Exempt 5/1/95 Open/Bon 0.60 9.14
Income Fund; M d
12 Putnam NY Tax Exempt 9/2/83 Open/Bon 1,770. 8.95
Income Fund; A d 60
12 Putnam NY Tax Exempt 1/4/93 Open/Bon 226.10 8.93
Income Fund; B d
12 Putnam NY Tax Exempt 4/10/95 Open/Bon 1.80 8.95
Income Fund; M d
12 Putnam NY Tax Exempt 11/7/90 Open/Bon 165.70 9.04
Opportunities Fund; A d
12 Putnam NY Tax Exempt 2/1/94 Open/Bon 54.60 9.03
Opportunities Fund; B d
12 Putnam NY Tax Exempt 2/10/95 Open/Bon 2.30 9.02
Opportunities Fund; M d
13 Putnam Global Natual 7/24/80 Open/Equ 242.00 22.13
Resources Fund; A ity
13 Putnam Global Natual 2/1/94 Open/Equ 142.30 21.77
Resources Fund; B ity
13 Putnam Global Natual 7/3/95 Open/Equ 7.90 22.00
Resources Fund; M ity
13 Putnam New 8/31/90 Open/Equ 7,757. 46.37
Opportunities Fund; A ity 00
13 Putnam New 3/1/93 Open/Equ 6,558. 44.87
Opportunities Fund; B ity 40
13 Putnam New 12/1/94 Open/Equ 356.00 45.75
Opportunities Fund; M ity
13 Putnam New 7/19/94 Open/Equ 180.30 46.75
Opportunities Fund; Y ity
13 Putnam OH Tax Exempt 10/23/89 Open/Bon 184.90 9.11
Income Fund; A d
13 Putnam OH Tax Exempt 7/15/93 Open/Bon 49.50 9.09
Income Fund; B d
13 Putnam OH Tax Exempt 4/3/95 Open/Bon 1.00 9.11
Income Fund; M d
14 Putnam OTC & Emerging 11/1/82 Open/Equ 2,175. 15.90
Growth Fund; A ity 90
14 Putnam OTC & Emerging 7/15/93 Open/Equ 1,108. 15.32
Growth Fund; B ity 70
14 Putnam OTC & & 12/2/94 Open/Equ 174.60 15.65
Emerging Growth Fund; ity
M
14 Putnam International 2/28/91 Open/Equ 83.83 17.25
Growth Fund; A ity
14 Putnam International 6/1/94 Open/Equ 576.46 16.98
Growth Fund; B ity
14 Putnam International 12/1/94 Open/Equ 68.964 17.15
Growth Fund; M ity
14 Putnam PA Tax Exempt 7/21/89 Open/Bon 187.90 9.35
Income Fund; A d
14 Putnam PA Tax Exempt 7/15/93 Open/Bon 79.90 9.34
Income Fund; B d
14 Putnam PA Tax Exempt 7/3/95 Open/Bon 1.00 9.36
Income Fund; M d
14 Putnam Preferred 1/4/84 Open/Bon 114.80 8.96
Income Fund; A d
15 Putnam Preferred 4/20/95 Open/Bon 7.60 8.93
Income Fund; M d
15 Putnam Tax Free 9/20/93 Open/Bon 617.00 14.40
Income Fund HY; A d
15 Putnam Tax Free 9/9/85 Open/Bon 1,402. 14.40
Income Fund HY; B d 70
15 Putnam Tax Free 12/29/94 Open/Bon 17.30 14.39
Income Fund HY; M d
15 Putnam Tax Free 9/30/93 Open/Bon 214.80 15.27
Income Fund Insured; d
A
15 Putnam Tax Free 9/9/85 Open/Bon 333.60 15.29
Income Fund Insured; d
B
15 Putnam Tax Free 6/1/95 Open/Bon 1.80 15.27
Income Fund Insured; d
M
15 Putnam Tax Exempt 12/31/76 Open/Bon 2,075. 9.06
Income Fund; A d 20
15 Putnam Tax Exempt 1/4/93 Open/Bon 247.30 9.06
Income Fund; B d
15 Putnam Tax Exempt 2/16/95 Open/Bon 7.50 9.08
Income Fund; M d
16 Putnam Tax Exempt 10/26/87 Open/Bon 95.80 1.00
Money Market Fund d
16 Putnam US Government 2/8/84 Open/Bon 2,157. 12.91
Income Trust; A d 80
16 Putnam US Government 4/27/92 Open/Bon 1,298. 12.87
Income Trust; B d 00
16 Putnam US Government 2/6/95 Open/Bon 7.90 12.91
Income Trust; M d
16 Putnam US Government 4/11/94 Open/Bon 6.10 12.91
