[Translation]
[H&M Final]
SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
ANNUAL SECURITIES REPORT
(the Fourth Term)
From: December 1, 1997
To: November 30, 1998
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
PUTNAM GLOBAL GOVERNMENTAL INCOME TRUST
SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
PUTNAM GLOBAL GOVERNMENTAL INCOME TRUST
SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date: March 16, 1999
Name of the Registrant Fund: PUTNAM GLOBAL GOVERNMENTAL INCOME TRUST
Name of Trustees: George Putnam
William F. Pounds
Jameson A. Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John J. Mullin III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U.S.A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]_
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]_____
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
- ii -
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM GLOBAL GOVERNMENTAL
Offering or Sale of Foreign INCOME TRUST
Investment Fund Securities:
Type and Aggregate Amount of Up to 80 million Class M Shares
Foreign Investment Fund Securities Up to the total amount obtained by
to be Publicly Offered or Sold: aggregating the net asset value
per Class M Share in respect of
80 million Class M Shares
(The maximum amount expected to be
sold is 1034.4 million U.S.
dollars (yen120.35 billion)).
Note 1: U.S.$ amount is translated into Japanese Yen at the
rate of U.S.$l.00=yen116.35 the mean of the exchange rate
quotations by The Bank of Tokyo-Mitsubishi, Ltd. for
buying and selling spot dollars by telegraphic transfer
against yen on January 29, 1999.
Note 2: The maximum amount expected to be sold is an amount
calculated by multiplying the net asset value per Class M
Share as of January 31, 1999 (U.S.$ 12.93) by 80 million
Class M Shares for convenience.
Places where a copy of this Securities Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Securities Registration
Statement in Japanese is
8 including front and back pages.)
C O N T E N T S
Japanese This
OriginalEnglish
Translation
PART I. INFORMATION CONCERNING SECURITIES 1 1
PART II. INFORMATION CONCERNING ISSUER 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
FOREIGN INVESTMENT FUND SECURITIES 4 6
VI. MISCELLANEOUS 4 6
PART III. SPECIAL INFORMATION 6 8
I. OUTLINE OF REGULATORY SYSTEM IN UNITED STATES 6 8
II. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY 12 16
III. FORM OF FOREIGN INVESTMENT
FUND SECURITIES 12 16
PART I. INFORMATION CONCERNING SECURITIES
1. NAME OF FUND: PUTNAM GLOBAL GOVERNMENTAL INCOME TRUST
(hereinafter referred to as the "Fund")
2. NATURE OF FOREIGN Three classes of shares (Class A shares,
INVESTMENT FUND SECU- Class B shares and Class M shares)
RITIES CERTIFICATES: Registered shares without par value.
In Japan, Class M Shares
(hereinafter referred to as the
"Shares") are for public
offering. No rating has been
acquired.
3. NUMBER OF SHARES TO Up to 80 million Shares
BE OFFERED FOR SALE
(IN JAPAN)
4. TOTAL AMOUNT OF Up to the total amount obtained by aggregating
OFFERING PRICE: the respective net asset value
per Share in respect of 80 million Shares
(The maximum amount expected to be
sold is 1034.4 million U.S. dollars
(yen120.35 billion).)
Note 1: The maximum amount expected to be sold is the
amount calculated, for convenience, by multiplying
the net asset value per Share as of January 29, 1999
($12.93) by the number of Shares to be offered (80
million).
Note 2: Dollar amount is translated for convenience at
the rate of $1.00=yen116.35 (the mean of the exchange
rate quotations by The Bank of Tokyo-Mitsubishi,
Ltd. for buying and selling spot dollars by
telegraphic transfer against yen on January 31,
1999). The same applies hereinafter.
Note 3: In this document, money amounts and percentages
have been rounded. Therefore, there are cases in
which the amount of the "total column" is not equal
to the aggregate amount. Also, translation 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: The sales charge in Japan shall be
3% of the amount obtained by
deduction of the amount
equivalent to 3% of the public
offering price from such price
(hereinafter referred to as the
"Sales Price"). Any amount,
which is over the net asset
value, of the Sales Price shall
be retained by Putnam Mutual
Funds Corp., principal
underwriter of the Fund.
The public offering price means the
amount calculated by dividing
the net asset value by (1-
0.0325) and rounded to three
decimal places.
7. MINIMUM AMOUNT OR The minimum amount for purchase of
NUMBER OF SHARES Shares is 300 shares and in integral
FOR SUBSCRIPTION: multiples of 100 shares for the
initial subscription and of 100
Shares and integral multiples of
100 Shares for any subsequent
subscription. Provided, however,
even in the case of the
subsequent subscription, a
Shareholder shall hold 300 Shares
or more after the subscription.
8. PERIOD OF SUBSCRIPTION: From: April 1, 1999 (Thursday)
To: March 31, 2000 (Friday)
Provided that the subscription
is handled only on a Fund
Business Day and a business day
when securities companies are
open for business in Japan.
9. DEPOSIT FOR SUBSCRIPTION: None.
10. PLACE OF SUBSCRIPTION: Towa Securities Co., Ltd.
(hereinafter referred to as "
Towa" or the "Distributor")
16-7, Nihonbashi 1-chome,Chuo-ku, Tokyo
Note:The subscription is handled at the head office and
the branch offices in Japan of the above-mentioned
securities company.
11. DATE AND PLACE Investors shall pay the Issue Price and Sales
OF PAYMENT: Charge to Towa within 4 business days
in Japan from the day when Towa
confirms the execution of the
order (the "Trade Day") (see
page 16 in the following
securities report).
The total issue price for each
Application Day will be
transferred by Towa to the
account of the Fund at Putnam
Fiduciary Trust Company, the
transfer agent, within 3 Fund
Business Days (hereinafter
referred to as "Payment Date")
from (and including) the
Application Day.
12. OUTLINE OF UNDERWRITING, ETC.:
(A) Towa undertakes to make a public offering of Shares in
accordance with an agreement dated November 21, 1997 with
Putnam Mutual Funds Corp. in connection with the sale of
the Shares in Japan.
(B) During the public offering period, Towa will execute or
forward the purchase orders and repurchase requests of
the Shares received directly or indirectly through other
Sales and Repurchase Handling Companies (hereinafter
referred to as "Sales Handling Company") to the Fund.
(C) The Fund has appointed Towa as the Agent Company in
Japan.
Note:"The Agent Company" shall mean a securities company
which, under a contract made with a foreign issuer
of investment securities, makes public the net asset
value per Share and submits or forwards the
financial reports or other documents to the Japan
Securities Dealers Association ("JSDA") and sales
handling securities companies rendering such other
services.
13. MISCELLANEOUS:
(A) Method of Subscription:
Investors who subscribe to Shares shall enter into
with a Distributor or a Sales Handling Company an
agreement concerning transactions of foreign securities.
A Sales Handling Company shall provide to the investors a
Contract Concerning a Foreign Securities Transactions
Account and other prescribed agreements (hereinafter
referred to as "Account Contract") and the investors
submit to the Distributor or the Sales Handling Company
an application for requesting the opening of a
transactions account under the Account Contract. The
subscription amount shall be paid in yen and the yen
exchange rate shall be the exchange rate which shall be
based on the foreign exchange rate quoted in the Tokyo
Foreign Exchange Market on the Trade Day of each
subscription and which shall be determined by such
Distributor or Sales Handling Company.
The subscription amount shall be paid in dollars to
the account of the Fund with Putnam Fiduciary Trust
Company as custodian for the Fund by Towa 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, the Fund's past performance is
not an indication of future performance.
Calendar Year Total Returns - Class M
1989 7.08%
1990 16.04%
1991 14.82%
1992 4.18%
1993 13.39%
1994 -10.21%
1995 15.42%
1996 9.21%
1997 -0.64%
1998 3.24%
During the periods shown in the bar chart, the
highest return for a quarter was 7.17% (quarter ending
12/ 31/90) and the lowest return for a quarter was -5.42
% (quarter ending 3/31/ 94).
Average Annual Total Returns (for periods ending
12/31/98)
Past 1 year Past 5 years Past 10 years
Class M 3.24% 3.03% 6.94 %
Salomon 15.30 % 7.85 % 8.97 %
Brothers World
Government
Bond Index
Unlike the bar chart, this performance information
reflects the impact of sales charges. Class M share
performance reflects the current maximum initial sales
charge. Performance of Class M share in the bar chart
and table following the bar chart, for periods prior to
their inception on March 17, 1995, is derived from the
historical performance of the Fund's Class A shares (not
offered in Japan), adjusted to reflect the appropriate
sales charge and the higher 12b-1 fees paid by class M
shares. The Fund's performance is compared to the
Salomon Brothers World Government Bond Index, a market
capitalization-weighted benchmark that tracks performance
of government-bond market in 14 countries.
(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 investor's Class M
investment) Shares
Maximum Sales Charge (Load) Imposed on 3.25%
Purchases
(as a percentage of the offering price)
Maximum Deferred Sales Charge (Load) (as a NONE
percentage of the original purchase price or
redemption proceeds, whichever is lower)
Annual Fund Operating Expenses (expenses that are
deducted from fund assets)
Management Fees Distribution Other Total Annual
(12b-1) Fees Expenses Fund
Operating
Expenses
Class M 0.78% 0.50% 0.23% 1.51%
(D) EXAMPLE
This example translates the "total annual fund
operating expenses" shown in the preceding table into
dollar amounts. By doing this, investors can more easily
compare the cost of investing in the fund to the cost of
investing in other mutual funds. The example makes
certain assumptions. It assumes that investors invest
$10,000 in the fund for the time periods shown and then
redeem all 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; investors' actual
costs and returns may be higher or lower.
1 year 3 years 5 years 10 years
Class M $474 $787 $1,122 $2,068
(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 26)
II. OUTLINE OF THE FUND
The description in this item is the same as the
description in II. OUTLINE OF THE FUND of the Securities
Report set forth below (Ditto, from page 27 to page 56)
III. OUTLINE OF THE OTHER RELATED COMPANIES
The description in this item is the same as the
description in III. OUTLINE OF THE OTHER RELATED
COMPANIES of the Securities Report set forth below
(Ditto, from page 57 to page 58)
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 (Ditto, from page
59 to page 131)
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
(Ditto, page 153)
VI. MISCELLANEOUS
(1) The following documents were filed with the
Ministry of Finance of Japan or the Director of Kanto
Local Finance Bureau in connection with the Fund.
April 30, 1998: Annual Securities Report
Amendment to Securities Registration Statement
July 31, 1998: Annual Semi-annual Report
Amendment to Securities Registration Statement
August 13, 1998 Amendment to Securities Registration Statement
November 13, 1998: Securities Registration Statement
(2) The ornamental design is used in cover page of the
Japanese Prospectus.
(3) The following must be set forth in the Prospectus.
Outline of the Prospectus will be included at the
beginning of the Prospectus, summarizing the content of
Part I., Information on the securities, "I. Descriptions
of the Fund", "III. Outline of Other Related Companies"
and "IV. Financial Condition of the Fund" in Part II,
Information on the Issuer, of the SRS.
PART III. SPECIAL INFORMATION
I. OUTLINE OF THE SYSTEM OF INVESTMENT TRUSTS IN
MASSACHUSETTS
Below is an outline of certain general information about open-
end U.S. investment companies. This outline is not intended
to provide comprehensive information about such investment
companies or the various laws, rules or regulations applicable
to them, but provides only a brief summary of certain
information which may be of interest to investors. The
discussion below is qualified in its entity by the complete
registration statement of the fund and the full text of any
referenced statutes and regulations.
I. Massachusetts Business Trusts
A. General Information
Many investment companies are organized as
Massachusetts business trusts. A Massachusetts business
trust is organized pursuant to a declaration of trust,
setting out the general rights and obligations of the
shareholders, trustees, and other related parties.
Generally, the trustees of the trust oversee its
business, and its officers and agents manage its day-to-
day affairs.
Chapter 182 of the Massachusetts General Laws
applies to certain "voluntary associations", including
many Massachusetts business trusts. Chapter 182 provides
for, among other things, the filing of the declaration of
trust with the Secretary of State of the Commonwealth of
Massachusetts and the filing by the trust of an annual
statement regarding, among other things, the number of
its shares outstanding and the names and addresses of its
trustees.
B. Shareholder Liability
Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of a trust. Typically, a declaration of
trust disclaims shareholder liability for acts or
obligations of the trust and provides for indemnification
out of trust property for all loss and expense of any
shareholder held personally liable for the obligations of
a trust. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is
limited to circumstances in which a particular trust
would be unable to meet its obligations.
II. United States Investment Company Laws and Enforcement
A. General
In the United States, pooled investment management
arrangements which offer shares to the public are
governed by a variety of federal statutes and
regulations. Most mutual funds are subject to these
laws. Among the more significant of these statutes are:
1. Investment Company Act of 1940
The Investment Company Act of 1940, as amended
(the "1940 Act"), in general, requires investment
companies to register as such with the U.S.
Securities and Exchange Commission (the "SEC"), and
to comply with a number of substantive regulations
of their operations. The 1940 Act requires an
investment company, among other things, to provide
periodic reports to its shareholders.
2. Securities Act of 1933
The Securities Act of 1933, as amended (the
"1933 Act"), regulates many sales of securities.
The Act, among other things, imposes various
registration requirements upon sellers of securities
and provides for various liabilities for failures to
comply with its provisions or in respect of other
specified matters.
3. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended
(the "1934 Act"), regulates a variety of matters
involving, among other things, the secondary trading
of securities, periodic reporting by the issuers of
securities, and certain of the activities of
transfer agents and brokers and dealers.
4. The Internal Revenue Code
An investment company is an entity subject to
federal income taxation under the Internal Revenue
Code. However, under the Code, an investment
company may be relieved of federal taxes on income
and gains it distributes to shareholders if it
qualifies as a "regulated investment company" under
the Code for federal income tax purposes and meets
all other necessary requirements.
5. Other laws
The Fund is subject to the provisions of other
laws, rules, and regulations applicable to the Fund
or its operations, such as, for example, various
state laws regarding the sale of the Fund's shares.
B. Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction
over the Fund or certain of its operations are the SEC
and state regulatory agencies or authorities.
1. The SEC has broad authority to oversee the
application and enforcement of the federal
securities laws, including the 1940 Act, the 1933
Act, and the 1934 Act, among others, to the Fund.
The 1940 Act provides the SEC broad authority to
inspect the records of investment companies, to
exempt investment companies or certain practices
from the provisions of the Act, and otherwise to
enforce the provisions of the Act.
2. State authorities typically have broad authority
to regulate the 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 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 fund is open for business at the
net asset value next computed after receipt of the
shareholders' order. Under unusual circumstances, a fund
may suspend redemptions, or postpone payment for more
than seven says, if permitted by U.S. securities laws. A
fund may charge redemption fees as described in its
prospectus.
C. Transfer agency
The transfer agent for a fund typically processes
the transfer of shares, redemption of shares, and payment
and/or reinvestment of distributions.
V. Shareholder Information, Rights and Procedures for the
Exercise of Such Rights
A. Voting Rights
Voting rights vary from fund to fund. In the case
of many funds organized as Massachusetts business trusts,
shareholders are entitled to vote on the election of
trustees, approval of investment advisory agreements,
underwriting agreements, and distribution plans (or
amendments thereto), certain mergers or other business
combinations, and certain amendments to the declaration
of trust. Shareholder approval is also required to
modify or eliminate a fundamental investment policy.
B. Dividends
Shareholders are typically entitled to receive
dividends when and if declared by a fund's trustees. In
declaring dividends, the trustees will normally set a
record date, and all shareholders of record on that date
will be entitled to receive the dividend paid.
C. Dissolution
Shareholders would normally be entitled to receive
the net assets of a fund which were liquidated in
accordance with the proportion of the fund's outstanding
shares he owns.
D. Transferability
Shares of a fund are typically transferable without
restriction.
E. Right to Inspection
Shareholders of a Massachusetts business trust have
the right to inspect the records of the trust as provided
in the declaration of trust or as otherwise provided by
applicable law.
VI. U.S. Tax Matters
The Fund intends to qualify each year as a regulated
investment company under Subchapter M of the United States
Internal Revenue Code of 1986, as amended (the "Code").
As a regulated investment company qualifying to have its
tax liability determined under Subchapter M, the Fund will not
be subject to U.S. federal income tax on any of its net
investment income or net realized capital gains that are
distributed to its shareholders. In addition, as a
Massachusetts business trust, the Fund under present
Massachusetts law is not subject to any excise or income taxes
in Massachusetts.
In order to qualify as a "regulated investment company"
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 foreign currencies, foreign
currency-denominated debt securities and certain foreign
currency options, futures contracts and forward contracts (and
similar instruments) may give rise to ordinary income or loss
to the extent such income or loss results from fluctuations in
the value of the foreign currency concerned.
Investment by the Fund in "passive foreign investment
companies" could subject the Fund to a U.S. federal income tax
or other charge on the proceeds from the sale of its
investment in such a company; however, this tax can be avoided
by making an election to mark such investments to market
annually or to treat the passive foreign investment company as
a "qualified electing fund".
A "passive foreign investment company" is any foreign
corporation: (i) 75 percent 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
foreign currency gains. Passive income for this purpose does
not include rents and royalties received by the foreign
corporation from active business and certain income received
from related persons.
The 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 sale, exchange or redemption of Fund shares may give
rise to a gain or loss. In general, any gain or loss realized
upon a taxable disposition of shares will be treated as long-
term capital gain or loss if the shares have been held for
more than 12 months, and otherwise as short-term capital gain
or loss. However, any loss realized upon a taxable
disposition of shares held for six months or less will be
treated as long-term, rather than short-term, to the extent of
any long-term capital gain distributions received by the
shareholder with respect to the shares. All or a portion of
any loss realized upon a taxable disposition of Fund shares
will be disallowed if other shares of the Fund are purchased
within 30 days before or after the disposition. In such a
case, the basis of the newly purchased shares will be adjusted
to reflect the disallowed loss.
Special tax rules apply to investments through defined
contribution plans and other tax-qualified plans.
Shareholders should consult their tax adviser to determine the
suitability of shares of the Fund as an investment through
such plans and the precise effect of an investment on their
particular tax situation.
The Fund generally is required to withhold and remit to
the U.S. Treasury 31% of the taxable dividends and other
distributions paid to any individual shareholder who fails to
furnish the Fund with a correct taxpayer identification number
(TIN), who has under-reported dividends or interest income, or
who fails to certify to the fund that he or she is not subject
to such withholding. Shareholders who fail to furnish their
correct TIN are subject to a penalty of $50 for each such
failure unless the failure is due to reasonable cause and not
wilful neglect. An individual's taxpayer identification
number is his or her social security number.
The Internal Revenue Service recently revised its
regulations affecting the application to foreign investors of
the back-up withholding and withholding tax rules described
above. The new regulations generally will be effective for
payment made after December 31, 1999 (although transition
rules will apply). In some circumstances, the new rules will
increase the certification and filing requirements imposed on
foreign investors in order to qualify for exemption from the
31% back-up withholding tax rates under income tax treaties.
Foreign investors in a fund should consult their tax advisors
with respect to the potential application of these new
regulations.
Non-U.S. investors should consult their tax advisers
concerning the tax consequences of ownership of shares of the
fund, including the possibility that distributions may be
subject to a 30% United States withholding tax (or a reduced
rate of withholding provided by treaty), the possibility that
a non-U.S. investor may be subject to U.S. tax on capital gain
distributions and gains realized upon the sale of fund shares
if the investor is present in the United States for more than
182 days during the taxable year (and certain other conditions
apply), or the possibility that a non-U.S. investor may be
subject to U.S. tax on income from the fund that is
"effectively connected" with a U.S. trade or business carried
on by such an investor. Shareholders residing in Japan should
consult "Tax Treatment of Shareholders in Japan"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 or local 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 CONDITION OF THE INVESTMENT MANAGEMENT COMPANY
The description in this item is same as the description
in V. FINANCIAL CONDITION OF THE INVESTMENT MANAGEMENT
COMPANY of the Securities Report set forth below (Ditto,
from page 132 to page 152)
III. FORM OF FOREIGN INVESTMENT FUND SECURITIES
Main items to be set forth on the share certificate of
the Fund (if issued) are as follows:-
(1) Front
a. Name of the Fund
b. Number of shares represented
c. Signatures of the Chairman and Transfer Agent
d. Description stating that the Declaration of Trust
applies to shareholders and assignees therefrom
(2) Back
a. Space for endorsement
b. Description concerning delegation of transfer agency
ANNUAL SECURITIES REPORT
THE FOURTH FISCAL YEAR
FROM: NOVEMBER 1, 1997
TO: OCTOBER 31, 1998
PUTNAM GLOBAL GOVERNMENTAL INCOME TRUST
ANNUAL SECURITIES REPORT
The Fourth Fiscal Year
From: November 1, 1997
To: October 30, 1998
To: Director of Kanto Local Finance Bureau
Filing Date: March 16, 1999
Name of the Registrant Trust: PUTNAM GLOBAL GOVERNMENTAL INCOME TRUST
Name of Trustees: George Putnam
William F. Pounds
Jameson A. Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin, III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U.S.A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
- ii -
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Places where a copy of this Annual Securities
Report is available for Public Inspection
Not applicable.
(Total number of pages of this Annual Securities Report in
Japanese is
79 including front and back pages.)
C O N T E N T S
Japanese This
OriginalEnglish
Translation
I. DESCRIPTION OF THE FUND 1 1
l. GENERAL INFORMATION 1 1
2. INVESTMENT POLICY 6 7
3. MANAGEMENT STRUCTURE 11 14
4. INFORMATION CONCERNING THE EXERCISE
OF RIGHTS BY SHAREHOLDERS, ETC. 21 29
5. STATUS OF INVESTMENT FUND 24 33
II. OUTLINE OF THE FUND 27 37
III. OUTLINE OF THE OTHER RELATED COMPANIES 57 72
IV. FINANCIAL CONDITION OF THE FUND 59 74
V. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY 132 80
VI. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT FUND SECURITIES 153 80
VII. REFERENCE INFORMATION 153 80
Note 1: The exchange rate of U.S. dollars ("Dollar" or
"$") into Japanese Yen used herein is yen116.35 for
one U.S. Dollar, which is the actual middle point
between the selling and buying currency rate by
telegraphic transfer on January 29, 1999 quoted by
The Bank of Tokyo-Mitsubishi, Ltd. The same
applies hereinafter.
Note 2: In this report, money amounts and percentages
have been rounded. Therefore, there are cases in
which the amount for the "total" column is not
equal to the aggregate amount. Also, conversion
into other currencies is done simply by multiplying
the corresponding amount by the conversion rate
specified and rounding up when necessary. As a
result, in this report, there are cases in which
figures for the same information differ from each
other.
Note 3: In this report, "fiscal year" refers to a year
from November 1 to October 31 of the following
year. However, the first fiscal year refers to a
period from March 17, 1995 (Inception of the Fund)
to October 31, 1995.
I. DESCRIPTION OF THE FUND
1. GENERAL INFORMATION
(A) Outline of Laws Regulating the Fund in the Jurisdiction
Where Established:
(1) Name of the Fund: Putnam Global Governmental
Income Trust (the "Fund")
(2) Form of the Fund
Putnam Global Governmental Income Trust is a
Massachusetts business trust organized on June 30, 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 non-diversified management
investment company with an unlimited number of authorized
shares of beneficial interest which may be divided
without shareholder approval into two or more 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 any series.
Only the Fund's class M shares are currently offered in
Japan. The Fund also offers in the United States of
America other classes of shares with different sales
charges and expenses. Because of these different sales
charges and expenses, the investment performance of the
classes will vary.
Each share has one vote, with fractional shares
voting proportionally. Shares of all classes will vote
together as a single class except when otherwise required
by law or as determined by the Trustees. Shares are
freely transferable, are entitled to dividends as
declared by the Trustees, and, if the Fund were
liquidated, would receive the net assets of the Fund.
The Fund may suspend the sale of shares at any time and
may refuse any order to purchase shares. Although the
Fund is not required to hold annual meetings of its
shareholders, shareholders holding at least 10% of the
outstanding shares entitled to vote have the right to
call a meeting to elect or remove Trustees, or to take
other actions as provided in the Agreement and
Declaration of Trust.
If a shareholder owns fewer shares than the minimum
set by the Trustees (presently 20 shares), the Fund may
choose to redeem the shareholders' shares. Shareholders
will receive at least 30 days' written notice before the
Fund redeems their 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.
YEAR 2000 ISSUES. The Fund could be adversely affected
if the computer systems used by the Investment Management
Company and the Fund's other service providers do not
properly process and calculate the date-related
information relating to the end of this century and the
beginning of the next. While year 2000-related computer
problems could have a negative effect on the Fund, both
in its operations and in its investments. The Investment
Management Company is working to avoid such problems and
to obtain assurances from service providers that they are
taking similar steps. No assurances, though, can be
provided that the Fund will not be adversely impacted by
these matters.
(3) Governing Laws
The Fund was created under, and is subject to, the
laws of the Commonwealth of Massachusetts. The sale of
the Fund's shares is subject to, among other things, the
Securities Act of 1933, as amended, and certain state
securities laws. The Fund also attempts to qualify each
year and elects to be taxed as a regulated investment
company under the United States Internal Revenue Code of
1986, as amended.
The following is a broad outline of certain of the
principal statutes regulating the operations of the Fund
in the U.S.:
a. Massachusetts General Laws, Chapter 182 -
Voluntary Associations and Certain Trusts
Chapter 182 provides in part as follows:
A copy of the declaration of trust must be filed
with the Secretary of State of the Commonwealth of
Massachusetts and with the Clerk of the City of
Boston. Any amendment of the declaration of trust
must be filed with the Secretary and the Clerk
within thirty days after the adoption of such
amendment.
A trust must annually file with the Secretary of
State on or before June 1 a report providing the
name of the trust, its address, number of shares
outstanding and the names and addresses of its
trustees.
Penalties may be assessed against the trust for
failure to comply with certain of the provisions of
Chapter 182.
b. Investment Company Act of 1940
The Investment Company Act of 1940, as amended
(the "1940 Act"), in general, requires investment
companies to register as such with the U.S.
Securities and Exchange Commission (the "SEC"), and
to comply with a number of substantive regulations
of their operations. The 1940 Act requires an
investment company, among other things, to provide
periodic reports to its shareholders.
c. Securities Act of 1933
The Securities Act of 1933, as amended (the
"1933 Act"), regulates many sales of securities. The
Act, among other things, imposes various
registration requirements upon sellers of securities
and provides for various liabilities for failures to
comply with its provisions or in respect of other
specified matters.
d. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended
(the "1934 Act"), regulates a variety of matters
involving, among other things, the secondary trading
of securities, periodic reporting by the issuers of
securities, and certain of the activities of
transfer agents and brokers and dealers.
e. The Internal Revenue Code
The Fund intends to qualify as a "regulated
investment company" for federal income tax purposes
and to meet all other requirements necessary for it
to be relieved of federal taxes on income and gains
it distributes to shareholders.
f. Other laws
The Fund is subject to the provisions of other
laws, rules, and regulations applicable to the Fund
or its operations, such as, for example, various
state laws regarding the sale of the Fund's shares.
(B) Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction
over the Fund or certain of its operations are the SEC
and state regulatory agencies or authorities.
a. The SEC has broad authority to oversee the
application and enforcement of the federal
securities laws, including the 1940 Act, the 1933
Act, and the 1934 Act, among others, to the Fund.
The 1940 Act provides the SEC broad authority to
inspect the records of investment companies, to
exempt investment companies or certain practices
from the provisions of the Act, and otherwise to
enforce the provisions of the Act.
b. State authorities typically have broad authority
to regulate the offering and sale of securities to
their residents or within their jurisdictions and
the activities of brokers, dealers, or other persons
directly or indirectly engaged in related
activities.
(C) Objectives and Basic Nature of the Fund:
GOAL
The Fund seeks high current income by investing
principally in debt securities of Non-U.S. or U.S.
governmental entities, including supranational issuers.
Preservation of capital and long-term total return are
secondary objectives, but only to the extent consistent
with the objective of seeking high current income.
MAIN INVESTMENT STRATEGIES - NON-U.S. AND U.S. GOVERNMENT
DEBT
Under normal market conditions, the Fund invests
mostly in debt issued or guaranteed by national,
provincial, state or other governments with taxing
authority or their agencies or by supranational entities.
Supranational entities include international banking
institutions and other organizations supported by
government entities to promote economic reconstruction or
developments, such as the World Bank and the European
Coal and Steel Community. The Fund generally diversifies
its investments among a number of different countries by
investing its assets in at least three different
countries, one of which may be the United States.
Although the Fund mainly invests in developed nations and
in debt of investment-grade quality, it can also invest
in developing (also known as emerging) markets or in debt
of below investment-grade quality ("junk bonds").
The Fund generally invests significantly in
mortgage-backed investments (which represent
participations in or are secured by mortgage loans) of
U.S. governmental entities. Some of these investments
are not supported by the full faith and credit of the
U.S. government. Similarly, some of the obligations of
non-U.S. governmental entities in which the Fund invests
are not supported by the full faith and credit of a non-
U.S. government.
MAIN RISKS
The main risks that could adversely affect the value of
this Fund's shares and the total return on investors'
investment include
The risk that movements in the securities markets
will adversely affect the price of the Fund's
investments.
The risk that rising interest rates will cause the
values of the Fund's investments to fall. Interest rate
risk is generally highest for investments with long
maturities and the Fund expects that its portfolio will
normally be weighted towards longer maturities.
The risk that sovereign issuers (non-U.S.
governments), companies whose debt the fund purchases, or
mortgagors who are repaying the mortgages underlying the
Fund's mortgage-backed investments will fail to make
timely payments of interest and principal or will
default. This credit risk is higher for the debt of non-
U.S. governments and corporate debt than for U.S.
government debt and is higher still for debt below
investment grade quality. Because a portion of the
Fund's investments is in junk bonds, this risk is
heightened for the Fund. Investors should carefully
consider the risks associated with an investment in the
Fund.
The risks of investing outside the United States,
such as currency fluctuations, economic of financial
instability, lack of timely or reliable financial
information, or unfavorable political or legal
developments in non-U.S. markets. These risks are
increased when investing in emerging markets.
The risk that mortgages underlying that Fund's
mortgage-backed investments may be prepaid faster than
expected during periods of falling interest rates, which
could hurt the fund's returns. Similarly, rising
interest rates may reduce the rate of prepayments, which
would effectively increase its interest rate risk at
times when that is least desirable---during periods of
rising interest rates.
The risk of loss from investing in fewer issuers
than a Fund that invest more broadly. The Fund is "non-
diversified," which means that it may invest more of its
assets in the securities of fewer companies than a
"diversified" Fund. Investors can lose money by
investing in the Fund. The Fund may not achieve its
goal, and is not intended as a complete investment
program. An investment in the Fund is NOT a deposit of a
bank and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government
agency.
(D) History of the Fund:
June 30, 1986: Organization of the Fund as a
Massachusetts business trust.
Adoption of the Agreement and
Declaration of Trust.
February 24, 1987: Adoption of the Amended and Restated
Agreement and Declaration of Trust.
December 3, 1993: 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. (the
"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. (the "Principal
Underwriter") engages in providing marketing
services to the Fund.
(4) Towa Securities Co., Ltd. (the "Distributor in
Japan" and "Agent Company") engages in forwarding
the purchase or repurchase orders for the Shares in
Japan and also acts as the agent company.
Related Companies of the Fund
Trust
Putnam Global Governmental Income Trust
Investor Servicing Agreement
Trustees
(Agreement and Declaration of Trust)
Custodian Agreement
Distribution Agreement
Principal Underwriter Custodian Investor Servicing Agent
Putnam Mutual Funds Corp. Putnam Fiduciary Trust Company
(acts as distributor) (acts as custodian and investor
servicing agent of the Fund)
Japan Dealer Sales Agreement
Agent Securities Management Contract
Company Agreement
Distributor in Japan Investment Management
Agent Company Company
Towa Securities Co., Ltd. Putnam Investment Management, Inc.
(forwardng of sales in Japan (acts as investment manager of the
and rendering of service as Fund and investment adviser
agent company) concerning the Fund's assets)
2. INVESTMENT POLICY (including risk factor)
(A) Basic Policy for Investment and Objects of Investment
Any investment carries with it some level of risk
that generally reflects its potential for reward. The
Fund pursues its goals by investing, under normal market
conditions, at least 65% of its assets in debt
investments issued or guaranteed by national, provincial,
state or other governments with taxing authority or their
agencies or by supranational entities. The 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. The Fund mainly invests in:
U.S. GOVERNMENT INVESTMENTS, INCLUDING
- U.S. Treasury bills, notes and bonds.
- Obligations backed by the U.S. Treasury. These include
obligations issued or guaranteed by certain agencies and
instrumentalities of the U.S. government that are backed
by the full faith and credit of the United States, such
as mortgage participation certificates guaranteed by the
Government National Mortgage Association (GNMA, commonly
known as "Ginnie Mae") and Federal Housing Administration
debentures.
- Obligations backed by a federal agency or government-
sponsored entity. These include obligations issued or
guaranteed by certain agencies and government-sponsored
entities that are supported only by the credit of such
agency or entity, such as Federal National Mortgage
Association (FNMA, commonly known as "Fannie Mae") bonds
and Federal Home Loan Bank debt.
The yields available from U.S. government securities are
generally lower than the yields available from comparable
corporate debt securities.
OBLIGATIONS OF NON-U.S. GOVERNMENTS, THEIR AGENCIES AND
INSTRUMENTALITIES, INCLUDING
- Obligations supported by the full faith and credit of a
non-U.S. government and obligations that do not have a
government guarantee.
OBLIGATIONS OF SUPRANATIONAL ENTITIES
U.S. AND NON-U.S. CORPORATE OBLIGATIONS
A description of the risks associated with the
Fund's main investment strategies follows.
INTEREST RATE RISK.
The values of fixed income investments usually rise
and fall in response to changes in interest rates.
Declining interest rates will generally raise the value
of existing debt investments, and rising interest rates
will generally lower the value of existing debt
investments. Changes in the values of fixed income
investments usually will not affect the amount of income
the Fund receives from them, but will affect the value of
the Fund's shares. Interest rate risk is often greater
for investments with longer maturities.
The Fund may invest in so-called "premium"
investments offering interest rates higher than
prevailing market rates. In addition, during times of
declining interest rates, many of the Fund's investments
may offer interest rates that are higher than current
market rates, regardless of whether the Fund bought them
at a premium. When the Fund holds premium investments,
shareholders are likely to receive higher dividends (but
will bear a greater risk that the value of the Fund's
shares will fall) than they would if the Fund held
investments offering current market rates of interest.
Premium investments involve a greater risk of loss,
because their values tend to decline over time.
Investors may find it useful to compare the Fund's
yield, which excludes the effect of premium securities,
with its current dividend rate, which does not exclude
that effect.
CREDIT RISK.
Investors normally expect to be compensated in
proportion to the risk they are assuming. Thus, fixed
income investments of companies with relatively weaker
credit prospects usually offer higher yields than those
of companies with better credit prospects. Higher-rated
investments generally offer lower credit risk (the risk
that the issuer will fail to make timely payments of
interest and principal), but not lower interest rate
risk. The value of a higher-rated investment still
fluctuates in response to changes in interest rates.
The Fund will not invest more than 20% of its assets
in debt securities rated, at the time of purchase, below
BBB (or its equivalent) by a nationally recognized
securities rating agency, or if unrated, determined by
the Investment Management Company to be of comparable
quality. Debt securities rated lower than BBB (and
comparable unrated debt) are sometimes referred to as
"junk bonds". They are considered to be of poor standing
and mainly speculative. The Fund will not invest more
than 5% of its assets in debt securities, at the time of
purchase, rated lower than CCC (or its equivalent), or if
unrated, determined by Investment Management Company to
be of comparable quality. The Fund will not necessarily
dispose of a security if its rating is reduced below the
ratings noted above. A reduction in an investment's
rating will generally cause its value to decline.
Securities rated below CCC (and comparable unrated
debt) may be in default and are generally regarded by the
ratings agencies as having extremely poor prospects of
ever attaining any real investment standing.
Lower-rated investments are more likely to default
in adverse economic conditions. If this happens, or is
perceived as likely to happen, the values of those
investments will usually be more volatile, A default or
expected default could also make it difficult for the
Fund to sell the investments at prices approximating the
value the Fund previously placed on them. The Fund might
also have to participate in various legal proceedings to
take possession of and manage assets that secure these
obligations, this could increase the Fund's operating
expenses and decrease its net asset value.
Although the Investment Management Company considers
credit ratings in making investment decisions, it
performs its own investment analysis and does not rely
only on ratings assigned by the rating agencies. When the
Fund buys debt of a company with poor credit prospects,
the achievement of the Fund's goals depends more on
Investment Management Company's ability to analyze credit
risks than would be the case if the Fund were buying debt
of a company with better credit prospects.
Although U.S. government investments are generally
considered to have the least credit risk, they are not
completely free of credit risk. While certain U.S.
government investments, such as U.S. Treasury obligations
and Ginnie Mae certificates, are backed by the full faith
and credit of the U.S. government, other investments are
subject to varying degrees of risk. The credit risks of
these securities include the creditworthiness of the
issuer and, in the case of mortgage-backed securities,
the ability of the underlying mortgagors or other
borrowers to meet their obligations. In addition, the
values of these investments will still fluctuate in
response to changes in interest rates.
NON-U.S. INVESTMENTS.
The Fund may invest without limit in securities of
non-U.S. issuers that are not actively traded in U.S.
markets. Non- U.S. investments involve certain special
risks, including
- Unfavorable changes in currency exchange rates: non-U.S.
investments are normally issued and traded in non-U.S.
currencies. As a result, their value may be affected by
changes in the exchange rates between particular non-U.S.
currencies and the U.S. dollar.
- Political and economic developments: non-U.S. investments
may be subject to the risks of seizure by a non-U.S.
government, imposition of restrictions on the exchange or
transport of non-U.S. currency, and tax increases.
- Unreliable or untimely information: There may be less
information publicly available about a non-U.S. company
than about most U.S. companies, and non-U.S. companies
are usually not subject to accounting, auditing and
financial reporting standards and practices that are as
stringent as those in the United States.
- Limited legal recourse: Legal remedies for investors such
as the Fund may be more limited than those available in
the United States.
- Limited markets: Certain non-U.S. investments may be less
liquid (harder to buy and sell) and more volatile than
domestic investments, which means the Fund may at times
be unable to sell these non-U.S. investments at desirable
prices. For the same reason, the Fund may at times find
it difficult to value its non-U.S. investments.
- Trading practices: Brokerage commissions and other fees
are generally higher for non-U.S. investments than for
domestic investments. The procedures and rules for
settling non-U.S. transactions may also involve delays in
payment, delivery or recovery of money or investments.
- Sovereign issuers: The willingness and ability of
sovereign issuers to pay principal and interest on
government securities may depend on various economic
factors, including the issuer's balance of payments,
overall debt level, and cash flow considerations related
to the availability of tax or other revenues to satisfy
the issuer's obligations.
Certain of these risks may also apply to some extent
to U.S. traded investments that are denominated in non-
U.S. currencies, or to investments in U.S. companies that
have significant non-U.S. operations. Special U.S. tax
considerations may apply to the Fund's non-U.S.
investments.
EMERGING MARKETS.
The risks of non-U.S. investments are typically
increased in less developed and developing countries,
which are sometimes referred to as emerging markets. For
example, political and economic structures in these
countries may be young and developing rapidly, which can
cause instability. These countries are also more likely
to experience high levels of inflation, deflation or
currency devaluation, which could hurt their economies
and securities markets. For these and other reasons,
investments in emerging markets are often considered
speculative.
PREPAYMENT RISK.
Certain securities held by the Fund may permit the
issuer at its option to "call," or redeem its securities.
If an issuer were to redeem securities held by the Fund
during a time of declining interest rates, the Fund may
not be able to reinvest the proceeds in securities
providing the same investment return as the securities
redeemed. Traditional debt investments typically pay a
fixed rate of interest until maturity, when the entire
principal amount is due. By contrast, payments on
mortgage-backed investments typically include both
interest and a partial payment of principal. Principal
may also be prepaid voluntarily, or as a result of
refinancing or foreclosure. The Fund may have to invest
the proceeds from prepaid investments under less
attractive terms and yields.
Prepayments are particularly common during periods
of declining interest rates, when property owners seek to
refinance their mortgages at more favorable terms; the
reverse is true during periods of rising interest rates.
Mortgage-backed investments are therefore less
likely to increase in value during periods of declining
interest rates than other debt of comparable maturities.
In addition, they have a higher risk of decline in value
during periods of rising interest rates because declining
prepayment rates effectively increase the average
maturity of the Fund's investments (and, therefore, its
sensitivity to changes in interest rates) at time when
that is least desirable. These investments can increase
the volatility of the Fund.
DERIVATIVES.
The Fund may engage in a variety of transactions
using "derivatives," such as futures, options, warrants,
forwards and swap contracts. Derivatives are financial
instruments whose value depends upon, or is derived from,
the value of something else, such as one or more
underlying investments, indexes or currencies.
Derivatives may be traded on organized exchanges, or in
individually negotiated transactions with other parties
(these are known as "over the counter"). The Fund may
use derivatives both for hedging and non-hedging
purposes. Although Investment Management Company has the
flexibility to use these strategies, it may choose not to
for a variety of reasons, even under volatile market
conditions.
Derivatives involve special risks and costs and may
result in losses to the Fund. The successful use of
derivatives requires sophisticated management and the
Fund will depend on Investment Management Company's
ability to analyze and manage derivatives transactions.
The prices of derivatives may move in unexpected ways,
especially in abnormal market conditions. Some
derivatives are "leveraged" and therefore may magnify or
otherwise increase investment losses to the Fund. The
Fund's use of derivatives may also increase the amount of
taxes payable by shareholders.
Other risks arise from the potential inability to
terminate or sell derivatives positions. A liquid
secondary market may not always exist for the Fund's
derivatives positions at any time. In fact, many over-
the-counter instruments will not be liquid. Over-the-
counter instruments also involve the risk that the other
party will not meet its obligations to the Fund.
FEWER INVESTMENTS
As a non-diversified investment company, the Fund
can invest up to 25% of its assets in the securities of
each of any two issuers, exclusive of any investments in
U.S. government securities. This means that the Fund may
invest more of its assets in fewer companies than most
funds. As a result, the Fund is subject to increased
risk of loss if the value of these investments declines.
FREQUENT TRADING.
The Fund may buy and sell investments relatively
often, which involves higher brokerage commissions and
other expenses, and may increase the amount of taxes
payable by shareholders.
OTHER INVESTMENTS.
In addition to the main investment strategies
described above, the Fund may also make other types of
investments, such as investments in collateralized
mortgage obligations and equity securities, and therefore
may be subject to other risks.
ALTERNATIVE STRATEGIES.
At times the Investment Management Company may judge
that market conditions make pursuing the Fund's
investment strategies inconsistent with the best
interests of its shareholders. The Investment Management
Company then may temporarily use alternative strategies,
including investing solely in money market instruments or
in securities of issuers located in the United States,
that are mainly designed to limit the Fund's losses.
Although the Investment Management Company has the
flexibility to use these strategies, it may choose not to
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 of Investment:
Except for the investment restrictions designated as
fundamental below, the investment restrictions described
in this Securities Registration Statement and the
Japanese prospectus are not fundamental investment
restrictions. The Trustees may change any non-
fundamental investment restrictions without shareholder
approval. As fundamental investment restrictions, which
may not be changed without a vote of a majority of the
outstanding voting securities, the Fund may not and will
not:
(1) Borrow money in excess of 10% of the value (taken at
the lower of cost or current value) of the Fund's total
assets (not including the amount borrowed) at the time
the borrowing is made, and then only from banks as a
temporary measure to facilitate the meeting of redemption
requests (not for leverage) which might otherwise require
the untimely disposition of portfolio investments or for
extraordinary or emergency purposes. Such borrowings
will be repaid before any additional investments are
purchased.
(2) Underwrite securities issued by other persons except
to the extent that, in connection with the disposition of
its portfolio investments, it may be deemed to be an
underwriter under certain federal securities laws.
(3) With respect to 50% 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.
(4) With respect to 50% of its total assets, acquire
more than 10% of the outstanding voting securities of any
issuer.
(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) 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.
(7) Issue any class of securities which is senior to the
Fund's shares of beneficial interest, except for
permitted borrowings.
(8) Purchase or sell commodities or commodity contracts,
except that the Fund may purchase and sell financial
futures contracts and options and may enter into non-U.
S. exchange contracts and other financial transactions
not involving physical commodities. (Securities
denominated in gold whose value is determined by the
value of gold are not considered to be commodity
contacts.)
(9) 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.
Although certain of the Fund's fundamental
investment restrictions permit it to borrow money to a
limited extent, it does not currently intend to do so and
did not do so last year.
The Investment Company Act of 1940 provides that a
"vote of a majority of the outstanding voting securities"
of the fund means the affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the Fund,
or (2) 67% or more of the shares present at a meeting if
more than 50% of the outstanding shares of the Fund are
represented at the meeting in person or by proxy.
IT IS CONTRARY TO THE FUND'S PRESENT POLICY, WHICH MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL, TO:
Invest in (a) securities which are not readily
marketable, (b) securities restricted as to resale
(excluding securities determined by the Trustees (or the
person designated by the Trustees 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.
In addition, the Fund will, so long as shares of the
Fund are being offered for sale by the Fund in Japan,
comply with the following standards of selection of the
Japan Securities Dealers Association.
1. The Fund will not invest more than 15% of its net
assets in securities that are not traded on an official
stock exchange or other regulated market, including,
without limitation, the National Association of
Securities Dealers Automated Quotation System (this
restriction shall not be applicable to securities
determined by the Investment Management Company to be
liquid and for which a market price (including a dealer
quotation) is generally obtainable or determinable);
2. The Fund will not borrow money in excess of 10% of
the value of its total assets;
3. The Fund will not make short sales of securities in
excess of the Fund's net asset value; and,
4. The Fund will not, together with other mutual funds
managed by the Investment Management Company, acquire
more than 50% of the outstanding voting securities of any
issuer.
If any violation of the foregoing standards occurs,
the Fund will, promptly after discovery of the violation,
take such action as may be necessary to cause the
violation to cease, which shall be the only obligation of
the Fund and the only remedy in respect of the violation.
All percentage limitations on investments (other
than pursuant to non-fundamental restriction listed
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.
(C) Distribution Policy:
The Fund distributes any net investment income once
a month and any net realized capital gains at least once
a year.
3. MANAGEMENT STRUCTURE
(A) Outline of Management of Assets, etc.:
A. Valuation of assets:
The Fund calculates the net asset value of a share
of each class by dividing the total value of its assets,
less liabilities, by the number of its shares
outstanding. 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. Dr. 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.,
New York time, 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. New York time.
Securities for which market quotations are readily
available are valued at prices which, in the opinion of
the Investment Management Company, most nearly represent
the market values of such securities. Currently, such
prices are determined using the last reported sale price
or, if no sales are reported (as in the case of some
securities traded over-the-counter), the last reported
bid price, except that certain securities are valued at
the mean between the last reported bid and asked prices.
Short-term investments having remaining maturities of 60
days or less are valued at amortized cost, which
approximates market value. All other securities and
assets are valued at their fair value following
procedures approved by the Trustees. Liabilities are
deducted from the total value of the assets attributable
to a class, and the resulting amount is divided by the
number of shares of the class outstanding.
Reliable market quotations are not considered to be
readily available for long-term corporate bonds and
notes, certain preferred stocks, tax-exempt securities,
and certain non-U.S. securities. These investments are
valued at fair value on the basis of valuations furnished
by pricing services, which determine valuations for
normal, institutional-size trading units of such
securities using methods based on market transactions for
comparable securities and various relationships between
securities which are generally recognized by
institutional traders.
If any securities held by the Fund are restricted as
to resale, the Investment Management Company determines
their fair value using procedures approved by the
Trustees. The fair value of such securities is generally
determined as the amount which the Fund could reasonably
expect to realize from an orderly disposition of such
securities over a reasonable period of time. The
valuation procedures applied in any specific instance are
likely to vary from case to case. However, consideration
is generally given to the financial position of the
issuer and other fundamental analytical data relating to
the investment and to the nature of the restrictions on
disposition of the securities (including any registration
expenses that might be borne by the Fund in connection
with such disposition). In addition, specific factors
are also generally considered, such as the cost of the
investment, the market value of any unrestricted
securities of the same class, the size of the holding,
the prices of any recent transactions or offers with
respect to such securities and any available analysts'
reports regarding the issuer.
Generally, trading in certain securities (such as
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 using procedures approved by the
Trustees.
B. Management Fee, etc.:
(1) Management Fee:
(a) Management and Agent Company Fees
Under a Management Contract dated February 20,
1997, the Fund pays a quarterly fee to the
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 0.80% of the first $500 million of
average net assets, 0.70% of the next $500 million,
0.65% of the next $500 million, 0.60% of the next $5
billion, 0.575% of the next $5 billion, 0.555% of
the next $5 billion, 0.54% of the next $5 billion
and 0.53% of any excess thereafter. Pursuant to the
Management Contract and a management contract in
effect prior to February 20, 1997, under which the
management fee payable to the Investment Management
Company was paid at the annual rate of 0.80% of the
first $500 million of average net asset, 0.70% of
the next $500 million, 0.65% of the next $500
million and 0.60% of any amount over $1.5 billion.
For the fiscal years ending October 31, 1998, 1997
and 1996, the Fund paid $ 4,223,569, $3,005,982 and
$3,116,163, respectively, as a management fee.
(b) Custodian Fee and Charges of the Investor
Servicing Agent
Putnam Fiduciary Trust Company, the Fund's
Custodian, shall be entitled to receive, out of the
assets of the Fund, reasonable compensation for its
services and expenses as Custodian, as agreed from
time to time between the Fund and the Custodian, not
including fees paid by the Custodian to any sub-
custodian, payable monthly based on the average
daily total net assets of the Fund during the
relevant month. Any reasonable disbursements and
out-of-pocket expenses (including without limitation
telephone, telex, cable and postage expenses)
incurred by the Custodian, and any custody charges
of banks and financial institutions to whom the
custody of assets of the Fund is entrusted, will be
borne by the Fund.
The Fund will pay to Putnam Investor Services, a
division of Putnam Fiduciary Trust Company, the
Fund's Investor Servicing Agent, such fee, out of
the assets of the Fund, as is mutually agreed upon
in writing from time to time, in the amount, at the
time and in the manner of payment mutually agreed.
For the fiscal year ended October 31, 1998, the
Fund paid $937,644 as a custodian fee and investor
servicing agent fee.
(c) Fee under Class M Distribution Plan
The Class M distribution plan provides for
payments by the Fund to Putnam Mutual Funds Corp. at
the annual rate of up to 1.00% of average net assets
attributable to Class M shares. The Trustees
currently limit payments under the Class M plan to
the annual rate of 0.50% of such assets.
Putnam Mutual Funds Corp. makes quarterly
payments to Towa and other dealers at an annual rate
of 0.40% of the average net asset value of Class M
shares attributable to shareholders for whom Towa
and other dealers are designated as the dealer of
record.
Payments under the plan are intended to
compensate Putnam Mutual Funds Corp. for services
provided and expenses incurred by it as principal
underwriter of the Fund's shares, including the
payments to dealers mentioned above. Putnam Mutual
Funds Corp. may suspend or modify such payments to
dealers.
For the fiscal year ended October 31, 1998, the
Fund paid fees under the distribution plan of
$1,129,190 for Class M shares.
(d) Other Expenses:
The Fund pays all expenses not assumed by
Investment Management Company, including Trustees'
fees, auditing, legal, custodial, investor servicing
and shareholder reporting expenses, and payments
under its distribution plans (which are in turn
allocated to the relevant class of shares). The
Fund also reimburses Investment Management Company
for the compensation and related expenses of certain
Fund officers and their staff who provide
administrative services. The total reimbursement is
determined annually by the Trustees and was $9,889
for Fiscal 1998.
Each Trustee receives a fee for his or her
services. Each Trustee also receives fees for
serving as Trustee of other Putnam funds. The
Trustees periodically review their fees to assure
that such fees continue to be appropriate in light
of their responsibilities as well as in relation to
fees paid to trustees of other mutual fund
complexes. The Trustees meet monthly over a two-day
period, except in August. The Board Policy
Committee, which consists solely of Trustees not
affiliated with the Investment Management Company
and is responsible for recommending Trustee
compensation, estimates that Committee and Trustee
meeting time together with the appropriate
preparation requires the equivalent of at least
three business days per Trustee meeting. The
following table shows the year each Trustee was
first elected a Trustee of the Putnam funds, the
fees paid to each Trustee by the Fund for fiscal
1998 and the fees paid to each Trustee by all of the
Putnam funds during calendar 1998:
<TABLE><CAPTION>
COMPENSATION TABLE
<S> <C> <C> <C> <C>
Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees/Year fund (1) fund expenses upon retirement(2) funds (3)
Jameson A. Baxter/1994 (4)$1,204 $272 $95,000 $207,000
Hans H. Estin/1972 1,060 534 95,000 182,500
John A. Hill/1985 (4)(5 )1,048 201 115,000 (6) 200,500
Ronald J. Jackson/1996 (4) 1,165 144 95,000 200,500
Paul L. Joskow/1997 (4) 1,048 19 95,000 180,500
Elizabeth T. Kennan/1992 1,165 288 95,000 200,500
Lawrence J. Lasser/1992 1,036 216 95,000 178,500
John H. Mullin, III/1997(4)1,048 29 95,000 180,500
Robert E. Patterson/1984 1,054 161 95,000 181,000
Donald S. Perkins/1982 1,060 577 95,000 182,500
William F. Pounds/1971(5) 1,122 600 115,000 (6) 215,000
George Putnam/1957 1,042 609 95,000 179,500
George Putnam, III/1984 1,054 106 95,000 181,500
A.J.C. Smith/1986 1,020 360 95,000 176,500
W. Thomas Stephens/1997(4) 1,051 27 95,000 181,500
W. Nicholas Thorndike/1992 1,060 414 95,000 182,500
</TABLE>
(1) Includes an annual retainer and an attendance fee
for each meeting attended.
(2) Assumes that each Trustee retires at the normal
retirement date. Estimated benefits for each
Trustee are based on Trustee fee rates in effect
during calendar 1998.
(3) As of December 31, 1998, there were 113 funds in the
Putnam family.
(4) Includes compensation deferred pursuant to a Trustee
Compensation Deferral Plan. The total amounts of
deferred compensation payable by the fund to Messrs.
Hill, Jackson, Stephens, Joskow and Mullin as of
October 31, 1998 were $4,921, $2,658, $1,196, $901
and $846, 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 is also
available under the Plan which assures that the
Trustee and his or her beneficiaries will receive
benefit payments for the lesser of an aggregate
period of (i) ten years or (ii) such Trustee's total
years of service.
The Plan Administrator (a committee comprised of
Trustees who are not "interested persons" of the
Fund, as defined in the Investment Company Act of
1940) may terminate or amend the Plan at any time,
but no termination or amendment will result in a
reduction in the amount of benefits (i) currently
being paid to a Trustee at the time of such
termination or amendment, or (ii) to which a current
Trustee would have been entitled had he or she
retired immediately prior to such termination or
amendment.
The Investment Management Company places all
orders for purchases and sales of Fund securities.
In selecting broker-dealers, the 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, the Investment
Management Company may consider sales of Fund shares
(and, if permitted by law, shares of the other
Putnam Funds) as a factor in the selection of broker-
dealers. During fiscal 1996, 1997 and 1998, the
Fund paid $54,032, $21,663 and $65,146 in brokerage
commissions, respectively. During fiscal 1998 the
Fund did not pay any fees to brokers and dealers to
recognize research, statistical and quotation
services provided to the Investment Management
Company and its affiliates.
For the fiscal year ended October 31, 1998, the
Fund paid $2,473,253in total other expenses,
including payments under its distribution plans, but
excluding management fees, investor servicing agent
expenses and custodian expenses.
C. Sales, Repurchases and Custody:
(1) Sales of Shares:
a. Sales in the United States
Investors residing in the U.S. can open a
fund account with as little as $500 and make
additional investments at any time with as little as
$50. The Fund sells its shares at the offering
price, which is the NAV plus any applicable sales
charge. An investors' financial advisor or Putnam
Investor Services generally must receive the
investor's completed buy order before the close of
regular trading on the exchange for the investor's
shares to be bought at that day's offering price.
Investors residing in the U.S. can buy shares
- Through a financial advisor
The investors' advisor will be responsible
for furnishing all necessary documents to the Sales
Handling Company, and may charge investors for
investors' advisor's services.
- Through systematic investing
Investors can make regular investments of
$25 or more per month through automatic
deductions from the investor's bank checking or
savings account. Application forms are available
through investors' advisor or the Sales Handling
Company.
Investors may also complete an order form and
write a check for the amount they wish to invest,
payable to the Fund. Return the check and completed
form to the Distributor.
The Fund may periodically close to new
purchases of shares or refuse any order to buy
shares if the Fund determines that doing so would be in
the best interests of the Fund and its shareholders.
Class M shares
The following is a brief description of
the sales charge and ongoing operating expenses of
Class M shares.
- Initial sales charge of up to 3.25%
- Lower sales charges for larger investments of
$50,000 or more
- No deferred sales charge
- Lower annual expenses, and higher dividends,
than class B shares because of lower 12b-1 fee
- Higher annual expenses, and lower dividends,
than class A shares because of higher 12b-1 fee
- No conversion to class A shares, so future 12b-
1 fee does not decrease
Initial sales charges for class M shares
Sales charge as a percentage of:
Net
Amount of purchase amount Offering
at offering price ($) 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.
An investor may be eligible to buy Class M
shares at reduced sales charges. Putnam Mutual
Funds Corp. received $19,651, $10,412 and
$11,362,021 in sales charges for Class M shares for
fiscal years 1996, 1997 and 1998, respectively, of
which it retained $1,663, $1,093 and $917,138,
respectively.
b. Sales in Japan
In Japan, shares of the Fund are offered on any
business day and on any business day of the
securities company in Japan during the subscription
period mentioned in "8. Period of Subscription, Part
I Information concerning Securities" of a securities
registration statement pursuant to the terms set
forth in "Part I. Information concerning Securities"
of the relevant securities registration statement.
A Distributor or a Sales Handling Company shall
provide to the investors an Account Contract and
receive from such investors an application for
requesting the opening of a transactions account
under the Contract. The purchase shall be made in
the minimum investment of 300 Shares and in integral
multiples of 100 Shares for the initial subscription
and of 100 Shares and integral multiples of 100
Shares for any subsequent subscription. Provided,
however, even in the case of the subsequent
subscription, a Shareholder shall hold 300 Shares or
more after the subscription.
The issue price for shares during the
subscription period shall be, in principal, 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 the
payment and delivery shall be made on the fourth
business day after and including the Trade Day. The
sales charge in Japan shall be 3% of the amount
obtained by deduction of the amount equivalent to 3%
of the public offering price from such price
(hereinafter referred to as the "Sales Price"). Any
amount, which is over the net asset value, of the
Sales Price shall be retained by Putnam Mutual Fund
Corp., principal underwriter of the Fund. The
public offering price means the amount calculated by
dividing the net asset value by (1- 0.0325) and
rounded to three decimal places.
The investors having entrusted a Distributor or
a Sales Handling Company with safekeeping of the
certificates for Fund shares will receive a
certificate of safekeeping in exchange for the
purchase price. In such case payment shall be made
in yen in principle and the applicable exchange rate
shall be the exchange rate which shall be based on
the foreign exchange rate quoted in the Tokyo
Foreign Exchange Market on the Trade Day and which
shall be determined by the Distributor or the Sales
Handling Company. The payment may be made in
dollars to the extent that the Distributor or the
Sales Handling Company can agree.
In addition, the Distributors or the Sales
Handling Companies who are members of the Japan
Securities Dealers' Association cannot continue sales
of the Shares in Japan when the net assets of the
Fund are less than yen100,000,000 or the Shares
otherwise cease to comply with the "Standards of
Selection of Foreign Investment Fund Securities" in
the "Regulations Concerning the Transaction of
Foreign Securities" established by the Association.
Distribution (12b-1) plans
The Fund has adopted distribution plans to pay for
the marketing of Fund shares and for services
provided to shareholders. The plans provide for
payments at the annual rate (based on average net
assets) of up to 1.00% on class M shares. The
Trustees currently limit payments on class M shares
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 an investor's
investment. The higher fees for class M shares may
cost investors more than paying the initial sales
charge for class A shares. Because class M shares,
do not convert to class A shares, class M shares may
cost investors more over time than class B shares.
(2) Repurchase of Shares:
a. Repurchase in the United States
Investors residing in the U.S. can sell their
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 redemption
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 for them 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
them for investors' advisor's services.
SELLING SHARES DIRECTLY TO THE FUND
The Investment Management Company must receive
investors' request in proper form before the close of
regular trading on the New York Stock Exchange in
order to receive that day's NAV, less any applicable
sales charge.
BY MAIL
Send a signed letter of instruction to Putnam
Investor Services. If investors have certificates
for the shares investors want to sell, investors must
include them along with completed stock power forms.
BY TELEPHONE
Investors may use the Investment Management
Company's Telephone Redemption Privilege to redeem
shares valued at less than $100,000 unless investors
have notified Putnam Investor Services of an address
change within the preceding 15 days. Unless
investors indicate otherwise on the account
application, Putnam Investor Services will be
authorized to accept redemption and transfer
instructions received by telephone.
The Telephone Redemption Privilege is not
available if there are certificates for investors'
shares. The Telephone Redemption Privilege may be
modified or terminated without notice.
ADDITIONAL DOCUMENTS
If investors
- sell shares with a value of $100,000 or more,
- want investors' redemption proceeds sent to an
address other than the investor's address as it
appears on Putnam's records, or
- have notified Putnam of a change in address within
the preceding 15 days,
the signatures of registered owners or their legal
representatives must be guaranteed by a bank, broker-
dealer or certain other financial institutions.
Stock power forms are available from investors'
financial advisor, Putnam Investor Services and many
commercial banks.
Putnam Investor Services usually requires
additional documents for the sale of shares by a
corporation, partnership, agent or fiduciary, or a
surviving joint owner.
WHEN WILL THE FUND PAY INVESTORS?
The Fund generally sends investors payment for
investors' shares the business day after investors'
request is received. Under unusual circumstances,
the Fund may suspend redemptions, or postpone payment
for more than seven days as permitted by federal
securities laws.
REDEMPTION BY THE FUND
If investors own fewer shares than the minimum
set by the Trustees (presently 20 shares), the Fund
may redeem investors' shares without investors'
permission and send investors the proceeds. The Fund
may also redeem shares if an investor owns more than
a maximum amount set by the Trustees. There is
presently no maximum, but the Trustees could set a
maximum that would apply to both present and future
shareholders.
b. Repurchase in Japan
Shareholders in Japan may at any time request
repurchase of their Shares. Repurchase requests in
Japan may be made to Investor Servicing Agent
through the Distributor or the Sales Handling
Company on a Fund business day that is business day
of the securities companies in Japan without a
contingent deferred sales charge. The repurchase
shall be made in integral multiples of 1 share.
The price a shareholder in Japan will receive is
the next net asset value calculated after the Fund
receives the repurchase request from Towa, provided
the request is received before the close of regular
trading on the New York Stock Exchange. The payment
of the price shall be made in yen through the
Distributors or the Sales Handling Companies
pursuant to the Account Contracts or, if the
Distributors or the Sales Handling Companies agree,
in dollars. The payment for repurchase proceeds
shall be made on the fourth business day of
securities companies in Japan after and including
the Trade Day.
(3) Suspension of Repurchase:
The Fund may suspend shareholders' right of
redemption, or postpone payment for more than seven
days, if the New York Stock Exchange is closed for
other than customary weekends or holidays, or if
permitted by the rules of the U.S. Securities and
Exchange Commission during periods when trading on
the Exchange is restricted or during any emergency
which makes it impracticable for the Fund to dispose
of its securities or to determine fairly the value
of its net assets, or during any other period
permitted by order of the U.S. Securities and
Exchange Commission for protection of investors.
(4) Custody of Shares:
Share certificates shall be held by shareholders
at their own risk.
The custody of the share certificates (if
issued) representing shares sold to Japanese
Shareholders shall, unless otherwise instructed by
the Shareholder, be held, in the name of the
custodian, by the custodian of Towa. Certificates
of custody for the Shares shall be delivered by the
Handling Securities Companies to the Japanese
Shareholders.
D. Miscellaneous:
(1) Duration and Liquidation:
Unless terminated, the Fund shall continue
without limitation of time. The Fund may be
terminated at any time by a vote of the Shareholders
holding at least 66 2/3% of the shares entitled to a
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 31st October.
(3) Authorized Shares:
There is no prescribed authorized number of
shares, and shares may be issued from time to time.
(4) Agreement and Declaration of Trust:
Originals or copies of the Agreement and
Declaration of Trust, as amended, are maintained in
the office of the Trust and are made available for
public inspection for the shareholders. Originals
or copies of the Agreement and Declaration of Trust,
as amended, are on file in the United States with
the Secretary of State of The Commonwealth of
Massachusetts and with the Clerk of the City of
Boston.
The Agreement and Declaration of Trust may be
amended at any time by an instrument in writing
signed by a majority of the then Trustees when
authorized to do so by vote of shareholders holding
a majority of the shares entitled to vote, except
that an amendment which shall affect the holders of
one or more series or classes of shares but not the
holders of all outstanding series and classes shall
be authorized by vote of the shareholders holding a
majority of the shares entitled to vote of each
series and class affected and no vote of
shareholders of a series or class not affected shall
be required. Amendments having the purpose of
changing the name of the Trust or of supplying any
omission, curing any ambiguity or curing, correcting
or supplementing any defective or inconsistent
provision contained herein shall not require
authorization by shareholder vote.
In Japan, material changes in the Agreement and
Declaration of Trust shall be published and 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" is
calculated by dividing the annualized net investment
income per share during a recent 30-day period by
the maximum public offering price per share on the
last day of that period.
For purposes of calculating yield, net
investment income is calculated in accordance with
U.S. Securities and Exchange Commission regulations
and may differ from net investment income as
determined for financial reporting purposes. U.S.
Securities and Exchange Commission regulations
require that net investment income be calculated on
a "yield-to-maturity" basis, which has the effect of
amortizing any premiums or discounts in the current
market value of fixed-income securities. The
current dividend rate is based on net investment
income as determined for tax purposes, which may not
reflect amortization in the same manner.
Yield is based on the price of the shares,
including the maximum initial sales charge.
"Total return" for the one-, five- and ten-year
periods (or for the life of the Fund, if shorter)
through the most recent calendar quarter represents
the average annual compounded rate of return on an
investment of $1,000 in the Fund invested at the
maximum public offering price(in the case of Class M
shares .). 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 October
31, 1998, the average annual total return for Class
M shares of the Fund was -4.51%, 2.47% and 6.54%,
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 March 17,
1995 are derived from the historical performance of
Class A shares, adjusted to reflect both the
deduction of the initial sales charge and the higher
operating expenses applicable to Class M shares.
The 30-day yield for the Class M shares of the Fund
for the period ended October 31, 1998 was 5.82%.
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 which 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 investment 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 annually in accordance with
the Investment Company Act of 1940.
(2) Disclosure in Japan:
a. Disclosure to the Supervisory Authority:
(i) Disclosure Required under the Securities and
Exchange Law:
When the Fund intends to offer the shares
amounting to more than 100 million yen in Japan, it
shall submit to the Director of Kanto Local Finance
Bureau of Ministry of Finance of Japan securities
registration statements together with the copies of
the Agreement and Declaration of Trust of the Fund
and the agreements with major related companies as
attachments thereto. The said documents are made
available for public inspection for investors and
any other persons who desire at the 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 to Part I and Part II of the
securities registration statements. For the purpose
of disclosure of the financial conditions, etc., the
Trustees shall submit to the Director of Kanto Local
Finance Bureau of Ministry of Finance of Japan
securities reports within 6 months of the end of
each fiscal year, semi-annual reports within 3 months
of the end of each semi-annual period and
extraordinary reports from time to time when changes
occur as to material subjects of the Fund. These
documents are available for public inspection for
the investors and any other persons who desire at
the Director of Kanto Local Finance Bureau of
Ministry of Finance of Japan.
(ii) Disclosure Required under the Law Concerning
Securities Investment Trust Fund and Securities
Investment Company:
When the Fund handles offering or selling of
Fund Share in Japan, the Fund 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 the 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 above report with the Director
of Finance Supervisory Agency.
b. Disclosure to Japanese Shareholders:
When the Investment Management Company makes
changes to the Agreement and Declaration of Trust,
if the contents of such changes are material, the
Investment Management Company must give 30 days
prior public notice thereof, including the contents
of such changes, before such changes are made, and
its written notice stating these matters must be
given to Japanese Shareholders known to the
Distributors or the Sales Handling Companies in
Japan ; provided, however, that if such written
notice is delivered to all Japanese Shareholders, no
public notice is required.
The Japanese Shareholders will be notified of
the material facts which would change their
position, including notices from the Trustees,
through the Distributors or the Sales Handling
Companies.
The investment management report mentioned in sub-
paragraph (a), (ii) above will be delivered to Japanese
Shareholders known to the Distributors 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, the Investment Management Company, acting as
investment adviser of the Fund, or any affiliate thereof
or any of their directors, officers, or employees, or any
major shareholder thereof (meaning a shareholder who
holds to the actual knowledge of Investment Management
Company, on his own account whether in his own or other
name (as well as a nominee's name), 10% or more of the
total issued outstanding shares of such a company) acting
as principal or for their own account unless the
transaction is made within the investment restrictions
set forth in the Fund's prospectus and statement of
additional information and either (i) at a price
determined by current publicly available quotations
(including a dealer quotation) or (ii) at competitive
prices or interest rates prevailing from time to time on
internationally recognized securities markets or
internationally recognized money markets (including a
dealer quotation).
4. INFORMATION CONCERNING THE EXERCISE OF RIGHTS BY
SHAREHOLDERS, ETC.
(A) Rights of Shareholders and Procedures for Their Exercise:
Shareholders must register their shares in their own
name in order to exercise directly their rights as
shareholders. Therefore, the shareholders in Japan who
entrust the custody of their shares to the Handling
Securities Company cannot exercise directly their
shareholder rights, because their shares are registered
in the name of the custodian. Shareholders in Japan may
have the Handling Securities Companies exercise their
rights on their behalf in accordance with the Account
Agreement with the Handling Securities Companies.
Shareholders in Japan who do not entrust the custody
of their shares to the Handling Securities Companies may
exercise their rights in accordance with their own
arrangement under their own responsibility.
The major rights enjoyed by Shareholders are as
follows:
(i) Voting rights
Each share has one vote, with fractional shares
voting proportionally. Shares of each class will
vote together as a single class except when
otherwise required by law or as determined by the
Trustees. Although the Fund is not required to hold
annual meetings of its shareholders, shareholders
holding at least 10% of the outstanding shares
entitled to vote have the right to call a meeting to
elect or remove Trustees, or to take other actions
as provided in the Agreement and Declaration of
Trust.
(ii)Repurchase rights
Shareholders are entitled to request repurchase
of shares at their Net Asset Value at any time.
(iii) Rights to receive dividends
Shareholders are entitled to receive any
distribution declared by the Trustees.
Distributions are generally made from net investment
income monthly and from any net realized capital
gains at least annually. Distributions from net
capital gains are made after applying any available
capital loss carryovers.
Shareholders may choose three distribution
options, though investors in Japan may only choose
the last alternative.
- Reinvest all distributions in additional
shares without a sales charge;
- Receive distributions from net investment
income in cash while reinvesting capital gains
distributions in additional shares without a sales
charge; or
- Receive all distributions in cash.
(iv)Right to receive distributions upon dissolution
Shareholders of a fund are entitled to receive
distributions upon dissolution in proportion to the
number of shares then held by them, except as
otherwise required.
(v) Right to inspect accounting books and the like
Shareholders are entitled to inspect the
Agreement and Declaration of Trust, the accounting
books at the discretion of the Court and the minutes
of any shareholders' meetings.
(vi)Right to transfer shares
Shares are transferable without restriction except
as limited by applicable law.
(vii) Rights with respect to the U.S.
registration statement
If, under the 1933 Act, there is any false
statement concerning any important matter in the
U.S. Registration Statement, or any omission of any
statement of important matters to be stated therein
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.
The Japanese withholding tax imposed on
distributions as referred to in a. and b. above will
be collected by way of so-called "difference
collecting method." In this method only the
difference between the amount equivalent to 20% of
the distributions before U.S. withholding tax and
the amount of U.S. withholding tax withheld in the
U.S. will be collected in Japan.
(2) The provisions of Japanese tax laws giving the
privilege of a certain deduction from taxable income to
corporations, which may apply to dividends paid by a
domestic corporation, shall not apply.
(3) Capital gains and losses arising from purchase and
repurchase of the Shares shall be treated in the same way
as those arising from purchase and sale of a domestic
investment trust. The distribution of the net
liquidation assets shall be also treated in the same way
as those arising from liquidation of a domestic
investment trust.
(4) The Japanese securities transaction tax will not be
imposed so far as the transactions concerned are
conducted outside Japan. Such tax, however, is
applicable to dealers' transactions for their own account
and to privately negotiated transactions conducted in
Japan.
(C) Foreign Exchange Control in U.S.A.:
In 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 Ministry of Finance the
continuous disclosure is each of the following persons:
Harume Nakano
Ken Miura
Attorneys-at-law
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki, 3-chome
Chiyoda-ku, Tokyo
(E) Jurisdiction:
Limited only to litigation brought by Japanese
investors regarding transactions relating to (D)(2)
above, the Fund has agreed that the following court has
jurisdiction over such litigation and the Japanese law is
applicable thereto:
Tokyo District Court
1-4, Kasumigaseki 1-chome
Chiyoda-ku, Tokyo
5. STATUS OF INVESTMENT FUND
(A) Diversification of Investment Portfolio
(As of January 31, 1999)
Investment
Types of Assets Name of Country Total U.S. Dollars Ratio (%)
Foreign Government United Kingdom 47,412,856 9.26
Bonds New Zealand 37,497,987 7.32
Germany 35,345,860 6.90
Netherlands 28,949,695 5.65
France 20,790,445 4.06
Italy 17,558,451 3.43
Sweden 16,496,216 3.22
Canada 15,977,705 3.12
Spain 14,273,998 2.79
Australia 11,059,800 2.16
Denmark 9,089,812 1.78
Greece 8,660,091 1.69
Russia 179,613 0.04
Sub-total 263,292,529 51.43
U.S. Government United States 135,566,245 26.48
Short-term United States 42,743,004 8.35
Brady Bonds Mexico 8,785,600 1.72
Bulgaria 6,329,688 1.24
Brazil 4,089,492 0.80
Argentina 3,103,100 0.61
Sub-total 22,307,880
Corporate Bonds United States 27,189,492 5.31
Germany 24,654,310 4.82
United Kingdom 10,664,358 2.08
Canada 5,237,145 1.02
Japan 2,269,596 0.44
Israel 510,000 0.10
Bermuda 254,800 0.05
Netherland 33,000 0.01
Sub-total 70,812,701 13.83
Common Stock United States 144,419 0.03
Warrants United States 9,500 0.00
Preferred Stocks United States 1,893 0.00
Purchased Options Japan 3,059,280 0.60
Cash, Deposit and Other
Assets (After deduction
of liabilities) -25,952,481 -5.07
Total 511,984,970 100.00
(Net Asset Value) (59,569 million yen)
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.
As of January 31, 1999, 62.69%, 11.61% and 25.7% of the
total Net Assets of the Fund was invested in securities
rated AAA (or its equivalent), AA (or its equivalent) and
other securities, respectively.
(B) Results of Past Operations
(1) Record of Changes in Net Assets (Class M Shares)
Record of changes in net assets at the end of the
following fiscal years and at the end of each month
within one year prior to the end of January 1999 is as
follows:
Total Net Asset Value Net Asset Value per Share
Dollar Yen
(thousands) (millions) Dollar Yen
1st Fiscal Year 509 59 13.59 1,581
(October 31, 1995)
2nd Fiscal Year 1,892 220 14.44 1,680
(October 31, 1996)
3rd Fiscal Year 2,506 292 13.89 1,616
(October 31, 1997)
4th Fiscal Year 213,868 24,884 12.77 1,486
(October 31, 1998)
1998 End of February 263,568 30,666 13.26 1,543
March 283,532 32,989 12.99 1,511
April 300,027 34,908 13.12 1,527
May 295,662 34,400 12.89 1,500
June 284,423 33,093 12.68 1,475
July 265,019 30,835 12.60 1,466
August 218,491 25,421 11.79 1,372
September 216,123 25,146 12.41 1,444
October 213,868 24,884 12.77 1,486
November 208,524 24,262 12.67 1,474
December 213,820 24,878 12.87 1,497
1999 End of January 226,303 26,330 12.93 1,504
(Note) Operations of Class M Shares were commenced on March 17, 1995.
(2) Record of Distributions Paid (unaudited)
Dividend Net Asset Value
Ex-Dividend Date (dollar) Per Share (dollar)
April 20, 1995 0.072 12.94
July 20, 1995 0.222 13.36
October 20, 1995 0.221 13.48
December 20, 1995 0.092 13.84
March 20, 1996 0.221 13.81
June 20, 1996 0.219 13.65
September 20, 1996 0.218 14.00
December 20, 1996 0.332 14.18
March 20, 1997 0.217 13.79
June 20, 1997 0.217 13.80
September 22, 1997 0.216 13.80
December 19, 1997 0.232 13.39
January 20, 1998 0.073 13.30
February 27, 1998 0.073 13.18
March 20, 1998 0.071 13.10
April 20, 1998 0.069 12.77
May 20, 1998 0.068 12.98
June 22, 1998 0.068 13.14
July 20, 1998 0.068 12.81
August 20, 1998 0.068 11.98
September 21, 1998 0.068 12.24
October 20, 1998 0.068 12.72
November 20, 1998 0.068 12.66
December 20, 1998 0.069 12.80
January 20, 1999 0.068 12.89
(Note) Record of distribution paid and Net Asset Value per
share from April 1995 to January 1999 are as follows:
(C) Record of Sales and Repurchases
Record of sales and repurchases during the following
fiscal years and number of outstanding Shares of the Fund as
of the end of such Fiscal Years are as follows:
Number of Number of Net Number of
Shares Shares Increase Outstanding
Sold Repurchased (Decrease) Shares
in Shares
Outstanding
1st Fiscal 42,244 4,802 37,442 37,442
Year (0) (0) (0) (0)
2nd Fiscal 138,180 44,620 93,560 131,000
Year (0) (0) (0) (0)
3rd Fiscal 121,290 71,842 49,448 180,450
Year (0) (0) (0) (0)
4th Fiscal 25,266,457 8,693,157 16,573,300 16,753,750
Year (0) (0) (0) (0)
Note: The number of Shares sold, repurchased and
outstanding in the parentheses represents those sold,
repurchased and outstanding in Japan. The Shares have
been sold in Japan since December, 1997.
II. OUTLINE OF THE FUND
1. Fund
(A) Law of Place of Incorporation
The Fund is a Massachusetts business trust organized
in Massachusetts, U.S.A. on June 30, 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, non-diversified management
company under the Investment Company Act of 1940.
(B) Outline of the Supervisory Authority
Refer to I - l (B) Outline of the Supervisory
Authority.
(C) Purpose of the Fund
The purpose of the Fund is to provide investors a
managed investment primarily in securities, debt
instruments and other instruments and rights of a
financial character.
(D) History of the Fund
June 30, 1986: Organization of the Fund as a
Massachusetts business trust.
Adoption of the Agreement and
Declaration of Trust.
February 24, 1987: Adoption of the Amended and Restated
Agreement and Declaration of Trust.
December 3, 1993: Adoption of the Amended and Restated
Agreement and Declaration of Trust
(E) Amount of Capital Stock
Not applicable.
(F) Structure of the Management of the Fund
The Trustees are responsible for generally
overseeing the conduct of the Fund's business. The
Agreement and Declaration of Trust provides that they
shall have all powers necessary or convenient to carry
out that responsibility. The number of Trustees is fixed
by the Trustees and may not be less than three. A
Trustee may be elected either by the Trustees or by the
shareholders. At any meeting called for the purpose, a
Trustee may be removed by vote of two-thirds of the
outstanding shares of the Trust. Each Trustee elected by
the Trustees or the shareholders shall serve until he or
she retires, resigns, is removed, or dies or until the
next meeting of shareholders called for the purpose of
electing Trustees and until the election and
qualification of his or her successor.
The 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 Trust, or any
registration of the Fund with the U.S. Securities and
Exchange Commission (or any successor agency) or any
state, or as the Trustees may consider necessary or
desirable. Certain of the foregoing actions may, in
addition, be taken by the Trustees without vote of the
shareholders of the Fund.
On any matter submitted to a vote of shareholders,
all shares of the Fund then entitled to vote are voted in
the aggregate as a single class without regard to series
or classes of shares, except (1) when required by the
Investment Company Act of 1940, as amended, or when the
Trustee shall have determined that the matter affects one
or more series or classes of shares materially
differently, share are voted by individual series or
class; and (2) when the Trustees have determined that the
matter affects on the interests of one or more series or
classes, then only shareholders of such series or classes
are entitled to vote thereon. There is no cumulative
voting.
Meetings of shareholders may be called by the Clerk
whenever ordered by the Trustees, the Chairman of the
Trustees, or requested in writing by the holder or
holders of at least one-tenth of the outstanding shares
entitled to vote at the meeting. Written notice of any
meeting of shareholders must be given by mailing the
notice at least seven days before the meeting. Thirty
percent of shares entitled to vote on a particular matter
is a quorum for the transaction of business on that
matter at a shareholders' meeting, except that, where any
provision of law or of the Agreement and Declaration of
Trust permits or requires that holders of any series or
class vote as an individual series or class, then thirty
percent of the aggregate number of shares of that series
or class entitled to vote are necessary to constitute a
quorum for the transaction of business by that series or
class. For the purpose of determining the shareholders
of any class or series of shares who are entitled to vote
or act at any meeting, or who are entitled to receive
payment of any dividend or other distribution, the
Trustees are authorized to fix record dates, which may
not be more then 90 days before the date of any meeting
of shareholders or more than 60 days before the date of
payment of any dividend or other distribution.
The Trustees are authorized by the Agreement and
Declaration of Trust to adopt Bylaws not inconsistent
with the Agreement and Declaration of Trust providing for
the conduct of the business of the Fund. The Bylaws
contemplate that the Trustees shall elect a Chairman of
the Trustees, the President, the Treasurer, and the Clerk
of the Fund, and that other officers, if any, may be
elected or appointed by the Trustees at any time. The
Bylaws may be amended or repealed, in whole or in part,
by a majority of the Trustees then in office at any
meeting of the Trustees, or by one or more writings
signed by such a majority.
Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the
Trustees may from time to time determine. It shall be
sufficient notice to a Trustee of a special meeting to
send notice by mail at least forty-eight hours or by
telegram at least twenty-four hours before the meeting or
to give notice to him or her in person or by telephone at
least twenty-four hours before the meeting.
At any meeting of Trustees, a majority of the
Trustees then in office shall constitute a quorum.
Except as otherwise provided in the Agreement and
Declaration of Trust or Bylaws, any action to be taken by
the Trustees may be taken by a majority of the Trustees
present at a meeting (a quorum being present), or by
written consents of a majority of the Trustees then in
office.
Subject to a favorable majority shareholder vote (as
defined in the Agreement and Declaration of Trust), the
Trustees may contract for exclusive or nonexclusive
advisory and/or management services with any corporation,
trust, association, or other organization.
The Agreement and Declaration of Trust contains
provisions for the indemnification of Trustees, officers,
and shareholders of the Fund under the circumstances and
on the terms specified therein.
The Fund may be terminated at any time by vote of
shareholders holding at least two-thirds of the shares
entitled to vote or by the trustees by written notice to
the shareholders. Any series of shares may be terminated
at any time by vote of shareholders holding at least two-
thirds of the shares of such series entitled to vote or
by the Trustees by written notice to the shareholders of
such series.
The foregoing is a general summary of certain
provisions of the Agreement and Declaration of Trust and
Bylaws of the Trust, and is qualified in its entirety by
reference to each of those documents.
(G) Information Concerning Major Shareholders
Not applicable.
(H) Information Concerning Directors, Officers and Employees
(1) Trustees and Officers of the Fund (as of
January 31, 1999)
Shares
Name Office and Resume Owned
Title
George Putnam Chairman and present: Chairman and 89,834
President Director of the
Investment
Management
Company and
Putnam Mutual
Funds Corp.
Director, Marsh &
McLennan
Companies, Inc.
John A. Hill Vice present: Chairman and 99
Chairman Managing
Director, First
Reserve
Corporation
William F. Vice present: Professor 586
Pounds Chairman Emeritus of
Management,
Alfred P. Sloan
School of
Management,
Massachusetts
Institute of
Technology
Jameson Adkins Trustee present: President, 261
Baxter Baxter
Associates, Inc.
Hans H. Estin Trustee present: Vice Chairman, 187
North American
Management Corp.
Ronald J. Trustee present: Former 129
Jackson Chairman,
President and
Chief Executive
Officer of Fisher-
Price, Inc.,
Trustee of Salem
Hospital and the
Peabody Essex
Museum
Paul. L. Trustee present: Elizabeth and 118
Joskow James Killian
Professor of
Economics and
Management and
Former Chairman
of the Department
of Economics at
the Massachusetts
Institute of
Technology,
Director, New
England Electric
System, State
Farm Indemnity
Corporation and
Whitehead
Institute for
Biological
Research
Elizabeth T. Trustee present: President 463
Kennan Emeritus and
Professor, Mount
Holyoke College
Lawrence J. Trustee and present: President, 139
Lasser Vice Chief Executive
President Officer and
Director of
Putnam
Investments, Inc.
and Investment
Management
Company Director,
Marsh & McLennan
Companies, Inc.
John H. Trustee present: Chairman and 235
Mullin, III Chief Executive
Officer of
Ridgeway Farm,
Director of ACX
Technologies,
Inc., Alex. Brown
Realty, Inc., and
The Liberty
Corporation
Robert E. Trustee present: President and 3,148
Patterson Trustee of Cabot
Industrial Trust
and Trustee of
SEA Education
Association
Donald S. Trustee present: Director of 1,665
Perkins various
corporations,
including Cummins
Engine Company,
Lucent
Technologies,
Inc., Nanophase
Technologies,
Inc., Springs
Industries, Inc.
and Time Warner
Inc.
George Putnam, Trustee present: President, New 2,484
III Generation
Research, Inc.
A.J.C. Smith Trustee present: Chairman and 232
Chief Executive
Officer, Marsh &
McLennan
Companies, Inc.
W. Thomas Trustee present: President and 108
Stephens Chief Executive
Officer of
MacMillan Bloedel
Ltd., Director of
Qwest
Communications
and New Century
Energies
W. Nicholas Trustee present: Director of 149
Thorndike various
corporations and
charitable
organizations,
including Data
General
Corporation,
Bradley Real
Estate, Inc. and
Providence
Journal Co.
Trustee of Cabot
Industrial Trust,
Massachusetts
General Hospital
and Eastern
Utilities
Associations
Charles E. Executive present: Managing 0
Porter Vice Director of
President Putnam
Investments, Inc.
and the
Investment
Management
Company
Patricia C. Senior Vice present: Senior Vice 0
Flaherty President President of
Putnam
Investments, Inc.
and the
Investment
Management
Company
Ian C. Vice present: Senior 0
Ferguson President Managing Director
of Investment
Management
Company
Gordon H. Vice present: Director and 0
Silver President Senior Managing
Director of
Putnam
Investments, Inc.
and the
Investment
Management
Company
John D. Hughes Senior Vice present Senior Vice 0
President President of the
and Investment
Treasurer Management
Company
John R. Verani Vice present Senior Vice 0
President President of
Putnam
Investments, Inc.
and the
Investment
Management
Company
D. William Managing present Managing 0
Kohli Director Director of
Putnam
Investments, Inc.
and the
Investment
Management
Company
Jeffrey A. Vice present Senior Vice 0
Kaufman President President of
Putnam
Investments, Inc.
and the
Investment
Management
Company
Jennifer E. Vice present Managing 0
Leichter President Director of
Putnam
Investments, Inc.
and the
Investment
Management
Company
Richard A. Vice present Director and 0
Monaghan President Senior Managing
Director of
Putnam
Investments, Inc.
and the
Investment
Management
Company,
President and
Director of
Putnam Mutual
Funds.
Stephen Vice present Managing 0
Oristaglio President Director of
Putnam
Investments, Inc.
and the
Investment
Management
Company
Brett Browchuk Vice present Managing 0
President Director of
Putnam
Investments, Inc.
and the
Investment
Management
Company
Edward Vice present Managing 0
D'Alelio President Director of
Putnam
Investments, Inc.
and the
Investment
Management
Company
(2) Employees of theFund
The Fund does not have any employees.
(I) Description of Business and Outline of Operation
The Fund may carry out any administrative and
managerial act, including the purchase, sale,
subscription and exchange of any securities, and the
exercise of all rights directly or indirectly pertaining
to the Fund's assets. The Fund has retained Putnam
Investment Management, Inc., the investment adviser, to
render investment advisory services and Putnam Fiduciary
Trust Company, to hold the assets of the Fund in custody
and act as the Investor Servicing Agent.
(J) Miscellaneous
(1) Changes of Trustees and Officers
Trustees may be removed or replaced by, among
other things, a resolution adopted by a vote of two-
thirds of the outstanding shares at a meeting called
for the purpose. In the event of vacancy, the
remaining Trustees may fill such vacancy by
appointing for the remaining term of the predecessor
Trustee such other person as they in their
discretion shall see fit. The Trustees may add to
their number as they consider appropriate. The
Trustees may elect and remove officers as they
consider appropriate.
(2) Amendment to the Agreement and Declaration of Trust
Generally, approval of shareholders is required
to amend the Agreement and Declaration of Trust,
except for certain matters such as change of name,
curing any ambiguity or curing any defective or
inconsistent provision.
(3) Litigation and Other Significant Events
Nothing which has or which would have a material
adverse effect on the Fund has occurred which has
not been disclosed. The fiscal year end of the Fund
is October 31. 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
The Investment Management Company is registered as an
investment adviser under the Investment Advisers Act of
1940.
(C) Purpose of the Company
The 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
The Investment Management Company is one of
America's oldest and largest money management firms. The
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.
The Investment Management Company has been managing
mutual funds since 1937. Today, the firm serves as the
Investment Management Company for the funds in the Putnam
Family, with over $228 billion in assets with over 9
million shareholder accounts at January 31, 1999. An
affiliate, The Putnam Advisory Company, Inc., manages
domestic and foreign institutional accounts and mutual
funds, including the accounts of many Fortune 500
companies. Another affiliate, Putnam Fiduciary Trust
Company, provides investment advice to institutional
clients under its banking and fiduciary powers as well as
shareholder and custody services to the Putnam Funds.
Putnam Investment Management Inc., Putnam Mutual
Funds and Putnam Fiduciary Trust Company are subsidiaries
of Putnam Investments, Inc., which is a subsidiary 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 $462,028,873 (as of January
31, 1999)
1. Amount of Capital (issued capital stock at par value):
Common Stock 1,000 shares at $1 par value
2. Number of authorized shares of capital stock:
Common Stock 1,000 shares
3. Number of outstanding shares of capital stock:
Common Stock 1,000 shares
4. Amount of capital (for the purposes of this Item,
"Amount of Capital" means total stockholders' equity
for the past five years:
Amount of Capital
Year (Total Stockholder's Equity)
End of 1993 $49,847,760
End of 1994 $48,149,491
End of 1995 $45,521,351
End of 1996 $45,817,658
End of 1997 $48,617,160
End of 1998 $425,782,007
(F) Structure of the Management of the Company
The Investment Management Company is ultimately managed
by its Board of Directors, which is elected by its
shareholders.
Each fund managed by the Investment Management Company is
managed by one or more portfolio managers. These
managers, in coordination with analysts who research
specific securities and other members of the relevant
investment group (in the case of the Fund, the Investment
Management Company's Fixed Income Investments Group),
provide a continuous investment program for the Fund and
place all orders for the purchase and sale of portfolio
securities.
The investment performance and portfolio of each Fund is
overseen by its Board of Trustees, a majority of whom are
not affiliated with the 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, the
Investment Management Company looks for securities that
represent attractive values based on careful issue-by-
issue credit analysis and hundreds of on-site visits and
other contacts with issuers every year. the Investment
Management Company is one of the largest managers of high
yield and other debt securities in the United States.
The following officers of the Investment Management
Company have had primary responsibility for the day-to-
day management of the Fund's portfolio since the years
stated below. Their experience as portfolio managers or
investment analysts over at least the last five years is
also shown.
Manager Year Experience
D. William 1994 Employed by Investment Management Company
Kohli since 1994.
Managing Prior to September, 1994, Mr. Kohli was
Director employed by Global Bond Management
Jennifer E. 1998 Employed by Investment Management Company
Leichter since 1987.
Managing
Director
Jeffrey A. 1998 Employed by Investment Management Company
Kaufman since 1998.
Senior Vice Prior to August 1998, Mr. Kaufman was
President employed by MFS Investment Management.Prior
to 1994, Mr. Kaufman was employed at Salomon
Brothers.
(G) Information Concerning Major Stockholders
As of the end of January 1999, all the outstanding shares
of capital stock of the 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 the Investment Management Company and their
respective positions with the Investment Management Company.
For each named individual, the table lists: (i) any other
organizations (excluding other Investment Management Company's
funds) with which the officer and/or director has recently had
or has substantial involvement; and (ii) positions held with
such organization:
List of Officers and Directors of Putnam Investment Management, Inc.
(as of January 31, 1999)
Position
with Putnam
Name Investment Other Business Affiliation
Management,
Inc.
1 Putnam, George Chairman Director of Putnam Mutual
Funds Corp.
2 Lasser, Lawrence President,
J. CEO and
Director
3 Silver, Gordon Director Director of Putnam
H. and Senior Fiduciary Trust Company and
Managing Senior Managing Director of
Director Putnam Mutual Funds Corp.
4 Burke, Robert W. Senior Senior Managing Director of
Managing Putnam Mutual Funds Corp.
Director
5 Coburn, Gary N. Senior
Managing
Director
6 Collman, Senior Senior Managing Director of
Kathleen M. Managing Putnam Mutual Funds Corp.
Director
7 Ferguson, Ian C. Senior
Managing
Director
8 Regan, Anthony Senior
W. Managing
Director
9 Spiegel, Steven Senior Senior Managing Director of
Managing Putnam Mutual Funds Corp.
Director
10 Anderson, Blake Managing
E. Director
11 Antill, Jennifer Managing
Director
12 Beck, Robert R. Managing
Director
13 Bogan, Thomas R. Managing
Director
14 Browchuk, Brett Managing
Director
15 Cassaro, Joseph Managing
A. Director
16 Cotner, C. Beth Managing
Director
17 Cronin, Kevin M. Managing Managing Director of Putnam
Director Fiduciary Trust Company
18 D'Alelio, Edward Managing
H. Director
19 Daly, Kenneth L. Managing Managing Director of Putnam
Director Mutual Funds Corp.
20 DeTore, John A. Managing Managing Director of Putnam
Director Fiduciary Trust Company
21 Durgarian, Managing Director and Managing
Karnig H. Director Director of Putnam
and Chief Fiduciary Trust Company
Financial
Officer
22 Esteves, Irene Managing Treasurer of Putnam
M. Director Fiduciary Trust Company
and Chief
Financial
Officer
23 Gillis, Roland Managing
Director
24 Haslett, Thomas Managing
R. Director
25 Hurley, William Managing Managing Director and CFO
J. Director of Putnam Mutual Funds
Corp.
26 Jacobs, Jerome Managing
J. Director
27 Joseph, Joseph Managing
P. Director
28 Kamshad, Omid Managing
Director
29 King, David L. Managing Managing Director of Putnam
Director Mutual Funds Corp.
30 Kohli, D. Managing
William Director
31 Kreisel, Anthony Managing
I. Director
32 Kuenstner, Managing
Deborah F. Director
33 Landes, William Managing
J. Director
34 Leichter, Managing
Jennifer Director
35 Maloney, Kevin Managing
J. Director
36 Martino, Michael Managing Managing Director of Putnam
Director Fiduciary Trust Company
37 Maxwell, Scott Managing
M. Director
38 McGue, William Managing
F. Director
39 McMullen, Carol Managing
C. Director
40 Mcmani, Krisha Managing
Director
41 Miller, Daniel Managing
L. Director
42 Morgan Jr., John Managing Managing Director of Putnam
J. Director Fiduciary Trust Company
43 O'Donnell Jr., Managing
C. Patrick Director
44 Oristaglio, Managing
Stephen Director
45 Peacher, Stephen Managing
C. Director
46 Porter, Charles Managing
E. Director
47 Reilly, Thomas Managing
V. Director
48 Schultz, Managing Managing Director of Putnam
Mitchell D. Director Mutual Funds Corp.
49 Scott, Justin M. Managing Managing Director of Putnam
Director Fiduciary Trust Company
50 Shadek Jr., Managing Managing Director of Putnam
Edward T. Director Fiduciary Trust Company
51 Starr, Loren Managing Managing Director of Putnam
Director Mutual Funds Corp.
52 Swift, Robert Managing
Director
53 Talanian, John Managing Managing Director of Putnam
C. Director Mutual Funds Corp.
54 Tibbetts, Managing Managing Director of Putnam
Richard B. Director Mutual Funds Corp.
55 Waldman, David Managing
L. Director
56 Wetlaufer, Eric Managing
Director
57 Woolverton, Managing Managing Director of Putnam
William H. Director Mutual Funds Corp.
58 Zieff, William Managing
E. Director
59 Arends, Michael Senior Vice Senior Vice President of
K. President Putnam Mutual Funds Corp.
60 Asher, Steven E. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
and Senior Vice President
of Putnam Fiduciary Trust
Company
61 Atkin, Michael Senior Vice
J. President
62 Attridge, Gail Senior Vice Senior Vice President of
S. President Putnam Fiduciary Trust
Company
63 Augustine, Senior Vice
Jeffrey B. President
64 Bakshi, Manjit Senior Vice
S. President
65 Bamford, Dolores Senior Vice
Snyder President
66 Baumbach, Robert Senior Vice
K. President
67 Berka, Sharon A. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
68 Block, Richard Senior Vice
L. President
69 Boselli, John A. Senior Vice
President
70 Bousa, Edward P. Senior Vice
President
71 Bresnahan, Senior Vice Senior Vice President of
Leslee R. President Putnam Mutual Funds Corp.
72 Burke, Andrea Senior Vice
President
73 Burns, Cheryl A. Senior Vice
President
74 Byrne, Joshua L. Senior Vice
President
75 Callahan, Ellen Senior Vice
S. President
76 Carlson, David Senior Vice
G. President
77 Chrostowski, Senior Vice Senior Vice President of
Louis F. President Putnam Mutual Funds Corp.
78 Curran, Peter J. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
79 Dalferro, John Senior Vice
R. President
80 Derbyshire, Senior Vice
Ralph C. President
81 England, Richard Senior Vice
B. President
82 Farrell, Deborah Senior Vice Senior Vice President of
S. President Putnam Mutual Funds Corp.
83 Finch, Edward R. Senior Vice
President
84 Flaherty, Senior Vice Senior Vice President of
Patricia C. President Putnam Mutual Funds Corp.
85 Fontana, Forrest Senior Vice
N. President
86 Francis, Senior Vice
Jonathan H. President
87 Frost, Karen T. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
88 Frucci, Richard Senior Vice Senior Vice President of
M. President Putnam Fiduciary Trust
Company
89 Fullerton, Brian Senior Vice Senior Vice President of
J. President Putnam Mutual Funds Corp.
90 Grant, Peter J. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
91 Graviere, Senior Vice
Patrice President
92 Grim, Daniel J. Senior Vice
President
93 Haagensen, Paul Senior Vice
E. President
94 Hadden, Peter J. Senior Vice
President
95 Halperin, Senior Vice
Matthew C. President
96 Healey, Deborah Senior Vice
R. President
97 Holding, Pamela Senior Vice
President
98 Hotchkiss, Senior Vice
Michael F. President
99 Kaufman, Jeffrey Senior Vice
President
100 Kay, Karen R. Senior Vice Clerk, Director and Senior
President Vice President of Putnam
Fiduciary Trust Company and
Senior Vice President of
Putnam Mutual Funds Corp.
101 Kirson, Steven Senior Vice
L. President
102 Knight, Jeffrey Senior Vice
L. President
103 Kobylarz, Senior Vice
Jeffrey J. President
104 Koontz, Jill A. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
105 Korn, Karen R. Senior Vice
President
106 Lannum III, Senior Vice
Coleman N. President
107 Lindsey, Jeffrey Senior Vice
R. President
108 Lomba, Rufino R. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
109 MacElwee, Jones, Senior Vice
Elizabeth M. President
110 Madore, Robert Senior Vice Senior Vice President of
A. President Putnam Fiduciary Trust
Company
111 Malloy, Julie M. Senior Vice
President
112 Marrkand, Paul Senior Vice
E. President
113 Matteis, Andrew Senior Vice
S. President
114 McDonald, Senior Vice
Richard E. President
115 Meehan, Thalia Senior Vice
President
116 Mehta, Sandeep Senior Vice
President
117 Miller, William Senior Vice
H. President
118 Mockard, Jeanne Senior Vice
L. President
119 Morgan, Kelly A. Senior Vice
President
120 Mufson, Michael Senior Vice
J. President
121 Mullen, Donald Senior Vice Senior Vice President of
E. President Putnam Mutual Funds Corp.
122 Mullin, Hugh H. Senior Vice
President
123 Netols, Jeffrey Senior Vice Senior Vice President of
W. President Putnam Fiduciary Trust
Company
124 Oler, Stephen S. Senior Vice
President
125 Paine, Robert M. Senior Vice
President
126 Parker, Margery Senior Vice
C. President
127 Perry, William Senior Vice
President
128 Peters, Carmel Senior Vice
President
129 Petralia, Senior Vice Senior Vice President of
Randolph S. President Putnam Mutual Funds Corp.
130 Plapinger, Keith Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
131 Pohl, Charles G. Senior Vice
President
132 Pollard, Mark D. Senior Vice
President
133 Prusko, James M. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
135 Quistberg, Paul Senior Vice
T. President
136 Ray, Christopher Senior Vice
A. President
137 Reeves, William Senior Vice
H. President
138 Rogers, Kevin J. Senior Vice
President
139 Ruys de Perez, Senior Vice Senior Vice President of
Charles A. President Putnam Fiduciary Trust
Company and Senior Vice
President of Putnam Mutual
Funds Corp.
140 Santos, David J. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
141 Santosus, Senior Vice
Anthony C. President
142 Schwister, Jay Senior Vice Senior Vice President of
E. President Putnam Fiduciary Trust
Company
143 Scordato, Senior Vice Senior Vice President of
Christine A. President Putnam Mutual Funds Corp.
144 Sievert, Jean I. Senior Vice
President
145 Simon, Sheldon Senior Vice
N. President
146 Simozar, Saied Senior Vice
President
147 Smith Jr., Leo Senior Vice
J. President
148 Smith, Margaret Senior Vice
D. President
149 Spatz, Erin J. Senior Vice
President
150 Stack, Michael Senior Vice Senior Vice President of
P. President Putnam Mutual Funds Corp.
151 Stairs, George Senior Vice
W. President
152 Strumpf, Casey Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
153 Sugimoto, Senior Vice Senior Vice President of
Toshifumi President Putnam Mutual Funds Corp.
154 Sullivan, Roger Senior Vice
R. President
155 Svensson, Lisa Senior Vice
H. President
156 Swanberg, Senior Vice
Charles H. President
157 Thomsen, Senior Vice Senior Vice President of
Rosemary H. President Putnam Fiduciary Trust
Company
158 Troped, Bonnie Senior Vice Senior Vice President of
L. President Putnam Mutual Funds Corp.
159 Verani, John R. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
160 Walsh, Francis Senior Vice
P. President
161 Warren, Paul C. Senior Vice
President
162 Weinstein, Senior Vice
Michael R. President
163 Weiss, Manuel Senior Vice
President
164 Whalen, Edward Senior Vice Senior Vice President of
F. President Putnam Mutual Funds Corp.
165 Wheeler, Diane Senior Vice
D.F. President
166 Wyke, Richard P. Senior Vice
President
167 Yogg, Michael R. Senior Vice
President
168 Zukowski, Gerald Senior Vice
S. President
(I) Summary of Business Lines and Business Operation
The Investment Management Company is engaged in the
business of providing investment management and
investment advisory services to mutual funds. As of
January 31, 1999, the Investment Management Company
managed, advised, and/or administered the following 113
mutual funds and fund portfolios (having an aggregate net
asset value of approximately $228.45 billion):
(As of January 31, 1999)
Name Month/Da Principal Total Net
te/Year Characteri Net Asset
Establis stics Asset Value
hed Value per
($ share
million) ($)
1 The George Putnam Fund of 11/5/37 Open/Equit 3822.28 18.22
Boston; A y
2 The George Putnam Fund of 32256 Open/Equit 1494.05 18.06
Boston; B y
3 The George Putnam Fund of 33207 Open/Equit 284.64 18.06
Boston; M y
4 The George Putnam Fund of 32873 Open/Equit 535.50 18.25
Boston; Y y
5 Putnam American Government 29645 Open/Bond 1450.70 9.00
Income Fund; A
6 Putnam American Government 33012 Open/Bond 104.51 8.97
Income Fund; B
7 Putnam American Government 33282 Open/Bond 4.05 9.02
Income Fund; M
8 Putnam Asia Pacific Growth 31827 Open/Equit 121.94 9.13
Fund; A y
9 Putnam Asia Pacific Growth 32659 Open/Equit 113.32 8.97
Fund; B y
10 Putnam Asia Pacific Growth 33269 Open/Equit 6.74 9.06
Fund; M y
11 Putnam Asia Pacific Fund II 34415 Open/Equit 1.91 7.35
y
12 Putnam Asset Allocation: 32910 Open/Balan 1025.18 12.25
Balanced Portfolio; A ced
13 Putnam Asset Allocation: 32914 Open/Balan 564.75 12.18
Balanced Portfolio; B ced
14 Putnam Asset Allocation: 33116 Open/Balan 113.13 12.11
Balanced Portfolio; C ced
15 Putnam Asset Allocation: 33274 Open/Balan 67.22 12.22
Balanced Portfolio; M ced
16 Putnam Asset Allocation: 33067 Open/Balan 282.75 12.26
Balanced Portfolio; Y ced
17 Putnam Asset Allocation : 32910 Open/Balan 412.34 10.56
Conservative Portfolio; A ced
18 Putnam Asset Allocation : 32921 Open/Balan 183.22 10.52
Conservative Portfolio; B ced
19 Putnam Asset Allocation : 33116 Open/Balan 55.99 10.49
Conservative Portfolio; C ced
20 Putnam Asset Allocation : 33275 Open/Balan 22.47 10.53
Conservative Portfolio; M ced
21 Putnam Asset Allocation : 33067 Open/Balan 47.22 10.57
Conservative Portfolio; Y ced
22 Putnam Asset Allocation: 32911 Open/Balan 752.65 13.98
Growth Portfolio; A ced
23 Putnam Asset Allocation: 32919 Open/Balan 472.51 13.82
Growth Portfolio; B ced
24 Putnam Asset Allocation: 33116 Open/Balan 106.97 13.72
Growth Portfolio; C ced
25 Putnam Asset Allocation: 33269 Open/Balan 63.25 13.83
Growth Portfolio; M ced
26 Putnam Asset Allocation: 33067 Open/Balan 264.53 14.05
Growth Portfolio; Y ced
27 Putnam Arizona Tax Exempt 31806 Open/Bond 116.52 9.44
Income Fund; A
28 Putnam Arizona Tax Exempt 32703 Open/Bond 34.14 9.42
Income Fund; B
29 Putnam Arizona Tax Exempt 33421 Open/Bond 0.51 9.47
Income Fund; M
30 Putnam Balanced Fund 33512 Open/Balan 3.79 12.52
ced
31 Putnam Balanced Retirement 29694 Open/Balan 669.77 10.90
Fund; A ced
32 Putnam Balanced Retirement 32904 Open/Balan 170.31 10.81
Fund; B ced
33 Putnam Balanced Retirement 33313 Open/Balan 13.73 10.85
Fund; M ced
34 Putnam California 32473 Closed/Bon 72.55 15.75
Investment Grade Municipal d
Trust
35 Putnam California Tax 28973 Open/Bond 3077.11 8.85
Exempt Income Fund; A
36 Putnam California Tax 32511 Open/Bond 661.65 8.85
Exempt Income Fund; B
37 Putnam California Tax 33282 Open/Bond 21.18 8.84
Exempt Income Fund; M
38 Putnam California Tax 30614 Open/Bond 32.86 1.00
Exempt Money Market Fund
39 Putnam Capital 32724 Open/Equit 53.71 8.02
Opportunities Fund; A y
40 Putnam Capital 33178 Open/Equit 73.48 8.01
Opportunities Fund; B y
41 Putnam Capital 33624 Open/Equit 4.72 8.02
Opportunities Fund; M y
42 Putnam Capital Appreciation 32724 Open/Equit 1539.13 23.23
Fund; A y
43 Putnam Capital Appreciation 33178 Open/Equit 1711.08 22.98
Fund; B y
44 Putnam Capital Appreciation 33624 Open/Equit 113.99 23.02
Fund; M y
45 Putnam Convertible 33417 Closed/Bon 87.46 23.56
Opportunity and Income d
Trust
46 Putnam Convertible Income- 6/29/72 Open/Balan 1064.98 19.89
Growth Trust; A ced
47 Putnam Convertible Income- 32703 Open/Balan 303.47 19.67
Growth Trust; B ced
48 Putnam Convertible Income- 33309 Open/Balan 18.38 19.77
Growth Trust; M ced
49 Putnam Diversified Equity 33054 Open/Equit 316.36 14.15
Trust; A y
50 Putnam Diversified Equity 33055 Open/Equit 395.36 13.92
Trust; B y
51 Putnam Diversified Equity 33421 Open/Equit 30.68 14.00
Trust; M y
52 Putnam Dividend Income Fund 31317 Closed/Bon 124.74 11.52
d
53 Putnam Diversified Income 30957 Open/Bond 1827.83 11.51
Trust; A
54 Putnam Diversified Income 32567 Open/Bond 2081.29 11.46
Trust; B
55 Putnam Diversified Income 33207 Open/Bond 1040.00 11.47
Trust; M
56 Putnam Diversified Income 33795 Open/Bond 15.62 11.52
Trust ; Y
57 Putnam Emerging Markets 33512 Open/Equit 34.89 7.00
Fund; A y
58 Putnam Emerging Markets 33512 Open/Equit 25.05 6.96
Fund; B y
59 Putnam Emerging Markets 33512 Open/Equit 2.07 6.98
Fund; M y
60 Putnam Equity Fund 98 34332 Open/Equit 6.11 11.44
y
61 Putnam Equity Income Fund; 26829 Open/Balan 1141.35 15.76
A ced
62 Putnam Equity Income Fund; 32763 Open/Balan 658.14 15.66
B ced
63 Putnam Equity Income Fund; 33208 Open/Balan 62.37 15.67
M ced
64 Putnam Europe Growth Fund; 31661 Open/Equit 934.77 22.17
A y
65 Putnam Europe Growth Fund; 32904 Open/Equit 817.49 21.65
B y
66 Putnam Europe Growth Fund; 33207 Open/Equit 140.92 21.97
M y
67 Putnam Florida Tax Exempt 31647 Open/Bond 246.49 9.57
Income Fund; A
68 Putnam Florida Tax Exempt 32511 Open/Bond 82.48 9.57
Income Fund; B
69 Putnam Florida Tax Exempt 33358 Open/Bond 1.85 9.56
Income Fund; M
70 Putnam Global Natural 27964 Open/Equit 153.56 15.09
Resources Fund; A y
71 Putnam Global Natural 32904 Open/Equit 106.74 14.88
Resources Fund; B y
72 Putnam Global Natural 33421 Open/Equit 5.49 15.02
Resources Fund; M y
73 Putnam Global Equity Fund 34459 Open/Equit 3.18 12.23
y
74 Putnam Global Growth and 33240 Open/Equit 27.08 13.10
Income Fund; A y
75 Putnam Global Growth and 33240 Open/Equit 20.91 13.02
Income Fund; B y
76 Putnam Global Growth and 33240 Open/Equit 2.23 13.05
Income Fund; M y
77 Putnam Global Governmental 30467 Open/Bond 249.00 12.99
Income Trust; A
78 Putnam Global Governmental 32904 Open/Bond 36.72 12.95
Income Trust; B
79 Putnam Global Governmental 33313 Open/Bond 226.30 12.93
Income Trust; M
80 Putnam Global Growth Fund; 9/1/67 Open/Equit 3487.37 12.97
A y
81 Putnam Global Growth Fund; 32259 Open/Equit 2051.12 12.49
B y
82 Putnam Global Growth Fund; 33297 Open/Equit 64.86 12.88
M y
83 Putnam Global Growth Fund; 33038 Open/Equit 88.13 13.17
Y y
84 Putnam Growth and Income 33242 Open/Balan 1287.76 14.21
Fund II; A ced
85 Putnam Growth and Income 33242 Open/Balan 1529.73 14.09
Fund II; B ced
86 Putnam Growth and Income 33242 Open/Balan 173.67 14.14
Fund II; M ced
87 The Putnam Fund for Growth 11/6/57 Open/Balan 21088.8 20.82
and Income; A ced 4
88 The Putnam Fund for Growth 32259 Open/Balan 16364.5 20.54
and Income; B ced 9
89 The Putnam Fund for Growth 33358 Open/Balan 464.75 20.69
and Income; M ced
90 The Putnam Fund for Growth 33038 Open/Balan 911.59 20.85
and Income; Y ced
91 Putnam Growth Fund 34454 Open/Equit 2.53 10.41
y
92 Putnam Growth 33512 Open/Equit 682.13 21.24
Opportunities; A y
93 Putnam Growth 34181 Open/Equit 763.01 21.02
Opportunities; B y
94 Putnam Growth 34181 Open/Equit 56.90 21.10
Opportunities; M y
95 Putnam High Income 30505 Closed/Bon 116.08 8.55
Convertible and Bond Fund d
96 Putnam High Yield Advantage 30034 Open/Bond 1202.40 8.24
Fund; A
97 Putnam High Yield Advantage 33008 Open/Bond 1006.42 8.21
Fund; B
98 Putnam High Yield Advantage 33207 Open/Bond 926.04 8.23
Fund; M
99 Putnam High Yield Total 33969 Open/Bond 50.18 7.51
Return Fund; A
100 Putnam High Yield Total 33969 Open/Bond 58.07 7.44
Return Fund; B
101 Putnam High Yield Total 33969 Open/Bond 3.75 7.45
Return Fund; M
102 Putnam High Quality Bond 30103 Open/Bond 339.53 10.20
Fund; A
103 Putnam High Quality Bond 33029 Open/Bond 42.74 10.16
Fund; B
104 Putnam High Quality Bond 33339 Open/Bond 2.74 10.21
Fund; M
105 Putnam High Yield Fund II; 34333 Open/Bond 456.79 7.88
A
106 Putnam High Yield Fund II; 34333 Open/Bond 651.93 7.88
B
107 Putnam High Yield Fund II; 34333 Open/Bond 35.59 7.88
M
108 Putnam High Yield Trust; A 27073 Open/Bond 2657.56 10.90
109 Putnam High Yield Trust; B 32567 Open/Bond 916.14 10.85
110 Putnam High Yield Trust; M 33421 Open/Bond 18.20 10.90
111 Putnam Health Sciences 28637 Open/Equit 2984.13 63.77
Trust; A y
112 Putnam Health Sciences 32567 Open/Equit 2063.97 61.29
Trust; B y
113 Putnam Health Sciences 33421 Open/Equit 90.92 62.82
Trust; M y
114 Putnam High Yield Municipal 31191 Closed/Bon 203.62 9.24
Trust d
115 Putnam Income Fund; A 11/1/54 Open/Bond 1445.39 6.95
116 Putnam Income Fund; B 32567 Open/Bond 514.65 6.91
117 Putnam Income Fund; M 33220 Open/Bond 1523.22 6.91
118 Putnam Income Fund; Y 32915 Open/Bond 257.92 6.95
119 Putnam Intermediate U.S. 32554 Open/Bond 228.36 5.00
Government Income Fund; A
120 Putnam Intermediate U.S. 32554 Open/Bond 140.23 5.01
Government Income Fund; B
121 Putnam Intermediate U.S. 33330 Open/Bond 10.19 5.01
Government Income Fund; M
122 Putnam Intermediate U.S. 34242 Open/Bond 119.78 5.00
Government Income Fund; Y
123 Putnam International Fund 33599 Open/Equit 4.57 10.99
y
124 Putnam International Growth 33816 Open/Equit 409.47 11.10
and Income Fund; A y
125 Putnam International Growth 33816 Open/Equit 401.86 11.02
and Income Fund; B y
126 Putnam International Growth 33816 Open/Equit 34.15 11.07
and Income Fund; M y
127 Putnam International Growth 31835 Open/Equit 2370.93 20.02
Fund; A y
128 Putnam International Growth 33024 Open/Equit 1530.16 19.68
Fund; B y
129 Putnam International Growth 33207 Open/Equit 168.85 19.89
Fund; M y
130 Putnam International Growth 33796 Open/Equit 162.36 20.08
Fund; Y y
131 Putnam International New 33240 Open/Equit 768.08 13.82
Opportunities Fund; A y
132 Putnam International New 33439 Open/Equit 958.83 13.52
Opportunities Fund; B y
133 Putnam International New 33439 Open/Equit 74.86 13.65
Opportunities Fund; M y
134 Putnam International 33599 Open/Equit 120.37 14.04
Voyager Fund; A y
135 Putnam International 33906 Open/Equit 96.15 13.94
Voyager Fund; B y
136 Putnam International 33906 Open/Equit 11.02 13.99
Voyager Fund; M y
137 Putnam Investment Grade 31345 Closed/Bon 250.46 12.00
Municipal Trust d
138 Putnam Investment Grade 32473 Closed/Bon 190.04 14.23
Municipal Trust II d
139 Putnam Investment Grade 32840 Closed/Bon 54.18 13.52
Municipal Trust III d
140 Putnam Investors Fund; A 8005 Open/Equit 4751.05 15.53
y
141 Putnam Investors Fund; B 32567 Open/Equit 1984.86 14.88
y
142 Putnam Investors Fund; M 33208 Open/Equit 149.63 15.25
y
143 Putnam Investors Fund; Y 33975 Open/Equit 356.86 15.57
y
144 Putnam Japan Fund 33599 Open/Equit 2.12 5.59
y
145 Putnam Latin America Fund 34415 Open/Equit 1.18 4.47
y
146 Putnam Massachusetts Tax 31342 Open/Bond 305.93 9.69
Exempt Income Fund; A
147 Putnam Massachusetts Tax 32703 Open/Bond 119.94 9.68
Exempt Income Fund; B
148 Putnam Massachusetts Tax 33369 Open/Bond 3.42 9.68
Exempt Income Fund; M
149 Putnam Master Income Trust 30800 Closed/Bon 444.57 8.37
d
150 Putnam Managed High Yield 32683 Closed/Bon 93.58 12.47
Trust d
151 Putnam Michigan Tax Exempt 31342 Open/Bond 148.19 9.39
Income Fund; A
152 Putnam Michigan Tax Exempt 32703 Open/Bond 46.32 9.38
Income Fund; B
153 Putnam Michigan Tax Exempt 33344 Open/Bond 1.72 9.39
Income Fund; M
154 Putnam Minnesota Tax Exempt 31342 Open/Bond 104.39 9.26
Income Fund; A
155 Putnam Minnesota Tax Exempt 32703 Open/Bond 49.74 9.23
Income Fund; B
156 Putnam Minnesota Tax Exempt 33330 Open/Bond 1.42 9.26
Income Fund; M
157 Putnam Managed Municipal 31101 Closed/Bon 453.88 9.80
Income Trust d
158 Putnam Money Market Fund; A 26572 Open/Bond 2934.12 1.00
159 Putnam Money Market Fund; B 32259 Open/Bond 707.12 1.00
160 Putnam Money Market Fund; M 33214 Open/Bond 85.97 1.00
161 Putnam Master Intermediate 30800 Closed/Bon 804.27 8.04
Income Trust d
162 Putnam Municipal Income 31188 Open/Bond 826.65 9.39
Fund; A
163 Putnam Municipal Income 32511 Open/Bond 511.17 9.38
Fund; B
164 Putnam Municipal Income 33207 Open/Bond 15.62 9.39
Fund; M
165 Putnam Municipal 32655 Closed/Bon 230.91 14.29
Opportunities Trust d
166 Putnam New Opportunities 31654 Open/Equit 11177.3 61.50
Fund; A y 6
167 Putnam New Opportunities 32567 Open/Equit 8236.26 58.74
Fund; B y
168 Putnam New Opportunities 33207 Open/Equit 474.22 60.18
Fund; M y
169 Putnam New Opportunities 33072 Open/Equit 695.64 62.26
Fund; Y y
170 Putnam New Value Fund; A 33605 Open/Equit 399.86 13.92
y
171 Putnam New Value Fund; B 33659 Open/Equit 408.64 13.80
y
172 Putnam New Value Fund; M 33659 Open/Equit 40.13 13.86
y
173 Putnam New Jersey Tax 31462 Open/Bond 219.50 9.42
Exempt Income Fund; A
174 Putnam New Jersey Tax 32511 Open/Bond 102.08 9.41
Exempt Income Fund; B
175 Putnam New Jersey Tax 33358 Open/Bond 0.94 9.42
Exempt Income Fund; M
176 Putnam New York Investment 32473 Closed/Bon 40.59 14.26
Grade Municipal Trust d
177 Putnam New York Tax Exempt 29099 Open/Bond 1616.83 9.04
Income Fund; A
178 Putnam New York Tax Exempt 32511 Open/Bond 232.13 9.02
Income Fund; B
179 Putnam New York Tax Exempt 33337 Open/Bond 2.30 9.04
Income Fund; M
180 Putnam New York Tax Exempt 30614 Open/Bond 39.50 1.00
Money Market Fund
181 Putnam New York Tax Exempt 31722 Open/Bond 165.93 9.25
Opportunities Fund; A
182 Putnam New York Tax Exempt 32904 Open/Bond 70.09 9.24
Opportunities Fund; B
183 Putnam New York Tax Exempt 33278 Open/Bond 2.53 9.23
Opportunities Fund; M
184 Putnam Ohio Tax Exempt 31342 Open/Bond 187.36 9.22
Income Fund; A
185 Putnam Ohio Tax Exempt 32703 Open/Bond 57.26 9.21
Income Fund; B
186 Putnam Ohio Tax Exempt 33330 Open/Bond 2.02 9.22
Income Fund; M
187 Putnam OTC & Emerging 28794 Open/Equit 2680.36 18.44
Growth Fund; A y
188 Putnam OTC & Emerging 32703 Open/Equit 1337.00 17.56
Growth Fund; B y
189 Putnam OTC & Emerging 33208 Open/Equit 272.69 18.00
Growth Fund; M y
190 Putnam OTC & Emerging 33796 Open/Equit 105.78 18.59
Growth Fund; Y y
191 Putnam Pennsylvania Tax 31248 Open/Bond 187.54 9.35
Exempt Income Fund; A
192 Putnam Pennsylvania Tax 32703 Open/Bond 98.68 9.34
Exempt Income Fund; B
193 Putnam Pennsylvania Tax 33421 Open/Bond 2.65 9.35
Exempt Income Fund; M
194 Putnam Preferred Income 29223 Open/Bond 117.57 8.87
Fund; A
195 Putnam Preferred Income 33347 Open/Bond 13.09 8.84
Fund; M
196 Putnam Premier Income Trust 2/29/95 Closed/Bon 1129.16 8.03
d
197 Putnam Research Fund; A 33512 Open/Equit 272.86 15.81
y
198 Putnam Research Fund; B 34499 Open/Equit 278.92 15.74
y
199 Putnam Research Fund; M 34499 Open/Equit 25.87 15.76
y
200 Putnam Strategic Income 33287 Open/Bond 76.50 7.77
Fund; A
201 Putnam Strategic Income 33652 Open/Bond 120.61 7.77
Fund; B
202 Putnam Strategic Income 33652 Open/Bond 9.33 7.76
Fund; M
203 Putnam Tax Exempt Income 26663 Open/Bond 1954.86 9.26
Fund; A
204 Putnam Tax Exempt Income 32511 Open/Bond 247.68 9.26
Fund; B
205 Putnam Tax Exempt Income 33284 Open/Bond 10.23 9.28
Fund; M
206 Putnam Tax Exempt Money 30614 Open/Bond 77.16 1.00
Market Fund
207 Putnam Tax - Free Health 32322 Closed/Bon 205.82 14.91
Care Fund d
208 Putnam Tax - Free Income 32770 Open/Bond 1072.91 14.73
Trust
Tax - Free High Yield Fund;
A
209 Putnam Tax - Free Income 29837 Open/Bond 938.32 14.75
Trust
Tax - Free High Yield Fund
B
210 Putnam Tax - Free Income 33235 Open/Bond 22.37 14.73
Trust
Tax - Free High Yield Fund
M
211 Putnam Tax - Free Income 32780 Open/Bond 245.74 15.55
Trust
Tax - Free Insured Fund; A
212 Putnam Tax - Free Income 29837 Open/Bond 358.45 15.57
Trust
Tax - Free Insured Fund; B
213 Putnam Tax - Free Income 33389 Open/Bond 2.47 15.54
Trust
Tax - Free Insured Fund; M
214 Putnam U.S. Core Fund 34454 Open/Equit 2.60 10.21
y
215 Putnam U.S. Government 29258 Open/Bond 2081.53 13.13
Income Trust; A
216 Putnam U.S. Government 32259 Open/Bond 1284.45 13.07
Income Trust; B
217 Putnam U.S. Government 33274 Open/Bond 156.61 13.11
Income Trust; M
218 Putnam U.S. Government 32973 Open/Bond 12.08 13.13
Income Trust; Y
219 Putnam Utilities Growth and 31734 Open/Balan 878.21 13.63
Income Fund; A ced
220 Putnam Utilities Growth and 32259 Open/Balan 704.31 13.55
Income Fund; B ced
221 Putnam Utilities Growth and 33297 Open/Balan 14.44 13.61
Income Fund; M ced
222 Putnam Value Fund 34454 Open/Balan 2.06 8.47
ced
223 Putnam Vista Fund; A 6/3/68 Open/Equit 3634.75 13.68
y
224 Putnam Vista Fund; B 32567 Open/Equit 1738.77 12.97
y
225 Putnam Vista Fund; M 33207 Open/Equit 142.19 13.35
y
226 Putnam Vista Fund; Y 33324 Open/Equit 328.84 13.87
y
227 Putnam Voyager Fund II; A 32611 Open/Equit 798.75 23.95
y
228 Putnam Voyager Fund II; B 33512 Open/Equit 739.68 23.34
y
229 Putnam Voyager Fund II; M 33512 Open/Equit 89.00 23.57
y
230 Putnam Voyager Fund; A 33694 Open/Equit 16311.2 23.02
y 5
231 Putnam Voyager Fund; B 32259 Open/Equit 8257.86 21.51
y
232 Putnam Voyager Fund; M 33207 Open/Equit 357.40 22.47
y
233 Putnam Voyager Fund; Y 32963 Open/Equit 1773.10 23.40
y
234 Putnam VT Asia Pacific 33358 Open/Equit 90.10 8.25
Growth Fund; A y
235 Putnam VT Asia Pacific 34453 Open/Equit 0.15 8.25
Growth Fund; B y
236 Putnam VT Diversified 32765 Open/Bond 669.34 10.55
Income Fund; A
237 Putnam VT Diversified 34429 Open/Bond 2.46 10.54
Income Fund; B
238 Putnam VT Global Asset 30712 Open/Balan 1032.02 19.31
Allocation Fund; A ced
239 Putnam VT Global Asset 34453 Open/Balan 1.56 19.32
Allocation Fund; B ced
240 Putnam VT George Putnam 34453 Open/Equit 130.88 10.37
Fund; A y
241 Putnam VT George Putnam 34453 Open/Equit 2.69 10.37
Fund; B y
242 Putnam VT Global Growth 31532 Open/Equit 2061.05 21.14
Fund; A y
243 Putnam VT Global Growth 34453 Open/Equit 1.11 21.13
Fund; B y
244 Putnam VT Growth and Income 30712 Open/Balan 10090.5 29.24
Fund; A ced 1
245 Putnam VT Growth and Income 34429 Open/Balan 9.95 29.21
Fund; B ced
246 Putnam VT U.S. Government 30712 Open/Bond 1020.00 13.86
and High Quality Bond Fund;
A
247 Putnam VT U.S. Government 34453 Open/Bond 2.75 13.85
and High Quality Bond Fund;
B
248 Putnam VT High Yield Fund; 30712 Open/Bond 1041.19 11.87
A
249 Putnam VT High Yield Fund; 34453 Open/Bond 2.49 11.87
B
250 Putnam VT Health and 34453 Open/Equit 150.56 10.90
Sciences Fund; A y
251 Putnam VT Health and 34453 Open/Equit 2.45 10.89
Sciences Fund; B y
252 Putnam VT International 33969 Open/Balan 304.21 12.25
Growth and Income; A ced
253 Putnam VT International 34429 Open/Balan 1.03 12.25
Growth and Income; B ced
254 Putnam VT International New 33969 Open/Equit 139.98 12.32
Opportunities Fund; A y
255 Putnam VT International New 34453 Open/Equit 0.12 12.31
Opportunities Fund; B y
256 Putnam VT International 33969 Open/Equit 338.71 14.07
Growth Fund; A y
257 Putnam VT International 34453 Open/Equit 1.57 14.06
Growth Fund; B y
258 Putnam VT Investors Fund; 34453 Open/Equit 289.99 12.20
A y
259 Putnam VT Investors Fund; 34453 Open/Equit 3.55 12.19
B y
260 Putnam VT Money Market 30712 Open/Bond 604.28 1.00
Fund; A
261 Putnam VT Money Market 34453 Open/Bond 5.28 1.00
Fund; B
262 Putnam VT New Opportunities 32994 Open/Equit 3791.89 27.43
Fund; A y
263 Putnam VT New Opportunities 34453 Open/Equit 1.76 27.41
Fund; B y
264 Putnam VT New Value Fund; A 33970 Open/Equit 262.34 12.44
y
265 Putnam VT New Value Fund; B 34453 Open/Equit 0.54 12.43
y
266 Putnam VT OTC & Emerging 34453 Open/Equit 33.43 10.94
Growth Fund; A y
267 Putnam VT OTC & Emerging 34453 Open/Equit 0.75 10.94
Growth Fund; B y
268 Putnam VT Research A 34607 Open/Equit 31.00 12.45
y
269 Putnam VT Research B 34607 Open/Equit 0.29 12.45
y
270 Putnam VT Utilities Growth 32263 Open/Balan 995.22 17.72
and Income Fund; A ced
271 Putnam VT Utilities Growth 34453 Open/Balan 1.96 17.72
and Income Fund; B ced
272 Putnam VT Vista Fund; A 33970 Open/Equit 330.67 15.43
y
273 Putnam VT Vista Fund; B 34453 Open/Equit 1.07 15.43
y
274 Putnam VT Voyager Fund; A 30712 Open/Equit 6093.39 48.19
y
275 Putnam VT Voyager Fund; B 34453 Open/Equit 5.46 48.15
y
(J) Miscellaneous
1. Election and Removal of Directors
Directors of the Investment Management Company are
elected to office or removed from office by vote of
either stockholders or directors, in accordance with
Articles of Organization and By-Laws of Investment
Management Company.
2. Results of operations
Officers are elected by the Board of Directors. The
Board of Directors may remove any officer without cause.
3. Supervision by SEC of Changes in Directors and
Certain Officers
Putnam files certain reports with the SEC in
accordance with Sections 203 and 204 of the Investment
Advisers Act of 1940, which reports, lists and provides
certain information relating to directors and officers of
Investment Management Company.
4. Amendment to the Articles of Organization, Transfer
of Business and Other Important Matters.
a. Articles of Organization of the 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. The 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
the Investment Management Company within the six-month
period preceding the filing of this Registration
Statement.
III. OUTLINE OF THE OTHER RELATED COMPANIES
(A) Putnam Fiduciary Trust Company (the Transfer Agent,
Shareholder Service Agent and Custodian)
(1) Amount of Capital
U.S.$32,578,770 as of January 31, 1999
(2) Description of Business
Putnam Fiduciary Trust Company is a Massachusetts
trust company and is a wholly-owned subsidiary of
Putnam Investments, Inc., parent of Putnam. Putnam
Fiduciary Trust Company has been providing paying
agent and shareholder service agent services to
mutual funds, including the Fund, since its
inception and custody services since 1990.
(3) Outline of Business Relationship with the Fund
Putnam Fiduciary Trust Company provides transfer
agent services, shareholder services and custody
services to the Fund.
(B) Putnam Mutual Funds Corp. (the Principal Underwriter)
(1) Amount of Capital
U.S.$ 116,101,386 as of January 31, 1999
(2) Description of Business
Putnam Mutual Funds Corp. is the Principal
Underwriter of the shares of Putnam Funds including
the Fund.
(3) Outline of Business Relationship with the Fund
Putnam Mutual Funds Corp. engages in providing
marketing services to the Fund.
(C) Towa Securities Co., Ltd. (Distributor in Japan and Agent
Company)
(1) Amount of Capital
yen10 billion as of January 31, 1999
(2) Description of Business
Towa Securities Co., Ltd. is a diversified
securities company in Japan. Also, it engages in
the Agent Company for US Money Income Fund.
(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 Putnam Investment Management,
Inc. are held by Putnam Investments, Inc.
(E) Interlocking Directors
Names and functions of officers of the Fund who also
are officers of the related companies are as follows:
(as of the filing date)
Name of Investment Transfer Agent
Officer Management and
or Fund Company Shareholder
Trustee Service Agent
George Chairman and Chairman and None
Putnam Trustee Director
Charles Executive Vice Managing None
E. Porter President Director
Patricia Senior Vice Senior Vice None
C. President President
Flaherty
Lawrence Trustee and President and None
J. Lasser Vice President CEO
Gordon H. Vice President Senior Director
Silver Managing
Director
John R. Vice President Senior Vice None
Verani President
D. Vice President Managing None
William Director
Kohli
Ian C. Vice President Senior None
Ferguson Managing
Director
Steven Vice President Managing None
Oristagli Director
o
Jennifer Vice President Managing None
Leichter Director
David L. Vice President Managing None
Waldman Director
Jeffrey Vice President Senior Vice None
A. President
Kaufman
Brett Vice President Managing None
Browchuk Director
Edward Vice President Managing None
D'Alelio Director
Richard Vice Senior None
A. President, Managing
Monaghan Director
IV. FINANCIAL CONDITION OF THE FUND
1. FINANCIAL STATEMENTS
[Omitted, in Japanese version, financial statements of
the Fund and Japanese translations thereof are
incorporated here]
FINANCIAL HIGHLIGHTS
The following table presents per share financial
information for class M shares. This information has
been audited and reported on by the Fund's independent
accountants. Financial statements included in the Fund's
annual report to shareholders for the 1998 fiscal year
are presented in their entirety in this SRS. The Fund's
annual report is available without charge upon request.
Effective July 1, 1998, Coopers & Lybrand L.L.P. and
Price Waterhouse LLP combined their businesses and
practices and began doing business as
PricewaterhouseCoopers LLP.
FINANCIAL HIGHLIGHTS (For a share outstanding throughout the period)
FOR THE PERIOD MARCH 17, 1995
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
OCTOBER 31 OCTOBER 31
1998 1997 1996 1995
CLASS M
NET ASSET VALUE, $13.89 $14.44 $13.59 $12.81
BEGINNING OF PERIOD
INVESTMENT OPERATIONS
Net investment income .76(c) .66(c) .77(c) .49
Net realized and unrealized(.95) (.23) .83 .88
gain (loss) on investments
TOTAL FROM INVESTMENT OPERATIONS (.19) .43 1.60 1.37
LESS DISTRIBUTIONS:
From net investment income (.46) (.56) (.75) (.40)
In excess of net investment income - (.42) - -
From return of capital (.47) - - (.19)
TOTAL DISTRIBUTIONS (.93) (.98) (.75) (.59)
NET ASSET VALUE, END OF PERIOD$12.77$13.89 $14.44 $13.59
RATIOS AND SUPPLEMENTAL DATA
TOTAL INVESTMENT RETURN (1.28) 3.15 12.14 10.87*
AT NET ASSET VALUE (%) (a)
NET ASSETS, END OF PERIOD$213,868 $2,506 $1,892 $509
(in thousands)
Ratio of expenses to average1.51 1.54 1.58 .96*
net assets (%) (b)
Ratio of net investment income5.55 4.74 5.52 4.78*
to average net assets (%)
Portfolio turnover (%) 561.48 638.66 429.38 300.66
* Not annualized.
(a) Total investment return assumes dividend reinvestment and
does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the
period ended October 31, 1995, and thereafter, includes
amounts paid through expense offset arrangements. Prior
period ratios exclude these amounts.
(c) Per share net investment income has been determined on
the basis of the weighted average number of shares
outstanding during the period.
[The following financial documents are omitted here.]
Financial statements of the Fund for the years 1996 and 1997
(audited) together with the auditors' reports.
Financial statements of the Fund for the semi-annual periods
ended on April 30, 1995 and April 30, 1996 (unaudited)
Financial Highlights
2. CONDITION OF THE FUND
(a) Statement of Net Assets
(As of January 31, 1999)
Dollar Yen (in thousands)
a. Total Assets 624,770,875 72,692,091
b. Total Liabilities 112,785,905 13,122,640
c. Total Net Assets (a-b) 511,984,970 59,569,451
d. Total Number of Shares
outstanding Class A 19,173,041 Shares
Class B 2,835,702 Shares
Class M 17,504,513 Shares
e. Net Asset Value Class A 12.99 1,511
per Share (c/d) Class B 12.95 1,507
Class M 12.93 1,504
<TABLE><CAPTION>
Putnam Global Governmental Income Trust
(As of January 31, 1999)
Top 30 Holdings
U.S. Dollar
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mat. Int. Par Value Acq. Current Invest.
Name of Issue Kind of Issue Date Rate (1000) curr. Cost Value Ratio(%)
FNMA TBA U.S. Government 2029 6 1/2 45,050 USD 42,205,275 45,458,153 8.88
U.S. Treasury Bonds U.S. Government 2027 6 3/8 30,770 USD 34,990,981 35,616,275 6.96
U.S. Treasury Notes U.S. Government 2003 4 1/4 26,095 USD 25,800,378 25,781,077 5.04
New Zealand (Gov. of) Foreign Gov Bonds 2004 8 42,565 NZD 24,040,482 25,726,188 5.02
United Kingdom Treasury Foreign Gov Bonds 2002 7 14,180 GBP 25,361,804 25,180,525 4.92
Germany (Fed. Rep. of) Foreign Gov Bonds 2003 7 1/8 16,765 DEM 23,038,112 21,845,089 4.27
United Kingdom Treasury Foreign Gov Bonds 2002 9 3/4 10,705 GBP 19,829,109 20,620,988 4.03
Kreditanstalt Fuer
Wiederaug Corporate Bonds 2009 5 14,802 DEM 15,857,277 18,358,072 3.59
Netherlands (Gov. of) Foreign Gov Bonds 2000 9 14,614 NLG 18,370,996 17,856,122 3.49
France (Gov. of) Foreign Gov Bonds 2007 5 1/2 12,958 FRF 14,992,522 16,700,368 3.26
Germany (Fed. Rep. of) Foreign Gov Bonds 2009 3 3/4 11,660 DEM 8,017,486 13,374,830 2.61
Canada (Gov. of) Foreign Gov Bond 2007 7 1/4 16,975 CAD 13,304,209 13,029,156 2.54
Sweden (Gov. of) Foreign Gov Bonds 2014 6 3/4 74,900 SEK 11,626,119 12,225,336 2.39
U.S. Treasury Notes U.S. Government 2008 4 3/4 11,540 USD 11,631,959 11,631,974 2.27
Netherlands (Gov. of) Foreign Gov Bonds 2023 7 1/2 6,848 NLG 9,969,170 11,093,573 2.17
Australia (Gov. of) Foreign Gov Bonds 2006 6 3/4 15,785 AUD 10,959,431 11,059,800 2.16
Spain (Gov. of) Foreign Gov Bonds 2009 5 1/7 8,730 ESP 10,764,820 10,735,220 2.10
Italy (Gov. of) Foreign Gov Bonds 2005 10 1/2 6,507 ITL 10,625,289 10,359,753 2.02
U.S. Treasury Notes U.S. Government 2007 6 1/8 8,415 USD 8,581,142 9,205,253 1.80
Denmark (Gov. of) Foreign Gov Bonds 2001 4 58,805 DKK 9,273,493 9,089,812 1.78
United Mexican States Foreign Gov Bonds 2019 6 1/4 11,560 USD 4,781,369 8,785,600 1.72
U.S. Treasury Bonds U.S. Government 2028 5 1/4 7,685 USD 7,620,158 7,873,513 1.54
New Zealand (Gov. of) Foreign Gov Bonds 2002 10 11,795 NZD 7,235,043 7,230,666 1.41
Italy (Gov. of) Foreign Gov Bonds 2002 5 3/4 5,828 ITL 6,536,945 7,198,698 1.41
Hellenic Greece (Rep of)Foreign Gov Bonds 2002 9 1/5 550,000 GRD 6,136,925 6,376,793 1.25
Bulgaria (Rep. of) Brady Bonds 2024 6 2/3 1,640 USD 6,468,962 5,407,188 1.06
New Zealand (Gov. of) Foreign Gov Bonds 2000 6 1/2 8,270 NZD 4,384,250 4,541,133 0.89
Hypothebk in Essen Corporate Bonds 2009 4 3,915 USD 4,454,183 4,400,454 0.86
Diamond Holdings Corporate Bonds 2008 10 2,500 USD 1,995,785 4,338,688 0.85
Sweden (Gov. of) Foreign Gov Bonds 2000 10 1/4 30,700 SEK 4,324,230 4,270,880 0.83
TOTALS 406,177,904 425,371,177
</TABLE>
V. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY
This part is translated from the English source; omitted
in English translation.
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
989, Boston, MA 02103, U. S. A.
The Japanese investors who entrust the custody of
their shares to a Handling Securities Company shall have
their shares transferred under the responsibility of such
company, and the other investors shall make their own
arrangements.
No fee is chargeable for the transfer of shares.
2. The Closing Period of the Shareholders' Book
No provision is made.
3. There are no annual shareholders' meetings. Special
shareholders' meetings may be held from time to time as
required by the Agreement and Declaration of Trust and
the Investment Company Act of 1940.
4. No special privilege is granted to shareholders.
The acquisition of shares by any person may be
restricted.
VII. REFERENCE INFORMATION
(1) The following documents were filed with the Ministry of
Finance of Japan or the Director of Kanto Local Finance
Bureau in connection with the Fund.
April 30, 1998: Annual Securities Report
Amendment to Securities Registration Statement
July 31, 1998: Annual Semi-annual Report
Amendment to Securities Registration Statement
August 13, 1998 Amendment to Securities Registration Statement
November 13, 1998: Securities Registration Statement
(2) The ornamental design is used in cover page of the
Japanese Prospectus.
(3) The following must be set forth in the Prospectus.
Outline of the Prospectus will be included at the
beginning of the Prospectus, summarizing the content of
Part I., Information on the securities, "I. Descriptions
of the Fund", "III. Outline of Other Related Companies"
and "IV. Financial Condition of the Fund" in Part II,
Information on the Issuer, of the SRS.
(4) Summarized Preliminary Prospectus will be used.
Attached document (Summarized Preliminary Prospectus)
will be used pursuant to the below, as the document
(Summarized Preliminary Prospectus) as set forth at Item
1.(1)(b), of Article 12 of the Ordinance Concerning the
Disclosure of the Content, etc. of the Specified
Securities.
As performance information, the average of the annual
yield calculated in respect of immediately preceding 30
days may be added in percentage up to one decimal places
(rounding down to second decimal places).
