[Translation] [H&M Final]
SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
ANNUAL SECURITIES REPORT
(the Fifth Term)
From: December 1, 1998
To: November 30, 1999
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
PUTNAM HIGH YIELD ADVANTAGE FUND
SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
PUTNAM HIGH YIELD ADVANTAGE FUND
SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date: April 21, 2000
Name of the Registrant Fund: PUTNAM HIGH YIELD ADVANTAGE FUND
Name and Official Title Charles E. Porter
of Representative of Trust: Executive Vice President
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
-------------------------
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
---------------------
(Seal)
Address or Place of Business: Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM HIGH YIELD
Offering or Sale of Foreign ADVANTAGE FUND
Investment Fund Securities:
Type and Aggregate Amount of Up to 176 million Class M Shares
Foreign Investment Fund Securities Up to the total amount obtained by
to be Publicly Offered or Sold: aggregating the respective net asset
value per Class M Share in respect of
176 million Class M Shares
(The maximum amount expected to be sold
is 1,362.24 million U.S. dollars
(YEN149.7 billion).
Note 1: U.S.$ amount is translated into Japanese Yen at the rate
of U.S.$l.00= YEN 109.90 the mean of the exchange rate quotations
by The Bank of Tokyo-Mitsubishi, Ltd. for buying and selling
spot dollars by telegraphic transfer against yen on February
29, 2000.
Note 2: The maximum amount expected to be sold is an amount
calculated by multiplying the net asset value per Class M Share
as of the end of February, 2000 (U.S.$ 7.74) by 176 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
8 including front and back pages.)
C O N T E N T S
Japanese This
Original English
Translation
PART I. INFORMATION CONCERNING SECURITIES 1 1
PART II. INFORMATION CONCERNING ISSUER 4 6
I. DESCRIPTION OF THE FUND 4 6
II. OUTLINE OF THE FUND 4 6
III. OUTLINE OF THE OTHER RELATED COMPANIES 4 6
IV. FINANCIAL CONDITION OF THE FUND 4 6
V. SUMMARY OF INFORMATION CONCERNING
THE EXERCISE OF RIGHTS BY HOLDERS OF
FOREIGN INVESTMENT FUND SECURITIES 4 6
VI. MISCELLANEOUS 4 6
PART III. SPECIAL INFORMATION 5 9
I. OUTLINE OF THE SYSTEM OF INVESTMENT
TRUSTS IN MASSACHUSETTS 5 9
II. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY 11 17
III. FORM OF FOREIGN INVESTMENT
FUND SECURITIES 11 17
PART I. INFORMATION CONCERNING SECURITIES
1. NAME OF FUND: PUTNAM HIGH YIELD ADVANTAGE FUND
(hereinafter referred to as the "Fund")
2. NATURE OF FOREIGN Four classes of shares (Class A shares,
INVESTMENT FUND SECU- Class B shares, Class M shares and
RITIES CERTIFICATES: Class Y shares). Registered shares
without par value. In Japan, only
Class M shares (hereinafter referred
to as the "Shares") are publicly
offered. No rating has been acquired.
3. NUMBER OF SHARES TO Up to 176 million Shares
BE OFFERED FOR SALE
(IN JAPAN)
4. TOTAL AMOUNT OF Up to the total amount obtained by
OFFERING PRICE: aggregating the respective net asset
value per Share in respect of
176 million Shares
(The maximum amount expected to be
sold is 1,362.24 million U.S. dollars
(YEN149.7 billion).
Note 1: The maximum amount expected to be sold is the amount
calculated, for convenience, by multiplying the net asset
value per Share as of the end of February, 2000 ($7.74) by
the number of Shares to be offered (176 million).
Note 2: Dollar amount is translated for convenience at the
rate of $1.00= YEN 109.90 (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 February 29, 2000). 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: A "Fund 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 Shares may be purchased in a minimum
NUMBER OF SHARES amount of 100 shares and in integral
FOR SUBSCRIPTION: multiples of 10 shares.
8. PERIOD OF SUBSCRIPTION: From: May 8, 2000 (Monday)
To: May 7, 2001 (Monday)
Provided that the subscription is
handled only on a Fund Business Day
and a business day when securities
companies are open for business
in Japan.
9. DEPOSIT FOR SUBSCRIPTION: None.
10. PLACE OF SUBSCRIPTION: Kokusai Securities Co., Ltd.
(hereinafter referred to as "Kokusai"
or the "Distributor")
Tokyo-Sumitomo Twin 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
OF PAYMENT: and 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 13 in the following securities
report). The total issue price 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. 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
purchase orders and repurchase requests for the Shares received directly
or indirectly through other distributor or Sales Handling Companies
(together with Kokusai, hereinafter referred to as the "Sales Handling
Companies") to the Fund.
Note: The "Sales Handling Company" shall mean an intermediary securities
company or intermediary registered financial institution which enters
into an agreement concerning the brokerage business of Fund Shares with
the Distributor to engage in the business of forwarding investor's
applications for subscription and requests for repurchase of Fund
Shares to the Distributor and in the business of handling the services
concerning acceptance of investors' subscription moneys and the services
concerning payments of the repurchase proceeds to the investors and
other services.
(C) The Fund has appointed Kokusai as the Agent Company in Japan.
Note: "The Agent Company" shall mean an agent 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 distributor or Sales Handling Companies
rendering such other services.
13. MISCELLANEOUS:
(A) Method of Subscription:
Investors who subscribe for Shares shall enter into an agreement with
the Handling Securities Company concerning the foreign securities
transactions. For this purpose, the Distributor or the Sales Handling
Company shall deliver to investors an Agreement of Foreign Securities
Transactions Account and other prescribed agreements (hereinafter
referred to as the "Account Agreement") and investors shall submit to
the Distributor the or Sales Handling Company an Application for Opening
of Transactions Account opened in accordance with Account Agreement.
The subscription amount shall be paid in yen in principal, and the
exchange rate between Dollars and Yen shall be determined by the
Distributor or the Sales Handling 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) PERFORMANCE INFORMATION
The following information provides some indication of the Fund's risks.
The chart shows year-to-year changes in the performance of the Fund's
class M shares. The table following the chart compares the Fund's
performance to that of a broad measure of market performance. Of
course, a Fund's past performance is not an indication of future
performance.
[GRAPHIC OMITTED: CALENDAR YEAR TOTAL RETURNS FOR CLASS M SHARES]
Calendar year total returns for class M shares
1990 -8.30%
1991 45.24%
1992 18.38%
1993 20.61%
1994 -5.36%
1995 18.58%
1996 10.26%
1997 13.11%
1998 -9.78%
1999 5.69%
Performance figures in the bar chart do not reflect the impact of sales
charges. If they did, performance would be less than that shown.
During the periods shown in the chart, the highest return for a quarter
was 17.75% (quarter ending 3/31/91) and the lowest return for a quarter
was -12.04% (quarter ending 9/30/98).
Performance of class M shares shown in the bar chart and in the table
that follows, for periods prior to their inception on December 1, 1994,
is derived from the historical performance of the Fund's class A shares
(not offered in Japan), adjusted to reflect the higher operating
expenses of class M shares and, in the table only, the appropriate sales
charge.
Average annual total returns (for periods ending 12/31/99)
- ------------------------------------------------------------------------
Past 1 year Past 5 years Past 10 years
- ------------------------------------------------------------------------
Class M 2.31% 6.42% 9.39%
- ------------------------------------------------------------------------
First Boston
High Yield
Index 3.28% 9.08% 11.06%
- ------------------------------------------------------------------------
Unlike the bar chart, this performance information reflects the impact
of sales charges. Class M share performance reflects the current maximum
initial sales charge. The Fund's performance is compared to the First
Boston High Yield Index, an unmanaged index of lower-rated,
higher-yielding U.S. corporate bonds.
(C) FEES AND EXPENSES
This table summarizes the fees and expenses investors may pay if they
invest in the Fund. Expenses are based on the Fund's last fiscal year.
Shareholder Fees (fees paid directly from investors' investment)
- ------------------------------------------------------------------------
Class M Shares
- ------------------------------------------------------------------------
Maximum Sales Charge (Load)
Imposed on Purchases
(as a percentage of the
offering price) 3.25%
- ------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as a percentage of the original
purchase price or redemption proceeds,
whichever is lower) NONE
- ------------------------------------------------------------------------
Annual Operating Expenses (expenses that are deducted from fund assets)
- ------------------------------------------------------------------------
Total Annual
Management Distribution Other Fund Operating
Fee Fee Expenses Expenses
- ------------------------------------------------------------------------
Class M 0.56% 0.50% 0.14% 1.20%
- ------------------------------------------------------------------------
(D) EXAMPLE
The example translates the expenses shown in the preceding table into
dollar amounts. By doing this, investors can more easily compare the
cost of investing in the Fund to the cost of investing in other mutual
funds. The example makes certain assumptions. It assumes that
investors invest $10,000 in the Fund for the time periods shown and then
redeem all the investors' shares at the end of those periods. It also
assumes a 5% return on investor's investment each year and that the
Fund's operating expenses remain the same. The example is hypothetical;
actual costs and returns may be higher or lower.
- ------------------------------------------------------------------------
1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------
Class M $443 $694 $963 $1,732
- ------------------------------------------------------------------------
(E) Offerings other than in Japan:
Shares are simultaneously offered in the United States of America.
PART II. INFORMATION CONCERNING ISSUER
I. DESCRIPTION OF THE FUND
The description in this item is the same as the description in I.
DESCRIPTION OF THE FUND of the Securities Report set forth below (The
Securities Report mentioned below, from page 1 to page 21)
II. OUTLINE OF THE FUND
The description in this item is the same as the description in II.
OUTLINE OF THE TRUST of the Securities Report set forth below (The
Securities Report, from page 22 to page 50)
III. OUTLINE OF THE OTHER RELATED COMPANIES
The description in this item is same as the description in III. OUTLINE
OF THE OTHER RELATED COMPANIES of the Securities Report set forth below
(The Securities Report, from page 51 to page 52)
IV. FINANCIAL CONDITIONS OF THE FUND
The description in this item is the same as the description in IV.
FINANCIAL CONDITIONS OF THE FUND of the Securities Report set forth
below (The Securities Report, from page 55 to page 156)
V. SUMMARY OF INFORMATION CONCERNING THE EXERCISE OF RIGHTS
BY HOLDERS OF FOREIGN INVESTMENT FUND SECURITIES
The description in this item is the same as the description in VI.
SUMMARY OF INFORMATION CONCERNING THE EXERCISE OF RIGHTS BY HOLDERS OF
FOREIGN INVESTMENT FUND SECURITIES of the Securities Report set forth
below (The Securities Report, page 174)
VI. MISCELLANEOUS
1. The following documents concerning the Fund have been filed with the
Director of Kanto Local Finance Bureau.
April 15, 1999 Securities Registration Statement/
Securities Report (the 4th term)/
Amendment to Securities Registration
Statement
August 31, 1999 Semi-annual Report (during the 5th 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 to the extent permitted by applicable law, 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, other books and internet.
(b) The layout, quality of papers, printing colour, design etc. of the
Summarized Preliminary Prospectus may vary depending on manner of usage.
Photos and illustrations set forth in the attached may be used.
(c) For information of the Fund's achievements, the changes of the net
asset value per share and the fluctuation rates since the establishment
of the Fund or for the latest 3 months, 6 months, one year, two years,
three years or five years may be set out in the figures or graphs. Such
information regarding the Fund's achievement may be converted into and
presented in yen.
Also, the average of the annual yield (including the dividends)
calculated from the beginning of the relevant year, in respect of
immediately preceding one year and from the establishment of the Fund
may be shown. In addition, the following note concerning the method of
calculation for such average rate of the annual yield may be added.
" Yield performance is calculated as the overall yield on investment
according to the following calculation method assuming the immediate
reinvestment of dividend before tax and may be different from the yield
obtained if unitholders actually reinvest their dividends. Further, the
overall yield on investment shows the performance during past certain
period and does not guarantee the future investment results.
(1) Calculation of cumulative increase ratio by distribution:
The amount shall be obtained by multiplying together all the amounts of
such dividend as distributed during the yield calculation period divided
by the net asset value per unit on the ex dividend day of the relevant
distribution plus 1.
(2) Calculation of the yield on investment (including dividend) (the
overall yield on investment):
( NAV at term end x cumulative increase )
Overall yield on ( ratio by distribution )
Investment (%) = 100x (--------------------- -1 )
( NAV at beginning of term )
NAV at beginning of term means the net asset value
per unit calculated at the beginning of the yield
calculation period.
NAV at term end means the net asset value per unit
calculated at the end of the yield calculation period
(3) Conversion into annual rate:
Annual rate of the overall yield on investment is obtained according to
the following formula:
Annual overall yield on investment (%)
= 100 x (1 + (overall yield on investment/100))x
( 1 )
( x = -------------------------------- - 1 )
(number of days during yield calculation period/365) "
PART III. SPECIAL INFORMATION
I. OUTLINE OF THE SYSTEM OF INVESTMENT TRUSTS IN MASSACHUSETTS
Below is an outline of certain general information about open-end U.S.
investment companies. This outline is not intended to provide
comprehensive information about such investment companies or the various
laws, rules or regulations applicable to them, but provides only a brief
summary of certain information which may be of interest to investors.
The discussion below is qualified in its entity by the complete
registration statement of the Fund and the full text of any referenced
statutes and regulations.
I. Massachusetts Business Trusts
A. General Information
Many investment companies are organized as Massachusetts business
trusts. A Massachusetts business trust is organized pursuant to a
declaration of trust, setting out the general rights and obligations of
the shareholders, trustees, and other related parties. Generally, the
trustees of the trust oversee its business, and its officers and agents
manage its day-to-day affairs.
Chapter 182 of the Massachusetts General Laws applies to certain
"voluntary associations", including many Massachusetts business trusts.
Chapter 182 provides for, among other things, the filing of the
declaration of trust with the Secretary of State of the Commonwealth of
Massachusetts and the filing by the trust of an annual statement
regarding, among other things, the number of its shares outstanding and
the names and addresses of its trustees.
B. Shareholder Liability
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of a trust.
Typically, a declaration of trust disclaims shareholder liability for
acts or obligations of the trust and provides for indemnification out of
trust property for all loss and expense of any shareholder held
personally liable for the obligations of a trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which a particular trust would be unable
to meet its obligations.
II. United States Investment Company Laws and Enforcement
A. General
In the United States, pooled investment management arrangements which
offer shares to the public are governed by a variety of federal statutes
and regulations. Most mutual funds are subject to these laws. Among
the more significant of these statutes are:
1. Investment Company Act of 1940
The Investment Company Act of 1940, as amended (the "1940 Act"), in
general, requires investment companies to register as such with the U.S.
Securities and Exchange Commission (the "SEC"), and to comply with a
number of substantive regulations of their operations. The 1940 Act
requires an investment company, among other things, to provide periodic
reports to its shareholders.
2. Securities Act of 1933
The Securities Act of 1933, as amended (the "1933 Act"), regulates many
sales of securities. The Act, among other things, imposes various
registration requirements upon sellers of securities and provides for
various liabilities for failures to comply with its provisions or in
respect of other specified matters.
3. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended (the "1934 Act"),
regulates a variety of matters involving, among other things, the
secondary trading of securities, periodic reporting by the issuers of
securities, and certain of the activities of transfer agents and brokers
and dealers.
4. The Internal Revenue Code
An investment company is generally an entity subject to federal income
taxation under the Internal Revenue Code of 1986, as amended (the
"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
activities of brokers, dealers, or other persons directly or indirectly
engaged in activities related to the offering and sale of securities to
their residents or within their jurisdictions.
C. Offering Shares to the Public
An investment company ("investment company" or "fund") offering its
shares to the public must meet a number of requirements, including,
among other things, registration as an investment company under the 1940
Act; registration of the sale of its shares under the 1933 Act;
registration of the fund, the sale of its shares, or both, with state
securities regulators; delivery of a current prospectus to current or
prospective investors; and so forth. Many of these requirements must be
met not only at the time of the original offering of the fund's shares,
but compliance must be maintained or updated from time to time
throughout the life of the fund.
D. Ongoing Requirements
Under U.S. law, a fund that continuously offers its shares is subject to
numerous ongoing requirements, including, but not limited to;
1. Updating its prospectus if it becomes materially inaccurate or
misleading;
2. Annual update of its registration statement;
3. Filing semi-annual and annual financial reports with the SEC and
distributing them to shareholders;
4. Annual trustee approval of investment advisory arrangements,
distribution plans, underwriting arrangements, errors and
omissions/director and officer liability insurance, foreign custody
arrangements, and auditors;
5. Maintenance of a code of ethics; and
6. Periodic board review of certain fund transactions, dividend
payments, and payments under a fund's distribution plan.
III. Management of a Fund
The board of directors or trustees of a fund are responsible for
generally overseeing the conduct of a fund's business. The officers and
agents of a fund are generally responsible for the day-to-day operations
of a fund. The trustees and officers of a fund may or may not receive a
fee for their services.
The investment adviser to a fund is typically responsible for
implementing the fund's investment program. The adviser typically
receives a fee for its services based on a percentage of the net assets
of a fund. Certain rules govern the activities of investment advisers
and the fees they may charge. In the United States, investment advisers
to investment companies must be registered under the Investment Advisers
Act of 1940, as amended.
IV. Share Information
A. Valuation
Shares of a fund are generally sold at the net asset value next
determined after an order is received by a fund, plus any applicable
sales charges. A fund normally calculates its net asset value per share
by dividing the total value of its assets, less liabilities, by the
number of its shares outstanding. Shares are typically valued as of the
close of regular trading on the New York Stock Exchange (4:00 p.m., New
York time) each day the Exchange is open.
B. Redemption
Shareholders may generally sell shares of a fund to that fund any day
the New York Stock Exchange 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
A shareholder 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 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" and to receive
the favorable tax treatment accorded regulated investment companies and
their shareholders, the Fund must, among other things, (a) derive at
least 90% of its gross income from dividends, interest, payments with
respect to certain securities loans, and gains from the sale of stock,
securities and foreign currencies, or other income (including but not
limited to gains from options, futures, or forward contracts) derived
with respect to its business of investing in such stock, securities, or
currencies; (b) distribute with respect to each taxable year at least
90% of the sum of its taxable net investment income, its net tax-exempt
income, and the excess, if any, of its net short-term capital gains over
net long-term capital losses for such year; (c) diversify its holdings
so that, at the close of each quarter of its taxable year, (i) at least
50% of the value of its total assets consists of cash, cash items, U.S.
Government Securities, securities of other regulated investment
companies and other securities limited generally with respect to any one
issuer to not more than 5% of the total assets of the Fund and not more
than 10% of the outstanding voting securities of such issuer, and (ii)
not more than 25 % of the value of its assets is invested in the
securities (other than those of the U.S. Government or other regulated
investment companies) of any one issuer or of two or more issuers which
the Fund controls and which are engaged in the same, similar or related
trades or businesses.
If the Fund qualifies as a regulated investment company that is accorded
special tax treatment, the Fund will not be subject to federal income
tax on income paid to its shareholders in the form of dividends
(including capital gain dividends).
If the Fund failed to qualify as a regulated investment company accorded
special tax treatment in any taxable year, the Fund would be subject to
tax on its taxable income at corporate rates, and all distributions from
earnings and profits, including any distributions of net tax-exempt
income and net long-term capital gains, would be taxable to shareholders
as ordinary income. In addition, the Fund could be required to
recognize unrealized gains, pay substantial taxes and interest and make
substantial distributions before requalifying as a regulated investment
company that is accorded special tax treatment.
If the Fund fails to distribute in a calendar year substantially all of
its ordinary income for such year and substantially all of its capital
gain net income for the one-year period ending October 31 (or later if
the Fund is permitted so to elect and so elects), plus any retained
amount from the prior year, the Fund will be subject to a 4% excise tax
on the undistributed amounts. A dividend paid to shareholders by the
Fund in January of a year generally is deemed to have been paid by the
Fund on December 31 of the preceding year, if the dividend was declared
and payable to shareholders of record on a date in October, November or
December of that preceding year. The Fund intends generally to make
distributions sufficient to avoid imposition of the 4% excise tax.
Fund distributions will be taxable to shareholders as ordinary income,
except that any distributions designated by the Fund as deriving from
net gains on securities held for more than one year will be taxable as
such, regardless of how long a shareholder has held shares in the Fund.
Distributions will be taxable as described above whether received in
cash or in shares through the reinvestment of distributions.
Shareholders who are not subject to U.S. federal income tax on their
income generally will not have to pay such tax on amounts distributed to
them.
Distributions from capital gains are made after applying any available
capital loss carryovers.
The Fund's transactions in non-U.S. currencies, non-U.S.
currency-denominated debt securities and certain non-U.S. 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 non-U.S.
currency concerned.
Investment by the Fund in "passive non-U.S. investment companies" could
subject the Fund to a U.S. federal income tax or other charge on the
proceeds from the sale of its investment in such a company; however,
this tax can be avoided by making an election to mark such investments
to market annually or to treat the passive non-U.S. investment company
as a "qualified electing fund".
A "passive non-U.S. investment company" is any non-U.S. corporation: (i)
75 percent or more of the income of which for the taxable year is
passive income, or (ii) the average percentage of the assets of which
(generally by value, but by adjusted tax basis in certain cases) that
produce or are held for the production of passive income is at least 50
percent. Generally, passive income for this purpose means dividends,
interest (including income equivalent to interest), royalties, rents,
annuities, the excess of gains over losses from certain property
transactions and commodities transactions, and non-U.S. currency gains.
Passive income for this purpose does not include rents and royalties
received by the non-U.S. corporation from active business and certain
income received from related persons.
The 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 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.
New regulations relating to withholding tax on income paid to foreign
persons (the "New Withholding Regulations") will generally be effective
for payments made after December 31, 2000. The New Withholding
Regulations modify and, in general, unify the way in which non-U.S.
investors establish their status as non-U.S. States "beneficial owners"
eligible for withholding exemptions including a reduced treaty rate or
an exemption from backup withholding. For example, the new regulations
will require new forms, which non-U.S. investors will generally have to
provide earlier that they would have had to provide replacements for
expiring existing forms.
The New Withholding Regulations clarify withholding agents' reliance
standards. They also require additional certifications for claiming
treaty benefits. For example, a non-U.S. investor may be required to
provide a TIN, and may have to certify that he/she "derives" the income
with respect to which the treaty benefit is claimed within the meaning
of applicable regulations. The New Withholding Regulations also
provides somewhat different procedures for foreign intermediaries and
flow-through entities, such as foreign partnerships, to claim the
benefit of applicable exemptions on behalf of non-U.S. investors for
which or for whom they receive payments. The New Withholding
Regulations also amend the foreign broker office definition as it
applies to partnerships.
The New Withholding Regulations are complex and this summary does not
completely describe them. Non-U.S. investors should consult with their
tax advisors to determine how the New Withholding Regulations will
affect their particular circumstances.
Non-U.S. investors should consult their tax advisors concerning the tax
consequences of ownership of shares of the fund, including the
possibility that distributions may be subject to a 30% United States
withholding tax (or a reduced rate of withholding provided by treaty),
the possibility that a non-U.S. investor may be subject to U.S. tax on
capital gain distributions and gains realized upon the sale of fund
shares if the investor is present in the United States for at least 31
days during the taxable year (and certain other conditions apply), or
the possibility that a non-U.S. investor may be subject to U.S. tax on
income from the fund that is "effectively connected" with a U.S. trade
or business carried on by such an investor. Shareholders residing in
Japan should consult "Tax Treatment of Shareholders in Japan "on page 38
of the Annual Report.
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 foreign, state or local taxes.
Shareholders are urged to consult their tax advisers regarding specific
questions as to U.S. federal, state, local or foreign taxes. The
foregoing discussion relates solely to U.S. federal income tax law.
VII. Important Participants in Offering of Mutual Fund Shares
A. Investment Company
Certain pooled investment vehicles qualify as investment companies under
the 1940 Act. There are open-end investment companies (those which
offer redeemable securities) and closed-end investment companies (any
others).
B. Investment Adviser/Administrator
The investment adviser is typically responsible for the implementation
of an investment company's investment program. It, or another
affiliated or unaffiliated entity, may also perform certain record
keeping and administrative functions.
C. Underwriter
An investment company may appoint one or more principal underwriters for
its shares. The activities of such a principal underwriter are
generally governed by a number of legal regimes, including, for example,
the 1940 Act, the 1933 Act, the 1934 Act, and state laws.
D. Transfer Agent
A transfer agent performs certain bookkeeping, data processing, and
administrative services pertaining to the maintenance of shareholder
accounts. A transfer agent may also handle the payment of any dividends
declared by the trustees of a fund.
E. Custodian
A custodian's responsibilities may include, among other things,
safeguarding and controlling a fund's cash and securities, handling the
receipt and delivery of securities, and collecting interest and
dividends on a fund's investments.
II. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY
The description in this item is same as the description in II. FINANCIAL
CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of the Securities Report
set forth below (Ditto, from page 181 to page 199)
III. FORM OF FOREIGN INVESTMENT FUND SECURITIES
Main items to be set forth on the share certificate of the Fund (if
issued) are as follows:-
(1) Front
a. Name of the Fund
b. Number of shares represented
c. Signatures of the Chairman and Transfer Agent
d. Description stating that the Declaration of Trust applies to
shareholders and assignees therefrom
(2) Back
a. Space for endorsement
b. Description concerning delegation of transfer agency
ANNUAL SECURITIES REPORT
(the Fifth Term)
From: December 1, 1998
To: November 30, 1999
PUTNAM HIGH YIELD ADVANTAGE FUND
SECURITIES REPORT
(the Fifth Term)
From: December 1, 1998
To: November 30, 1999
To: Director of Kanto Local Finance Bureau
Filing Date : April 21, 2000
Name of the Registrant Fund: PUTNAM HIGH YIELD ADVANTAGE FUND
Name and Official Title of Charles E. Porter
Representative of Trust: Executive Vice President
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
-------------------------
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
---------------------
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Places where a copy of this Securities Report is available for Public
Inspection
Not applicable.
(Total number of pages of this Securities Report in Japanese is 69
including the front page)
C O N T E N T S
Japanese This
Original English
Translation
I. DESCRIPTION OF THE FUND 1 1
1. GENERAL INFORMATION 1 1
2. INVESTMENT POLICY 5 6
3. MANAGEMENT STRUCTURE 8 11
4. INFORMATION CONCERNING THE EXERCISE
OF RIGHTS BY SHAREHOLDERS 17 25
5. STATUS OF INVESTMENT PORTFOLIO 19 30
II. OUTLINE OF THE FUND 22 34
III. OUTLINE OF THE OTHER RELATED COMPANIES 51 68
IV. FINANCIAL CONDITIONS OF THE FUND 53 70
V. FINANCIAL CONDITIONS OF THE INVESTMENT 157 77
MANAGEMENT COMPANY (translated from
the English source:
omitted in English Translation)
VI. SUMMARY OF INFORMATION CONCERNING THE
EXERCISE OF RIGHTS BY HOLDERS OF
FOREIGN INVESTMENT FUND SECURITIES 174 77
VII. REFERENCE INFORMATION 174 77
Note 1: The exchange rate of U.S. Dollars ("dollar" or "$") into
Japanese Yen is [YEN] 109.90 for one U.S. Dollar, which is the actual
Middle point between the selling and buying currency rate by
Telegraphic transfer on February 29, 2000 quoted by The Bank of
Tokyo-Mitsubishi, Ltd. The same applies hereinafter.
Note 2: In this report, money amounts and percentages have been rounded.
Therefore, there are cases in which the amount for the "total"
column is not equal to the aggregate amount. Also, conversion
into other currencies is done simply by multiplying the corresponding
amount by the conversion rate specified and rounded up when
necessary. As a result, in this report, there are cases in which
figures for the same information differ from each other.
Note 3: In this report, "fiscal year" refers to a year from December 1 to
November 30 of the following year.
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.
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 M
shares are currently offered in Japan. 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 a shareholder owns fewer shares than the minimum set by the Trustees
(presently 20 shares), the Fund may redeem a shareholder's shares.
Shareholders will receive at least 30 days' written notice before the
Fund redeems shareholder's 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
other federal and state securities laws. The Fund also intends to
continue 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) Objective and Basic Nature of the Fund:
GOAL
The Fund seeks high current income. capital growth is a secondary goal
when consistent with achieving high current income.
MAIN INVESTMENT STRATEGIES- LOWER-RATED BONDS
The Fund invests mostly in bonds that
- - are obligations of U.S. corporations,
- - are below investment-grade in quality ("junk bonds"), and
- - have intermediate-to long-term maturities (three years or longer).
MAIN RISKS
The main risks that could adversely affect the value of the Fund's
shares and the total return on investors' investment include:
- - The risk that issuers of the Fund's investments will not make
timely payments of interest and principal. This credit risk is higher
for debt that is below investment grade in quality. Because the Fund
invests significantly in junk bonds, this risk is heightened for the
fund. Investors should carefully consider the risks associated with an
investment in the Fund.
- - The risk that movements in financial markets will adversely affect
the value of the Fund's investments. This risk includes interest rate
risk, which means that the prices of the Fund's investments are likely
to fall if interest rates rise. Interest rate risk is generally higher
for investments with longer maturities.
Investors can lose money by investing in the Fund. The Fund may not
achieve its goal, and is not intended as a complete investment program.
An investment in the Fund is not a deposit in a bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
(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.
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") provides
marketing services to the Fund.
(4) Kokusai Securities Co., Ltd. ("Distributor in Japan" and "Agent
Company") engages in forwarding purchase or repurchase orders for the
Shares in Japan and also acts as the agent company.
Related Companies of the Fund
Fund
Putnam High Yield Advantage Fund
Trustees Investor Servicing
(Agreement and Agreement
Declaration of Trust)
Distribution Agreement Custodian Agreement
Principal Custodian
Underwriter Investor
Servicing Agent
Putnam Mutual Funds Corp.
Putnam Fiduciary
(acts as distributor) Trust Company
(acts as custodian
and investor
servicing agent
of the Fund)
Japan Dealer Sales Agreement
Agent Company Agreement Management Contract
Distributor in Japan Investment Management
Agent Company Company
Kokusai Securities Co., Ltd. Putnam Investment
Management, Inc.
(forwarding of sales in
Japan and rendering of service (acts as investment
as agent company) management of the
Fund and investment
adviser concerning
the Fund's assets)
2. INVESTMENT POLICY
(A) Basic Policy for Investment and Objectives of Investment
(including risk factors):
Any investment carries with it some level of risk that generally
reflects its potential for reward. Investment Management Company
pursues the Fund's goal (high current income and capital growth) by
investing mainly in lower-rated bonds. Investment Management Company
will consider, among other things, credit, interest rate and prepayment
risks as well as general market conditions when deciding whether to buy
or sell investments. A description of the risks associated with the
Fund's main investment strategies follows.
Interest rate risk.
The values of bonds and other debt usually rise and fall in response to
changes in interest rates. Declining interest rates generally increase
the value of existing debt instruments, and rising interest rates
generally decrease the value of existing debt instruments. Changes in a
debt instrument's value usually will not affect the amount of interest
income paid to the Fund, but will affect the value of the Fund's shares.
Interest rate risk is generally greater for investments with longer
maturities.
Some investments give the issuer the option to call, or redeem, their
securities before their maturity date. If an issuer calls its security
during a time of declining interest rates, Investment Management Company
might have to reinvest the proceeds in an investment offering a lower
yield, and therefore might not benefit from any increase in value as a
result of declining interest rates.
"Premium investments" offer interest rates higher than prevailing market
rates. However, they involve a greater risk of loss, because their
values tend to decline over time. An investor may find it useful to
compare the Fund's yield, which factors out the effect of premium
investments, with its current dividend rate, which does not factor out
that effect.
Credit risk.
Investors normally expect to be compensated in proportion to the risk
they are assuming. Thus, debt of issuers with poor credit prospects
usually offers higher yields than debt of issuers with more secure
credit. Higher-rated investments generally have lower credit risk.
Investment Management Company invests mostly in higher-yielding,
higher-risk debt investments that are rated below BBB or its equivalent
at the time of purchase by each nationally recognized securities rating
agency rating such investments, or are unrated investments that
Investment Management Company believes are of comparable quality.
Investment Management Company may invest up to 15% of the Fund's total
assets in debt investments rated below CCC or its equivalent, at the
time of purchase, by each agency rating such investments, including
investments in the lowest rating category of the rating agency, and
unrated investments that Investment Management Company believes are of
comparable quality. Investment Management Company will not necessarily
sell an investment if its rating is reduced after Investment Management
Company buys it.
Investments rated below BBB or its equivalent are known as "junk bonds."
This rating reflects a greater possibility that the issuer may be unable
to make timely payments of interest and principal and thus default. If
this happens, or is perceived as likely to happen, the values of those
investments will usually be more volatile and are likely to fall. A
default or expected default could also make it difficult for the Fund to
sell the investments at prices approximating the values Investment
Management Company had previously placed on them. Lower-rated debt
usually has a more limited market than higher-rated debt, which may at
times make it difficult for the Fund to buy or sell certain debt
instruments or to establish their fair value. Credit risk is generally
greater for investments that are issued at less than their face value
and that are required to make payment of interest only at maturity
rather than at intervals during the life of the investment.
Credit ratings are based largely on the issuer's historical financial
condition and the rating agencies' investment analysis at the time of
rating. The rating assigned to any particular investment does not
necessarily reflect the issuer's current financial condition, and does
not reflect an assessment of an investment's volatility or liquidity.
Although Investment Management Company considers credit ratings in
making investment decisions, Investment Management Company performs its
own investment analysis and do not rely only on ratings assigned by the
rating agencies. The Fund depends more on Investment Management
Company's ability in buying lower-rated debt than it does in buying
investment-grade debt. Investment Management Company may have to
participate in legal proceedings or take possession of and manage assets
that secure the issuer's obligations. This could increase the Fund's
operating expenses and decrease its net asset value.
Although investment-grade investments generally have lower credit risk,
they may share some of the risks of lower-rated investments.
Non-U.S. investments.
Investment Management Company may invest in securities of non-U.S.
issuers. Non-U.S. investments involve certain special risks. For
example, their values may drop in response to changes in currency
exchange rates, unfavorable political and legal developments, unreliable
or untimely information, or economic and financial instability. In
addition, the liquidity of these investments may be more limited than
domestic investments, which means Investment Management Company may at
times be unable to sell them at desirable prices. Non-U.S. settlement
procedures may also involve additional risks. These risks are generally
greater in the case of developing (also known as emerging) markets that
typically have less developed legal and financial systems.
Certain of these risks may also apply to some extent to U.S.-traded
investments that are denominated in non-U.S. currencies, investments in
U.S. companies that are traded in non-U.S. markets, or investments in
U.S. companies that have significant non-U.S. operations. Special U.S.
tax considerations may apply to Investment Management Company's non-U.S.
investments.
Illiquid investments.
Investment Management Company may invest up to 15% of the Fund's assets
in illiquid investments, which may be considered speculative. Illiquid
investments are investments that may be difficult to sell. The sale of
many of these investments is limited by law. Investment Management
Company may not be able to sell the Fund's illiquid investments when
Investment Management Company considers it desirable to do so or
Investment Management Company may be able to sell them only at less than
their market value.
Other investments.
In addition to the main investment strategies described above,
Investment Management Company may also make other types of investments,
such as investments in derivatives, including futures, options, warrants
and swap contracts, equity securities, assignments of and participations
in fixed and floating rate loans, which may be subject to other risks.
Alternative strategies.
At times Investment Management Company may judge that market conditions
make pursuing the Fund's usual investment strategies inconsistent with
the best interests of its shareholders. Investment Management Company
then may temporarily use alternative strategies that are mainly designed
to limit losses. However, Investment Management Company may choose not
to use these strategies for a variety of reasons, even in very volatile
market conditions. These strategies may cause the Fund to miss out on
investment opportunities, and may prevent the Fund from achieving its
goal.
Changes in policies
The Fund's Trustees may change the Fund's goal, investment strategies
and other policies without shareholder approval, except as otherwise
indicated.
(B) Restrictions on Investment:
Except for the policies designated as fundamental below, the investment
policies described in this document are not fundamental policies. The
Trustees may 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.
(7) With respect to 75% of its total assets, acquire more than 10% of
the outstanding voting securities of any issuer.
(8) Purchase securities (other than securities of the U.S. government,
its agencies or instrumentalities) if, as a result of such purchase,
more than 25% of the Fund's total assets would be invested in any one
industry.
(9) Issue any class of securities which is senior to the Fund's shares
of beneficial interest, except for permitted borrowings.
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 Fund shares,
or (2) 67% or more of the shares present at a meeting if more than 50%
of the outstanding Fund shares are represented at the meeting in person
or by proxy.
It is contrary to the Fund's present policy, which may be changed
without shareholder approval, to:
Invest in (a) securities which are not readily marketable, (b)
securities restricted as to resale (excluding securities determined by
the Trustees of the Fund (or the person designated by the Trustees of
the Fund to make such determinations) to be readily marketable), and (c)
repurchase agreements maturing in more than seven days, if, as a result,
more than 15% of the Fund's net assets (taken at current value) would
then be invested in securities described in (a), (b) and (c) above.
All percentage limitations on investments (other than pursuant to the
non-fundamental restriction 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 Fund normally invests at least 80% of its assets in debt
securities, convertible securities or preferred stocks that Investment
Management Company believes are consistent with its primary investment
objective of high current income.
*Subject to Trustee approval, it is expected that effective on or
about May 4, 2000, this restriction will be eliminated.
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 more than 15% of its net assets in
securities that are not traded on an official stock exchange or other
regulated market, including, without limitation, the National
Association of Securities Dealers Quotation System (this restriction
shall not be applicable to bonds determined by Investment Management
Company to be liquid and for which a market price (including a dealer
quotation) is generally obtainable or determinable).
2. The Fund may not borrow money in excess of 10% of the value of its
total assets.
3. The Fund may not make short sales of securities in excess of the
Fund's net asset value.
4. The Fund may not, together with other mutual funds managed by
Investment Management Company, acquire more than 50% of the outstanding
voting securities of any issuer.
If the undertaking is violated, the Fund will, promptly after discovery,
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. This undertaking will remain in effect as
long as shares of the Fund are qualified for offer or sale in Japan and
such undertaking is required by the Japanese Securities Dealers
Association as a condition of such qualification.
(C) Distribution Policy:
The Fund normally distributes any net investment income monthly and any
net realized capital gains annually. The Fund normally pays a
distribution to Japanese investors who hold shares as of 15th day of
each month at the end of each month, provided, however, the distribution
may be paid, if at all, at the beginning of the 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. New York time. 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.
Market quotations are not considered to be readily available for
long-term corporate bonds and notes, certain preferred stocks,
tax-exempt securities, and certain non-U.S. securities. These
investments are valued at fair value on the basis of valuations
furnished by pricing services approved by the Trustees, 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 non-U.S. 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 March 20, 1997 the Fund pays a
quarterly fee to Investment Management Company based on the average net
assets of the fund, as determined at the close of each business day
during the quarter, at the annual rate of 0.70% of the first $500
million of average net assets, 0.60% of the next $500 million, 0.55% of
the next $500 million, 0.50% of the next $5 billion, 0.475% of the next
$5 billion, 0.455% of the next $5 billion, 0.44% of the next $5 billion
and 0.43% of any amount thereafter. For the past three fiscal years,
pursuant to the Management Contract (and a management contract in effect
prior to March 20, 1997, under which the management fee payable to
Investment Management Company was paid at an annual rate of 0.70% of the
first $500 million of average net assets, 0.60% of the next $500
million, 0.55% of the next $500 million and 0.50% of any amount over
$1.5 billion), the Fund incurred the following fees:
Fiscal year Management fee paid
1999 $16,607,601
1998 $23,937,532
1997 $17,916,237
(b) Custodian Fee
The Custodian is entitled to receive, out of the assets of the Fund
reasonable compensation for its services and expenses as Custodian, as
agreed from time to time between the Fund and the Custodian.
For the fiscal year ended on November 30, 1999, custodian fees as
follows.
Custodian fee $262,459
Other expenses credit ($96,855)
--------------------------------------
Total Custodian Fee $165,604
(c) Charges of the Investor Servicing Agent
The Fund pays 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 ended on November 30, 1999, the Fund paid $2,308,262
as an investor servicing agent fee.
(d) Fee under 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 distribution 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
below.
To compensate Kokusai and other dealers further for services provided in
connection with the sale of Class M shares and the maintenance 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 ended on November 30, 1999, the Fund paid fees under
the Fund's distribution plans of $4,552,917, for the Class M shares.
(e) Other Expenses:
The Fund pays all of its expenses not assumed by Investment Management
Company 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.
The Trustees are responsible for generally overseeing the conduct of
Fund business. Subject to such policies as the Trustees may determine,
Investment Management Company furnishes a continuing investment program
for the Fund and makes investment decisions on its behalf. Subject to
the control of the Trustees, Investment Management Company also manages
the Fund's other affairs and business.
Each Trustee receives a fee for his or her services. Each Trustee also
receives fees for serving as Trustee of other Putnam funds. The
Trustees periodically review their fees to assure that such fees
continue to be appropriate in light of their responsibilities as well as
in relation to fees paid to trustees of other mutual fund complexes.
The Trustees meet monthly over a two-day period, except in August. The
Board Policy Committee, which consists solely of Trustees not affiliated
with Investment Management Company and is responsible for recommending
Trustee compensation, estimates that Committee and Trustee meeting time
together with the appropriate preparation requires the equivalent of at
least three business days per Trustee meeting. The following table
shows the year each Trustee was first elected a Trustee of the Putnam
funds, the fees paid to each Trustee by the Fund for fiscal 1999 and the
fees paid to each Trustee by all of the Putnam funds during calendar
year 1999:
<TABLE>
<CAPTION>
COMPENSATION TABLE
Pension or Estimated
retirement annual Total
Aggregate benefits benefits from compensation
compensation accrued as all Putnam from all
from part of funds upon Putnam
Trustee/Year the Fund(1) Fund expenses retirement (2) funds (3)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jameson A. Baxter/1994 (4) $1,937 $ 538 $ 95,000 $191,000
Hans H. Estin/1972 1,921 1,254 95,000 190,000
John A. Hill/1985 (4)(5) 2,368 607 115,000 239,750
Ronald J. Jackson/1996 (4) 1,957 564 95,000 193,500
Paul L. Joskow/1997 (4) 1,921 174 95,000 191,000
Elizabeth T. Kennan/1992 1,921 766 95,000 191,000
Lawrence J. Lasser/1992 1,905 583 95,000 189,000
John H. Mullin, III/1997 (4) 1,991 262 95,000 196,000
Robert E. Patterson/1984 1,929 413 95,000 190,250
William F. Pounds/1971 (5) 2,286 1,398 115,000 231,000
George Putnam/1957 1,921 1,299 95,000 190,000
George Putnam, III/1984 1,921 280 95,000 190,000
A.J.C. Smith/1986 1,888 889 95,000 188,000
W. Thomas Stephens/1997 (4) 1,888 244 95,000 188,000
W. Nicholas Thorndike/1992 1,911 1,076 95,000 190,000
</TABLE>
(1) Includes an annual retainer and an attendance fee for each meeting
attended.
(2) Assumes that each Trustee retires at the normal retirement date.
Estimated benefits for each Trustee are based on Trustee fee rates in
effect during calendar 1999.
(3) As of December 31, 1999, there were 114 funds in the Putnam
family.
(4) Includes compensation deferred pursuant to a Trustee Compensation
Deferral Plan. The total amounts of deferred compensation payable by
the Fund to Ms. Baxter, Mr. Hill, Mr. Jackson, Mr. Joskow, Mr. Mullin,
and Mr. Stephens as of November 30, 1999 were $3,078, $15,707, $11,939,
$5,655, $6,764 and $7,081, respectively, including income earned on such
amounts.
(5) Includes additional compensation for service as Vice Chairman of
the Putnam funds.
Under a Retirement Plan for Trustees of the Putnam funds (the "Plan"),
each Trustee who retires with at least five years of service as a
Trustee of the funds is entitled to receive an annual retirement benefit
equal to one-half of the average annual compensation paid to such
Trustee for the last three years of service prior to retirement. This
retirement benefit is payable during a Trustee's lifetime, beginning the
year following retirement, for a number of years equal to such Trustee's
years of service. A death benefit, also available under the Plan,
assures that the Trustee and his or her beneficiaries will receive
benefit payments for the lesser of an aggregate period of (i) ten years
or (ii) such Trustee's total years of service.
The Plan Administrator (a committee comprised of Trustees that are not
"interested persons" of the fund, as defined in the Investment Company
Act of 1940) may terminate or amend the Plan at any time, but no
termination or amendment will result in a reduction in the amount of
benefits (i) currently being paid to a Trustee at the time of such
termination or amendment, or (ii) to which a current Trustee would have
been entitled had he or she retired immediately prior to such
termination or amendment.
Investment Management Company places all orders for purchases and sales
of the Fund's portfolio securities. In selecting broker-dealers,
Investment Management Company may consider research and brokerage
services furnished to it and its affiliates. Subject to seeking the most
favorable price and execution available, Investment Management Company
may consider sales of Fund shares (and, if permitted by law, of the
other Putnam Funds) as a factor in the selection of broker-dealers.
During fiscal 1997, 1998 and 1999, the Fund paid $49,284, $72,056 and
$477,523 in brokerage commissions, respectively. During fiscal 1999, the
Fund did not pay any fee to brokers and dealers to recognize research,
statistical and quotation services provided to Investment Management
Company and its affiliates.
For the fiscal year ended on November 30, 1999, the Fund paid
$13,101,615 in other expenses, excluding management fees, investor
servicing agent expenses, custodian expenses and payments under its
distribution plan.
C. Sales, Repurchases and Custody:
(1) Sales of Shares:
a. Sales in the United States
Investors can open a Fund account with as little as $500 and make
additional investments at any time with as little as $50 ($25 through
systematic investing). The Fund sells its shares at the offering price,
which is the NAV plus any applicable sales charge. Investor's financial
advisor or Putnam Investor Services generally must receive investor's
completed buy order before the close of regular trading on the New York
Stock Exchange for investor's shares to be bought at that day's offering
price.
Investors can buy shares:
- - Through a financial advisor. Investor's advisor will be
responsible for furnishing all necessary documents to Putnam Investor
Services, and may charge investor for his or her services.
- - 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 through investor's advisor or Putnam Investor Services at
1-800-225-1581.
Investors may also complete an order form and write a check for the
amount investors wish to invest, payable to the Fund. Return the check
and completed form to Putnam Mutual Funds.
The Fund may periodically close to new purchases of shares or refuse any
order to buy shares if the Fund determines that doing so would be in the
best interests of the Fund and its shareholders. Currently, shares of
the Fund may only be purchased by existing investors.
Class M shares
- - Initial sales charge of up to 3.25%
- - Lower sales charge for investments of $50,000 or more
- - No deferred sales charge
- - Lower annual expenses, and higher dividends, than class B shares
(not offered in Japan) because of lower 12b-1 fee
- - Higher annual expenses, and lower dividends, than class A shares
(not offered in Japan) because of higher 12b-1 fee
- - No conversion to class A shares so future 12b-1 fee does not
decrease
Initial sales charges for class M shares
Class M sales charge
as a percentage of:
-------------------------
Amount of purchase Net amount Offering
at offering price($) invested price*
- ---------------------------------------------------------
Under 50,000 3.36% 3.25%
50,000 but under 100,000 2.30 2.25
100,000 but under 250,000 1.52 1.50
250,000 but under 500,000 1.01 1.00
500,000 but under 1,000,000 NONE NONE
1,000,000 and above NONE NONE
- ---------------------------------------------------------
*Offering price includes sales charge.
Distribution (12b-1) plan. The Fund has adopted a distribution plan to
pay for the marketing of fund shares and for services provided to
shareholders. The plan provides for payments at an annual rate (based
on average net assets) of up to 1.00%. The Trustees currently limit
payments to 0.50% of average net assets. Because these fees are paid
out of the Fund's assets on an ongoing basis, they will increase the
cost of the investor's investment. An investor may be eligible to buy
Class M shares at reduced sales charges. Putnam Mutual Funds Corp.
received $523,076, $191,904 and $25,816 in sales charges for Class M
shares for fiscal years 1997, 1998 and 1999, respectively of which it
retained $52,940, $18,419 and $2,746, respectively.
b. Sales in Japan
The Fund closed to new record shareholders on December 5, 1997.
(Investors in Japan who purchase shares from Kokusai that are held of
record under the name of Kokusai are not considered new record
shareholders.) Accordingly, the number of Class M Shares available for
purchase in Japan is limited.
In Japan, Shares of the Fund are offered on any Valuation Date during
the Subscription Period mentioned in "Section 8. Period of Subscription,
Part I Information concerning Securities" of a securities registration
statement pursuant to the terms set forth in "Part I. Information
concerning Securities" of the relevant securities registration
statement. The Distributor or the Sales Handling Company shall deliver
to investors Agreement of Foreign Securities Transactions Account and
other prescribed agreements and investors shall submit to the
Distributor or the Sales Handling Company an Application for Opening of
Transactions Account opened in accordance with Account 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 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 Distributor or the Sales Handling Company confirms the execution of
the order (ordinarily the business day in Japan next following the
placement of orders), and payment and delivery shall be made on the
fourth Business Day after and including the Trade Day. The sales charge
shall be 3.25% of the amount of subscription, all of which will be
retained by the KOKUSAI. In addition, investors must pay a 5%
consumption tax on the Sales Charge.
The investors having entrusted the Distributor or the Sales Handling
Company with custody of the Shares will receive from the Distributor or
the Sales Handling 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 Distributor or the Sales Handling 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 Distributor or the Sales Handling Companies can agree.
In addition, Distributor or Sales Handling Companies who are members of
the Japan Securities Dealers' Association cannot continue to sell Shares
in Japan when the net assets of the Fund are less than [YEN] 100,000,000 or
the Shares otherwise cease to comply with the "Standards of Selection of
Foreign Investment Fund Securities" in the "Regulations Concerning the
Transaction of Foreign Securities" established by the Association.
(2) Repurchase of Shares:
a. Repurchase of shares in the United States
Investors can sell investors' shares back to the Fund any day the New
York Stock Exchange is open, either through investors' financial advisor
or directly to the Fund. Payment for redemptions may be delayed until
the Fund collects the purchase price of shares, which may take up to 15
calendar days after the purchase date.
Selling Shares through investors' financial advisor
Investors' advisor must receive investors' request in proper form before
the close of regular trading on the New York Stock Exchange to receive
that day's NAV, less any applicable deferred sales charge. Investors'
advisor will be responsible for furnishing all necessary documents to
Putnam Investor Services on a timely basis and may charge investors for
his or her services.
Selling Shares directly to the Fund
Putnam Investor Services must receive investors' request in proper form
before the close of regular trading on the New York Stock Exchange in
order to receive that day's NAV, less any applicable sales charge.
By mail
Send a letter of instruction signed by all registered owners or their
legal representatives to Putnam Investor Services. If investors have
certificates for the Shares investors want to sell, investors must
include them along with completed stock power forms.
By telephone
Investors may use Putnam's telephone redemption privilege to redeem
Shares valued at less than $100,000 unless investors have notified
Putnam Investor Services of an address change within the preceding 15
days, in which case other requirements may apply. Unless investors
indicate otherwise on the account application, Putnam Investor Services
will be authorized to accept redemption instructions received by
telephone.
The telephone redemption privilege is not available if there are
certificates for investors' Shares. The telephone redemption privilege
may be modified or terminated without notice.
Additional requirements.
In certain situations, for example, if an investor sells shares with a
value of $100,000 or more, the signatures of all registered owners or
their legal representatives must be guaranteed by a bank, broker-dealer
or certain other financial institutions. In addition, Putnam Investors
Services usually requires additional documents for the sale of shares by
a corporation, partnership, agent or fiduciary, or a surviving joint
owner. For more information concerning Putnam's signature guarantee and
documentation requirements, contact Putnam Investor Services.
When will the Fund pay investors?
The Fund generally sends investors payment for investor's Shares the
business day after investor's request is received. Under unusual
circumstances, the Fund may suspend redemptions, or postpone payment for
seven days, as permitted by federal securities law.
Redemption by the Fund
If investors own fewer Shares than the minimum set by the Trustees
(presently 20 shares), the Fund may redeem investors' Shares without
investors' permission and send investors the proceeds. The Fund may
also redeem Shares if investors own Shares more than a maximum amount
set by the Trustees. There is presently no maximum, but the Trustees
could set a maximum that applies to both present and future
shareholders.
b. Repurchase in Japan
Shareholders in Japan may at any time request repurchase of their Shares
without a contingent deferred sales charge. Repurchase requests in
Japan may be made to Investor Servicing Agent through the Distributor or
the Sales and Handling Company on a Fund Business Day that is also a
business day of securities companies in Japan.
The price a shareholder in Japan will receive is the next net asset
value calculated after the Fund receives the repurchase request from
Kokusai. The price shall be paid in yen through the Distributor or the
Sales Handling Companies pursuant to the Account Agreement or, if the
Distributor or the Sales Handling 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 non-U.S. 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 Distributors or the Sales Handling 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 November 30th.
(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 therein shall not require authorization
by Shareholder vote.
In Japan, material changes in the Agreement and Declaration of Trust
shall be published and 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, or other similar rights.
(6) How Performance is Shown:
Fund advertisements may, from time to time, include performance
information. "Yield" for each class of shares is calculated by dividing
the annualized net investment income per share during a recent 30-day
period by the maximum public offering price per share of the class on
the last day of that period.
For purposes of calculating yield, net investment income is calculated
in accordance with SEC regulations and may differ from net investment
income as determined for tax purposes. SEC regulations require that net
investment income be calculated on a "yield-to-maturity" basis, which
has the effect of amortizing any premiums or discounts in the current
market value of fixed-income securities. The current dividend rate is
based on net investment income as determined for tax purposes, which may
not reflect amortization in the same manner.
Yield is based on the price of the shares, including the maximum initial
sales charge.
"Total return" for the one-, five- and ten-year periods (or for the life
of the Fund, if shorter) through the most recent calendar quarter
represents the average annual compounded rate of return on an investment
of $1,000 in the Fund at the maximum public offering price (in the case
of class A (not offered in Japan) and class M shares) or reflecting the
deduction of any applicable contingent deferred sales charge (in the
case of class B shares (not offered in Japan)). Total return may also
be presented for other periods or based on investment at reduced sales
charge levels. Any quotation of investment performance not reflecting
the maximum initial sales charge or contingent deferred sales charge
would be reduced if the sales charge were used. For the one-year,
five-year and ten-year periods ended November 30, 1999, the average
annual total return for Class M shares of the Fund was -0.68%, 6.08% and
9.01%, respectively. Returns for Class M shares reflect the deduction
of the current maximum initial sales charge of 3.25% for Class M shares.
Returns shown for Class M shares for periods prior to December 1, 1994
are derived from the historical performance of Class A shares, adjusted
to reflect both the deduction of the initial sales charge and the higher
operating expenses applicable to Class M shares. The 30-day yield for
the Class M shares of the Fund at public offering price (POP), for the
period ended November 30,1999 was 10.71%.
All data are based on past investment results and do not predict future
performance. Investment performance, which will vary, is based on many
factors, including market conditions, portfolio composition, Fund
operating expenses and the class of shares the investor purchases.
Investment performance also often reflects the risks associated with the
Fund's investment objectives and policies. These factors should be
considered when comparing the Fund's investment results with those of
other mutual funds and other investment vehicles.
Quotations of investment performance for any period when an expense
limitation was in effect will be greater than if the limitation had not
been in effect. Fund performance may be compared to that of various
indexes.
(B) Outline of Disclosure System:
(1) Disclosure in U.S.A.:
(i) Disclosure to shareholders
In accordance with the Investment Company Act of 1940, the Fund is
required to send to its shareholders annual and semi-annual reports
containing financial information.
(ii) Disclosure to the SEC
The Fund has filed a registration statement with the SEC on Form N-1A;
the Fund updates that registration statement periodically in accordance
with applicable law.
(2) Disclosure in Japan:
a. Disclosure to the Supervisory Authority:
(i) Disclosure Required under the Securities and Exchange Law:
When the Fund intends to offer Shares amounting to more than 100 million
yen in Japan, it shall submit to the Director of Kanto Local Finance
Bureau securities registration statements together with the copies of
the Agreement and Declaration of 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
at Kanto Local Finance Bureau of the Ministry of Finance.
The Distributors or the Sales Handling Companies in Japan of the Shares
shall deliver to the investors prospectuses 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 Director of Kanto Local
Finance Bureau 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
at Kanto Local Finance Bureau of the Ministry of Finance.
(ii) Disclosure Required under the Law Concerning Securities Investment
Trust Fund and Securities Investment Company:
When the Investment Management Company handles offering or selling of
Fund Shares in Japan, the Investment Management Company must file with
the Director of Finance Supervisory Agency a prior notification
concerning certain matters of the Fund in accordance with the Law
Concerning Securities Investment Trust Fund and Securities Investment
Company (the "Investment Fund Law"). Also, when the Investment
Management Company makes changes to the Agreement and Declaration of
Trust, the Investment Management Company must file with the Director of
Finance Supervisory Agency a prior notification thereof, including
contents of such changes. Further, in accordance with the Investment
Fund Law, the Investment Management Company must prepare an investment
management report with regard to certain matters relating to the Fund's
assets immediately after the end of each fiscal period of the Fund and
must immediately file the above report with the Director of Finance
Supervisory Agency.
b. Disclosure to Japanese Shareholders:
When the Investment Management Company makes change to the Agreement and
Declaration of Trust, if the contents of such changes are material, the
Investment Management Company must give 30 day prior public notice
thereof, including the contents of such changes, before such changes are
made, and its written notice summarizing such changes must be given to
Japanese Shareholders known to the Distributor or the Sales Handling
Companies; provided, however, that if such written notice is delivered
to each of all Japanese Shareholders, no public notice is required.
The Japanese Shareholders will be notified of the material facts which
would change their position and of notices from the Trustees, through
the Distributor or the Sales Handling Companies in Japan.
The investment management report mentioned in sub-paragraph (a), (ii)
above will be delivered to Japanese Shareholders known to the
Distributor or the Sales Handling Companies.
(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, Investment Management Company, 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:
Shareholders must register their shares in their own name in order to
exercise directly the rights of their Shares. Therefore, the
Shareholders in Japan who entrust the custody of their Shares to the
Distributor or the Sales Handling Company in Japan cannot exercise
directly their rights, because they are not registered. Shareholders in
Japan may have the Distributor or the Sales Handling Companies in Japan
exercise their rights on their behalf in accordance with the Account
Agreement with the Distributor or the Sales Handling Companies in Japan.
The Shareholders in Japan who do not entrust the custody of their Shares
to the Distributor or the Sales Handling Companies in Japan 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 any net investment income are currently declared and
paid monthly and any net capital gains are currently declared and paid
at least annually.
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 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 organizational documents, 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.
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and the Rules promulgated thereunder are
Registrant's Associate Clerk, Judith Cohen; Registrant's investment
adviser, Investment Management Company; Registrant's principal
underwriter, Putnam Mutual Funds Corp.; Registrant's custodian, Putnam
Fiduciary Trust Company; and Registrant's transfer and dividend
disbursing agent, Putnam Investor Services, a division of Putnam
Fiduciary Trust Company. The address of the Associate Clerk, investment
adviser, principal underwriter, custodian and transfer and dividend
disbursing agent is One Post Office Square, Boston, Massachusetts 02109.
(vi) Right to transfer shares
Shares are transferable without restriction except as limited by
applicable law.
(vii) Rights with respect to the U.S. registration statement
If, under the 1933 Act, there is any untrue statement of a material
fact in the U.S. Registration Statement, or any omission of any
statement of material fact required to be stated therein or necessary to
make the statements there not misleading or not to cause any
misunderstanding, shareholders are generally entitled to institute a
lawsuit, against the person who had signed the relevant Registration
Statement, the trustee of the issuer (or any person placed in the same
position) at the time of filing such Statement, any person involved in
preparing such Statement or any subscriber of the relevant shares.
(B) Tax Treatment of Shareholders in Japan:
The tax treatment of Shareholders in Japan shall be as follows:
(1) The distributions to be made by the Fund will be treated as
distributions made by a domestic investment trust.
a. The distributions to be made by the Fund to Japanese individual
shareholders will be subject to separate taxation from other income
(i.e. withholding of income tax at the rate of 15% and withholding of
local taxes at the rate of 5%) in Japan. In this case, no report
concerning distributions will be filed with the Japanese tax
authorities.
b. The distributions to be made by the Fund to Japanese corporate
shareholders will be subject to withholding of income tax at the rate of
15% and to withholding of local taxes at the rate of 5% in Japan. In
certain cases, the Paying Handling 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.
(C) Foreign Exchange Control in the United States:
In the United States, there are no foreign exchange control restrictions
on remittance of dividends, repurchase money, etc. of the Shares to
Japanese Shareholders.
(D) Agent in Japan:
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
The foregoing law firm is the true and lawful agent of the Fund to
represent and act for the Fund in Japan for the purpose of;
(1) the receipt of any and all communications, claims, actions,
proceedings and processes as to matters involving problems under the
laws and the rules and regulations of the JSDA and
(2) representation in and out of court in connection with any and all
disputes, controversies or differences regarding the transactions
relating to the public offering, sale and repurchase in Japan of the
Shares of the Fund.
The agent for the registration with the Director of Kanto Local Finance
Bureau of the public offering and who are responsible 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
<TABLE>
<CAPION>
5. STATUS OF INVESTMENT FUND
(A) Diversification of Investment Portfolio:
(As of February 29, 2000)
- --------------------------------------------------------------------------------------------------
Total Investment
Types of Assets Name of Country U.S. Dollars Ratio (%)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Corporate Bonds United States 1,666,018,287 69.6
Canada 74,267,300 3.1
Mexico 37,546,469 1.6
Luxembourg 27,019,500 1.1
China 25,949,200 1.1
Netherlands 19,506,625 0.8
Indonesia 19,095,667 0.8
United Kingdom 16,357,213 0.7
Cayman Islands 13,660,700 0.6
Brazil 10,771,000 0.4
Colombia 9,008,125 0.4
Israel 7,612,350 0.3
Korea 7,435,350 0.3
Bermuda 6,358,500 0.3
India 6,191,000 0.3
Argentina 6,047,300 0.3
Poland 3,928,488 0.2
Philippines 1,755,388 0.1
Australia 408,429 0
Sub-total 1,958,936,891 81.8
Preferred Stock United States 185,693,583 7.8
Canada 18,402,100 0.8
Germany 15,757,300 0.7
Sub-total 219,852,983 9.2
Warrants United States 32,122,732 1.3
Netherlands 7,936,500 0.3
Ireland 975,375 0
Mexico 919,200 0
Equador 10,402 0
Sub-total 41,964,209 1.8
Convertible Bonds United States 38,245,313 1.6
Collatelized Mortgatge Obligation United States 25,780,997 1.1
Common Stock United States 22,112,870 0.9
Brazil 78 0
Sub-total 22,112,948 0.9
Convertible Preferred Stocks United States 18,577,588 0.8
Units United States 17,764,989 0.7
U.S.Treasury United States 1,160,459 0
Cash, Deposit and Other Assets 49,676,552 2.1
(After deduction of liabilities)
Total 2,394,072,929 100.0
(Net Asset Value) (\263,109 million)
- --------------------------------------------------------------------------------------------------
</TABLE>
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
February, 2000 is as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Total Net Asset Value Net Asset Value per Share
Dollar Yen Dollar Yen
(thousands) (millions) (thousands) (millions)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1st Fiscal Year 20,077 2,206 9.51 1,045
(November 30, 1995)
2nd Fiscal Year 464,506 51,049 9.64 1,059
(November 30, 1996)
3rd Fiscal Year 2,071,302 227,636 9.95 1,094
(November 30, 1997)
4th Fiscal Year 949,346 104,333 8.34 917
(November 30, 1998)
5th Fiscal Year 826,257 90,806 7.71 847
(November 30, 1999)
1999 End of March 965,496 106,108 8.20 901
April 983,537 108,091 8.39 922
May 940,272 103,336 8.20 901
June 934,843 102,739 8.14 895
July 917,288 100,810 8.06 886
August 890,962 97,917 7.89 867
September 862,914 94,834 7.74 851
October 842,559 92,597 7.63 839
November 826,257 90,806 7.71 847
December 818,826 89,989 7.78 855
2000 End of January 785,650 86,343 7.73 850
February 764,156 83,981 7.74 851
- --------------------------------------------------------------------------------------------------
</TABLE>
(Note) Operations of Class M Shares were commenced on December 1, 1994.
(2) Record of Distributions Paid (Class M Shares)
- ---------------------------------------------------------------------------
Period Amount of Dividend paid per Share
- ---------------------------------------------------------------------------
1st Fiscal Year (12/1/94 - 11/30/95) $0.98 (YEN)107.702)
2nd Fiscal Year (12/1/95 - 11/30/96) $0.88 (YEN)96.712)
3rd Fiscal Year (12/1/96 - 11/30/97) $0.89 (YEN)97.811)
4th Fiscal Year (12/1/97 - 11/30/98) $0.92 (YEN)101.108)
5th Fiscal Year (12/1/98 - 11/30/99) $0.850(YEN)93.415)
- ---------------------------------------------------------------------------
Record of distribution paid from September 1996 to February 2000 and Net
Asset Value per share as of each ex-dividend date are as follows:
- ------------------------------------------------------------------
Dividend NAV per share
Ex-Dividend Date Dollar Yen Dollar
- ------------------------------------------------------------------
17-Sep-1996 0.070 7.693 9.48
15-Oct-1996 0.071 7.803 9.59
15-Nov-1996 0.071 7.803 9.57
16-Dec-1996 0.071 7.803 9.60
15-Jan-1997 0.070 7.693 9.66
18-Feb-1997 0.070 7.693 9.78
17-Mar-1997 0.070 7.693 9.64
15-Apr-1997 0.070 7.693 9.37
15-May-1997 0.070 7.693 9.59
16-Jun-1997 0.072 7.913 9.77
15-Jul-1997 0.078 8.572 9.79
15-Aug-1997 0.080 8.792 9.86
15-Sep-1997 0.080 8.792 9.88
15-Oct-1997 0.080 8.792 10.13
17-Nov-1997 0.080 8.792 9.92
15-Dec-1997 0.080 8.792 9.95
15-Jan-1998 0.080 8.792 10.01
17-Feb-1998 0.078 8.572 10.08
16-Mar-1998 0.076 8.352 10.05
15-Apr-1998 0.076 8.352 10.12
15-Jun-1998 0.075 8.243 9.87
15-Jul-1998 0.076 8.352 9.88
17-Aug-1998 0.075 8.243 9.49
15-Sep-1998 0.075 8.243 8.51
15-Oct-1998 0.075 8.243 7.94
16-Nov-1998 0.075 8.243 8.18
15-Dec-1998 0.075 8.243 8.27
15-Jan-1999 0.075 8.243 8.14
16-Feb-1999 0.072 7.913 8.20
15-Mar-1999 0.072 7.913 8.08
15-Apr-1999 0.072 7.913 8.31
17-May-1999 0.072 7.913 8.26
15-Jun-1999 0.072 7.913 8.09
15-Jul-1999 0.067 7.363 8.14
16-Aug-1999 0.067 7.363 7.88
15-Sep-1999 0.067 7.363 7.79
15-Oct-1999 0.067 7.363 7.64
15-Nov-1999 0.067 7.363 7.65
15-Dec-1999 0.067 7.363 7.76
18-Jan-2000 0.067 7.363 7.71
- ------------------------------------------------------------------
(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 Shares Number of
Shares Sold Repurchased Outstanding Shares
- -------------------------------------------------------------------------------
1st Fiscal Year 2,370,932 259,901 2,111,031
(12/1/94 - 11/30/95) 0 0 0
2nd Fiscal Year 47,178,747 1,092,778 48,197,000
(12/1/95 - 11/30/96) (42,967,350) (252,350) (42,715,000)
3rd Fiscal Year 202,989,234 42,956,933 208,229,301
(12/1/96 - 11/30/97) (195,241,280) (38,341,875) (199,614,405)
4th Fiscal Year 42,331,572 136,787,356 113,773,517
(12/1/97 - 11/30/98) (38,771,320) (132,486,947) (105,898,778)
5th Fiscal Year 31,517,038 38,117,136 107,173,419
(12/1/98 - 11/30/99) (30,247,040) (35,040,208) (4,793,168)
- -------------------------------------------------------------------------------
Note: The number of Shares sold, repurchased and outstanding in the
parentheses represents those sold, repurchased and outstanding in Japan.
II. OUTLINE OF THE FUND
1. Fund
(A) Law of Place of Incorporation
The Fund is a Massachusetts business trust organized in Massachusetts,
U.S.A. on January 13, 1986.
Chapter 182 of the Massachusetts General Laws prescribes the fundamental
matters in regard to the operations of certain business trusts
constituting voluntary associations under that chapter.
The Fund is an open-end, diversified management company under the 1940 Act.
(B) Outline of the Supervisory Authority
Refer to I - l(B) Outline of the Supervisory Authority.
(C) Purpose of the Fund
The purpose of the Fund is to provide investors a managed investment
primarily in securities, debt instruments and other instruments and
rights of a financial character.
(D) History of the Fund
January 13, 1986: Date of initial Agreement and Declaration of
Trust
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 Fund
The Trustees are responsible for generally overseeing the conduct of
Fund business. The Agreement and Declaration of Trust provides that
they shall have all powers necessary or convenient to carry out that
responsibility. The number of Trustees is fixed by the Trustees and may
not be less than three. A Trustee may be elected either by the Trustees
or by the shareholders. At any meeting called for the purpose, a
Trustee may be removed by vote of two-thirds of the outstanding shares
of the Fund. Each Trustee elected by the Trustees or the shareholders
shall serve until he or she retires, resigns, is removed, or dies or
until the next meeting of shareholders called for the purpose of
electing Trustees and until the election and qualification of his or her
successor.
The Trustees of the Fund are authorized by the Agreement and Declaration
of Trust to issue shares of the Fund in one or more series, each series
being preferred over all other series in respect of the assets allocated
to that series. The Trustees may, without shareholder approval, divide
the shares of any series into two or more classes, with such preferences
and special or relative rights and privileges as the Trustees may
determine.
Under the Agreement and Declaration of Trust the shareholders shall have
power, as and to the extent provided therein, to vote only (i) for the
election of Trustees, to the extent provided therein (ii) for the
removal of Trustees, to the extent provided therein (iii) with respect
to any investment adviser, to the extent provided therein (iv) with
respect to any termination of the Fund, to the extent provided therein
(v) with respect to certain amendments of the Agreement and Declaration
of Trust, (vi) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding, or
claim should or should not be brought or maintained derivatively or as a
class action on behalf of the Fund or the shareholders, and (vii) with
respect to such additional matters relating to the Fund as may be
required by the Agreement and Declaration of Trust, the Bylaws of the
Fund, or any registration of the Fund with the Securities and Exchange
Commission (or any successor agency) or any state, or as the Trustees
may consider necessary or desirable. Certain of the foregoing actions
may, in addition, be taken by the Trustees without vote of the
shareholders of the Fund.
On any matter submitted to a vote of shareholders, all shares of the
Fund then entitled to vote are voted in the aggregate as a single class
without regard to series or classes of shares, except (1) when required
by the 1940 Act, as amended, or when the Trustees shall have determined
that the matter affects one or more series or classes of shares
materially differently, shares are voted by individual series or class;
and (2) when the Trustees have determined that the matter affects the
interests of one or more series or classes, then only shareholders of
such series or classes are entitled to vote thereon. There is no
cumulative voting.
Meetings of shareholders may be called by the Clerk whenever ordered by
the Trustees, the Chairman of the Trustees, or requested in writing by
the holder or holders of at least one-tenth of the outstanding shares
entitled to vote at the meeting. Written notice of any meeting of
shareholders must be given by mailing the notice at least seven days
before the meeting. Thirty percent of shares entitled to vote on a
particular matter is a quorum for the transaction of business on that
matter at a shareholders' meeting, except that, where any provision of
law or of the Agreement and Declaration of Trust permits or requires
that holders of any series or class vote as an individual series or
class, then thirty percent of the aggregate number of shares of that
series or class entitled to vote are necessary to constitute a quorum
for the transaction of business by that series or class. For the
purpose of determining the shareholders of any class or series of shares
who are entitled to vote or act at any meeting, or who are entitled to
receive payment of any dividend or other distribution, the Trustees are
authorized to fix record dates, which may not be more then 90 days
before the date of any meeting of shareholders or more than 60 days
before the date of payment of any dividend or other distribution.
The Trustees are authorized by the Agreement and Declaration of Trust to
adopt Bylaws not inconsistent with the Agreement and Declaration of
Trust providing for the conduct of the business of the Fund. The Bylaws
contemplate that the Trustees shall elect a Chairman of the Trustees,
the President, the Treasurer, and the Clerk of the Fund, and that other
officers, if any, may be elected or appointed by the Trustees at any
time. The Bylaws may be amended or repealed, in whole or in part, by a
majority of the Trustees then in office at any meeting of the Trustees,
or by one or more writings signed by such a majority.
Regular meetings of the Trustees may be held without call or notice at
such places and at such times as the Trustees may from time to time
determine. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram
at least twenty-four hours before the meeting or to give notice to him
or her in person or by telephone at least twenty-four hours before the
meeting.
At any meeting of Trustees, a majority of the Trustees then in office
shall constitute a quorum. Except as otherwise provided in the
Agreement and Declaration of Trust or Bylaws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a
meeting (a quorum being present), or by written consents of a majority
of the Trustees then in office.
Subject to a favorable majority shareholder vote (as defined in the
Agreement and Declaration of Trust), the Trustees may contract for
exclusive or nonexclusive advisory and/or management services with any
corporation, trust, association, or other organization.
The Agreement and Declaration of Trust contains provisions for the
indemnification of Trustees, officers, and shareholders of the Fund
under the circumstances and on the terms specified therein.
The Fund may be terminated at any time by vote of shareholders holding
at least two-thirds of the shares entitled to vote or by the trustees by
written notice to the shareholders. Any series of shares may be
terminated at any time by vote of shareholders holding at least
two-thirds of the shares of such series entitled to vote or by the
Trustees by written notice to the shareholders of such series.
The foregoing is a general summary of certain provisions of the
Agreement and Declaration of Trust and Bylaws of the Fund, and is
qualified in its entirety by reference to each of those documents.
(G) Information Concerning Major Shareholders
Not applicable.
(H) Information Concerning Directors, Officers and Employees
(1) Trustees and Officers of the Fund
(as of February 29, 2000)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Name Office and Title Resume Shares Owned
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
George Putnam Chairman and President present: Chairman and Director, 68,055.128
Putnam Investment Management and
Putnam Mutual Funds Corp.
Director, Freeport Copper and
Company and Marsh & McLennan
Companies, Inc.
John A. Hill Vice Chairman present: Chairman and Managing 237.071
Director, First Reserve Corp.
Director, Synder Oil Corporation,
TransMontaigne Oil Company and
various private companies owned
by First Reserve Corp.
William F. Pounds Vice Chairman present: Professor Emeritus of 0
Management, Alfred P. Sloan School
of Management, Massachusetts
Institute of Technology, Director,
IDEXX Laboratories, Inc.,
Management Sciences for Health,
Inc. and Sun Company, Inc.
Jameson Adkins Baxter Trustee present: President, Baxter 507.315
Associates, Inc.,
Director, MB Financial, Inc.,
ASHTA Chemicals, Inc., Banta
Corporation and Ryerson Tull, Inc.
Hans H. Estin Trustee present: Vice Chairman, North 239.460
American Management Corp.
Ronald J. Jackson Trustee present: Former Chairman, 152.784
President and Chief Executive
Officer, Fisher-Price, Inc.
Paul. L. Joskow Trustee present: Professor of Economics 233.157
and Management and former Chairman
of Dept. of Economics, the
Massachusetts Institute of
Technology, Director of New England
Electric System, State Farm Indemnity
Company and Whitehead Institute for
Biomedical Research
Elizabeth T. Kennan Trustee present: President Emeritus and 275.124
Professor, Mount Holyoke College,
Director, Bell Atlantic, The Kentucky
Home Life Insurance Companies,
Northern Utilities and Talbots
Lawrence J. Lasser Trustee and Vice President present: President, Chief Executive 0
Officer and Director Putnam Investments,
Inc. and Putnam Investment Management,
Inc.
Director, Marsh & McLennan Companies,
Inc. and United Way of Massachusetts Bay
John H. Mullin, III Trustee present: Chairman and Chief Executive 635.037
Officer, Ridgeway Farm
Director, ACX Technologies, Inc.,
Alex. Brown Realty, Inc., The Liberty
Corporation and Carolina Power & Light
Robert E. Patterson Trustee present: President and Trustee, 21,859.391
Cabot Industrial Trust and Director
of Brandywine Trust Company
George Putnam, III Trustee present: President, New Generation 3,762.282
Research, Inc. and New Generation
Advisers, Inc.
Director, The Boston Family
Office L.L.C.
A.J.C. Smith Trustee present: Chairman and Chief 399.491
Executive Officer, Marsh &
McLennan Companies, Inc.
Director, Trident Partnership
W. Thomas Stephens Trustee present: President and Chief 127.136
Executive Officer of MacMillan
Bloedel, Ltd.
Director, Qwest Communications
and New Century Energies
W. Nicholas Thorndike Trustee present: Director of various 192.022
corporations and charitable
organizations, including Courier
Corp., Data General Corp., Bradley
Real Estate, Inc. and Providence
Journal Co.
Charles E. Porter Executive Vice President present: Managing Director, 0
Putnam Investments, Inc. and
Putnam Investment Management, Inc.
Patricia C. Flaherty Senior Vice President present: Senior Vice President 0
of Putnam Investments, Inc. and
Putnam Investment Management, Inc.
Richard A. Monaghan Vice President present: Managing Director, 0
Putnam Investments, Inc., Chief
of Mutual Fund Business, Putnam
Mutual Funds Corp.
Ian C. Ferguson Vice President present: Senior Managing Director 0
of Putnam Investments, Inc. and
Putnam Investment Management, Inc.
Gordon H. Silver Vice President present: Director and Senior 3,581.654
Managing Director of Putnam
Investments, Inc. and Putnam
Investment Management, Inc.
John D. Hughes Senior Vice President present Senior Vice President 0
and Treasurer of Putnam Investment Management, Inc.
Brett C. Browchuk Vice President present Managing Director of 0
Putnam Investment Management, Inc.
John R. Verani Vice President present: Senior Vice President 0
of Putnam Investments, Inc. and
Putnam Investment Management, Inc.
Stephen Oristaglio Vice President present Managing Director of 0
Putnam Investment Management, Inc.
Edward H. D'Alelio Vice President present: Managing Director, 15,280.464
Putnam Investment Management, Inc.
Rosemary Thomsen Vice President present: Senior Vice President 0
of Putnam Investment Management, Inc.
Paul G. Bucuvalas Assistant Treasurer present: N/A 0
Mary A. Eaton Associate Treasurer and present: N/A 0
Assistant Clerk
Judith Cohen Associate Clerk present: N/A 0
Katharine Howard Senior Associate Treasurer present: N/A 0
Wanda M McManus Assistant Clerk present: N/A 0
Joanne M. Neary Assistant Clerk present: N / A 0
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(2) Employees of the Fund
The Fund does not have any employees.
(I) Description of Business and Outline of Operation
The Fund may carry out any administrative and managerial act, including
the purchase, sale, subscription and exchange of any securities, and the
exercise of all rights directly or indirectly pertaining to the Fund's
assets. The Fund has retained Putnam Investment Management, Inc., the
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, shareholder approval 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
No litigation which has or which would have a material adverse effect on
the Fund has occurred which is required to be disclosed and has not been
disclosed. The fiscal year end of the Fund is November 30. The Fund is
established for an indefinite period and may be dissolved at any time by
vote of the shareholders holding at least two-thirds of the shares
entitled to vote or by the Trustees by written notice to shareholders.
2. Putnam Investment Management, Inc. (Investment Management Company)
(A) Law of Place of Incorporation
Putnam is incorporated under the General Corporation Law of the
Commonwealth of Massachusetts, U.S.A. Its investment advisory business
is regulated under the Investment Advisers Act of 1940.
Under the Investment Advisers Act of 1940, an investment adviser means,
with certain exceptions, any person who, for compensation, engages in
the business of advising others, either directly or through publications
or writings, as to the value of securities or as to the advisability of
investing in, purchasing or selling securities, or who, for compensation
and as part of a regular business, issues analyses or reports concerning
securities. Investment advisers under the Act may not conduct their
business unless they are registered with the SEC.
(B) Outline of the Supervisory Authority
Investment Management Company is registered as an investment adviser
under the Investment Advisers Act of 1940.
(C) Purpose of the Company
Investment Management Company's sole business is investment management,
which includes the buying, selling, exchanging and trading of securities
of all descriptions on behalf of mutual funds in any part of the world.
(D) History of the Company
Investment Management Company is one of America's oldest and largest
money management firms. Investment Management Company's staff of
experienced portfolio managers and research analysts selects securities
and constantly supervises the fund's portfolio. By pooling an
investor's money with that of other investors, a greater variety of
securities can be purchased than would be the case individually: the
resulting diversification helps reduce investment risk, Investment
Management Company has been managing mutual funds since 1937. Today,
the firm serves as the Investment Management Company for the funds in
the Putnam Family, with over $305.75 billion in assets in nearly 12
million shareholder accounts at the end of February, 2000. An
affiliate, The Putnam Advisory Company, Inc., manages domestic and
foreign institutional accounts and mutual funds, including the accounts
of many Fortune 500 companies. Another affiliate, Putnam Fiduciary
Trust Company, provides investment advice to institutional clients under
its banking and fiduciary powers as well as shareholder and custody
services to the Putnam Funds.
Putnam Investment Management Inc., Putnam Mutual Funds and Putnam
Fiduciary Trust Company are subsidiaries of Putnam Investments, Inc.,
which is located at One Post Office Square, Boston, Massachusetts 02109
and except for a minority stake owned by employees, is owned by of Marsh
& McLennan Companies, Inc., a publicly-owned holding company whose
principal businesses are international insurance and reinsurance
brokerage, employee benefit consulting and investment management.
(E) Amount of Capital Stock (as of the end of February, 2000)
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
(Total Stockholders' Equity
Year in Thousands)
- -------------------------------------------------
End of 1994 $48,149,491
End of 1995 $45,521,351
End of 1996 $45,817,658
End of 1997 $48,617,160
End of 1998 $425,782,008
End of 1999 $879,639,862
(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 following officer and the Credit Team of Investment Management
Company have primary responsibility for the day-to-day management of the
Fund's portfolio. Ms. Thomsen's length of service to the Fund and her
experience as a portfolio manager or investment analyst over at least
the last five years are shown.
(as of February 29, 2000)
Manager Since Experience
- -------------------------------------------------------------------------
Rosemary H. Thomsen 1996 1986-Present Putnam Management
Senior Vice President
- -------------------------------------------------------------------------
(G) Information Concerning Major Shareholders
As of the end of February, 2000, 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:
<TABLE>
<CAPTION>
(as of February 29, 2000)
- ------------------------------------------------------------------------------------------------------------------------------------
Position with Putnam Investment
Name Management, Inc. Other Business Affiliation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Putnam, George Chairman Director of Putnam Mutual Funds Corp.
2 Lasser, Lawrence J. President and Director, CEO
3 Silver, Gordon H. Director and Senior Director of Putnam Fiduciary Trust Company and
Managing Director Senior Managing Director of Putnam Mutual Funds Corp.
4 Collman, Kathleen M. Senior Managing Director Senior Managing Director of Putnam Mutual Funds Corp.
5 Ferguson, Ian C. Senior Managing Director Senior Managing Director of Putnam Mutual Funds Corp.
6 Oristaglio, Stephen Senior Managing Director
7 Regan, Anthony W. Senior Managing Director
8 Spiegel, Steven Senior Managing Director Senior Managing Director of Putnam Mutual Funds Corp.
9 Anderson, Blake E. Managing Director
10 Beck, Robert R. Managing Director
11 Boneparth, John F. Managing Director Managing Director of Putnam Mutual Funds Corp.
12 Bresnahan, Leslee R. Managing Director Managing Director of Putnam Mutual Funds Corp.
13 Browchuk, Brett C. Managing Director
14 Cassaro, Joseph A. Managing Director
15 Cotner, C. Beth Managing Director
16 Cronin, Kevin M. Managing Director Managing Director of Putnam Fiduciary Trust Company
17 D'Alelio, Edward H. Managing Director
18 Daly, Kenneth L. Managing Director Managing Director of Putnam Mutual Funds Corp.
19 DeTore, John A. Managing Director Managing Director of Putnam Fiduciary Trust Company
20 Durgarian, Karnig H. Managing Director Director and Managing Director of Putnam Fiduciary
Trust Company
21 Esteves, Irene M. Managing Director and Director of Putnam Fiduciary Trust Company
Chief Financial Officer
22 Gillis, Roland Managing Director
23 Haslett, Thomas R. Managing Director
24 Holding, Pamela Managing Director
25 Hurley, William J. Managing Director Managing Director and CFO of Putnam Mutual Funds Corp.
26 Jacobs, Jerome J. Managing Director
27 Joseph, Joseph P. Managing Director
28 Kamshad, Omid Managing Director
29 Kanwal, Amrit Managing Director Managing Director of Putnam Mutual Funds Corp.
30 King, David L. Managing Director
31 Kohli, D. William Managing Director
32 Kreisel, Anthony I. Managing Director
33 Kuenstner, Deborah F. Managing Director
34 Landes, William J. Managing Director
35 Leibovitch, Richard G. Managing Director
36 Leichter, Jennifer E. Managing Director
37 Lohr, Mark G. Managing Director Managing Director of Putnam Mutual Funds Corp.
38 Maloney, Kevin J. Managing Director
39 Martens, Erwin W. Managing Director Managing Director of Putnam Mutual Funds Corp.
40 Martino, Michael Managing Director Managing Director of Putnam Fiduciary Trust Company
41 Maxwell, Scott M. Managing Director Managing Director of Putnam Mutual Funds Corp.
42 McMullen, Carol C. Managing Director
43 Memani, Krisha K. Managing Director
44 Miller, Daniel L. Managing Director
45 Miller, Jeffrey M. Managing Director Managing Director of Putnam Mutual Funds Corp.
46 Morgan Jr., John J. Managing Director Managing Director of Putnam Fiduciary Trust Company
47 Morgan, Kelly A. Managing Director
48 Morris, Dick Managing Director
49 Murphy, Jennifer P. Managing Director
50 Nagashima, Tohio Managing Director Managing Director of Putnam Mutual Funds Corp.
51 Peacher, Stephen C. Managing Director
52 Peters, Jeffrey F. Managing Director Managing Director of Putnam Mutual Funds Corp.
53 Pollard, Mark D. Managing Director
54 Porter, Charles E. Managing Director
55 Price, Quintin I. Managing Director
56 Reilly, Thomas V. Managing Director
57 Schultz, Mitchell D. Managing Director Managing Director of Putnam Mutual Funds Corp.
58 Scott, Justin M. Managing Director Managing Director of Putnam Fiduciary Trust Company
59 Shadek Jr., Edward T. Managing Director
60 Starr, Loren Managing Director Managing Director of Putnam Mutual Funds Corp.
61 Swift, Robert Managing Director
62 Talanian, John C. Managing Director Managing Director of Putnam Mutual Funds Corp.
63 Tibbetts, Richard B. Managing Director Managing Director of Putnam Mutual Funds Corp.
64 Waldman, David L. Managing Director
65 Warren, Paul C. Managing Director
66 Wetlaufer, Eric Managing Director
67 Woolverton, William H. Managing Director Managing Director of Putnam Mutual Funds Corp.
68 Allansmith, Lauren L. Senior Vice President
69 Arends, Michael K. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
70 Asher, Steven E. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
71 Atkin, Michael J. Senior Vice President
72 Augustine, Jeffrey B. Senior Vice President
73 Bakshi, Manjit S. Senior Vice President
74 Bamford, Dolores Snyder Senior Vice President
75 Bent, John J. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
76 Block, Richard L. Senior Vice President
77 Bloemker, Rob A. Senior Vice President
78 Boselli, John A. Senior Vice President
79 Bousa, Edward P. Senior Vice President
80 Bradford Jr., Linwoood E. Senior Vice Presidet Senior Vice President of Putnam Mutual Funds Corp.
81 Burke, Andrea Senior Vice President
82 Burns, Cheryl A. Senior Vice President
83 Byrne, Joshua L. Senior Vice President
84 Callahan, Ellen S. Senior Vice President
85 Carlson, David G. Senior Vice President
86 Chase, Mary Claire Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
87 Chrostowski, Louis F. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
88 Crane, George H. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
89 Curran, Peter J. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
90 Dalferro, John R. Senior Vice President
91 Derbyshire, Ralph C. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
92 Dexter, Stephen P. Senior Vice President
93 Divney, Kevin M. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
94 Eigerman, Nathan W. Senior Vice President
95 Elavia, Tony H. Senior Vice President
96 England, Richard B. Senior Vice President
97 Epke, Laura L. Senior Vice President
98 Farrell, Deborah S. Senior Vice President
99 Flaherty, Patricia C. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
100 Fleisher, Peter M. Senior Vice President
101 Fontana, Forrest N. Senior Vice President
102 Francis, Jonathan H. Senior Vice President
103 Frost, Karen T. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
104 Frucci, Richard M. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
105 Gorman, Stephen A. Senior Vice President
106 Graham, Andrew Senior Vice President
107 Grant, Peter J. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
108 Graviere, Patrice Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
109 Grim, Daniel J. Senior Vice President
110 Haagensen, Paul E. Senior Vice President
111 Hadas, Edward Senior Vice President
112 Hadden, Peter J. Senior Vice President
113 Halperin, Matthew C. Senior Vice President
114 Hamlin, David E. Senior Vice President
115 Harring, Linda Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
116 Hart, Nigel P. Senior Vice President
117 Healey, Deborah R. Senior Vice President
118 Horwitz, Jonathan S. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
119 Hotchkiss, Michael F. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
120 Kaufman, Jeffrey Senior Vice President
121 Kay, Karen R. Senior Vice President Clerk, Director and Senior Vice President of
Putnam Fiduciary Trust Company
122 Kirson, Steven L. Senior Vice President
123 Knight, Jeffrey L. Senior Vice President
124 Koontz, Jill A. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
125 Korn, Karen R. Senior Vice President
126 Kurey, Thomas J. Senior Vice President
127 Lannum III, Coleman N. Senior Vice President
128 Lindsey, Jeffrey R. Senior Vice President
129 Lode, Geirulv Senior Vice President
130 Lomba, Rufino R. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
131 MacElwee, Jones, Elizabeth M. Senior Vice President
132 Madore, Robert A. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
133 Malloy, Julie M. Senior Vice President
134 Manuel Jr., Richard D. Senior Vice President
135 Marrkand, Paul E. Senior Vice President
136 Marshall, William L. Senior Vice President
137 Matteis, Andrew S. Senior Vice President
138 McDonald, Richard E. Senior Vice President
139 Meehan, Thalia Senior Vice President
140 Mehta, Sandeep Senior Vice President
141 Miller, William H. Senior Vice President
142 Mockard, Jeanne L. Senior Vice President
143 Mufson, Michael J. Senior Vice President
144 Mullen, Donald E. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
145 Mullin, Hugh H. Senior Vice President
146 Murphy, Kevin F. Senior Vice President
147 Netols, Jeffrey W. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
148 Oler, Stephen S. Senior Vice President
149 Paine, Robert M. Senior Vice President
150 Parker, Margery C. Senior Vice President
151 Parr, Cynthia O. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
152 Perry, William Senior Vice President
153 Peters, Carmel Senior Vice President
154 Petralia, Randolph S. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
155 Plapinger, Keith Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
156 Pohl, Charles G. Senior Vice President
157 Prusko, James M. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
158 Puddle, David G. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
159 Quistberg, Paul T. Senior Vice President
160 Rogers, Kevin J. Senior Vice President
161 Ruys de Perez, Charles A. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
162 Sai, Yumiko Senior Vice President
163 Santos, David J. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
164 Santosus, Anthony C. Senior Vice President
165 Schwister, Jay E. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
166 Scordato, Christine A. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
167 Selden, Denise D. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
168 Sievert, Jean I. Senior Vice President
169 Simon, Sheldon N. Senior Vice President
170 Simozar, Saied Senior Vice President
171 Smith Jr., Leo J. Senior Vice President
172 Smith, Margaret D. Senior Vice President
173 Spatz, Erin J. Senior Vice President
174 Spiers, John Graham Senior Vice President
175 Stack, Michael P. Senior Vice President
176 Stairs, George W. Senior Vice President
177 Strumpf, Casey Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
178 Sugimoto, Toshifumi Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
179 Sullivan, Roger R. Senior Vice President
180 Sullivan, William J. Senior Vice President
181 Suzuki, Toshimi Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
182 Svensson, Lisa H. Senior Vice President
183 Swanberg, Charles H. Senior Vice President
184 Thomsen, Rosemary H. Senior Vice President Senior Vice President of Putnam Fiduciary Trust
Company
185 Troped Blacker, Bonnie L. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
186 Verani, John R. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
187 Walsh, Francis P. Senior Vice President
188 Weinstein, Michael R. Senior Vice President
189 Weiss, Manuel Senior Vice President
190 Whalen, Edward F. Senior Vice President Senior Vice President of Putnam Mutual Funds Corp.
191 Wyke, Richard P. Senior Vice President
192 Yogg, Michael R. Senior Vice President
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(I) Summary of Business Lines and Business Operation
Investment Management Company is engaged in the business of providing
investment management and investment advisory services to mutual funds.
As of the end of February, 2000, Investment Management Company managed,
advised, and/or administered the following 116 funds and fund portfolios
(having an aggregate net asset value of approximately $305.75 billion):
<TABLE>
<CAPTION>
(As of February 29, 2000)
- ------------------------------------------------------------------------------------------------------------------------------------
Year/ Principal Total Net Net Asset
Month/Day Character- Asset Value Value per
Name Established istics ($ million) share ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 The George Putnam Fund of Boston; A 11/5/37 Open/Equity 3,180.09 14.99
2 The George Putnam Fund of Boston; B 4/24/92 Open/Equity 1,268.77 14.87
3 The George Putnam Fund of Boston; M 12/1/94 Open/Equity 234.23 14.87
4 The George Putnam Fund of Boston; Y 1/1/94 Open/Equity 679.26 15.02
5 Putnam American Government Income Fund; A 3/1/85 Open/Bond 1,452.01 8.25
6 Putnam American Government Income Fund; B 5/20/94 Open/Bond 128.32 8.21
7 Putnam American Government Income Fund; M 2/14/95 Open/Bond 6.80 8.27
8 Putnam Asia Pacific Growth Fund; A 2/20/91 Open/Equity 349.22 17.68
9 Putnam Asia Pacific Growth Fund; B 6/1/93 Open/Equity 306.49 17.32
10 Putnam Asia Pacific Growth Fund; M 2/1/95 Open/Equity 19.61 17.51
11 Putnam Asia Pacific Fund II 3/23/98 Open/Equity 4.47 14.60
12 Putnam Asset Allocation: Balanced Portfolio; A 2/7/94 Open/Balanced 1,028.03 12.67
13 Putnam Asset Allocation: Balanced Portfolio; B 2/11/94 Open/Balanced 581.78 12.58
14 Putnam Asset Allocation: Balanced Portfolio; C 9/1/94 Open/Balanced 135.81 12.50
15 Putnam Asset Allocation: Balanced Portfolio; M 2/6/95 Open/Balanced 70.62 12.63
16 Putnam Asset Allocation: Balanced Portfolio; Y 7/14/94 Open/Balanced 502.20 12.68
17 Putnam Asset Allocation: Conservative Portfolio; A 2/7/94 Open/Balanced 391.44 10.44
18 Putnam Asset Allocation: Conservative Portfolio; B 2/18/94 Open/Balanced 186.33 10.41
19 Putnam Asset Allocation: Conservative Portfolio; C 9/1/94 Open/Balanced 47.02 10.38
20 Putnam Asset Allocation: Conservative Portfolio; M 2/7/95 Open/Balanced 25.47 10.41
21 Putnam Asset Allocation: Conservative Portfolio; Y 7/14/94 Open/Balanced 114.62 10.46
22 Putnam Asset Allocation: Growth Portfolio; A 2/8/94 Open/Balanced 797.20 14.97
23 Putnam Asset Allocation: Growth Portfolio; B 2/16/94 Open/Balanced 537.87 14.76
24 Putnam Asset Allocation: Growth Portfolio; C 9/1/94 Open/Balanced 129.04 14.63
25 Putnam Asset Allocation: Growth Portfolio; M 2/1/95 Open/Balanced 70.00 14.78
26 Putnam Asset Allocation: Growth Portfolio; Y 7/14/94 Open/Balanced 474.04 15.06
27 Putnam Arizona Tax Exempt Income Fund; A 1/30/91 Open/Bond 93.30 8.54
28 Putnam Arizona Tax Exempt Income Fund; B 7/15/93 Open/Bond 28.79 8.53
29 Putnam Arizona Tax Exempt Income Fund; M 7/3/95 Open/Bond 0.85 8.56
30 Putnam Balanced Fund 10/2/95 Open/Balanced 5.42 14.10
31 Putnam Balanced Retirement Fund; A 4/19/85 Open/Balanced 549.13 9.19
32 Putnam Balanced Retirement Fund; B 2/1/94 Open/Balanced 158.37 9.11
33 Putnam Balanced Retirement Fund; M 3/17/95 Open/Balanced 12.72 9.14
34 Putnam Balanced Retirement Fund; Y 1/4/99 Open/Balanced 2.88 9.19
35 Putnam California Investment Grade Municipal Trust 11/27/92 Closed/Bond 64.92 14.09
36 Putnam California Tax Exempt Income Fund; A 4/29/83 Open/Bond 2,515.42 8.03
37 Putnam California Tax Exempt Income Fund; B 1/4/93 Open/Bond 549.35 8.02
38 Putnam California Tax Exempt Income Fund; M 2/14/95 Open/Bond 13.28 8.01
39 Putnam California Tax Exempt Money Market Fund 10/26/87 Open/Bond 42.51 1.00
40 Putnam Capital Opportunities Fund; A 8/5/93 Open/Equity 99.69 11.80
41 Putnam Capital Opportunities Fund; B 11/2/94 Open/Equity 106.85 11.68
42 Putnam Capital Opportunities Fund; M 1/22/96 Open/Equity 8.20 11.71
43 Putnam Capital Appreciation Fund; A 8/5/93 Open/Equity 1,206.85 27.62
44 Putnam Capital Appreciation Fund; B 11/2/94 Open/Equity 1,277.83 27.25
45 Putnam Capital Appreciation Fund; M 1/22/96 Open/Equity 83.76 27.33
46 Putnam Convertible Opportunity and Income Trust 6/29/95 Closed/Bond 89.21 24.03
47 Putnam Convertible Income-Growth Trust; A 6/29/72 Open/Balanced 1,067.56 20.77
48 Putnam Convertible Income-Growth Trust; B 7/15/93 Open/Balanced 294.58 20.48
49 Putnam Convertible Income-Growth Trust; M 3/13/95 Open/Balanced 17.64 20.61
50 Putnam Convertible Income-Growth Trust; Y 12/30/98 Open/Balanced 66.84 20.77
51 Putnam Dividend Income Fund 9/28/89 Closed/Bond 116.11 10.73
52 Putnam Diversified Income Trust; A 10/3/88 Open/Bond 1,429.68 10.68
53 Putnam Diversified Income Trust; B 3/1/93 Open/Bond 1,480.40 10.63
54 Putnam Diversified Income Trust; C 2/1/99 Open/Bond 8.50 10.65
55 Putnam Diversified Income Trust; M 12/1/94 Open/Bond 1,057.23 10.63
56 Putnam Diversified Income Trust; Y 7/11/96 Open/Bond 13.15 10.69
57 Putnam Emerging Markets Fund; A 10/2/95 Open/Equity 104.21 13.02
58 Putnam Emerging Markets Fund; B 10/2/95 Open/Equity 68.40 12.90
59 Putnam Emerging Markets Fund; M 10/2/95 Open/Equity 5.75 12.94
60 Putnam Equity Fund 98 12/30/97 Open/Equity 27.86 32.41
61 Putnam Equity Income Fund; A 6/15/77 Open/Balanced 943.84 12.42
62 Putnam Equity Income Fund; B 9/13/93 Open/Balanced 478.21 12.32
63 Putnam Equity Income Fund; C 2/1/99 Open/Balanced 11.33 12.38
64 Putnam Equity Income Fund; M 12/2/94 Open/Balanced 48.22 12.33
65 Putnam Europe Growth Fund; A 9/7/90 Open/Equity 1,108.45 27.66
66 Putnam Europe Growth Fund; B 2/1/94 Open/Equity 916.52 26.98
67 Putnam Europe Growth Fund; C 7/26/99 Open/Equity 7.94 27.57
68 Putnam Europe Growth Fund; M 12/1/94 Open/Equity 75.87 27.48
69 Putnam Florida Tax Exempt Income Fund; A 8/24/90 Open/Bond 203.82 8.64
70 Putnam Florida Tax Exempt Income Fund; B 1/4/93 Open/Bond 73.32 8.64
71 Putnam Florida Tax Exempt Income Fund; M 5/1/95 Open/Bond 0.57 8.64