Income Trust; Y d
16 Putnam Utilities 11/19/90 Open/Bal 614.30 11.98
Growth and Income anced
Fund; A
16 Putnam Utilities 4/27/92 Open/Bal 635.60 11.91
Growth and Income anced
Fund; B
16 Putnam Utilities 33297 Open/Bal 7.90 11.96
Growth and Income anced
Fund; M
16 Putnam Vista Fund; A 6/3/68 Open/Equ 2,545. 121.6
ity 00 0
16 Putnam Vista Fund; B 3/1/93 Open/Equ 1,197. 11.73
ity 50
17 Putnam Vista Fund; M 12/1/94 Open/Equ 94.40 11.99
ity
17 Putnam Vista Fund; Y 3/28/95 Open/Equ 235.30 12.26
ity
17 Putnam Voyager Fund 4/14/93 Open/Equ 471.60 17.86
II; A ity
17 Putnam Voyager Fund 10/2/95 Open/Equ 433.90 16.71
II; B ity
17 Putnam Voyager Fund 10/2/95 Open/Equ 49.60 17.71
II; M ity
17 Putnam Voyager Fund; 4/1/96 Open/Equ 10,841 18.87
A ity .20
17 Putnam Voyager Fund; 4/27/92 Open/Equ 5,528. 7.98
B ity 80
17 Putnam Voyager Fund; 12/1/94 Open/Equ 204.90 18.60
M ity
17 Putnam Voyager Fund; 4/1/94 Open/Equ 1,028. 19.08
Y ity 80
17 Putnam CA Inv GD Muni 11/27/92 Closed/B 70.20 15.24
ond
18 Putnam Convertible 6/29/95 Closed/B 103.50 27.94
Opportunity and ond
Income Fund
18 Putnam Dividend 9/28/89 Closed/B 124.50 11.51
Income Fund ond
18 Putnam High Income 7/9/87 Closed/B 138.40 10.34
Convertible and Bond ond
18 Putnam Intermediate 6/27/88 Closed/B 527.80 8.20
Government Income ond
Fund
18 Putnam Investment GD 10/26/89 Closed/B 245.60 11.92
Municipal I ond
18 Putnam Investment GD 11/27/92 Closed/B 188.50 14.11
Municipal II ond
18 Putnam Investment GD 11/29/93 Closed/B 52.90 13.22
Municipal III ond
18 Putnam Managed High 6/25/93 Closed/B 109.07 14.53
Yield ond
18 Putnam Managed 2/24/89 Closed/B 627.40 13.70
Municipal Income Fund ond
18 Putnam Master Income 12/28/87 Closed/B 488.00 9.19
Trust ond
19 Putnam Master 4/29/88 Closed/B 331.60 8.63
Intermediate Income ond
Fund
19 Putnam Municipal 5/28/93 Closed/B 16.20 21.34
Opportunity Trust ond
19 Putnam NY Investment 11/27/92 Closed/B 39.60 13.90
GD Municipal ond
19 Putnam Premier Income 2/29/88 Closed/B 1,231. 8.78
Trust ond 00
19 Putnam Tax Free Heath 6/29/92 Closed/B 204.00 14.78
Care Fund ond
19 Putnam American 10/2/95 Open/Equ 23.60 12.53
Renaissance Fund A ity
19 Putnam Conv. Opp. and 6/26/95 Closed/B 1,384. 23.01
Income Trust ond 00
19 Putnam Diversified 2/19/95 Open/Bon 46.10 8.61
Income Trust II A d
19 Putnam Diversified 2/19/96 Open/Bon 67.80 8.61
Income Trust II B d
19 Putnam Diversified 2/19/96 Open/Bon 7.40 8.61
Income Trust II M d
20 Putnam Diversified 7/1/96 Open/Bon 19.00 12.45
Income Trust Y d
20 Putnam Equity Fund 97 12/30/96 Open/Equ 2,054. 8.40
ity 00
20 Putnam High Yield 1/1/97 Open/Bon 11.60 8.97
Total Return Fund A d
20 Putnam High Yield 1/1/97 Open/Bon 13.20 8.95
Total Return Fund B d
20 Putnam High Yield 1/1/97 Open/Bon 1.50 8.96
Total Return Fund M d
20 Putnam VT Interl. 1/1/97 Open/Bal 13.30 11.37
Growth and Income anced
20 Putnam VT Interl. New 1/1/97 Open/Equ 96.20 10.22
Opprotunities ity
20 Putnam VT Interl. 1/1/97 Open/Equ 103.80 11.26
Growth ity
20 Putnam Balanced Fund 10/2/95 Open/Bal 2.60 11.45
anced
20 Putnam Emging Mkts Fd 10/2/95 Open/Equ 49.40 10.95
A ity
21 Putnam Emging Mkts Fd 10/2/95 Open/Equ 38.00 10.89
B ity
21 Putnam Emging Mkts Fd 10/2/95 Open/Equ 4.00 10.91
M ity
21 Putnam Global Growth 1/3/95 Open/Equ 2.70 11.69
and Income Fund ity
21 Putnam New Value Fund 1/3/95 Open/Equ 428.90 14.64
A ity
21 Putnam New Value Fund 2/26/96 Open/Equ 406.50 14.50
B ity
21 Putnam New Value Fund 2/26/96 Open/Equ 46.70 14.55
M ity
21 Putnam International 8/1/96 Open/Bal 218.20 10.57
Growth Income - CLA anced
21 Putnam International 8/1/96 Open/Bal 223.80 10.52
Growth Income - CLB anced
21 Putnam International 8/1/96 Open/Bal 22.10 10.54
Growth Income - CLM anced
Fund List for SR and Semi
(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.$ 24,854,060 (approximately 3 billion Yen) as
of
the end of August, 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.$ 48,657,467 (approximately 5.8 billion Yen)
as
of the end of August, 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 August,
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 Asset
Management
Co., Ltd., and as the Underwriting Company and the
Agent Securities Company for International Bond
Index Fund, Fidelity Special Growth Fund, A CM
International Healthcare Fund, ACM Global
Investments, European and Asian 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
Morgan Stanley Money Market Family.
(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
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)
Investment Transfer
Name of Officer Fund Management Agent and
or Trustee Company Shareholder
Service Agent
George Putnam Chairman Chairman and None
and Director
Trustee
Charles E. Executive Managing None
Porter Vice Director
President
Patricia C. Senior Senior Vice None
Flaherty Vice President
President
Lawrence J. Trustee President and None
Lasser and Vice CEO
President
Gordon H. Vice Senior Director
Silver President Managing
Director
Gary N. Coburn Vice Senior None
President Managing
Director
Edward H. Vice Managing None
D'Alelio President Director
William J. Vice Managing None
Curtin President Director
Rosemary H. Vice Senior Vice None
Thonsen President President
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 August, 1997)
$ Yen
(in thousands)
a. Total Assets 3,808,567,924 454,933,438
b. Total Liabilities 105,752,995 12,632,195
c. Total Net Assets (a-b) 3,702,814,929 442,301,243
d. Total Number of Shares Class A 133,717,998 Shares
Outstanding Class B
100,095,566 Shares
Class M 141,312,934 Shares
e. Net Asset Value Class A
9.89 Yen1,181
Class B 9.85 Yen1,177
Class M 9.88 Yen 1,180
3, b. Names of Major
70 Portfolio Securities 2, (Top 30 Holdings)
81
4,
92
9
Objects of
Investment by Putnam
High Yield Advantage
Fund are mainly
securities other than
shares, except for
certain preferred
stock.
<TABLE> <CAPTION>
<C> <C>
<S> <C> <C> <C> <C>
U.S.$
Name Inter Matur Par
Acquisit Current
of est ity Velue
ion
Name of Issue Countr Kind of Rate Date ($100
Curr Cost Value
y Issue (%) 0)
ency
1. Transamerican Energy U.S.A. Corporat 78,40 US$
60,583,0 59,388,
144A e Bond 0
18 000
2. Cencall Communications U.S.A. Corporat 55,97 US$
21,636,2 47,154,
Corp. e Bond 0
92 725
3. Diamond Cable U.S.A. Corporat 51,77 US$
34,689,5 36,954,
Communication Co. e Bond 5
91 406
4. Cablevision Systems U.S.A. Preferre $11.1
27,273,3 30,591,
Corp. d Stock 25
99 672
5. Adelphia U.S.A. Corporat 9 7/8 2007 27,15 US$
26,937,4 27,082,
Communications Corp. e Bond 0
16 125
144A
6. Revlon Worldwide Corp. U.S.A. Corporat 0 2001 37,89 US$
24,793,0 26,759,
144A e Bond 0
51 813
7. ICG Holdings, Inc. U.S.A. Corporat 0 2005 34,50 US$
18,807,7 26,478,
e Bond 0
49 750
8. Transamerican Energy U.S.A. Corporat 11 2002 26,59 US$
26,595,0 25,797,
144A e Bond 1/2 5
00 150
9. Iridium LLC/Capital U.S.A. Corporat 14 2005 22,64 US$
21,746,3 24,116,
Corp. 144A e Bond 5
17 925
10 Tenet Healthcare Corp. U.S.A. Corporat 8 5/8 2007 23,17 US$
23,918,9 23,870,
. e Bond 5
26 250
11 First Nationwide U.S.A. Corporat 10 2003 20,90 US$
22,340,4 22,990,
. Holdings e Bond 5/8 0
75 000
12 Mesa Operating Co. U.S.A. Corporat 0 2006 28,38 US$
21,970,1 22,282,
. e Bond 5
69 225
13 Viacom International, U.S.A. Corporat 8 2006 20,75 US$
19,252,6 20,386,
. Inc. e Bond 0
56 875
14 Nextel Communications U.S.A. Preferre $13
18,325,0 20,020,
. Inc. 144A d Stock
00 063
15 Midland Funding Corp. U.S.A. Corporat 11 2005 16,96 US$
16,688,2 19,924,
. e Bond 3/4 5
66 375
U.S.$
Name Inter Matur Par
Acquisit Current
of est ity Value
ion
Name of Issue Countr Kind of Rate Date (US$1
Curr Cost Value
y Issue (%) 000)
ency
16 Sun Healthcare Group U.S.A. Corporat 9 1/2 2007 18,98 US$
19,066,2 19,454,
. Inc. 144A e Bond 0
94 500
17 GST Telecommunicaions, U.S.A. Corporat 0 2005 27,54 US$
15,488,5 18,594,
. Inc. e Bond 8
28 900
18 Foxl Liberty Networks U.S.A. Corporat 8 7/8 2007 18,48 US$
18,480,0 18,249,
. LLC 144A e Bond 0
00 000
19 Long Island Lighting U.S.A. Corporat 8.9 2019 17,20 US$
17,924,7 17,993,
. Co. e Bond 0
50 436
20 International U.S.A. Corporat 0 2006 24,75 US$
14,709,2 17,943,
. Cabletel, Inc. e Bond 0
38 750
21 Consorcio (MC) Mexico Corporat 0 2002 19,73 US$
15,386,5 17,904,
. Holdings e Bond 0
50 975
22 AMC Entertainment, U.S.A. Corporat 9 1/2 2009 17,28 US$
17,429,0 17,371,
. Inc. 144A e Bond 5
15 425
23 Hyperion U.S.A. Corporat 12 2004 16,64 US$
16,640,0 17,056,
. Telecommunications e Bond 1/4 0
00 000
24 Worldcom Inc. U.S.A. Corporat 8 7/8 2006 15,86 US$
16,025,6 16,935,
. e Bond 5
25 925
25 Repap New Brunswick Canada Corporat 10 2005 17,54 US$
17,477,4 16,623,
. e Bond 5/8 5
50 888
26 Mobile U.S.A. Corporat 13 2002 14,75 US$
16,223,1 16,114,
. Telecommunications e Bond 1/2 0
21 375
Tech.
27 International Semi- Canada Corporat 0 2003 25,56 US$
14,403,7 16,102,
. Tech, Corp. e Bond 0
46 800
28 Australis Media, Ltd. Austra Unit 0 2003 19,68 US$
14,499,6 15,891,
. lia 0
30 600
29 Union Carbide Global U.S.A. Corporat 12 2005 13,91 US$
15,786,4 15,845,
. Enterprises e Bond 5
50 706
30 Florida Coast Paper U.S.A. Corporat 12 2003 14,65 US$
15,065,3 15,822,
. e Bond 3/4 0
75 000
</TABLE>
FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY
[Omitted, in Japanese version, financial statements of
the Fund and Japanese translations thereof are
incorporated here]
VI. SUMMARY OF INFORMATION CONCERNING FOREIGN INVESTMENT
TRUST SECURITIES
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 isare no annual shareholders' meetings. Special
shareholders' meeting shallmay be held from time to time
as required by the Agreement and Declaration of Trust and
the Investment Company Act of 1940.
4. No special privilege is granted to Shareholders.
The acquisition of Shares by any person may be
restricted.
VII. REFERENCE INFORMATION
VI. MISCELLANEOUS
1. The following documents concerning the Fund have
been filed with the Ministry of Finance of Japan.
November 15, 1996 Securities Registration
Statement
November 22, 1996 Amendment to Securities
Regiatration Statement
December 16, 1996 Amendment to Securities
Regiatration Statement
April 15, 1997 Securities
Registration Statement/Securities
Report (the 2nd term)/Amendment to
Securities Registration Statement
August 29, 1997 Semi-annual
Report (during the 3rd
term)/Amendment to Securities
Registration 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, 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 of Foreign Securities Transactions
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, priting colour,
design etc. of the Summarized Preliminary Prospectus
may varyetc. of the Summarized Prelimin ary 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
thefluctuation 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.
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
disposition 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, and (b)
diversify its holdings so that, at the close of each quarter
of its taxable year, (i) at least 50% of the value of its
total assets consists of cash, cash items, U.S. Government
Securities, securities of other regulated investment
companies, and other securities limited generally with respect
to any one issuer to not more than 5% of the total assets of
the Fund and not more than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25 % of the
value of its assets is invested in the securities of any
issuer (other than those of the U.S. Government or other
regulated investment companies). In addition, until the start
of the Fund's first tax year beginning after August 5, 1997,
the Fund must derive less than 30% of its gross income from
the sale or other disposition of certain assets (including
stock or securities and certain options, futures contracts,
forward contracts and foreign currencies) held for less than
three months in order to qualify as a regulated investment
company. In order to receive the favorable tax treatment
accorded regulated investment companies and their
shareholders, moreover, the 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, the 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.
Distributions from the Fund will be taxable to
shareholders as ordinary income to the extent derived from the
Fund's investment income and net short-term gains. Pursuant
to the Taxpayer Relief Act of 1997, two different tax rates
apply to net capital gains (that is, the excess of net gains
from capital assets held for more than one year over net
losses from capital assets held for not more than one year).
One rate (generally 28%) applies to net gains on capital
assets held for more than one year but not more than18 months
("mid-term gains") and a second, preferred rate (generally
20%) applies to the balance of such net capital gains
("adjusted net capital gains"). Distributions of net capital
gains will be treated in the hands of shareholders as mid-term
gains to the extent designated by the Fund as deriving from
net gains from assets held for more than one year but not more
than 18 months, and the balance will be treated as adjusted
net capital gains. Distributions of mid-term gains and
adjusted net capital gains will be taxable to shareholders as
such, regardless of how long a shareholder has held the 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 the Fund shares may
give rise to a gain or loss. In general, any gain realized
upon a taxable disposition of shares will be treated as mid-
term capital gain if the shares have been held for more than12
months but not more than 18 months, and as adjusted net
capital gains if the shares been held for more than 18 months.
Otherwise the gain on the sale, exchange or redemption of the
Fund shares will be treated as short-term capitalgain. In
general, any loss realized upon a taxable disposition of
shares will be treated as long-term capital loss if the shares
have been held for more then 12 months, and otherwise as short-
term capital 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).
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
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(NAV Sale)
PUTNAM HIGH YIELD ADVANTAGE FUND
AMENDMENT TO 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
Signature [Harume Nakano]
(Seal)
Ken
Miura
Attorney-at-Law
Signature [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
- ii -
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 4.6672,455 billion U.S.
dollars (Yen50.5296.7 billion).
Note: U.S.$ amount is translated into Japanese Yen at the rate
of U.S.$l=Yen120.85, 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 = Yen120.85, 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:
