Putnam
High Income
Convertible and
Bond Fund
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
2-29-00
[SCALE LOGO OMITTED]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
During the six months ended February 29, 2000, Putnam High Income
Convertible and Bond Fund provided a total return of 7.83% at net asset
value. This result outperformed the Merrill Lynch High Yield Convertible
Index, which had a total return of -3.33% for the same period. Because of
the fund's objective of seeking high income, this index, a subindex of the
broader Merrill Lynch All-Convertible Index, is a more appropriate
indicator for this fund. The broader Merrill Lynch All-Convertible Index
had a total return of 41.00% during the period. The strong return of the
broader index reflected the impact of soaring valuations in the technology
and telecommunications sectors, which have become heavy weightings and
important components of the convertible bond market as a whole.
Total return for 6 months ended 2/29/00
NAV Market price
- ----------------------------------------------------------------------
7.83% -17.47%
- ----------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods begins on page 7.
* FUND REMAINS FOCUSED ON YIELD
Your fund differs from many other convertible bond funds in that its
objective is high income whereas more traditional convertible bond funds
typically seek total return. Since Forrest Fontana and Rosemary Thomsen,
the fund's managers, are looking for the highest income possible, they
invest in convertible bonds of companies that are out of favor in the
market or have had significant price declines for a specific reason.
The low prices of these securities often translate into much higher
yields. For example, a typical convertible bond might have a yield of 4%,
while many of the bonds in this fund carry yields of 10% to 12%. These
out-of-favor securities may have a higher credit risk and can be more
sensitive to interest-rate movements than a typical convertible bond. To
manage these risks, the team researches the issuing companies thoroughly
before investing and employs a strict sell discipline in an effort to
limit potential price declines.
* RISING RATES AFFECTED PERFORMANCE
Because of its focus on income, the fund was affected by many of the
factors that influenced high-yield bonds and the bond market in general
during the period. Rising interest rates, uncertainty about the economy,
and an increase in market volatility had a negative impact on the fund's
holdings. In an environment in which high-yield bonds outperformed the
bond market as a whole, however, the fund's high-yield holdings
outperformed the sector average, as measured by the First Boston High
Yield Index.
[GRAPHIC OMITTED: TOP FIVE CONVERTIBLE BOND HOLDINGS]
TOP FIVE CONVERTIBLE BOND HOLDINGS*
Credence Systems Corp.
cv. sub. notes 5.25%, 2002
Semiconductors
Aspen Technology, Inc.
cv. sub. deb. 5.25%, 2005
Computer service and software
Rogers Communications
cv. deb. 2.00%, 2005
Telecommunications
Arbor Software Corp.
cv. sub. notes 4.50%, 2005
Computer service and software
Cirrus Logic, Inc.
cv. sub. notes 6.00%, 2003
Electronics
[GRAPHIC OMITTED: TOP FIVE CORPORATE HIGH-YIELD BOND HOLDINGS]
TOP FIVE CORPORATE HIGH-YIELD BOND HOLDINGS*
Midland Funding II Corp.
deb. Ser. A, 11.75%, 2005
Electric utilities
Nextel Communications, Inc.
senior notes 9.375%, 2009
Cellular communications
Benedek Communications Corp.
stepped-coupon zero %, 2006
Broadcasting
Global Crossing Holdings, Ltd.
company guaranty 9.625%, 2008
Telecommunications
Calpine Corp.
senior notes 7.75%, 2009
Electric utilities
Footnote reads:
*These combined holdings represent 13.0% of the fund's net assets as of
2/29/00. Portfolio holdings will vary over time.
The period was characterized by generally narrowing spreads, that is, the
difference between the yields on Treasury bonds and high-yield bonds, and
by continued strong economic growth with low inflation. The fund's
high-yield holdings performed well primarily because of the fund's bias
toward lower-rated securities and its overweight positions in the
telecommunications and, to a lesser extent, energy sectors. The
health-care sector experienced significant upheaval as a result of major
cutbacks in Medicare reimbursements. Bonds of nursing home providers, in
particular, were hit hard by this industry-wide event. However, the fund's
health-care weighting was relatively small, so the damage to performance
was not significant.
[GRAPHIC OMITTED: horizontal bar chart PORTFOLIO COMPOSITION (2/29/00)]
PORTFOLIO COMPOSITION (2/29/00)*
Convertible
securities 63.3%
Corporate
high-yield bonds 33.6%
Preferred stocks 1.9%
Common stocks,
including warrants 1.0%
Other 0.2%
Footnote reads:
*Based on total market value of investments. Composition will vary over time.
The telecommunications industry has experienced tremendous growth in the
past several years, and high-yield bonds have financed much of this
growth. The fund's telecom holdings include Covad Communications Group, a
high-speed Internet and network access provider. Covad's services are
provided over standard copper telephone lines, and its customers include
Cisco Systems, Oracle, and Stanford University. A second
telecommunications holding is IPC Information Systems, which provides
equipment and services to facilitate securities trading for financial
institutions.
* VALUE OPPORTUNITIES FOUND IN SEVERAL SECTORS
In the past six months, Rosemary and Forrest have added to the fund's
technology sector by increasing holdings of Aspen Technology, which
provides software solutions to the high- technology industry. Aspen
benefited from strength in the software sector in the latter part of 1999
as companies updated their systems to prepare for Y2K. While this holding,
as well as others discussed in this report, was viewed favorably at the
end of the period, all are subject to review and adjustment in accordance
with the fund's investment strategy and may well vary in the future.
The managers also purchased bonds issued by Benchmark Electronics, a
contract manufacturer for several industries including medical devices,
communications, and computers. This company did not meet quarterly
earnings expectations last fall, and its bonds fell in price from $100 to
$65. Having followed the company for some time, the managers believed it
was fundamentally sound and took advantage of the short-lived price
decline. The bonds are now trading back near par.
Finally, in the struggling health-care sector, Rosemary and Forrest found
value in Omnicare, Inc., an operator of long-term health-care institutions
such as skilled nursing facilities and assisted living communities.
Despite the difficulties that the health-care industry experienced in
1999, the team has successfully identified attractively priced,
high-yielding bonds from companies like Omnicare that have strong balance
sheets and good cash flow.
In the retail, consumer products, and automotive sectors, the fund holds
several high-yielding convertible bonds. These include Michaels Stores, a
retailer of handcrafted products; J. Baker, an apparel retailer that sells
uniforms and distributes men's clothing through its Casual Male outlets;
and Whole Foods, an owner of health-food stores. Another holding is Tower
Automotive, which designs and manufactures structural components,
suspension components, and engineered assemblies for the automotive
industry.
* SELLING DISCIPLINE IMPORTANT FOR CONVERTIBLES IN VOLATILE, BIFURCATED MARKET
The convertible bond market has become extremely volatile, in part because
of the sky-high valuations of "new economy" companies, which include
Internet builders, dot-com companies, and telecommunications firms. As a
result, your fund's selling discipline has become even more important. If
the price of a holding is declining rapidly and the prospects are not good
for a turnaround, it will be sold to preserve shareholder value. On the
other hand, when certain sectors are performing well, like technology and
telecommunications, positions will be maintained as long as the companies
continue to perform.
The outlook for high-income, deep-value convertibles and high-yield bonds
will depend largely on what happens with inflation and the economy. The
team's current analysis suggests that the U.S. economy should continue to
show solid but moderating growth in the coming year and this scenario
would be favorable for high-yield bonds. The management team anticipates
that yields in the bond market will remain relatively stable, given that
the market has already discounted one or two more interest-rate increases
before the end of June. A key factor will be inflation, which is beginning
to show signs of increasing. The rise in oil prices and the tight U.S.
labor markets have become a concern, but strong productivity growth and
global competition have thus far kept inflation at bay.
* UPCOMING TRANSITION
This is my last letter to you and other Putnam High Income Convertible and
Bond Fund shareholders. After more than 30 years as Chairman of the
Trustees and President of the Putnam Funds, the time has come for me to
step aside. In June, John Hill will become Chairman. John is currently an
independent Trustee and has served on the Board for the past 14 years. In
addition, my son, George Putnam, III, will take on the role of President.
I am confident that the leadership of the funds will be in exceptionally
strong hands. I will become Chairman Emeritus, remain a shareholder, and
stay in close touch with the funds.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
April 19, 2000
The views expressed here are exclusively those of Putnam Management. They
are not meant as investment advice. Although the described holdings were
viewed favorably as of 2/29/00, there is no guarantee the fund will
continue to hold these securities in the future. The lower credit ratings
of high-yield bonds reflect a greater possibility that adverse changes in
the economy or poor performance by the issuers of these bonds may affect
the issuer's ability to pay principal and interest.
Performance summary
This section provides information about your fund's performance, which should
always be considered in light of its investment strategy. Putnam High Income
Convertible and Bond Fund is designed for investors seeking high current
income through an aggressive portfolio of high-yielding convertible and debt
securities with potential for capital appreciation.
TOTAL RETURN FOR PERIODS ENDED 2/29/00
Merrill Lynch First Boston
Market All-Convertible High-Yield
NAV price Index* Bond Index
- --------------------------------------------------------------------------
6 months 7.83% -17.47% 41.00% 1.52%
- --------------------------------------------------------------------------
1 year 13.46 -15.07 56.21 2.76
- --------------------------------------------------------------------------
5 years 59.45 19.23 178.90 49.45
Annual average 9.78 3.58 22.76 8.36
- --------------------------------------------------------------------------
10 years 237.84 206.23 394.62 202.07
Annual average 12.95 11.84 17.33 11.69
- --------------------------------------------------------------------------
Life of fund
(since 7/9/87) 254.26 168.96 -- 232.53
Annual average 10.52 8.14 -- 9.95
- --------------------------------------------------------------------------
Past performance is no guarantee of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment
returns, net asset value and market price will fluctuate so that an
investor's shares when sold may be worth more or less than their original
cost.
*Index began on 12/31/87.
PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 2/29/00
- -------------------------------------------------------------------------
Distributions (common shares)
- -------------------------------------------------------------------------
Number 6
- -------------------------------------------------------------------------
Income $0.426
- -------------------------------------------------------------------------
Total $0.426
- -------------------------------------------------------------------------
Share value NAV Market price
- -------------------------------------------------------------------------
8/31/99 $8.32 $8.813
- -------------------------------------------------------------------------
2/29/00 8.48 6.875
- -------------------------------------------------------------------------
Current return (end of period)
- -------------------------------------------------------------------------
Current dividend rate1 10.05% 12.39%
- -------------------------------------------------------------------------
1 Income portion of most recent distribution, annualized and divided by
NAV or market price at end of period.
TOTAL RETURN FOR PERIODS ENDED 3/31/00 (most recent calendar quarter)
Market
NAV price
- --------------------------------------------------------------------------
6 months 5.92% -6.48%
- --------------------------------------------------------------------------
1 year 11.08 -9.46
- --------------------------------------------------------------------------
5 years 52.97 26.02
Annual average 8.87 4.73
- --------------------------------------------------------------------------
10 years 228.94 220.47
Annual average 12.64 12.35
- --------------------------------------------------------------------------
Life of fund 246.78 179.07
Annual average 10.26 8.40
- --------------------------------------------------------------------------
Past performance is no guarantee of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment
returns, net asset value and market price will fluctuate so that an
investor's shares when sold may be worth more or less than their original
cost.
Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding common shares.
Market price is the current trading price of one share of the fund. Market
prices are set by transactions between buyers and sellers on the New York
Stock Exchange.
Comparative benchmarks
Merrill Lynch All-Convertible Index* is an unmanaged list of convertible
securities commonly used as a measure of performance for the convertible
market.
Merrill Lynch High Yield Convertible Index* is a sub-index of the Merrill
Lynch All-Convertible Index and is an unmanaged list of high yield
convertible securities that measures performance for high-yield
convertible securities. The index's inception was 12/98.
First Boston High-Yield Bond Index* is a market-weighted index including
publicly traded bonds having a rating below BBB by Standard & Poor's and
Moody's. The average quality of bonds included in the index may be lower
than the average quality of the bonds in which the fund customarily
invests.
*Securities indexes assume reinvestment of all distributions and interest
payments and do not take into account brokerage fees or taxes. Securities
in the fund do not match those in the indexes and performance of the fund
will differ. It is not possible to invest directly in an index.
A guide to the financial statements
These sections of the report constitute the fund's financial
statements.
The fund's portfolio lists all the fund's investments and their values as
of the last day of the reporting period. Holdings are organized by asset
type and industry sector, country, or state to show areas of concentration
and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are subtracted
from this total. The result is divided by the number of shares to
determine the net asset value per share, which is calculated separately
for each class of shares. (For funds with preferred shares, the amount
subtracted from total assets includes the net assets allocated to
remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss for
the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that remain
in the portfolio -- any change in unrealized gains or losses over the
period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number of
the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed here
may not match the sources listed in the Statement of operations because
the distributions are determined on a tax basis and may be paid in a
different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment results,
per-share distributions, expense ratios, net investment income ratios and
portfolio turnover in one summary table, reflecting the five most recent
reporting periods. In a semiannual report, the highlight table also
includes the current reporting period. For open-end funds, a separate
table is provided for each share class.
<TABLE>
<CAPTION>
The fund's portfolio
February 29, 2000 (Unaudited)
CONVERTIBLE BONDS AND NOTES (48.9%) (a)
PRINCIPAL AMOUNT VALUE
<S> <C> <C>
Aerospace and Defense (1.6%)
- --------------------------------------------------------------------------------------------------------------------------
$ 1,500,000 Kellstrom Industries, Inc. cv. sub. notes 5 1/2s, 2003 $ 813,750
750,000 Orbital Sciences Corp. cv. sub. notes 5s, 2002 636,563
500,000 SPACEHAB, Inc. 144A cv. sub. notes 8s, 2007 368,125
--------------
1,818,438
Automotive (1.6%)
- --------------------------------------------------------------------------------------------------------------------------
1,500,000 Mascotech, Inc. cv. sub. deb. 4 1/2s, 2003 1,132,500
1,000,000 Tower Automotive, Inc. cv. sub. notes 5s, 2004 756,250
--------------
1,888,750
Biotechnology (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
700,000 Aviron cv. sub. notes 5 3/4s, 2005 980,000
Computers Services and Software (10.7%)
- --------------------------------------------------------------------------------------------------------------------------
500,000 Adaptec, Inc. cv. sub. notes 4 3/4s, 2004 487,500
2,250,000 Arbor Software Corp. cv. sub. notes 4 1/2s, 2005 2,292,188
2,500,000 Aspen Technology, Inc. cv. sub. deb. 5 1/4s, 2005 2,553,125
4,500,000 Network Associates, Inc. cv. sub deb. zero %, 2018 1,681,875
1,750,000 Quantum Corp. cv. sub. deb. 7s, 2004 1,361,727
1,000,000 Silicon Graphics Corp. cv. sr. notes 5 1/4s, 2004 746,250
1,500,000 System Software Associates, Inc. cv. sub. notes 7s, 2002 495,000
1,500,000 Telxon Corp. cv. sub. notes 5 3/4s, 2003 1,464,375
750,000 Wind River Systems, Inc. cv. sub. notes 5s, 2002 1,348,125
--------------
12,430,165
Electrical Equipment (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,250,000 Mark IV Industries, Inc. cv. sub. notes 4 3/4s, 2004 1,043,750
Electronics (9.5%)
- --------------------------------------------------------------------------------------------------------------------------
600,000 Advanced Micro Devices, Inc. cv. sub. notes 6s, 2005 725,250
1,500,000 Benchmark Electronics, Inc. 144A cv. sub. notes 6s, 2006 1,425,000
2,250,000 Cirrus Logic, Inc. cv. sub notes 6s, 2003 2,261,250
1,000,000 Integrated Device Technology, Inc. cv. sub. notes
5 1/2s, 2002 1,303,750
1,400,000 Kent Electronics Corp. cv. sub. notes 4 1/2s, 2004 1,291,500
1,000,000 Lam Research Corp. cv. sub. notes 5s, 2002 1,808,750
1,250,000 Park Electrochemical Corp. cv. sub. notes 5 1/2s, 2006 1,034,375
1,250,000 S3, Inc. 144A cv. sub. notes 5 3/4s, 2003 1,234,375
--------------
11,084,250
Energy (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
2,000,000 Pride International, Inc. cv. sub. deb. zero %, 2018 672,500
Environmental Control (3.4%)
- --------------------------------------------------------------------------------------------------------------------------
1,914,000 OHM Corp. cv. sub. deb. 8s, 2006 1,674,750
1,250,000 Waste Management, Inc. cv. sub. notes 4s, 2002 1,107,813
1,300,000 Weston (Roy F.), Inc. cv. deb. 7s, 2002 1,131,000
--------------
3,913,563
Health Care Services (1.5%)
- --------------------------------------------------------------------------------------------------------------------------
2,500,000 Omnicare, Inc. cv. bonds 5s, 2007 1,725,000
Metals and Mining (2.1%)
- --------------------------------------------------------------------------------------------------------------------------
2,000,000 Homestake Mining Co. 144A cv. sub. 5 1/2s, 2000 1,975,000
500,000 Inco Ltd. cv. deb. 7 3/4s, 2016 423,750
--------------
2,398,750
Paper & Forest Products (1.4%)
- --------------------------------------------------------------------------------------------------------------------------
2,000,000 Stone Container Corp. cv. sub. deb. 6 3/4s, 2007 1,617,500
Pharmaceuticals (1.4%)
- --------------------------------------------------------------------------------------------------------------------------
2,000,000 Duramed Pharmaceuticals, Inc. cv. sub. notes 3 1/2s, 2002 1,652,500
REIT (Real Estate Investment Trust) (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
1,350,000 Malan Realty Investors cv. sub. notes 9 1/2s, 2004 1,179,563
Retail (4.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,500,000 Baker (J.), Inc. cv. deb. 7s, 2002 1,160,625
400,000 Cybernet Internet Service 144A cv. sr. disc. notes
stepped-coupon zero % (13s, 8/15/04), 2009 (STP) 208,000
500,000 Michaels Stores, Inc. cv. sub. notes 6 3/4s, 2003 463,125
3,500,000 Rite Aid Corp. cv. sub. notes 5 1/4s, 2002 1,732,500
1,250,000 Sunglass Hut International, Inc. cv. sub. notes
5 1/4s, 2003 967,188
1,500,000 Whole Foods Market, Inc. cv. sub. deb. zero %, 2018 519,375
--------------
5,050,813
Semiconductor (2.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,350,000 Credence Systems Corp. cv. sub. notes 5 1/4s, 2002 2,620,688
Telecommunications (4.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,600,000 Cellstar Corp. cv. sub notes 5s, 2002 1,232,000
2,000,000 Rogers Communications cv. deb. 2s, 2005 2,350,000
2,000,000 World Access, Inc. cv. sub. notes 4 1/2s, 2002 1,647,500
500,000 World Access, Inc. 144A Inc. cv. sub. notes 4 1/2s, 2002 411,875
--------------
5,641,375
Tobacco (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
2,300,000 Standard Commercial Corp. cv. sub. deb. 7 1/4s, 2007 1,069,500
--------------
Total Convertible Bonds and Notes (cost $53,580,720) $ 56,787,105
CORPORATE BONDS AND NOTES (33.4%) (a)
PRINCIPAL AMOUNT VALUE
Advertising (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
$ 90,000 Adams Outdoor Advertising sr. notes 10 3/4s, 2006 $ 93,375
Aerospace and Defense (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
50,000 Argo-Tech Corp. company guaranty 8 5/8s, 2007 41,000
54,000 Aviation Sales Co. company guaranty 8 1/8s, 2008 35,910
70,000 BE Aerospace, Inc. sr. sub. notes 9 1/2s, 2008 64,400
70,000 BE Aerospace, Inc. sr. sub. notes Ser. B, 8s, 2008 59,500
40,000 Decrane Aircraft Holdings company guaranty
Ser. B, 12s, 2008 36,400
100,000 Sequa Corp. med. term notes 10s, 2001 101,314
--------------
338,524
Agriculture (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
432,037 Premium Standard Farms, Inc. sr. sec. notes 11s, 2003 (PIK) 393,154
Airlines (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
100,000 Airbus Industries 144A notes 12.266s, 2020 102,190
80,000 Calair LLC 144A company guaranty 8 1/8s, 2008 68,900
140,000 Canadian Airlines Corp. secd. notes 10s, 2005 (In default)
(Canada) (NON) 113,400
50,000 Trans World Airlines, Inc. sr. notes 11 1/2s, 2004 31,750
40,000 Trans World Airlines, Inc. sr. notes 11 3/8s, 2006 15,900
100,000 United Pan-Europe N.V. 144A 10 7/8s, 2009
(Netherlands) 97,500
320,000 United Pan-Europe N.V. 144A zero %, 2010
(Netherlands) 169,600
280,000 United Pan-Europe N.V. 144A zero %, 2009
(Netherlands) 156,100
--------------
755,340
Apparel (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
70,000 William Carter Holdings Co. sr. sub. notes Ser. A,
12s, 2008 65,100
Automotive (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
80,000 Dura Operating Corp. company guaranty Ser. B,
9s, 2009 75,200
180,000 Federal Mogul Corp. notes 7 1/2s, 2009 156,118
70,000 Motors and Gears, Inc. sr. notes Ser. D, 10 3/4s, 2006 68,950
190,000 Navistar International Corp. sr. notes Ser. B, 8s, 2008 175,750
250,000 Oxford Automotive, Inc. company guaranty Ser. D,
10 1/8s, 2007 235,000
15,000 San Luis Corp. S.A. de CV sr. notes 8 7/8s, 2008 (Mexico) 13,650
60,000 Transportation Manufacturing Operations, Inc.
company guaranty 11 1/4s, 2009 60,150
--------------
784,818
Automotive Parts (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
262,000 Aftermarket Technology Corp. sr. sub. notes 12s, 2004 263,310
90,000 Hayes Lemmerz International, Inc. company guaranty
Ser. B, 8 1/4s, 2008 79,425
50,000 Hayes Wheels International, Inc. company guaranty
Ser. B, 9 1/8s, 2007 48,125
180,000 Talon Automotive Group sr. sub. notes Ser. B,
9 5/8s, 2008 93,600
--------------
484,460
Banks (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
75,000 Chevy Chase Savings Bank Inc. sub. deb. 9 1/4s, 2008 70,125
135,000 Hanvit Bank 144A sub. notes 11 3/4s, 2010 (Korea) 136,013
25,000 Ocwen Capital Trust I company guaranty
10 7/8s, 2027 16,250
80,000 Ocwen Federal Bank FSB sub. deb. 12s, 2005 75,200
50,000 Ocwen Financial Corp. notes 11 7/8s, 2003 46,000
75,000 Provident Capital Trust company guaranty 8.6s, 2026 70,339
45,000 Riggs Capital Trust 144A bonds 8 5/8s, 2026 40,051
80,000 Sovereign Bancorp Inc. sr. notes 10 1/2s, 2006 80,000
65,000 Sovereign Capital Trust company guaranty 9s, 2027 48,046
55,000 Webster Capital Trust I 144A bonds 9.36s, 2027 52,245
--------------
634,269
Basic Industrial Products (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
80,000 Azurix Corp. 144A notes 10 3/8s, 2007 80,600
330,000 Grove Holdings LLC deb. stepped-coupon zero %
(11 5/8s, 5/1/03), 2009 (STP) 33,000
55,000 Paragon Corp. Holdings, Inc. company guaranty
Ser. B, 9 5/8s, 2008 19,250
50,000 Roller Bearing Co. company guaranty Ser. B,
9 5/8s, 2007 45,750
--------------
178,600
Broadcasting (2.2%)
- --------------------------------------------------------------------------------------------------------------------------
170,000 Allbritton Communications Co. sr. sub. notes
Ser. B, 8 7/8s, 2008 158,950
103,300 AMFM Operating, Inc. deb. 12 5/8s, 2006 (PIK) 117,246
600,000 Benedek Communications Corp. sr. disc. notes
stepped-coupon zero % (13 1/4s, 5/15/01), 2006 (STP) 552,750
215,000 Capstar Broadcasting sr. disc. notes stepped-coupon
zero % (12 3/4s, 2/1/02), 2009 (STP) 189,200
75,800 Capstar Broadcasting sub. deb. 12s, 2009 (PIK) 85,654
215,000 Capstar Broadcasting sr. sub. notes 9 1/4s, 2007 217,150
75,000 Central European Media Enterprises Ltd. sr. notes
9 3/8s, 2004 (Bermuda) 30,750
90,220 Citadel Broadcasting, Inc. sr. sub. notes 10 1/4s, 2007 91,799
10,000 Citadel Broadcasting, Inc. company guaranty 9 1/4s, 2008 9,625
40,000 Fox Family Worldwide, Inc. sr. disc. notes stepped-coupon
zero % (10 1/4s, 11/1/02), 2007 (STP) 25,400
125,000 Fox Family Worldwide, Inc. sr. notes 9 1/4s, 2007 113,125
80,000 Fox/Liberty Networks LLC sr. notes 8 7/8s, 2007 81,200
80,000 Granite Broadcasting Corp. sr. sub. notes 8 7/8s, 2008 72,000
250,000 Heritage Media Services Corp. sr. sub. notes 8 3/4s, 2006 251,875
50,000 LIN Television Corp. company guaranty 8 3/8s, 2008 44,500
30,000 Pegasus Communications Corp. sr. notes Ser. B,
9 3/4s, 2006 29,100
110,000 Radio One, Inc. company guaranty Ser. B, stepped-coupon
7s, (12s, 5/15/00), 2004 (STP) 117,700
50,000 RBS Participacoes S.A. 144A company guaranty
11s, 2007 (Brazil) 43,000
80,000 SFX Entertainment Inc. company guaranty 9 1/8s, 2008 82,000
150,000 Spanish Broadcasting Systems sr. sub notes 9 5/8s, 2009 147,750
50,000 TV Azteca Holdings S.A. de C.V. sr. notes 11s, 2002
(Mexico) 47,750
60,000 TV Azteca S.A. de C.V. sr. notes 10 1/2s, 2007 (Mexico) 55,200
25,000 TV Azteca S.A. de C.V. sr. notes Ser. A, 10 1/8s, 2004
(Mexico) 23,438
--------------
2,587,162
Building and Construction (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
55,000 American Architectural Products Corp. company
guaranty 11 3/4s, 2007 13,750
160,000 D.R. Horton, Inc. company guaranty 8s, 2009 141,200
190,000 GS Superhighway Holdings sr. notes 9 7/8s,
2004 (China) 134,900
60,000 NCI Building Systems Inc. sr. sub. notes Ser. B,
9 1/4s, 2009 57,000
80,000 Toll Corp. company guaranty 8 1/8s, 2009 73,000
--------------
419,850
Building Products (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
30,000 Atrium Companies, Inc. company guaranty Ser. B,
10 1/2s, 2009 28,725
90,000 Building Materials Corp. company guaranty 8s, 2008 78,300
150,000 Consumers International 144A sr. notes 10 1/4s,
2005 (Canada) 106,500
--------------
213,525
Business Equipment and Services (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
110,000 Iron Mountain, Inc. company guaranty 8 3/4s, 2009 98,450
50,000 Outsourcing Solutions, Inc. sr. sub. notes Ser. B, 11s, 2006 44,500
30,000 U.S. Office Products Co. company guaranty 9 3/4s, 2008 11,700
--------------
154,650
Cable Television (1.7%)
- --------------------------------------------------------------------------------------------------------------------------
240,000 Acme Television sr. disc. notes stepped-coupon zero %
(10 7/8s, 9/30/00), 2004 (STP) 220,800
80,000 Adelphia Communications Corp. sr. notes 7 7/8s, 2009 69,200
2,044 Australis Media, Ltd. sr. disc. notes stepped-coupon zero %
(15 3/4s 5/15/00), 2003 (In default) (Australia) (NON) (STP) (PIK) 1
180,000 Century Communications Corp. sr. notes 8 7/8s, 2007 167,850
220,000 Charter Communications Holdings LLC sr. disc. notes
stepped-coupon zero % (9.92s, 4/1/04), 2011 (STP) 126,500
200,000 Charter Communications Holdings LLC sr. notes
8 5/8s, 2009 182,000
100,000 Classic Cable, Inc. 144A sr. sub. notes 10 1/2s, 2010 100,125
120,000 CSC Holdings, Inc. sr. sub. deb. 9 7/8s, 2013 123,900
30,000 CSC Holdings, Inc. deb. 7 7/8s, 2018 28,139
215,000 Diamond Cable Communication Co. sr. disc. notes
stepped-coupon zero % (10 3/4s, 2/15/02), 2007
(United Kingdom) (STP) 170,388
45,000 Lamar Media Corp. company guaranty 9 5/8s, 2006 45,112
100,000 Lamar Media Corp. sr. sub. notes 9 1/4s, 2007 99,000
55,000 Lamar Media Corp. company guaranty 8 5/8s, 2007 52,800
210,000 NTL, Inc. sr. notes Ser. B, 10s, 2007 (United Kingdom) 209,475
300,000 TeleWest Communications PLC 144A sr. notes
9 7/8s, 2010 (United Kingdom) 300,000
60,000 TeleWest Communications PLC 144A sr. disc. notes
stepped-coupon zero % (9 1/4, 4/15/04) 2009
(United Kingdom) (STP) 35,400
--------------
1,930,690
Cellular Communications (1.7%)
- --------------------------------------------------------------------------------------------------------------------------
110,000 Call-Net Enterprises, Inc. sr. disc. notes stepped-coupon
zero % (10.8s, 5/15/04), 2009 (Canada) (STP) 50,600
170,000 Call-Net Enterprises, Inc. sr. disc. notes stepped-coupon
zero % (9.27s, 8/15/02), 2007 (Canada) (STP) 100,300
220,000 Celcaribe S.A. sr. notes stepped-coupon zero %
(13 1/2s, 3/15/04), 2004 (Colombia) (STP) 192,500
391,000 CellNet Data Systems, Inc. sr. disc. notes stepped-coupon
zero % (14s, 10/1/02), 2007 (STP) 46,920
105,000 Conecel Holdings 144A notes Ser. A, 14s, 2000 (In default)
(United Kingdom) (NON) 26,250
160,000 McCaw International Ltd sr. disc. notes stepped-coupon
zero % (13s, 4/15/02), 2007 (STP) 115,600
250,000 Millicom International Cellular S.A. sr. disc. notes
stepped-coupon zero % (13 1/2s, 6/1/01), 2006
(Luxembourg) (STP) 215,625
330,000 NEXTEL Communications, Inc. sr. disc. notes
stepped-coupon zero % (12 1/8s, 4/15/03), 2008 (STP) 207,900
190,000 NEXTEL Communications, Inc. sr. notes 12s, 2008 207,575
590,000 NEXTEL Communications, Inc. sr. notes 9 3/8s, 2009 570,825
110,000 Nextel Partners, Inc. 144A sr. notes 11s, 2010 110,000
30,000 Price Communications Wireless, Inc. 144A sr. notes
9 1/8s, 2006 30,000
130,000 US Unwired, Inc. sr. disc. notes stepped-coupon zero %
(13 3/8s, 11/1/04), 2009 (STP) 75,075
--------------
1,949,170
Chemicals (1.2%)
- --------------------------------------------------------------------------------------------------------------------------
70,000 Geo Specialty Chemicals, Inc. sr. sub. notes
10 1/8s, 2008 59,500
90,000 Georgia Gulf Corp. 144A sr. sub. notes 10 3/8s, 2007 92,475
30,000 Huntsman Corp. 144A sr. sub. notes 9 1/2s, 2007 28,350
90,000 Huntsman Corp. 144A sr. sub. notes FRN 9.38s, 2007 83,700
330,000 Huntsman ICI Chemicals Inc. 144A sr. sub. notes
10 1/8s, 2009 328,350
100,000 Lyondell Petrochemical Co. sr. sub. notes
10 7/8s, 2009 94,500
300,000 Lyondell Petrochemical Co. sec. notes Ser. B,
9 7/8s, 2007 288,000
200,000 PCI Chemicals & Pharmaceuticals company guaranty
9 1/4s, 2007 (India) 164,000
100,000 Pioneer Americas Acquisition 144A sr. notes 9 1/4s, 2007 86,000
140,791 Polytama International notes 11 1/4s, 2007 (Indonesia) 16,895
80,000 Royster-Clark Inc. 144A 1st mtge 10 1/4s, 2009 71,200
75,000 Sterling Chemicals Holdings sr. disc. notes stepped-coupon
zero % (13 1/2s, 8/15/01), 2008 (STP) 24,750
95,000 Trikem S.A. 144A bonds 10 5/8s, 2007 (Brazil) 75,050
--------------
1,412,770
Computer Services and Software (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
35,000 Concentric Network Corp. sr. notes 12 3/4s, 2007 37,713
130,000 Globix Corp. 144A sr. notes 12 1/2s, 2010 129,025
110,000 Interact Operating Co. notes 14s, 2003 33,000
100,000 PSINet, Inc. sr. notes 11 1/2s, 2008 101,000
130,000 PSINet, Inc. sr. notes 11s, 2009 132,600
55,000 PSINet, Inc. 144A sr. notes 10 1/2s, 2006 54,175
240,000 Unisys Corp. sr. notes 11 3/4s, 2004 259,200
60,000 Verio Inc. sr. notes 11 1/4s, 2008 60,900
--------------
807,613
Conglomerates (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
120,000 Axia, Inc. company guaranty 10 3/4s, 2008 102,000
170,000 Cathay International Ltd. 144A sr. notes 13s, 2008 (China) 85,000
--------------
187,000
Consumer Durable Goods (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
90,000 Albecca, Inc. company guaranty 10 3/4s, 2008 71,775
30,000 Iron Age Corp. company guaranty 9 7/8s, 2008 21,600
300,000 Samsonite Corp. sr. sub. notes 10 3/4s, 2008 252,000
50,000 Sealy Mattress Co. sr. sub. notes Ser. B, 9 7/8s, 2007 49,000
--------------
394,375
Consumer Services (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
190,000 Coinmach Corp. sr. notes Ser. D, 11 3/4s, 2005 192,850
Cosmetics (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
30,000 French Fragrances, Inc. company guaranty Ser. D,
10 3/8s, 2007 28,800
40,000 French Fragrances, Inc. sr. notes Ser. B, 10 3/8s, 2007 38,000
60,000 Revlon Consumer Products sr. notes 9s, 2006 42,900
250,000 Revlon Consumer Products sr. notes 8 1/8s, 2006 177,500
--------------
287,200
Electric Utilities (1.9%)
- --------------------------------------------------------------------------------------------------------------------------
90,000 AES China Generating Co. sr. notes 10 1/8s,
2006 (China) 63,000
40,000 Applied Power Inc. sr. sub. notes 8 3/4s, 2009 41,000
40,000 Calpine Corp. sr. notes 7 7/8s, 2008 38,364
420,000 Calpine Corp. sr. notes 7 3/4s, 2009 396,900
180,000 CMS Energy Corp. sr. notes Ser. B, 6 3/4s, 2004 167,850
940,000 Midland Funding II Corp. deb. Ser. A, 11 3/4s, 2005 1,006,195
175,541 Northeast Utilities System notes Ser. A, 8.58s, 2006 175,045
350,000 Panda Global Energy Co. company guaranty 12 1/2s,
2004 (China) 175,000
150,000 York Power Funding 144A notes 12s, 2007
(Cayman Islands) 154,500
--------------
2,217,854
Electronics (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
35,000 Celestica International Ltd. 144A sr. sub. notes
10 1/2s, 2006 (Canada) 35,700
80,000 DII Group, Inc. (The) sr. sub. notes 8 1/2s, 2007 78,400
85,000 Flextronics International Ltd. sr. sub. notes Ser. B,
8 3/4s, 2007 81,175
20,000 HCC Industries, Inc. company guaranty 10 3/4s, 2007 11,400
30,000 Metromedia Fiber Network, Inc. sr. notes 10s, 2009 29,550
180,000 Metromedia Fiber Network, Inc. sr. notes Ser. B, 10s, 2008 177,300
130,000 Moog, Inc. sr. sub. notes Ser. B, 10s, 2006 131,950
155,000 Viasystems, Inc. sr. sub notes 9 3/4s, 2007 120,900
--------------
666,375
Electronics and Electrical Equipment (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
170,000 Argo-Tech Corp. company guaranty Ser. D, 8 5/8s, 2007 145,350
Entertainment (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
190,000 ITT Corp. notes 6 3/4s, 2005 167,234
190,000 Premier Parks, Inc. sr. notes 9 1/4s, 2006 178,600
50,000 Regal Cinemas, Inc. sr. sub. notes 9 1/2s, 2008 32,500
80,000 SFX Entertainment, Inc. 144A company guaranty
Ser. B, 9 1/8s, 2008 75,200
100,000 Silver Cinemas, Inc. sr. sub. notes 10 1/2s, 2005 32,500
--------------
486,034
Environmental Control (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
360,000 Allied Waste Industries, Inc. company guaranty
Ser. B, 10s, 2009 293,400
140,000 Allied Waste Industries, Inc. company guaranty
Ser. B, 7 7/8s, 2009 117,950
250,000 Waste Management, Inc. company guaranty 6 7/8s, 2009 212,100
--------------
623,450
Financial Services (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
165,000 Aames Financial Corp. sr. notes 9 1/8s, 2003 99,000
250,000 Advanta Corp. med. term notes Ser. B, 7s, 2001 234,058
50,000 AMRESCO, Inc. sr. sub. notes Ser. 98-A, 9 7/8s, 2005 35,000
40,000 Cellco Finance Corp. NV sr. sub. notes 15s, 2005
(Netherlands) 43,900
90,000 Cellco Finance Corp. NV 144A sr. notes 12 3/4s, 2005
(Netherlands) 95,400
100,000 Colonial Capital II 144A company guaranty 8.92s, 2027 90,823
120,000 Contifinancial Corp. sr. notes 8 3/8s, 2003 10,800
110,000 Contifinancial Corp. sr. notes 8 1/8s, 2008 9,900
90,000 Contifinancial Corp. sr. notes 7 1/2s, 2002 7,875
80,000 Delta Financial Corp. sr. notes 9 1/2s, 2004 52,000
75,000 Imperial Credit Capital Trust I 144A company guaranty
10 1/4s, 2002 58,125
45,000 Imperial Credit Industries, Inc. sr. notes 9 7/8s, 2007 34,200
40,000 Nationwide Credit Inc. sr. notes Ser. A, 10 1/4s, 2008 29,200
140,000 RBF Finance Co. company guaranty 11 3/8s, 2009 148,400
20,000 RBF Finance Co. company guaranty 11s, 2006 20,800
100,000 Resource America Inc. 144A sr. notes 12s, 2004 79,000
--------------
1,048,481
Food and Beverages (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
25,000 Aurora Foods, Inc. sr. sub. notes Ser. B, 9 7/8s, 2007 13,750
120,000 Aurora Foods, Inc. 144A ser. sub. notes Ser. D,
9 7/8s, 2007 66,000
80,000 Eagle Family Foods company guaranty Ser. B,
8 3/4s, 2008 63,600
160,000 RAB Enterprises, Inc. company guaranty
10 1/2s, 2005 110,400
114,000 Triarc Consumer Products, Inc. company guaranty
10 1/4s, 2009 109,155
135,000 Vlassic Foods Intl. Inc. sr. sub notes Ser. B, 10 1/4s, 2009 76,950
--------------
439,855
Gaming (1.3%)
- --------------------------------------------------------------------------------------------------------------------------
90,000 Argosy Gaming Co. company guaranty 10 3/4s, 2009 92,700
110,000 Boyd Gaming Corp. sr. sub. notes 9 1/2s, 2007 103,400
190,000 Fitzgeralds Gaming Corp. company guaranty Ser. B,
12 1/4s, 2004 (In default) (NON) 96,900
50,000 Harrahs Entertainment, Inc. company guaranty
7 1/2s, 2009 47,017
250,000 Hollywood Casino Corp. company guaranty
11 1/4s, 2007 258,125
60,000 Hollywood Park, Inc. company guaranty Ser. B,
9 1/4s, 2007 57,750
70,000 Horseshoe Gaming Holdings company guaranty
8 5/8s, 2009 64,400
60,000 Isle of Capri Black Hawk LLC 144A 1st mortgage
Ser. B, 13s, 2004 65,400
100,000 Mohegan Tribal Gaming, Auth. sr. sub. notes 8 3/4s, 2009 95,750
90,000 Park Place Entertainment sr. notes 8 1/2s, 2006 86,730
60,000 Riviera Black Hawk, Inc. 1st mtge. 13s, 2005 64,200
210,000 Trump A.C. 1st mtge. 11 1/4s, 2006 143,850
340,000 Trump Castle Funding 144A sub. notes 10 1/4s, 2003 343,400
50,000 Venetian Casino company guaranty 12 1/4s, 2004 45,500
--------------
1,565,122
Health Care (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
40,000 Bio-Rad Labs Corp. 144A sr. sub. notes 11 5/8s, 2007 40,450
30,000 Columbia/HCA Healthcare Corp. deb. 8.36s, 2024 26,775
90,000 Columbia/HCA Healthcare Corp. notes 7 1/4s, 2008 78,975
235,000 Conmed Corp. company guaranty 9s, 2008 216,200
110,000 Hudson Respiratory Care, Inc. sr. sub. notes 9 1/8s, 2008 88,000
90,000 Integrated Health Services, Inc. sr. sub. notes Ser. A,
9 1/2s, 2007 (In default) (NON) 1,800
60,000 Integrated Health Services, Inc. sr. sub. notes Ser. A,
9 1/4s, 2008 (In default) (NON) 1,200
160,000 Mariner Post-Acute Network, Inc. sr. sub. notes Ser. B,
stepped-coupon zero % (10 1/2s, 11/1/02), 2007
(In default) (NON) (STP) 800
255,000 Multicare Cos., Inc. sr. sub. notes 9s, 2007 38,250
140,000 Paracelsus Healthcare sr. sub. notes 10s, 2006 57,400
150,000 Sun Healthcare Group, Inc. sr. sub. notes Ser. B,
9 1/2s, 2007 (In default) (NON) 3,000
60,000 Sun Healthcare Group, Inc. 144A sr. sub. notes
9 3/8s, 2008 (In default) (NON) 1,200
100,000 Tenet Healthcare Corp. sr. notes 8 5/8s, 2003 98,500
80,000 Tenet Healthcare Corp. sr. notes Ser. B, 8 1/8s, 2008 73,600
--------------
726,150
Hospital Management and Medical Services (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
70,000 Triad Hospitals Holdings company guaranty
Ser. B, 11s, 2009 71,575
Insurance and Finance (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
150,000 GS Escrow Corp. sr. notes 7 1/8s, 2005 134,133
Lodging (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
80,000 Epic Resorts LLC company guaranty Ser. B, 13s, 2005 58,400
220,000 HMH Properties, Inc. company guaranty Ser. B,
7 7/8s, 2008 190,850
40,000 Host Marriott L.P. sr. notes Ser. E, 8 3/8s, 2006 36,900
125,000 Prime Hospitality Corp. sub. notes 9 3/4s, 2007 119,688
--------------
405,838
Manufacturing (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
150,000 Blount, Inc. company guaranty 13s, 2009 158,250
90,000 Insilco Holding Co. sr. disc. notes stepped-coupon zero %
(14s, 8/15/03), 2008 (STP) 43,200
--------------
201,450
Medical Supplies and Devices (--%)
- --------------------------------------------------------------------------------------------------------------------------
90,000 Mediq, Inc. deb. stepped-coupon zero %
(13s, 6/1/03), 2009 (STP) 4,500
80,000 Mediq, Inc. company guaranty 11s, 2008 8,000
--------------
12,500
Metals and Mining (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
64,000 Anker Coal Group, Inc. 144A sec. notes 14 1/4s, 2007 (PIK) 46,720
85,000 Continental Global Group sr. notes Ser. B, 11s, 2007 41,650
75,000 Kaiser Aluminum & Chemical Corp. sr. sub. notes
12 3/4s, 2003 73,688
120,000 Lodestar Holdings, Inc. company guaranty 11 1/2s, 2005 36,000
90,000 WHX Corp. sr. notes 10 1/2s, 2005 84,825
--------------
282,883
Motion Picture Distribution (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
190,000 AMC Entertainment, Inc. sr. sub. notes 9 1/2s, 2009 146,300
70,000 Cinemark USA, Inc. sr. sub. notes 8 1/2s, 2008 (Mexico) 56,700
351,000 Diva Systems Corp. sr. disc. notes Ser. B, stepped-coupon
zero % (12 5/8s, 3/1/03), 2008 (STP) 186,030
115,000 United Artists Theatre sr. sub. notes 9 3/4s, 2008 9,200
--------------
398,230
Oil and Gas (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
170,000 Belco Oil & Gas Corp. company guaranty
Ser. B, 10 1/2s, 2006 174,250
95,000 Benton Oil & Gas Co. sr. notes 9 3/8s, 2007 56,763
70,000 Gulf Canada Resources, Ltd. sr. notes 8 3/8s, 2005
(Canada) 68,250
80,000 HS Resources, Inc. sr. sub. notes Ser. B, 9 1/4s, 2006 76,800
40,000 Leviathan Gas Corp. company guaranty Ser. B,
10 3/8s, 2009 40,800
80,000 Ocean Energy, Inc. company guaranty Ser. B,
8 7/8s, 2007 78,000
100,000 Ocean Energy, Inc. company guaranty Ser. B,
8 3/8s, 2008 95,250
90,000 R & B Falcon Corp. sr. notes 12 1/4s, 2006 96,750
60,000 RAM Energy Inc. sr. notes 11 1/2s, 2008 28,800
60,000 Seven Seas Petroleum sr. notes Ser. B, 12 1/2s, 2005 18,000
40,000 Snyder Oil Corp. sr. sub. notes 8 3/4s, 2007 39,600
160,000 Vintage Petroleum sr. sub. notes 9 3/4s, 2009 161,600
--------------
934,863
Packaging and Containers (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
200,000 AEP Industries, Inc. sr. sub. notes 9 7/8s, 2007 176,000
160,000 Gaylord Container Corp. sr. sub. notes 9 7/8s, 2008 131,200
80,000 Huntsman Packaging Corp. company guaranty
9 1/8s, 2007 76,000
105,000 Innova S De R.L. sr. notes 12 7/8s, 2007 (Mexico) 97,125
20,000 Owens-Illinois, Inc. deb. 7.8s, 2018 17,487
150,000 Owens-Illinois, Inc. sr. notes 7.35s, 2008 135,722
110,000 Packaging Corp. company guaranty 9 5/8s, 2009 110,275
40,000 Radnor Holdings, Inc. sr. notes 10s, 2003 37,000
270,000 Riverwood International Corp. company guaranty
10 7/8s, 2008 258,525
--------------
1,039,334
Paper and Forest Products (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
155,000 APP Finance II Mauritius Ltd. bonds stepped-coupon
12s, (16s, 2/15/04), 2049 (Indonesia) (STP) 97,650
10,000 Boise Cascade Co. med. term notes Ser. A, 7.43s, 2005 9,421
90,000 Indah Kiat Financial Mauritius Ltd. company guaranty
10s, 2007 (Indonesia) 61,200
195,000 Pacifica Papers, Inc. sr. notes 10s, 2009 (Canada) 194,025
255,000 Pindo Deli Finance Mauritius Ltd. company guaranty
10 3/4s, 2007 (Indonesia) 173,400
200,000 Repap New Brunswick sr. notes 10 5/8s, 2005 (Canada) 185,000
30,000 Republic Group, Inc. sr. sub. notes 9 1/2s, 2008 27,000
60,000 Tembec Industries, Inc. company guaranty 8 5/8s,
2009 (Canada) 57,750
--------------
805,446
Pharmaceuticals and Biotechnology (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
40,000 Biovail Corp. International sr. notes 10 7/8s, 2005 45,200
115,000 ICN Pharmaceuticals, Inc. 144A sr. notes 9 1/4s, 2005 109,538
70,000 ICN Pharmaceuticals, Inc. 144A sr. notes 8 3/4s, 2008 64,750
--------------
219,488
Publishing (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
150,000 Affinity Group Holdings sr. notes 11s, 2007 138,000
60,000 American Media Operation, Inc. sr. sub. notes
10 1/4s, 2009 59,550
180,000 Garden State Newspapers, Inc. sr. sub. notes Ser. B,
8 3/4s, 2009 164,700
60,000 Perry-Judd company guaranty 10 5/8s, 2007 50,250
35,012 Von Hoffman Press, Inc. 144A sr. sub. notes 13 1/2s, 2009 31,861
40,000 Von Hoffman Press, Inc. 144A sr. sub. notes 10 3/8s, 2007 38,400
--------------
482,761
Railroads (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
25,000 MRS Logistica, S.A. bonds Ser. B, 10 5/8s, 2005 (Brazil) 21,500
160,000 TFM S.A. de C.V. company guaranty stepped-coupon
zero % (11 3/4s, 6/15/02), 2009 (Mexico) (STP) 113,200
--------------
134,700
REIT (Real Estate Investment Trust) (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
190,000 Tanger Properties Ltd. partnership gtd. notes
8 3/4s, 2001 188,102
Restaurants (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
100,000 FRD Acquisition Co. sr. notes Ser. B, 12 1/2s, 2004 60,000
Retail (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
140,000 Home Interiors & Gifts, Inc. company guaranty
10 1/8s, 2008 116,200
115,000 Kasper A.S.L. Ltd. sr. notes 12 3/4s, 2004 74,750
175,000 Mothers Work, Inc. sr. notes 12 5/8s, 2005 169,750
75,000 NBTY Inc. 144A sr. sub. notes 8 5/8s, 2007 67,500
160,000 North Atlantic Trading Co. company guaranty
Ser. B, 11s, 2004 152,800
110,000 Zale Corp. sr. notes Ser. B, 8 1/2s, 2007 106,150
--------------
687,150
Satellite Services (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
125,000 Gloden Sky DBS, Inc. sr. disc. notes Ser. B, stepped-coupon
zero % (13 1/2s, 3/1/04), 2007 (STP) 82,500
75,000 Golden Sky Systems company guaranty Ser. B,
12 3/8s, 2006 82,875
65,000 Satelites Mexicanos S.A. de C.V. 144A sr. notes
10 1/8s, 2004 (Mexico) 50,700
--------------
216,075
Semiconductors (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
100,000 Amkor Technology, Inc. sr. notes 9 1/4s, 2006 97,000
40,000 Chippic Intl. Ltd. 144A company guaranty
12 3/4s, 2009 42,000
140,000 Fairchild Semiconductor Corp. sr. sub. notes
10 1/8s, 2007 137,900
90,000 Zilog, Inc. company guaranty Ser. B, 9 1/2s, 2005 81,900
--------------
358,800
Shipping (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
40,000 International Shipholding Corp. sr. notes 7 3/4s, 2007 35,600
105,000 Johnstown America Industries, Inc. company guaranty
Ser. C, 11 3/4s, 2005 113,138
30,000 Transportacion Maritima Mexicana S.A. de C.V. notes
9 1/4s, 2003 26,250
--------------
174,988
Specialty Consumer Products (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
105,000 Decora Industries, Inc. sr. sec. notes Ser. B, 11s, 2005 55,650
Steel (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
250,000 AK Steel Corp. company guaranty 7 7/8s, 2009 226,250
40,000 Armco, Inc. sr. notes 8 7/8s, 2008 38,800
190,000 LTV Corp. sr. notes 11 3/4s, 2009 193,800
80,000 National Steel Corp. 1st mtge. Ser. D, 9 7/8s, 2009 79,200
100,000 Wheeling-Pittsburgh Steel Corp. sr. notes 9 1/4s, 2007 93,750
--------------
631,800
Telecommunications (6.0%)
- --------------------------------------------------------------------------------------------------------------------------
325,000 21st Century Telecom Group sub. deb. 13 3/4s, 2010 (PIK) 292,500
80,000 Alaska Communications Systems Corp. company
guaranty 9 3/8s, 2009 74,600
80,000 Bestel S.A. de C.V. sr. disc. notes stepped-coupon zero %
(12 3/4s, 5/15/03), 2005 (Mexico) (STP) 61,600
80,000 Birch Telecommunications, Inc. sr. notes 14s, 2008 80,000
50,000 Caprock Communications Corp. sr. notes 11 1/2s, 2009 51,000
30,000 CapRock Communications Corp. sr. notes Ser. B,
12s, 2008 30,900
120,000 Carrier1 Intl. S.A. sr. notes Ser. B, 13 1/4s, 2009
(Luxembourg) 126,000
100,000 Colt Telecommunications Group PLC sr. disc. notes
stepped-coupon zero %, (12s, 12/15/01), 2006
(United Kingdom) (STP) 89,000
90,000 Covad Communications Group, Inc. sr. notes
12 1/2s, 2009 92,700
125,000 Covad Communications Group, Inc. 144A sr. notes
12s, 2010 124,063
330,000 Echostar DBS Corp. sr. notes 9 3/8s, 2009 322,575
65,000 Esprit Telecom Group PLC sr. notes 11 1/2s, 2007
(United Kingdom) 62,400
30,000 Exodus Communications, Inc. sr. notes 11 1/4s, 2008 30,600
120,000 Exodus Communications, Inc. 144A sr. notes 10 3/4s, 2009 121,800
420,000 Firstworld Communication Corp. sr. disc. notes
stepped-coupon zero % (13, 4/15/03), 2008 (STP) 214,200
470,000 Global Crossing Holdings, Ltd. company guaranty
9 5/8s, 2008 458,250
30,000 Globe Telecom, Inc. 144A sr. notes 13s, 2009 (Philippines) 33,225
30,000 Hermes Europe Railtel 144A sr. notes 11 1/2s, 2007
(Netherlands) 30,000
130,800 Hyperion Telecommunications Corp., Inc. sr. notes Ser. B,
12 1/4s, 2004 139,629
615,000 ICG Services, Inc. sr. disc. notes stepped-coupon zero %
(9 7/8s, 5/1/03), 2008 (STP) 352,088
140,000 Intermedia Communications, Inc. sr. notes Ser. B,
8.6s, 2008 127,750
180,000 IPC Information Systems, Inc. sr. disc. notes stepped-coupon
zero % (10 7/8s, 11/1/01), 2008 (STP) 156,600
500,000 KMC Telecom Holdings, Inc. sr. disc. notes stepped-coupon
zero % (12 1/2s, 2/15/03), 2008 (STP) 290,000
225,000 Knology Holdings, Inc. sr. disc. notes stepped-coupon zero %
(11 7/8s, 10/15/02), 2007 (STP) 146,250
65,000 L-3 Communications Corp. sr. sub. notes Ser. B,
10 3/8s, 2007 65,325
250,000 L-3 Communications Corp. sr. notes 9 1/8s, 2008 225,625
50,000 L-3 Communications Corp. sr. sub. notes 8 1/2s, 2008 45,250
40,000 L-3 Communications Corp. company guaranty Ser. B,
8s, 2008 35,100
10,000 Level 3 Communication, Inc. 144A sr. notes 11 1/4s, 2010 9,950
160,000 Level 3 Communication, Inc. 144A sr. notes 11s, 2008 160,400
140,000 Logix Communications Enterprises sr. notes 12 1/4s, 2008 101,500
210,000 Madison River Capital 144A sr. notes 13 1/4s, 2010 206,850
200,000 Microcell Telecommunications sr. disc. notes Ser. B,
stepped-coupon zero % (14s, 12/1/01), 2006
(Canada) (STP) 180,000
45,000 Netia Holdings B.V. 144A company guaranty
stepped-coupon zero % (11 1/4s, 11/1/01),
2007 (Poland) (STP) 31,613
40,000 Netia Holdings B.V. 144A company guaranty 10 1/4s,
2007 (Poland) 35,300
40,000 Nextlink Communications, Inc. 144A sr. notes
10 1/2s, 2009 39,500
150,000 NorthEast Optic Network, Inc. sr. notes 12 3/4s, 2008 157,500
100,000 NTL Communications Corp. sr. notes Ser. B, 11 1/2s, 2008 105,250
160,000 Pathnet, Inc. sr. notes 12 1/4s, 2008 105,600
145,000 Qwest Communications International, Inc. sr. disc. notes
stepped-coupon zero % (9.47s, 10/15/02), 2007 (STP) 119,476
100,000 Rhythms Netconnections Inc. 144A sr. notes 14s, 2010 98,500
89,000 RSL Communications, Ltd. company guaranty
12 1/4s, 2006 90,113
70,000 RSL Communications, Ltd. 144A 10 1/2s, 2008 61,250
110,000 RSL Communications, Ltd. company guaranty
9 1/8s, 2008 88,000
40,000 Spectrasite Holdings, Inc. sr. disc. notes stepped-coupon
zero % (11 1/4s, 4/15/04), 2009 (STP) 23,200
90,000 Startec Global Communications Corp. sr. notes 12s, 2008 75,150
60,000 Telecommunications Techniques, Inc. company guaranty
9 3/4s, 2008 54,750
55,000 Telehub Communications Corp. company guaranty
stepped-coupon zero % (13 7/8s, 7/31/02), 2005 (STP) 2,750
200,000 Time Warner Telecom Inc. sr. notes 9 3/4s, 2008 201,000
90,000 Versatel Telecom B.V. sr. notes 13 1/4s, 2008 (Netherlands) 98,100
40,000 Versatel Telecom B.V. sr. notes 13 1/4s, 2008 (Netherlands) 43,600
120,000 Viatel, Inc. sr. disc. notes stepped-coupon zero %
(12 1/2s, 4/15/03), 2008 (STP) 70,200
164,000 Viatel, Inc. sr. notes 11 1/2s, 2009 154,160
220,000 Viatel, Inc. sr. notes 11 1/4s, 2008 205,700
250,000 Williams Communications Group, Inc. sr. notes
10 7/8s, 2009 254,375
160,000 WinStar Communications, Inc. sr. sub. notes
stepped-coupon zero % (15s, 3/1/02), 2007 (STP) 236,800
125,000 World Access, Inc. sr. notes Ser. B, 13 1/4s, 2008 113,594
--------------
7,003,211
Telephone Services (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
260,000 Alamosa PCS Holdings, Inc. company guaranty
stepped-coupon zero % (12 7/8s, 2/15/05), 2010 (STP) 137,800
130,000 Allegiance Telecom, Inc. sr. disc. notes Ser. B, stepped-coupon
zero % (11 3/4s, 2/15/03), 2008 (STP) 94,900
30,000 Allegiance Telecom, Inc. sr. notes 12 7/8s, 2008 33,450
210,000 BTI Telecom Corp. sr. notes 10 1/2s, 2007 184,800
175,000 Call-Net Enterprises, Inc. sr. disc. notes stepped-coupon
zero % (8.94s, 8/15/03), 2008 (Canada) (STP) 84,656
70,000 Call-Net Enterprises, Inc. sr. notes 8s, 2008 (Canada) 53,900
170,000 Flag Ltd. 144A sr. notes 8 1/4s, 2008 (Bermuda) 153,000
105,000 Globo Communicacoes 144A company guaranty
10 1/2s, 2006 (Brazil) 91,350
20,000 Long Distance International, Inc. sr. notes 12 1/4s, 2008
(In default) (NON) 14,000
45,000 Onepoint Communications, Inc. company guaranty
Ser. B, 14 1/2s, 2008 29,250
250,000 Primus Telecommunications Group, Inc. sr. notes
12 3/4s, 2009 257,500
30,000 RCN Corp. sr. disc. notes stepped-coupon zero %,
(11 1/8s, 10/15/02), 2007 (STP) 19,950
45,000 Transtel S.A. pass through certificates 12 1/2s, 2007 26,100
50,000 US Xchange LLC sr. notes 15s, 2008 30,000
--------------
1,210,656
Textiles (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
245,000 Day International Group, Inc. company guaranty
9 1/2s, 2008 200,900
120,000 Galey & Lord, Inc. company guaranty 9 1/8s, 2008 36,600
70,000 Polymer Group, Inc. company guaranty Ser. B, 9s, 2007 65,800
40,000 Polymer Group, Inc. company guaranty Ser. B, 8 3/4s, 2008 37,100
--------------
340,400
Transportation (--%)
- --------------------------------------------------------------------------------------------------------------------------
60,000 Kitty Hawk, Inc. company guaranty 9.95s, 2004 57,150
Wireless Communications (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
85,000 Neuvo Grupo Iusacell S.A. 144A sr. notes
14 1/4s, 2006 (Mexico) 93,383
100,000 Orbital Imaging Corp. sr. notes Ser. B, 11 5/8s, 2005 70,000
55,000 Paging Network Do Brasil sr. notes 13 1/2s, 2005 (Brazil) 6,050
110,000 Telecorp PCS Inc. company guaranty stepped-coupon
zero % (11 5/8s, 4/15/04), 2009 (STP) 71,500
250,000 Voicestream Wire Corp. 144A sr. notes 10 3/8s, 2009 258,750
--------------
499,683
--------------
Total Corporate Bonds and Notes (cost $43,878,943) $ 38,790,032
CONVERTIBLE PREFERRED STOCKS (13.9%) (a)
NUMBER OF SHARES VALUE
Automotive (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
35,000 Federal-Mogul Financial Trust $3.50 cum. cv. pfd. $ 1,032,500
Banking (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
15,000 Sovereign Bancorp, Inc. $7.50 cv. pfd. 716,250
Broadcasting (1.3%)
- --------------------------------------------------------------------------------------------------------------------------
50,000 Sinclair Broadcast Group, Inc. $3.00 cv. pfd. 1,487,500
Building Materials (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
12,500 Owens Corning Capital LLC $3.25 cv. pfd. 381,250
Electronics (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
220 Interact Electronic $14.00 cv. pfd 220
10,000 Pioneer Standard Electronics, Inc. 144A $3.375 cv. pfd. 640,000
--------------
640,220
Energy (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
15,000 Evi, Inc. $2.50 cum. cv. pfd. 594,375
Engineering & Construction (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
30,000 Txi Capital Trust I $2.75 cv. pfd. 960,000
Health Care Services (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
24,000 Caremark RX Capital Trust I 144A $3.50 cv. pfd. 924,000
Medical Technology (1.2%)
- --------------------------------------------------------------------------------------------------------------------------
45,000 Owens & Minor Trust I 144A Ser. A, $2.688 cum. cv. pfd. 1,451,250
Metals (1.9%)
- --------------------------------------------------------------------------------------------------------------------------
60,000 Freeport-McMoRan Copper Co., Inc. $1.75 cv. pfd. 937,500
600 LTV Corp. (The) 144A $4.13 cv. pfd. 30,900
20,000 Titanium Metals Corp. $3.313 cv. pfd. 227,500
28,000 USX Capital Trust I $3.375 cum. cv. pfd. 1,001,000
--------------
2,196,900
Oil & Gas (1.1%)
- --------------------------------------------------------------------------------------------------------------------------
590 Chesapeake Energy Corp. $3.50 cum. cv. pfd. 21,830
45,000 Lomack Financing Trust 144A $2.875 cv. pfd. 765,000
10,000 Tosco Financing Trust $2.875 cv. pfd. 465,000
--------------
1,251,830
Retail (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
25,000 K mart Financing I $3.875 cum. cv. pfd. 1,015,625
Technology Services (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
60,000 Vanstar Financial Trust Corp. $3.375 cv. pfd. 697,500
Telecommunications (1.7%)
- --------------------------------------------------------------------------------------------------------------------------
50,000 Intermedia Communications, Inc. Ser. F, $7.00 cv. pfd. 2,031,250
Textiles (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
29,000 Designer Finance $3.00 cum. cv. pfd. 790,250
--------------
Total Convertible Preferred Stocks (cost $19,475,717) $ 16,170,700
PREFERRED STOCKS (1.9%) (a)
NUMBER OF SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
2,926 AmeriKing, Inc. $3.25 pfd. (PIK) $ 32,186
3,115 Chevy Chase Capital Corp. Ser. A, $5.188 pfd. (PIK) 165,095
894 Citadel Broadcasting Inc. 144A $13.25 cum. pfd. (PIK) 99,905
71 Concentric Network Corp. Ser. B, 13.50% pfd. (PIK) 72,287
3,605 CSC Holdings, Inc. Ser. M, $11.125 cum. pfd. (PIK) 390,241
119 Dobson Communications Corp. 13.00% pfd. 129,115
111 Dobson Communications Corp. 144A 12.25%
pfd. (PIK) 111,000
4,700 Fitzgeralds Gaming $3.75 cum. pfd. 47
130 Fresenius Medical Capital Trust I Ser. D, $9.00 company
guaranty, pfd. (Germany) 125,775
140 Fresenius Medical Capital Trust II $7.875 company
guaranty, pfd. (Germany) 126,350
2,364 Lady Luck Gaming Corp. $11.25 pfd. 122,928
99 NEXTEL Communications, Inc. Ser. D, 13.00%
cum. pfd. (PIK) 104,940
135 Nextlink Communications, Inc. 144A $7.00
cum. pfd. (PIK) 7,020
423 Packaging Corp. of America $12.375 pfd. (PIK) 49,385
21 Paxson Communications Corp. 13.25% cum. pfd. (PIK) 215,250
87 R&B Falcon Corp. 13.875% pfd. 89,610
130 Rural Cellular Corp. 12.25% pfd. (PIK) 130,325
165 WinStar Communications, Inc. 144A 14.25%
cum. pfd. (PIK) 189,750
--------------
Total Preferred Stocks (cost $2,237,117) $ 2,161,209
COMMON STOCKS (0.6%) (a)
NUMBER OF SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
50 AmeriKing, Inc. (NON) $ 500
1,200 AMFM, Inc. (NON) 73,650
25,470 Celcaribe (NON) 9,551
35,772 Celcaribe S.A. 144A (Colombia) (NON) 62,601
9,047 Fitzgerald Gaming Corp. (NON) 2,262
1,885 IFINT Diversified Holdings 144A (NON) 3,770
2,391 Lady Luck Gaming Corp. (NON) 27,945
728 MGC Communications, Inc. (NON) 50,232
73 Mothers Work, Inc. (NON) 830
55 Paging Do Brazil Holdings Co., LLC 144A
Class B, (Brazil) (NON) 1
144 Premium Holdings (L.P.) 144A (NON) 1,436
33,430 PSF Holdings LLC Class A (NON) 334,300
2,200 Spanish Broadcasting Systems (NON) 33,660
3,750 Specialty Foods Acquisition Corp. (NON) 38
795 Viatel, Inc. (NON) 44,768
162 WinStar Communications. Inc. (NON) 12,535
--------------
Total Common Stocks (cost $1,276,235) $ 658,079
WARRANTS (0.4%) (a) (NON) EXPIRATION
NUMBER OF WARRANTS DATE VALUE
- --------------------------------------------------------------------------------------------------------------------------
250 21st Century Telecom Group 144A 2/15/10 $ 6,875
80 Bestel S.A. (Mexico) 5/15/05 9,600
80 Birch Telecommunications, Inc. 144A (PIK) 6/15/08 4,400
721 Cellnet Data Systems, Inc. 10/1/07 3,605
90 Club Regina, Inc. 144A 12/1/04 1
500 Comunicacion Cellular 144A (Colombia) 11/15/03 5,000
1,417 Consorcio Ecuatoriano 144A (Ecuador) 10/1/00 142
210 Decrane Holdings 9/30/08 2
195 Diva Systems Corp. 5/15/06 78,000
1,053 Diva Systems Corp. 3/1/08 8,424
80 Epic Resorts 6/15/05 1
95 Esat Holdings, Inc. (Ireland) 2/1/07 21,375
420 Firstworld Communication 4/15/08 84,000
1,617 ICG Communications 10/15/05 28,295
90 Insilco Holding Co. 8/15/08 315
220 Interact Systems, Inc. 8/1/03 2
220 Interact Systems, Inc. 144A 12/15/09 2
105 International Wireless Communications
Holdings 144A 8/15/01 0
175 Iridium World Com 144A 7/15/05 0
210 KMC Telecom Holdings, Inc. 4/15/08 735
245 Knology Holdings 10/22/07 551
20 Long Distance International, Inc. 144A 4/13/08 25
160 McCaw International Ltd. 4/15/07 720
90 Mediq Inc. 144A 6/1/09 1
120 Network Plus Corp. 2/19/09 78,000
45 Onepoint Communications, Inc. 6/1/08 450
100 Orbital Imaging Corp. 144A 3/1/05 2,000
160 Pathnet, Inc. 144A 4/15/08 1,600
80 R&B Falcon Corp. 144A 5/1/09 22,000
350 Signature Brands Ltd. 8/15/02 7,000
90 Startec Global Communications Corp. 5/15/08 1,620
75 Sterling Chemicals Holdings 8/15/08 1,350
55 Telehub Communications Corp. 7/31/05 28
520 UIH Australia/Pacific, Inc. 144A 5/15/06 15,600
130 Versatel Telecom B.V. 144A (Netherlands) 5/15/08 101,400
20,520 Wright Medical Technology, Inc. 144A 6/30/03 0
--------------
Total Warrants (cost $157,320) $ 483,119
UNITS (0.2%) (a)
NUMBER OF UNITS VALUE
- --------------------------------------------------------------------------------------------------------------------------
250 Australis Media, Ltd. units stepped-coupon zero %
(15 3/4s, 5/15/00), 2003 (In default) (Australia) (NON) (STP) $ 25
150 Equinix, Inc. 144A units 13s, 2007 154,500
100 Leap Wireless 144A units 12 1/2s, 2010 101,500
210 XCL Ltd. units sr. sec. notes 13 1/2s, 2004 (In default) (NON) 21,000
600 XCL Ltd. 144A units cum. pfd. 9.50%, 2006 (PIK) 600
115 XCL Ltd 144A Ser. A, units cum. cv. pfd. 9.50%, 2006 (PIK) 115
--------------
Total Units (cost $771,997) $ 277,740
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $121,378,049) (b) $ 115,327,984
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $116,100,273.
(b) The aggregate identified cost on a tax basis is $121,871,294, resulting in gross unrealized appreciation and
depreciation of $10,369,415 and $16,912,725 respectively, or net unrealized depreciation of $6,543,310.
(NON) Non-income-producing security.
(STP) The interest or dividend rate and date shown parenthetically represent the new interest or dividend rate to be paid
and the date the fund will begin receiving interest or dividend income at this rate.
(PIK) Income may be received in cash or additional securities at the discretion of the issuer.
144A after the name of a security represents those exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional
buyers.
The rates shown on Floating Rate Notes (FRN) are the current interest rates shown at February 29, 2000, which are
subject to change based on the terms of the security.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
February 29, 2000 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $121,378,049) (Note 1) $115,327,984
- -----------------------------------------------------------------------------------------------
Cash 43,374
- -----------------------------------------------------------------------------------------------
Dividends, interest and other receivables 1,993,154
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 345,950
- -----------------------------------------------------------------------------------------------
Total assets 117,710,462
Liabilities
- -----------------------------------------------------------------------------------------------
Distributions payable to shareholders 966,363
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 352,252
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 206,286
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 24,772
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 15,265
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,039
- -----------------------------------------------------------------------------------------------
Other accrued expenses 44,212
- -----------------------------------------------------------------------------------------------
Total liabilities 1,610,189
- -----------------------------------------------------------------------------------------------
Net assets $116,100,273
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Note 1) $128,444,236
- -----------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 1,095,219
- -----------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (7,389,117)
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (6,050,065)
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $116,100,273
Computation of net asset value
- -----------------------------------------------------------------------------------------------
Net asset value per share ($116,100,273 divided by 13,683,315 shares) $8.48
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended February 29, 2000 (Unaudited)
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Interest income $4,911,569
- -----------------------------------------------------------------------------------------------
Dividends 873,160
- -----------------------------------------------------------------------------------------------
Total investment income 5,784,729
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 414,003
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 91,160
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 7,488
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,198
- -----------------------------------------------------------------------------------------------
Reports to shareholders 9,720
- -----------------------------------------------------------------------------------------------
Auditing 30,088
- -----------------------------------------------------------------------------------------------
Legal 9,133
- -----------------------------------------------------------------------------------------------
Postage 7,052
- -----------------------------------------------------------------------------------------------
Exchange listing fees 24,715
- -----------------------------------------------------------------------------------------------
Other 6,227
- -----------------------------------------------------------------------------------------------
Total expenses 602,784
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (2,749)
- -----------------------------------------------------------------------------------------------
Net expenses 600,035
- -----------------------------------------------------------------------------------------------
Net investment income 5,184,694
- -----------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (573,540)
- -----------------------------------------------------------------------------------------------
Net realized loss on futures contracts (Note 1) (4,939)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 3,458,805
- -----------------------------------------------------------------------------------------------
Net gain on investments 2,880,326
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $8,065,020
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
February 29 August 31
2000* 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 5,184,694 $ 11,187,772
- ---------------------------------------------------------------------------------------------------------------
Net realized loss on investments (578,479) (6,660,169)
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 3,458,805 2,151,231
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 8,065,020 6,678,834
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income (5,826,179) (11,015,483)
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- (2,461,525)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions 285,888 1,180,572
- ---------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 2,524,729 (5,617,602)
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 113,575,544 119,193,146
- ---------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $1,095,219 and $1,736,704, respectively) $116,100,273 $113,575,544
- ---------------------------------------------------------------------------------------------------------------
Number of fund shares
- ---------------------------------------------------------------------------------------------------------------
Shares outstanding at beginning of period 13,648,608 13,515,511
- ---------------------------------------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 34,707 133,097
- ---------------------------------------------------------------------------------------------------------------
Shares outstanding at end of period 13,683,315 13,648,608
- ---------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
- ----------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share February 29
operating performance (Unaudited) Year ended August 31
- ----------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.32 $8.82 $10.35 $9.48 $9.49 $9.13
- ----------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income .38 .82 .90 .86 .88 .79
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .21 (.33) (1.20) .92 (.04) .42
- ----------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .59 .49 (.30) 1.78 .84 1.21
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.43) (.81) (.85) (.85) (.85) (.85)
- ----------------------------------------------------------------------------------------------------------------------------------
From net realized
gains on investments -- (.18) (.38) (.06) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (.43) (.99) (1.23) (.91) (.85) (.85)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.48 $8.32 $8.82 $10.35 $9.48 $9.49
- ----------------------------------------------------------------------------------------------------------------------------------
Market price,
end of period $6.875 $8.813 $8.937 $10.562 $10.125 $10.000
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------------------------------------
Total return at
market price (%)(a) (17.47)* 10.29 (4.74) 14.29 10.63 12.60
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $116,100 $113,576 $119,193 $138,400 $125,864 $124,911
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .53* 1.11 1.13 1.03 1.06 1.00
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.60* 9.72 9.01 8.80 9.19 8.73
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 29.18* 78.62 59.13 58.88 56.82 61.19
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Total 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 August 31, 1996 and thereafter includes amounts paid through
expense offset arrangements. Prior period ratios exclude these amounts. (Note 2).
</TABLE>
Notes to financial statements
February 29, 2000 (Unaudited)
Note 1
Significant accounting policies
Putnam High Income Convertible and Bond Fund (the "fund") is registered
under the Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The fund's primary investment
objective is high current income; its secondary objective is capital
appreciation. The fund invests in high-yielding convertible securities.
The fund seeks to augment current income by investing in non-convertible
securities, lower-rated, or non-rated debt securities, which are believed
not to involve undue risk to income or principal.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period.
Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sales price on its principal exchange, or if no sales are
reported -- as in the case of some securities traded over-the-counter --
the last reported bid price. Short-term investments having remaining
maturities of 60 days or less are stated at amortized cost, which
approximates market value. Other investments, including restricted
securities, are stated at fair value following procedures approved by the
Trustees. Market quotations are not considered to be readily available for
certain debt obligations; such investments are stated at fair value on the
basis of valuations furnished by a pricing service or dealers, approved by
the Trustees, which determine valuations for normal institutional-size
trading units of such securities using methods based on market
transactions for comparable securities and variable relationships between
securities that are generally recognized by institutional traders.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam Investment Management, Inc. ("Putnam Management"), the fund's
manager, a wholly-owned subsidiary of Putnam Investments, Inc. These
balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the market
value of which at the time of purchase is required to be in an amount at
least equal to the resale price, including accrued interest. Collateral
for certain tri-party repurchase agreements is held at the counterparty's
custodian in a segregated account for the benefit of the fund and the
counterparty. Putnam Management is responsible for determining that the
value of these underlying securities is at all times at least equal to the
resale price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis.
Interest income is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date. Discounts on zero coupon bonds, original
issue discount bonds, stepped-coupon bonds and payment-in-kind bonds are
accreted according to the yield-to-maturity basis.
Any premium resulting from the purchase of stepped-coupon securities in
excess of market value is amortized on a yield-to-maturity basis.
E) Futures and options contracts The fund may use futures and options
contracts to hedge against changes in the values of securities the fund
owns or expects to purchase. The fund may also write options on securities
it owns or in which it may invest to increase its current returns.
The potential risk to the fund is that the change in value of futures and
options contracts may not correspond to the change in value of the hedged
instruments. In addition, losses may arise from changes in the value of
the underlying instruments, if there is an illiquid secondary market for
the contracts, or if the counterparty to the contract is unable to
perform. When the contract is closed, the fund records a realized gain or
loss equal to the difference between the value of the contract at the time
it was opened and the value at the time it was closed. Realized gains and
losses on purchased options are included in realized gains and losses on
investment securities.
Futures contracts are valued at the quoted daily settlement prices
established by the exchange on which they trade. Exchange traded options
are valued at the last sale price, or if no sales are reported, the last
bid price for purchased options and the last ask price for written
options. Options traded over-the-counter are valued using prices supplied
by dealers.
F) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies. It is also the intention of the fund to distribute an amount
sufficient to avoid imposition of any excise tax under Section 4982 of the
Internal Revenue Code of 1986, as amended. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held nor for excise tax on income and capital
gains.
At August 31, 1999, the fund had a capital loss carryover of approximately
$6,120,000 available to offset future net capital gain, if any, which will
expire on August 31, 2007.
G) Distributions to shareholders Distributions to shareholders are
recorded by the fund on the ex-dividend date. At certain times, the fund
may pay distributions at a level rate even though, as a result of market
conditions or investment decisions, the fund may not achieve projected
investment results for a given period. The amount and character of income
and gains to be distributed are determined in accordance with income tax
regulations, which may differ from generally accepted accounting
principles. Reclassifications are made to the fund's capital accounts to
reflect income and gains available for distribution (or available capital
loss carryovers) under income tax regulations.
Note 2
Management fee, administrative
services and other transactions
Compensation of Putnam Management, for management and investment advisory
services, is paid quarterly based on the average net assets of the fund.
Such fee is based on the following annual rates: 0.75% of the first $500
million of average weekly net assets, 0.65% of the next $500 million,
0.60% of the next $500 million, and 0.55% of any amount over $1.5 billion.
The fund reimburses Putnam Management an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The aggregate
amount of all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam Fiduciary
Trust Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the six months ended February 29, 2000, fund expenses were reduced by
$2,749 under expense offset arrangements with PFTC. Investor servicing and
custodian fees reported in the Statement of operations exclude these
credits. The fund could have invested a portion of the assets utilized in
connection with the expense offset arrangements in an income producing
asset if it had not entered into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $652 has
been allocated to the fund, and an additional fee for each Trustee's
meeting attended. Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as Trustee for at least five years. Benefits under the Pension Plan
are equal to 50% of the Trustee's average total retainer and meeting fees
for the three years preceding retirement. Pension expense for the fund is
included in Compensation of Trustees in the Statement of operations.
Accrued pension liability is included in Payable for compensation of
Trustees in the Statement of assets and liabilities.
Note 3
Purchase and sales of securities
During the six months ended February 29, 2000, purchases and sales of
investment securities other than short-term investments aggregated
$34,230,356 and $32,066,248, respectively. There were no purchases and
sales of U.S. government obligations.
The Putnam family of funds
The following is a complete list of Putnam's open-end mutual funds. Please call
your financial advisor or Putnam at 1-800-225-1581 to obtain a prospectus for
any Putnam fund. It contains more complete information, including charges and
expenses. Please read it carefully before you invest or send money.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund [DBL. DAGGER]
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Century Growth Fund [DBL. DAGGER]
New Opportunities Fund [DBL. DAGGER]
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund *
U.S. Government Income Trust
TAX-FREE INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund **
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey,
New York, Ohio and Pennsylvania
State tax-free money market funds [SECTION MARK] **
California, New York
ASSET ALLOCATION FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* Formerly Putnam Diversified Income Trust II
[DBL. DAGGER] Closed to new investors. Some exceptions may apply.
Contact Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at www.putnaminv.com.
Welcome to www.putnaminv.com
Now you can use your PC to get up-to-date information about your funds, learn
more about investing and retirement planning, and access market news and
economic outlooks from Putnam.
VISIT PUTNAM'S SITE ON THE WORLD WIDE WEB FOR:
* the benefits of investing with Putnam
* Putnam's money management philosophy
* complete fund information, daily pricing and long-term performance
* the latest on new funds and other Putnam news
You can also read Putnam economist Dr. Robert Goodman's commentary and
Putnam's Capital Markets outlook, search for a particular fund by name or
objective, use our glossary to decode investment terms . . . and much more.
The site can be accessed through any of the major online services (America
Online, CompuServe, Prodigy) that offer web access. Of course, you can also
access it via Netscape or Microsoft Internet Explorer, using an independent
Internet service provider.
New features will be added to the site regularly. So be sure
to bookmark us at http://www.putnaminv.com
Fund information
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Stephen Oristaglio
Vice President
Thomas V. Reilly
Vice President
Forrest Fontana
Vice President and Fund Manager
Rosemary H. Thomsen
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Edward T. Shadek, Jr.
Vice President
Richard G. Leibovitch
Vice President
John R. Verani
Vice President
Call 1-800-225-1581 weekdays from 9 a.m. to 5 p.m. Eastern Time, or visit
our Web site (www.putnaminv.com) any time for up-to-date information about
the fund's NAV.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
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PUTNAM
INVESTMENTS
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For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
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