72 Putnam Global Natural Resources Fund; A 7/24/80 Open/Equity 167.14 18.06
73 Putnam Global Natural Resources Fund; B 2/1/94 Open/Equity 122.41 17.78
74 Putnam Global Natural Resources Fund; M 7/3/95 Open/Equity 5.28 17.96
75 Putnam Global Equity Trust; A 7/1/94 Open/Equity 623.86 19.32
76 Putnam Global Equity Trust; B 7/2/94 Open/Equity 709.59 18.92
77 Putnam Global Equity Trust; C 2/1/99 Open/Equity 25.39 19.21
78 Putnam Global Equity Trust; M 7/3/95 Open/Equity 58.72 19.07
79 Putnam Global Growth and Income Fund; A 1/3/95 Open/Equity 40.55 12.60
80 Putnam Global Growth and Income Fund; B 1/3/95 Open/Equity 32.02 12.46
81 Putnam Global Growth and Income Fund; M 1/3/95 Open/Equity 2.61 12.53
82 Putnam Global Governmental Income Trust; A 6/1/87 Open/Bond 110.68 11.40
83 Putnam Global Governmental Income Trust; B 2/1/94 Open/Bond 26.36 11.37
84 Putnam Global Governmental Income Trust; C 7/26/99 Open/Bond 0.11 11.39
85 Putnam Global Governmental Income Trust; M 3/17/95 Open/Bond 173.14 11.35
86 Putnam Global Growth Fund; A 9/1/67 Open/Equity 6,508.38 19.00
87 Putnam Global Growth Fund; B 4/27/92 Open/Equity 2,603.32 18.06
88 Putnam Global Growth Fund; C 2/1/99 Open/Equity 51.71 18.83
89 Putnam Global Growth Fund; M 3/1/95 Open/Equity 109.87 18.74
90 Putnam Global Growth Fund; Y 6/15/94 Open/Equity 315.96 19.37
91 Putnam Growth and Income Fund II; A 1/5/95 Open/Balanced 999.39 10.91
92 Putnam Growth and Income Fund II; B 1/5/95 Open/Balanced 1,067.93 10.80
93 Putnam Growth and Income Fund II; C 2/1/99 Open/Balanced 29.72 10.88
94 Putnam Growth and Income Fund II; M 1/5/95 Open/Balanced 124.45 10.85
95 The Putnam Fund for Growth and Income; A 11/6/57 Open/Balanced 17,876.11 16.59
96 The Putnam Fund for Growth and Income; B 4/27/92 Open/Balanced 10,556.90 16.34
97 The Putnam Fund for Growth and Income; M 5/1/95 Open/Balanced 366.99 16.47
98 The Putnam Fund for Growth and Income; Y 6/15/94 Open/Balanced 1,296.06 16.63
99 Putnam Growth Fund 5/1/98 Open/Equity 4.30 15.37
100 Putnam Growth Opportunities; A 10/2/95 Open/Equity 2,725.37 30.38
101 Putnam Growth Opportunities; B 8/1/97 Open/Equity 3,087.12 29.82
102 Putnam Growth Opportunities; C 2/1/99 Open/Equity 225.06 30.20
103 Putnam Growth Opportunities; M 8/1/97 Open/Equity 156.87 30.01
104 Putnam High Income Convertible and Bond Fund 7/9/87 Closed/Bond 116.13 8.49
105 Putnam High Yield Advantage Fund; A 3/25/86 Open/Bond 895.12 7.75
106 Putnam High Yield Advantage Fund; B 5/16/94 Open/Bond 725.83 7.71
107 Putnam High Yield Advantage Fund; M 12/1/94 Open/Bond 764.16 7.74
108 Putnam High Yield Advantage Fund; Y 12/30/98 Open/Bond 8.96 7.75
109 Putnam High Yield Fund II; A 12/31/97 Open/Bond 574.81 7.31
110 Putnam High Yield Fund II; B 12/31/97 Open/Bond 815.35 7.32
111 Putnam High Yield Fund II; M 12/31/97 Open/Bond 37.40 7.32
112 Putnam High Yield Trust; A 2/14/78 Open/Bond 2,339.32 10.26
113 Putnam High Yield Trust; B 3/1/93 Open/Bond 493.53 10.22
114 Putnam High Yield Trust; M 7/3/95 Open/Bond 12.50 10.26
115 Putnam High Yield Trust; Y 12/30/98 Open/Bond 18.20 10.26
116 Putnam Health Sciences Trust; A 5/28/82 Open/Equity 3,376.95 72.60
117 Putnam Health Sciences Trust; B 3/1/93 Open/Equity 2,438.37 69.22
118 Putnam Health Sciences Trust; M 7/3/95 Open/Equity 103.51 71.14
119 Putnam High Yield Municipal Trust 5/25/89 Closed/Bond 182.08 8.22
120 Putnam Income Fund; A 11/1/54 Open/Bond 1,035.71 6.34
121 Putnam Income Fund; B 3/1/93 Open/Bond 411.22 6.30
122 Putnam Income Fund; C 7/26/99 Open/Bond 4.40 6.33
123 Putnam Income Fund; M 12/14/94 Open/Bond 1,487.33 6.30
124 Putnam Income Fund; Y 2/12/94 Open/Bond 226.10 6.35
125 Putnam Intermediate U.S. Government Income Fund; A 2/16/93 Open/Bond 222.39 4.75
126 Putnam Intermediate U.S. Government Income Fund; B 2/16/93 Open/Bond 113.36 4.76
127 Putnam Intermediate U.S. Government Income Fund; M 4/3/95 Open/Bond 10.41 4.77
128 Putnam Intermediate U.S. Government Income Fund; Y 10/1/97 Open/Bond 110.14 4.75
129 Putnam International Fund 12/28/95 Open/Equity 6.32 13.35
130 Putnam International Growth and Income Fund; A 8/1/96 Open/Equity 524.30 11.61
131 Putnam International Growth and Income Fund; B 8/1/96 Open/Equity 455.30 11.49
132 Putnam International Growth and Income Fund; C 2/1/99 Open/Equity 18.01 11.57
133 Putnam International Growth and Income Fund; M 8/1/96 Open/Equity 37.47 11.57
134 Putnam International Growth Fund; A 2/28/91 Open/Equity 6,097.31 30.68
135 Putnam International Growth Fund; B 6/1/94 Open/Equity 3,367.64 30.04
136 Putnam International Growth Fund; M 12/1/94 Open/Equity 363.53 30.42
137 Putnam International Growth Fund; Y 7/12/96 Open/Equity 867.54 30.80
138 Putnam International New Opportunities Fund; A 1/3/95 Open/Equity 1,924.19 27.49
139 Putnam International New Opportunities Fund; B 7/21/95 Open/Equity 1,960.96 26.63
140 Putnam International New Opportunities Fund; C 2/1/99 Open/Equity 50.78 27.30
141 Putnam International New Opportunities Fund; M 7/21/95 Open/Equity 154.95 26.96
142 Putnam International Voyager Fund; A 12/28/95 Open/Equity 1,008.12 32.27
143 Putnam International Voyager Fund; B 10/30/96 Open/Equity 738.23 31.84
144 Putnam International Voyager Fund; M 10/30/96 Open/Equity 66.84 32.03
145 Putnam Investment Grade Municipal Trust I 10/26/89 Closed/Bond 219.40 10.42
146 Putnam Investment Grade Municipal Trust II 11/27/92 Closed/Bond 165.71 12.41
147 Putnam Investment Grade Municipal Trust III 11/29/93 Closed/Bond 48.06 12.00
148 Putnam Investors Fund; A 12/1/25 Open/Equity 7,897.72 18.31
149 Putnam Investors Fund; B 3/1/93 Open/Equity 4,267.23 17.40
150 Putnam Investors Fund; M 12/2/94 Open/Equity 262.26 17.89
151 Putnam Investors Fund; Y 1/7/97 Open/Equity 1,204.46 18.42
152 Putnam Latin America Fund 3/23/98 Open/Equity 1,148.52 18.07
153 Putnam Massachusetts Tax Exempt Income Fund; A 10/23/89 Open/Bond 260.96 8.77
154 Putnam Massachusetts Tax Exempt Income Fund; B 7/15/93 Open/Bond 112.61 8.77
155 Putnam Massachusetts Tax Exempt Income Fund; M 5/12/95 Open/Bond 4.51 8.77
156 Putnam Master Income Trust 4/29/88 Closed/Bond 409.68 7.72
157 Putnam Managed High Yield Trust 6/25/93 Closed/Bond 87.31 11.63
158 Putnam Michigan Tax Exempt Income Fund; A 10/23/89 Open/Bond 120.47 8.38
159 Putnam Michigan Tax Exempt Income Fund; B 7/15/93 Open/Bond 39.89 8.37
160 Putnam Michigan Tax Exempt Income Fund; M 4/17/95 Open/Bond 1.89 8.38
161 Putnam Mid-Cap Value Fund 11/1/99 Open/Balanced 2.87 7.87
162 Putnam Minnesota Tax Exempt Income Fund; A 10/23/89 Open/Bond 88.33 8.35
163 Putnam Minnesota Tax Exempt Income Fund; B 7/15/93 Open/Bond 46.10 8.33
164 Putnam Minnesota Tax Exempt Income Fund; M 4/3/95 Open/Bond 2.20 8.35
165 Putnam Managed Municipal Income Trust 2/24/89 Closed/Bond 395.02 8.46
166 Putnam Money Market Fund; A 10/1/76 Open/Bond 3,576.37 1.00
167 Putnam Money Market Fund; B 4/27/92 Open/Bond 826.62 1.00
168 Putnam Money Market Fund; C 2/1/99 Open/Bond 22.87 1.00
169 Putnam Money Market Fund; M 12/8/94 Open/Bond 118.98 1.00
170 Putnam Master Intermediate Income Trust 4/29/88 Closed/Bond 746.80 7.46
171 Putnam Municipal Income Fund; A 5/22/89 Open/Bond 711.26 8.46
172 Putnam Municipal Income Fund; B 1/4/93 Open/Bond 421.68 8.45
173 Putnam Municipal Income Fund; C 2/1/99 Open/Bond 8.36 8.45
174 Putnam Municipal Income Fund; M 12/1/94 Open/Bond 12.97 8.45
175 Putnam Municipal Opportunities Trust 5/28/93 Closed/Bond 200.35 12.40
176 Putnam New Century Growth Fund; A 1/21/00 Open/Equity 455.29 30.50
177 Putnam New Century Growth Fund; B 1/21/00 Open/Equity 360.22 30.48
178 Putnam New Century Growth Fund; C 1/21/00 Open/Equity 68.49 30.49
179 Putnam New Century Growth Fund; M 1/21/00 Open/Equity 19.66 30.50
180 Putnam New Opportunities Fund; A 8/31/90 Open/Equity 21,748.81 104.36
181 Putnam New Opportunities Fund; B 3/1/93 Open/Equity 13,801.27 98.57
182 Putnam New Opportunities Fund; M 12/1/94 Open/Equity 832.41 101.31
183 Putnam New Opportunities Fund; Y 7/19/94 Open/Equity 2,180.64 106.07
184 Putnam New Value Fund; A 1/3/96 Open/Equity 278.95 10.47
185 Putnam New Value Fund; B 2/26/96 Open/Equity 274.61 10.39
186 Putnam New Value Fund; M 2/26/96 Open/Equity 24.94 10.44
187 Putnam New Jersey Tax Exempt Income Fund; A 2/20/90 Open/Bond 180.55 8.51
188 Putnam New Jersey Tax Exempt Income Fund; B 1/4/93 Open/Bond 87.22 8.50
189 Putnam New Jersey Tax Exempt Income Fund; M 5/1/95 Open/Bond 0.76 8.51
190 Putnam New York Investment Grade Municipal Trust 11/27/92 Closed/Bond 36.39 12.78
191 Putnam New York Tax Exempt Income Fund; A 9/2/83 Open/Bond 1,304.07 8.20
192 Putnam New York Tax Exempt Income Fund; B 1/4/93 Open/Bond 178.41 8.18
193 Putnam New York Tax Exempt Income Fund; M 4/10/95 Open/Bond 1.54 8.20
194 Putnam New York Tax Exempt Money Market Fund 10/26/87 Open/Bond 36.32 1.00
195 Putnam New York Tax Exempt Opportunities Fund; A 11/7/90 Open/Bond 131.10 8.33
196 Putnam New York Tax Exempt Opportunities Fund; B 2/1/94 Open/Bond 60.44 8.33
197 Putnam New York Tax Exempt Opportunities Fund; M 2/10/95 Open/Bond 2.15 8.32
198 Putnam Ohio Tax Exempt Income Fund; A 10/23/89 Open/Bond 155.67 8.31
199 Putnam Ohio Tax Exempt Income Fund; B 7/15/93 Open/Bond 49.83 8.30
200 Putnam Ohio Tax Exempt Income Fund; M 4/3/95 Open/Bond 1.73 8.31
201 Putnam OTC & Emerging Growth Fund; A 11/1/82 Open/Equity 8,301.02 48.66
202 Putnam OTC & Emerging Growth Fund; B 7/15/93 Open/Equity 3,822.60 45.79
203 Putnam OTC & Emerging Growth Fund; M 12/2/94 Open/Equity 936.50 47.15
204 Putnam OTC & Emerging Growth Fund; Y 7/12/96 Open/Equity 1,101.86 49.23
205 Putnam Pennsylvania Tax Exempt Income Fund; A 7/21/89 Open/Bond 149.76 8.38
206 Putnam Pennsylvania Tax Exempt Income Fund; B 7/15/93 Open/Bond 80.39 8.37
207 Putnam Pennsylvania Tax Exempt Income Fund; M 7/3/95 Open/Bond 2.42 8.39
208 Putnam Preferred Income Fund; A 1/4/84 Open/Bond 94.89 8.13
209 Putnam Preferred Income Fund; M 4/20/95 Open/Bond 9.12 8.11
210 Putnam Premier Income Trust 1995/2/29 Closed/Bond 1,044.88 7.41
211 Putnam Research Fund; A 10/2/95 Open/Equity 711.95 17.40
212 Putnam Research Fund; B 6/15/98 Open/Equity 752.25 17.17
213 Putnam Research Fund; C 2/1/99 Open/Equity 69.90 17.27
214 Putnam Research Fund; M 6/15/98 Open/Equity 54.67 17.25
215 Putnam Small Cap Value Fund; A 4/12/99 Open/Equity 83.41 10.01
216 Putnam Small Cap Value Fund; B 5/3/99 Open/Equity 59.12 9.96
217 Putnam Strategic Income Fund; A 2/19/95 Open/Bond 77.25 7.21
218 Putnam Strategic Income Fund; B 2/19/96 Open/Bond 120.45 7.22
219 Putnam Strategic Income Fund; C 2/1/99 Open/Bond 5.59 7.23
220 Putnam Strategic Income Fund; M 2/19/96 Open/Bond 7.80 7.20
221 Putnam Tax Smart Equity Fund; A 7/1/99 Open/Equity 118.42 10.98
222 Putnam Tax Smart Equity Fund; B 10/1/99 Open/Equity 125.45 10.95
223 Putnam Tax Smart Equity Fund; C 10/1/99 Open/Equity 35.40 10.95
224 Putnam Tax Exempt Income Fund; A 12/31/76 Open/Bond 1,592.96 8.33
225 Putnam Tax Exempt Income Fund; B 1/4/93 Open/Bond 197.92 8.32
226 Putnam Tax Exempt Income Fund; M 2/16/95 Open/Bond 9.23 8.35
227 Putnam Tax Exempt Money Market Fund 10/26/87 Open/Bond 96.93 1.00
228 Putnam Tax-Free Health Care Fund 6/29/92 Closed/Bond 183.56 13.29
229 Putnam Tax-Free Income Trust Tax-Free High Yield Fund; A 9/20/93 Open/Bond 1,133.86 13.28
230 Putnam Tax-Free Income Trust Tax-Free High Yield Fund B 9/9/85 Open/Bond 504.18 13.30
231 Putnam Tax-Free Income Trust Tax-Free High Yield Fund C 2/1/99 Open/Bond 3.13 13.28
232 Putnam Tax-Free Income Trust Tax-Free High Yield Fund M 12/29/94 Open/Bond 18.89 13.29
233 Putnam Tax-Free Income Trust Tax-Free Insured Fund; A 9/30/93 Open/Bond 237.05 14.07
234 Putnam Tax-Free Income Trust Tax-Free Insured Fund; B 9/9/85 Open/Bond 264.31 14.09
235 Putnam Tax-Free Income Trust Tax-Free Insured Fund; M 6/1/95 Open/Bond 1.66 14.11
236 Putnam U.S. Core Fund 5/1/98 Open/Equity 4.89 12.19
237 Putnam U.S. Government Income Trust; A 2/8/84 Open/Bond 1,850.72 12.26
238 Putnam U.S. Government Income Trust; B 4/27/92 Open/Bond 816.44 12.20
239 Putnam U.S. Government Income Trust; C 7/26/99 Open/Bond 3.60 12.24
240 Putnam U.S. Government Income Trust; M 2/6/95 Open/Bond 109.34 12.23
241 Putnam U.S. Government Income Trust; Y 4/11/94 Open/Bond 26.05 12.25
242 Putnam Utilities Growth and Income Fund; A 11/19/90 Open/Balanced 964.25 12.14
243 Putnam Utilities Growth and Income Fund; B 4/27/92 Open/Balanced 372.43 12.06
244 Putnam Utilities Growth and Income Fund; C 7/26/99 Open/Balanced 1.26 12.10
245 Putnam Utilities Growth and Income Fund; M 3/1/95 Open/Balanced 11.82 12.11
246 Putnam Value Fund 5/1/98 Open/Balanced 2.00 7.40
247 Putnam Vista Fund; A 6/3/68 Open/Equity 6,714.00 21.17
248 Putnam Vista Fund; B 3/1/93 Open/Equity 2,984.49 19.73
249 Putnam Vista Fund; M 12/1/94 Open/Equity 251.91 20.45
250 Putnam Vista Fund; Y 3/28/95 Open/Equity 1,046.88 21.57
251 Putnam Voyager Fund II; A 4/14/93 Open/Equity 2,138.24 44.26
252 Putnam Voyager Fund II; B 10/2/95 Open/Equity 1,930.13 42.69
253 Putnam Voyager Fund II; C 2/1/99 Open/Equity 112.18 43.94
254 Putnam Voyager Fund II; M 10/2/95 Open/Equity 203.44 43.26
255 Putnam Voyager Fund; A 4/1/96 Open/Equity 26,869.10 33.46
256 Putnam Voyager Fund; B 4/27/92 Open/Equity 12,860.89 30.75
257 Putnam Voyager Fund; M 12/1/94 Open/Equity 633.25 32.42
258 Putnam Voyager Fund; Y 4/1/94 Open/Equity 4,359.61 34.18
259 Putnam VT Asia Pacific Growth Fund; IA 5/1/95 Open/Equity 231.15 16.05
260 Putnam VT Asia Pacific Growth Fund; IB 4/30/98 Open/Equity 8.90 16.01
261 Putnam VT Diversified Income Fund; IA 9/15/93 Open/Bond 605.67 9.98
262 Putnam VT Diversified Income Fund; IB 4/6/98 Open/Bond 30.24 9.95
263 Putnam VT Global Asset Allocation Fund; IA 2/1/88 Open/Balanced 947.32 19.02
264 Putnam VT Global Asset Allocation Fund; IB 4/30/98 Open/Balanced 7.92 19.01
265 Putnam VT George Putnam Fund; IA 4/30/98 Open/Equity 255.88 9.27
266 Putnam VT George Putnam Fund; IB 4/30/98 Open/Equity 43.51 9.26
267 Putnam VT Global Growth Fund; IA 5/1/90 Open/Equity 3,166.93 31.17
268 Putnam VT Global Growth Fund; IB 4/30/98 Open/Equity 44.01 31.08
269 Putnam VT Growth and Income Fund; IA 2/1/88 Open/Balanced 8,060.08 23.74
270 Putnam VT Growth and Income Fund; IB 4/6/98 Open/Balanced 192.13 23.69
271 Putnam VT High Yield Fund; IA 2/1/88 Open/Bond 927.91 11.18
272 Putnam VT High Yield Fund; IB 4/30/98 Open/Bond 22.31 11.18
273 Putnam VT Health and Sciences Fund; IA 4/30/98 Open/Equity 285.82 12.39
274 Putnam VT Health and Sciences Fund; IB 4/30/98 Open/Equity 30.87 12.38
275 Putnam VT Income Fund; IA 2/1/88 Open/Bond 881.36 12.58
276 Putnam VT Income Fund; IB 4/30/98 Open/Bond 22.09 12.57
277 Putnam VT International Growth and Income; IA 1/1/97 Open/Balanced 385.74 14.56
278 Putnam VT International Growth and Income; IB 4/6/98 Open/Balanced 17.35 14.53
279 Putnam VT International New Opportunities Fund; IA 1/1/97 Open/Equity 452.28 25.66
280 Putnam VT International New Opportunities Fund; IB 4/30/98 Open/Equity 79.30 25.62
281 Putnam VT International Growth Fund; IA 1/1/97 Open/Equity 703.76 22.37
282 Putnam VT International Growth Fund; IB 4/30/98 Open/Equity 60.54 22.33
283 Putnam VT Investors Fund; IA 4/30/98 Open/Equity 919.92 14.45
284 Putnam VT Investors Fund; IB 4/30/98 Open/Equity 132.00 14.42
285 Putnam VT Money Market Fund; IA 2/1/88 Open/Bond 668.19 1.00
286 Putnam VT Money Market Fund; IB 4/30/98 Open/Bond 29.73 1.00
287 Putnam VT New Opportunities Fund; IA 5/2/94 Open/Equity 7,583.46 50.02
288 Putnam VT New Opportunities Fund; IB 4/30/98 Open/Equity 105.86 49.89
289 Putnam VT New Value Fund; IA 1/2/97 Open/Equity 209.99 10.48
290 Putnam VT New Value Fund; IB 4/30/98 Open/Equity 10.37 10.46
291 Putnam VT OTC & Emerging Growth Fund; IA 4/30/98 Open/Equity 439.97 29.54
292 Putnam VT OTC & Emerging Growth Fund; IB 4/30/98 Open/Equity 49.15 29.49
293 Putnam VT Research; IA 10/1/98 Open/Equity 149.26 14.01
294 Putnam VT Research; IB 10/1/98 Open/Equity 32.89 13.99
295 Putnam VT Small Cap Value Fund; IA 4/30/99 Open/Equity 17.77 10.64
296 Putnam VT Small Cap Value Fund; IB 4/30/99 Open/Equity 9.03 10.63
297 Putnam VT Utilities Growth and Income Fund; IA 5/1/92 Open/Balanced 870.41 16.42
298 Putnam VT Utilities Growth and Income Fund; IB 4/30/98 Open/Balanced 13.87 16.40
299 Putnam VT Vista Fund; IA 1/2/97 Open/Equity 708.90 24.96
300 Putnam VT Vista Fund; IB 4/30/98 Open/Equity 75.63 24.93
301 Putnam VT Voyager Fund; IA 2/1/88 Open/Equity 10,002.30 72.09
302 Putnam VT Voyager Fund; IB 4/30/98 Open/Equity 227.91 71.92
303 Putnam Worldwide Equity Fund 5/6/98 Open/Equity 29.89 45.68
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(J) Miscellaneous
1. Election and Removal of Directors
Directors of Investment Management Company are elected to office or
removed from office by vote of either stockholders or directors, in
accordance with Articles of Organization and By-Laws of Investment
Management Company.
2. Results of operations
Officers are elected by the Board of Directors. The Board of Directors
may remove any officer without cause.
3. Supervision by SEC of Changes in Directors and Certain Officers
Investment Management Company files certain reports with the SEC in
accordance with Sections 203 and 204 of the Investment Advisers Act of
1940, which reports list and provide certain information relating to
directors and officers of Investment Management Company.
Under Section 9 (b) of the 1940 Act, the SEC may prohibit the directors
and officers from remaining in office, if the SEC judges that such
directors and officers have willfully violated any provision of the
federal securities law.
4. Amendment to the Articles of Organization, Transfer of Business
and Other Important Matters.
a. Articles of Organization of Investment Management Company may be
amended, under the General Corporation Law of The Commonwealth of
Massachusetts, by appropriate shareholders' vote.
b. Under the General Corporation Law of The Commonwealth of
Massachusetts, transfer of business requires a vote of 2/3 of the
stockholders entitled to vote thereon.
c. Investment Management Company has no direct subsidiaries.
5. Litigation, etc.
There are no known facts, such as legal proceedings, which are expected
to materially affect the Fund and/or Investment Management Company
within the past one-year period preceding the filing of this document.
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.$50,691,135 (approximately 5.6 billion Yen) as of the end of
February, 2000
(2) Description of Business
Putnam Fiduciary Trust Company is a Massachusetts trust company and is a
wholly-owned subsidiary of Putnam Investments, Inc., parent of
Investment Management Company. Putnam Fiduciary Trust Company has been
providing paying agent and shareholder service agent services to mutual
funds, including the Fund, since its inception and custody services
since 1990.
(3) Outline of Business Relationship with the Fund
Putnam Fiduciary Trust Company provides transfer agent services,
shareholder services and custody services to the Fund.
(B) Putnam Mutual Funds Corp. (the Principal Underwriter)
(1) Amount of Capital
U.S.$ 145,981,497 (approximately 16 billion Yen) as of the end of
February, 2000
(2) Description of Business
Putnam Mutual Funds Corp. is the Principal Underwriter of the shares of
Putnam Funds indulging 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
Company)
(1) Amount of Capital
YEN64.6 billion as of the end of February, 2000
(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 Company for Fresh Korea Fund, Loomis Sayles
Managed Bond Fund, ACM International Healthcare Fund, European and Asian
Fund, Putnam High Yield Advantage Fund, ACM American Growth Portfolio,
ACM Global Growth Trend portfolio, Ever Green Small Company Growth Fund,
Asia Network Growth Fund, Ever Green Global Opportunities Fund, Super
Phenix Fund, Salomon Euro Bond Fund, Putnam U.S. Government Income
Trust, Everyone and Galois and as the Underwriting Company for AGF
Canadian Growth Equity Fund, Invesco G.T. Investment Fund, Sci/Tech S.A.
and Morgan Stanley Money Market Family.
(3) The Company acts as a Distributor in Japan and Agent Company for
the Fund in connection with the offering of shares in Japan.
(D) Capital Relationships
100% of the shares of Investment Management Company 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:
<TABLE>
<CAPTTION>
(as of February 29, 2000)
- ------------------------------------------------------------------------------------------------
Name of Investment Transfer Agent
Officer Management and Shareholder
or Trustee Fund Company Service Agent
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
George Chairman, Trustee and Chairman and Director None
Putnam President
Charles E. Executive Vice President Managing Director None
Porter
Patricia C. Senior Vice President Senior Vice President None
Flaherty
John D. Senior Vice President Senior Vice President None
Hughes and Treasurer
Lawrence J. Trustee and President and CEO None
Lasser Vice President
Gordon H. Vice President Senior Managing Director Director
Silver
Ian C. Vice President Senior Managing Director None
Ferguson
John R. Vice President Senior Vice President None
Verani
Steven Vice President Managing Director None
Oristaglio
Edward H. Vice President Managing Director None
D'Alelio
Rosemary Vice President Senior Vice President None
Thomsen
- ------------------------------------------------------------------------------------------------
</TABLE>
IV. FINANCIAL CONDITION OF THE FUND
1. FINANCIAL STATEMENTS
Financial highlights
The financial highlights table is intended to help investors understand
the Fund's recent financial performance. Certain information reflects
financial results for a single Fund share. The total returns represent
the rate that an investor would have earned or lost on an investment in
the Fund, assuming reinvestment of all dividends and distributions.
This information for the year ended November 30, 1999 has been derived
from the Fund's financial statements, which have been audited by KPMG
LLP. Its report and the Fund's financial statements are included in the
Fund's annual report to shareholders, which is available upon request.
The information for all periods prior to the year ended November 30,
1999 has been derived from the Fund's financial statements which have
been audited by the Fund's previous independent accountants.
<TABLE>
<CAPTION>
Financial highlights
CLASS M
(For a share outstanding throughout the period)
For the year
Dec. 1, 1994+
Year ended November 30 to November 30
- ----------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.34 $9.95 $9.64 $9.51 $9.05
- ----------------------------------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------------------------------
Net investment income .79c .92c .87 .87 .99
- ----------------------------------------------------------------------------------------------------
Net realized and
unrealized gain(loss)
on investments (.57) (1.61) .33 .14 .45
- ----------------------------------------------------------------------------------------------------
Total from
investment operations .22 (.69) 1.20 1.01 1.44
- ----------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------
From net investment
income (.79) (.91) (.87) (.88) (.98)
- ----------------------------------------------------------------------------------------------------
In excess of net
investment income (.03) (.01) (.02) --d --
- ----------------------------------------------------------------------------------------------------
From return of capital (.03) -- -- -- --
- ----------------------------------------------------------------------------------------------------
Total distributions (.85) (.92) (.89) (.88) (.98)
- ----------------------------------------------------------------------------------------------------
Net asset value,
end of period $7.71 $8.34 $9.95 $9.64 $9.51
- ----------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)a 2.66 (7.64) 13.05 11.15 16.72
- ----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $826,257 $949,346 $2,071,302 $464,506 $20,077
- ----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)b 1.20 1.17 1.22 1.36 1.35
- ----------------------------------------------------------------------------------------------------
Ratio of net
investment income to
average net assets (%) 9.72 9.56 8.93 8.86 10.06
- ----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 49.29 89.53 67.62 74.47 89.96
- ----------------------------------------------------------------------------------------------------
</TABLE>
+ Commencement of operations.
a Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
b Includes amounts paid through expense offset arrangements.
c Per share net investment income has been determined on the basis
of the weighted average number of shares outstanding during the period.
d Distributions in excess of net investment income were less than
$0.01 per share.
[The following financial documents are omitted here.][In Japanese
version, the following financial documents and Japanese translations
thereof are incorporated here.]
Statement of assets and liabilities, November 30, 1999
Statement of operations, Year ended November 30, 1999
Statement of changes in net assets, Year ended November 30, 1999
Financial highlights (For a share outstanding throughout the period)
Notes to financial statement, November 30, 1999
The fund's Portfolio, November 30, 1999
Statement of assets and liabilities, November 30, 1998
Statement of operations, Year ended November 30, 1998
Statement of changes in net assets, Year ended November 30, 1998
Financial highlights (For a share outstanding throughout the period)
Notes to financial statements November 30, 1998
2. CONDITION OF THE FUND
(a) Statement of Net Assets
(As of February 29, 2000)
- ------------------------------------------------------------------------
$ \
- ------------------------------------------------------------------------
(in thousands)
- ------------------------------------------------------------------------
a. Total Assets 2,442,516,088 268,432,518
b. Total Liabilities 48,443,159 5,323,903
c. Total Net Assets (a-b) 2,394,072,929 263,108,615
- ------------------------------------------------------------------------
d. Total Number of Shares Class A 115,480,431 Shares
Outstanding Class B 94,090,805 Shares
Class M 98,725,793 Shares
Class Y 1,155,955 Shares
- ------------------------------------------------------------------------
e. Net Asset Value Class A 7.75 \851.73
per Share (c/d) Class B 7.71 \847.33
Class M 7.74 \850.63
Class Y 7.75 \851.73
- ------------------------------------------------------------------------
(b) Names of Major Portfolio Holdings other than Equity Shares (Top 30
Holdings)
The major portfolio holdings of Putnam High Yield Advantage Fund is
other than equity shares excluding some common stocks.
<TABLE>
<CAPTION>
(As of the end of February 2000)
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. Dollar Investment
Kind of Interest Par Value Acquisition Current
Name of Securities Issue Maturity Rate (%) [1,000] currency Cost Value Ratio (%)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Nextel Communications, Inc. Corporate Bond 2009 9.375 27,500 USD 27,284,120 26,606,250 1.11
2. Midland Funding II Corp. Ser. A Corporate Bond 2005 11.75 20,945 USD 24,011,348 22,419,947 0.94
3. California Federal Bancorp, Inc. Ser. A Preferred Stock - $ 2.281 882 USD 23,277,745 20,507,081 0.86
4. Allied Waste Industries, Inc. Ser. B Corporate Bond 2009 10 23,900 USD 21,691,973 19,478,500 0.81
5. Millicom International Cellular S.A. Corporate Bond 2006 13.5 22,160 USD 19,185,094 19,113,000 0.80
6. United Pan-Europe N.V. Corporate Bond 2010 0 34,880 USD 18,115,641 18,486,400 0.77
7. 21st Century Telecom Group, Inc. Corporate Bond 2008 12.25 26,190 USD 18,529,341 18,136,575 0.76
8. CSC Holdings, Inc. Ser. M Preferred Stock - $11.13 158 USD 17,311,776 17,109,887 0.71
9. Winstar Communications, Inc. 144A Preferred Stock - 14 1/4 14 USD 14,400,000 16,560,000 0.69
10. Dobson Communications Corp. 144A Preferred Stock - 12.25 16 USD 16,350,325 16,465,000 0.69
11. Advanta Corp. Ser. B Common Stock 2026 8.99 21,850 USD 14,206,691 15,622,750 0.65
12. Viatel, Inc. Common Stock 2009 12 1/2 25,870 USD 16,808,535 15,133,950 0.63
13. Diva Systems Corp. Ser. B Corporate Bond 2008 12 5/8 28,512 USD 18,372,746 15,111,360 0.63
14. Paxson communications Corp. Preferred Stock 13 1/4 1 USD 14,454,916 14,739,500 0.62
15. Nextel Communications, Inc. Corporate Bond 2008 12 1/8 23,140 USD 16,028,565 14,578,200 0.61
16. Intermedia Communication Ser. B Preferred Stock - 13.5 14 USD 15,975,490 14,221,535 0.59
17. Winstar Communications, Inc. Corporate Bond 2007 15 9,605 USD 12,231,250 14,215,400 0.59
18. Chancellor Media Corp. Corporate Bond 2008 8 14,320 USD 14,666,925 14,212,600 0.59
19. Unisys Corp. Corporate Bond 2004 11 3/4 9,885 USD 11,442,075 13,915,800 0.58
20. KMC Telecom Holdings, Inc. Corporate Bond 2008 12 1/2 23,645 USD 15,803,889 13,714,100 0.57
21. Lyondell Petrochemical Co. Ser. B Corporate Bond 2007 9 7/8 14,245 USD 14,245,000 13,675,200 0.57
22. Voicestream Wire Corp. 144A Corporate Bond 2009 10 3/8 12,750 USD 12,882,500 13,196,250 0.55
23. IPC Information Systems, Inc. Corporate Bond 2008 10.875 14,500 USD 10,930,174 12,615,000 0.53
24. Guess Jeans, Inc. Corporate Bond 2003 9.5 12,490 USD 12,632,846 12,614,900 0.53
25. Premium Standard Farms, Inc. Corporate Bond 2003 11 13,591 USD 13,483,197 12,368,169 0.52
26. Doane Products Co. Preferred Stock - 14 1/4 260 USD 11,453,000 11,700,000 0.49
27. Huntsman ICI Chemicals, Inc. 144A Corporate Bond 2009 10.125 11,600 USD 11,600,000 11,542,000 0.48
28. BTI Telecom Corp. Corporate Bond 2007 10.5 12,705 USD 12,780,900 11,180,400 0.47
29. Midland Funding II Corp. Ser. B Corporate Bond 2006 13.25 9,600 USD 12,057,600 11,157,312 0.47
30. Viatel, Inc. Corporate Bond 2009 11 1/2 11,676 USD 9,123,635 10,975,440 0.46
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
V. FINANCIAL CONDITION 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
1. Transfer of the Shares
The transfer agent for the registered share certificates is Putnam
Fiduciary Trust Company, P.O. Box 41203, Providence, RI 02940-1203, U.
S. A.
The Japanese investors who entrust the custody of their shares to the
Distributor or a Sales Handling Company shall have their shares
transferred under the responsibility of such company, and the other
investors shall make their own arrangements.
No fee is chargeable for the transfer of shares.
2. The Closing Period of the Shareholders' Book
No provision is made.
3. There are no annual shareholders' meetings. Special shareholders'
meeting may be held from time to time as required by the Agreement and
Declaration of Trust and the 1940 Act.
4. No special privilege is granted to Shareholders.
The acquisition of Shares by any person may be restricted.
VII. REFERENCE INFORMATION
The following documents concerning the Fund have been filed with the
Ministry of Finance of Japan (on and after August 31, 1998, with the
Director of Kanto Local Finance Bureau).
April 20, 1999 Securities Registration Statement/Securities
Report (the 4th term)/Amendment to Securities
Registration Statement
August 31, 1999 Semi-annual Report (during the 5th term)/
Amendment to Securities Registration Statement
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(NAV Sale)
PUTNAM HIGH YIELD ADVANTAGE FUND
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date: April 21, 2000
Name of the Registrant Fund: PUTNAM HIGH YIELD ADVANTAGE FUND
Name and Official Title Charles E. Porter
of Representative Executive Vice President
of Trust:
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
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 130 million Class M Shares
Foreign Investment Fund Securities Up to the total amount obtained by
to be Publicly Offered or Sold: aggregating the respective net
asset value per Class M Share
in respect of 130 million
Class M Shares
(The Maximum amount expected to
be sold is 835 million U.S.
dollars (YEN91.8billion).
Note 1: U.S.$ amount is translated into Japanese Yen at the rate of
U.S.$l=(YEN) 109.90, 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 29, 2000.
Note 2: 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 February, 1999 ($8.11) by the number of Shares to
be offered (130 million).
Places where a copy of this Amendment to Securities Registration
Statement is available for Public Inspection
Not applicable.
(Total number of sheets of this Amendment to 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 February 21, 2000
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 FUND I. DESCRIPTION OF THE FUND
(the aforementioned Japanese Annual
Securities Report, from page 1
to page 21))
II. OUTLINE OF THE FUND II. OUTLINE OF THE FUND (Ditto, from
page 22 to page 50)
III. OUTLINE OF THE OTHER III. OUTLINE OF THE OTHER
RELATED COMPANIES RELATED COMPANIES (Ditto,
from page 51 to page 52)
IV. FINANCIAL CONDITIONS OF IV. FINANCIAL CONDITIONS OF THE FUND
THE FUND (Ditto, from page 53 to page 156)
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 174)
VI. MISCELLANEOUS VII. REFERENCE INFORMATION (Ditto,
page 174)
Note 1: U.S.$ amount is translated into Japanese Yen at the rate of
U.S.$1 = YEN 109.90, 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 29, 2000, 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
(page 202 of the original Securities Registration Statement)
II. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of the
Original SRS is amended to have the same contents as those provided in
V. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of the
aforementioned Securities Report:
