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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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SIGNATURE PAUL BUCUVALAS
TITLE MANAGING DIRECTOR
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
Putnam High Income Convertible and Bond Fund
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> CLASS A
<S> <C>
<PERIOD-TYPE> Annual
<FISCAL-YEAR-END> Aug-31-1999
<PERIOD-END> Aug-31-1999
<INVESTMENTS-AT-COST> 121,333,427
<INVESTMENTS-AT-VALUE> 111,824,557
<RECEIVABLES> 3,014,002
<ASSETS-OTHER> 440
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 114,838,999
<PAYABLE-FOR-SECURITIES> 9,761
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,253,684
<TOTAL-LIABILITIES> 1,263,445
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 128,158,348
<SHARES-COMMON-STOCK> 13,648,608
<SHARES-COMMON-PRIOR> 13,515,511
<ACCUMULATED-NII-CURRENT> 1,736,704
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (6,810,638)
<ACCUM-APPREC-OR-DEPREC> (9,508,870)
<NET-ASSETS> 113,575,544
<DIVIDEND-INCOME> 1,460,109
<INTEREST-INCOME> 10,988,863
<OTHER-INCOME> 0
<EXPENSES-NET> 1,261,200
<NET-INVESTMENT-INCOME> 11,187,772
<REALIZED-GAINS-CURRENT> (6,660,169)
<APPREC-INCREASE-CURRENT> 2,151,231
<NET-CHANGE-FROM-OPS> 6,678,834
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11,015,483)
<DISTRIBUTIONS-OF-GAINS> (2,461,525)
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<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 133,097
<NET-CHANGE-IN-ASSETS> (5,617,602)
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<PER-SHARE-DIVIDEND> (.81)
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</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Putnam High Income Convertible and
Bond Fund:
In planning and performing our audit of the financial statements
of Putnam High Income Convertible and Bond Fund for the year
ended August 31, 1999, we considered its internal control,
including control activities for safeguarding securities, in
order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply
with the requirements of Form N-SAR, not to provide assurance on
internal control.
The management of Putnam High Income Convertible and Bond Fund is
responsible for establishing and maintaining internal control.
In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant
to an audit pertain to the entity's objective of preparing
financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets
against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal controls, errors or
fraud may occur and may not be detected. Also, projection of any
evaluation of internal control to future periods is subject to
the risk that it may become inadequate because of changes in
conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be material
weaknesses under standards established by the American Institute
of Certified Public Accountants. A material weakness is a
condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low
level the risk that misstatements caused by errors or fraud in
amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing
their assigned functions. However, we noted no matters involving
internal control and its operation, including controls for
safeguarding securities, that we consider to be material
weaknesses as defined above as of August 31, 1999.
This report is intended solely for the information and use of
management and the Board of Trustees and the Securities and
Exchange Commission and is not intended to be and should not be
used by anyone other than these specified parties.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 13, 1999
Results of June 3, 1999 shareholder meeting
(Unaudited)
An annual meeting of shareholders of the fund
was held on
June 3, 1999. At the meeting, each of the
nominees for
Trustees was elected, as follows:
Votes
Votes for withheld
Jameson Adkins Baxter 11,696,308
135,375
Hans H. Estin 11,684,176 147,507
John A. Hill 11,705,600 126,083
Ronald J. Jackson 11,704,433
127,250
Paul L. Joskow 11,690,212 141,471
Elizabeth T. Kennan 11,684,587
147,096
Lawrence J. Lasser 11,702,931
128,752
John H. Mullin III 11,699,409
132,274
Robert E. Patterson 11,703,298
128,385
William F. Pounds 11,681,176
150,507
George Putnam 11,685,309 146,374
George Putnam, III 11,687,626
144,057
A.J.C. Smith 11,703,946 127,737
W. Thomas Stephens 11,691,560
140,123
W. Nicholas Thorndike 11,689,227
142,456
A proposal to ratify the selection of
PricewaterhouseCoopers LLP as the independent
auditors of your fund was approved as
follows:
11,679,342 votes for, and 50,733 votes
against, with 101,608
abstentions and broker non-votes.
All tabulations are rounded to nearest whole
number.
