Putnam
Daily
Dividend
Trust
[Artwork]
SEMIANNUAL REPORT
April 30, 1994
[Putnam Logo]
Boston * London * Tokyo
<PAGE>
<PAGE>
PERFORMANCE HIGHLIGHTS
"When one sector of the market performs poorly, another sector may offset the
losses. To diversify a fund portfolio, split your holdings among domestic and
international stocks and bonds, and money market funds."
- - "Reducing your risk," Success (January/February 1994)
"Our strategy is to take advantage of higher interest rates. At the same time,
we will continue to follow a conservative investment approach, maintaining the
fund's superior quality and stability."
- - Lindsey Callen, Portfolio Manager
Performance should always be considered in light of a fund's investment strate-
gy. Putnam Daily Dividend Trust is designed for investors seeking current income
with capital preservation, stable principal, and liquidity through a money mar-
ket fund.
SEMIANNUAL RESULTS AT A GLANCE
Six months ended 4/30/94 Class A Class B
- -------------------------------------------------------------------------------
Total return NAV NAV
(change in value plus
reinvested earnings) 1.39% 1.12%
Current return: NAV NAV
(end of period)
Current rate(1): 3.33% 2.75%
Current 30-day SEC yield (1) 3.17% 2.59%
Distributions: Income Total
Class A $0.013820 $0.013820
Class B $0.011151 $0.011151
- -------------------------------------------------------------------------------
(1) The Performance data represent past results. For performance over longer
periods, see pages 6 and 7. The 7-day and 30-day yields are the two most common
gauges for measuring money market mutual fund performance and are calculated in
accordance with SEC guidelines.
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<PAGE>
FROM THE CHAIRMAN [Photograph of George Putnam]
*(C) Karsh, Ottowa
Dear Shareholder:
Many shareholders have been asking us whether we think the volatility that hit
the securities markets in February and March was a prelude to further decline
during the rest of 1994. We have been pointing out that we believe the recent
adjustments in the markets are a natural occurrence at this stage of the econo-
mic recovery.
Some volatility will likely continue for a while as investors digest new reali-
ties in areas such as interest rates, inflation, and the pace of the recovery.
But the economy is still strong, interest rates remain historically low and in-
flation appears under control. In our view, overall prospects for the long term
are still positive.
Seasoned investors know there will occasionally be periods of rough going. But
experience has also taught them that long-term investment programs should rarely
be altered in response to short-term events.
In the report that follows, Lindsey Callen, the fund's manager, discusses the
performance of Putnam Daily Dividend Trust in this market environment.
Respectfully yours,
George Putnam
June 15, 1994
* (C) Copyright.
<PAGE>
<PAGE>
REPORT FROM THE FUND MANAGER
LINDSEY M. CALLEN
For the semiannual period ended April 30, l994, Putnam Daily Dividend Trust once
again delivered competitive performance, continuing to produce a steady stream
of income. During this period, your fund operated in an environment of strong
economic growth, low inflation, and rising interest rates. After months of
steadily declining rates that fed the economic recovery, the Federal Reserve
Board began taking steps to curb what it perceived as the possibility of rising
inflation in the wake of too-rapid growth.
Beginning in February, the Fed raised interest rates three times within a three-
month period, boosting the Federal Funds Rate, the interest rate banks charge
each other for overnight loans, from 3.00% to 3.75%. This action, which effec-
tively raised all short-term interest rates, ultimately led the rise in short-
term rates to 4.25%.
CAPITALIZING ON HIGHER INTEREST RATES
After interest rates sank to historic lows last fall, we began anticipating a
reversal of the trend. We started positioning the fund to take advantage of
incrementally higher yields. We achieved this objective mainly by shortening
the portfolio's average maturity so the fund would not be locked into lower-
yielding securities in a rising interest rate environment. We also increased the
number of floating-rate securities. Interest rates on these securities are reset
at fixed intervals (weekly or monthly), so that when market rates rise, inves-
tors promptly benefit.
In addition, investments in your fund include certificates of deposit of large
banks and commercial paper; that is, the short-term debt of large U.S. and fo-
reign corporations. In the investment spectrum, these are generally the safest,
most stable short-term securities available. All money market investments are
U.S. dollar denominated, so when we refer to foreign debt, we mean debt of do-
mestic subsidiaries of foreign banks and/or corporations issued in the United
States.
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<PAGE>
MAINTAINING PORTFOLIO QUALITY
Superior portfolio quality is one of your fund's most important attributes.
Ideally, every holding must be rated in one of the two highest categories by at
least two nationally recognized rating services. If only one rating service has
rated the security, it must be in one of the highest two categories rated by
that service. If the securities are unrated, Putnam Management must judge them
to be of equivalent quality.
In addition, we continually monitor the quality of each investment as long as
it remains in the portfolio, making sure it provides a balance of attractive
yield and relative stability. We also scrutinize market trends and factors that
could affect the financial strength of each security's issuer, working to ensure
the continued high credit quality of every portfolio holding.
LOOKING AHEAD
We believe the Fed will continue its anti-inflation policy by periodically rai-
sing short-term interest rates. While the Fed has already made several moves
in this direction, interest rates are still relatively low, and we do not anti-
cipate that rates will return to the extremely high levels of the 1970s and
early l980s. While incrementally higher rates may result in a modest slowdown
in the economy, our long-term outlook anticipates stronger economic growth with
relatively low inflation.
- -------------------------------------------------------------------------------
PERFORMANCE COMPARISONS (4/30/93)*
Current return:
Passbook savings account 2.00%
Putnam Daily Dividend Trust (7-day yield)
Class A 3.33
Class B 2.75
Average taxable money market fund 7-day yield 3.13
3-month certificate of deposit 2.70
- -------------------------------------------------------------------------------
The principal value of money market mutual funds is uninsured and designed to be
fixed while distributions vary daily. The principal value on passbook savings
and bank CDs are generally insured up to certain limits by state and federal
agencies. Unlike money market funds, early withdrawals from bank CDs may be sub-
ject to substantial penalties. Investment returns will fluctuate.
* Sources: Bank of Boston (passbook savings), Bank Rate Monitor (3-month CDs),
IBC/Donaghue's Money Fund Report (taxable money market fund 7-day yield).
<PAGE>
<PAGE>
PERFORMANCE SUMMARY
This section provides, at a glance, information about your fund's performance.
Total return shows how the value of the fund's shares changed over time, assum-
ing you held the shares through the entire period and reinvested all distribu-
tions back into the fund. We show total return in two ways: On a cumulative
long-term basis and how the fund might have grown each year, on average, over
varying periods. For comparative purposes, we show how the fund performed rela-
tive to appropriate indexes and benchmarks.
TOTAL RETURN FOR PERIODS ENDING 4/30/94
Lipper
Class A Class B(1) Money Mkt.
NAV NAV Fund Avg. CPI
- ------------------------------------------------------------------------
6 months 1.39% 1.12% 1.34% 1.17
- ------------------------------------------------------------------------
1 year 2.65 2.12 2.64 2.36
- ------------------------------------------------------------------------
5 years 28.81 -- 28.76 19.74
Annual average 5.19 -- 5.19 3.67
- ------------------------------------------------------------------------
10 years 84.36 -- 84.48 42.97
Annual average 6.31 -- 6.32 3.64
- ------------------------------------------------------------------------
Life of class B -- 4.68 5.62 5.66
Annual average -- 2.30 2.76 2.78
- ------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDING 3/31/94
(MOST RECENT CALENDAR QUARTER)
Class A Class B(1)
NAV NAV
- ------------------------------------------------------------------------
6 months 1.35% 1.09%
- ------------------------------------------------------------------------
1 year 2.59 2.06
- ------------------------------------------------------------------------
5 years 29.40 --
Annual average 5.29 --
- ------------------------------------------------------------------------
10 years 84.36 --
Annual average 6.37 --
- ------------------------------------------------------------------------
Life of class B -- 4.46
Annual average -- 2.29
- ------------------------------------------------------------------------
(1) Effective April 27, 1992, the fund began offering class B shares.
Performance for each share class will differ.
Performance data represent past results and should not be taken as assu-
rance of future performance. Investment returns of the fund will fluctuate.
An investment in the fund is neither insured nor guaranteed by the U.S. go-
vernment. There can be no assurance that the fund will be able to maintain
a stable net asset value of $1.00 per share. However, since the fund's in-
ception on October 1, 1976, no investor has ever lost a penny of principal.
<PAGE>
<PAGE>
TERMS AND DEFINITIONS
CLASS A shares generally are fund shares purchased with an initial sales charge.
In the case of your fund, which has no sales charge, the reference is to shares
purchased or acquired through the exchange of class A shares from another Putnam
fund. Exchange of your fund's class A shares into another fund may involve a sa-
les charge, however.
CLASS B shares generally are fund shares purchased with no initial sales charge
but subject to a contingent deferred sales charge (CDSC) on redemption. However,
class B shares of your fund can be acquired only through exchange of class B
shares from another Putnam fund. They are subject to the same CDSC schedule as
the fund from which they were exchanged.
NET ASSET VALUE (NAV) is the value of all fund assets, minus liabilities, divi-
ded by the number of outstanding shares. It does not include any initial or con-
tingent deferred sales charges.
COMPARATIVE BENCHMARKS
LIPPER MONEY FUND AVERAGE, used for performance comparison purposes, is an
arithmetic average of the total return of all money market mutual funds tracked
by Lipper Analytical Services. Lipper is an independent rating organization for
the mutual fund industry. Lipper rankings vary for other periods. The fund's
holdings do not match those in the Lipper Average.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation. It does not
represent an investment return.
<PAGE>
<PAGE>
THE PUTNAM FUND SELECTOR (TM)*
The Putnam Fund Selector shows the many opportunities for investors within
every investment strategy. All investors should first accumulate a base of con-
servative, cash-equivalent investments. Then, with the help of your investment
advisor, diversify your portfolio by investing in the Putnam Family of Funds.
(Pyramid graphic)
Risk/Reward
PUTNAM GROWTH FUNDS
PUTNAM GROWTH AND INCOME FUNDS
PUTNAM INCOME OR TAX-FREE INCOME FUNDS
MOST CONSERVATIVE INVESTMENTS
* (TM) Trademark.
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<PAGE>
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund Diversify Equity Trust
Energy-Resources Trust Europe Growth Fund
Global Growth Fund Health Sciences Trust
Investors Fund New Opportunities Fund
OTC Emerging Growth Fund Overseas Growth Fund
Vista Fund Voyager Fund
PUTNAM GROWTH AND INCOME FUNDS
Convertible Income-Growth Trust Dividend Growth Fund
Equity Income Fund The George Putnam Fund of Boston
The Putnam Fund for Growth and Income Managed Income Trust
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
Adjustable Rate U.S. Government Fund American Government Income Fund
Balanced Government Fund Corporate Asset Trust
Diversified Income Trust Federal Income Trust
Global Governmental Income Trust High Yield Advantage Fund
High Yield Trust Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE INCOME FUNDS
Intermediate Tax Exempt Fund Municipal Income Fund
Tax Exempt Income Fund Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds*
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey,
New York, Ohio, and Pennsylvania
LIFESTAGE (SM) FUNDS
Putnam Asset Allocation Funds - three investment portfolios that spread your
money across a variety of stocks, bonds, and money market investments to help
maximize your return and reduce your risk.
The three portfolios:
Putnam Asset Allocation: Balanced Portfolio
Putnam Asset Allocation: Conservative Portfolio
Putnam Asset Allocation: Growth Portfolio
MOST CONSERVATIVE INVESTMENTS +
Putnam money market funds:
Daily Dividend Trust
New York Tax-Exempt Money Market Fund
Tax Exempt Money Market Fund
CDs and savings accounts ++
* Not available in all states.
+ Relative to above.
++ Not offered by Putnam Investments. Certificates of deposit offer a fixed
rate of return and may be insured, up to certain limits, by federal/state
agencies. Savings accounts may also be insured up to certain limits.
Please call your financial advisor or Putnam to obtain a prospectus for
any Putnam fund. It contains more complete information, including charges
and expenses. Read it carefully before you invest or send money.
<PAGE>
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
April 30, 1994 (Unaudited)
COMMERCIAL PAPER(80.8%)(a)
Principal Amount Value
DOMESTIC (58.5%)
- -------------------------------------------------------------------------------
$ 18,077,000 AES Barbers (Letter of Credit (LOC), Bank
of America) 3.85s 5/26/94 $ 18,024,803
25,000,000 AES Barbers (LOC, Bank of America) 3.85s 5/20/94 24,946,528
30,000,000 AT&T Capital Corp. 3.94s 7/7/94 29,776,733
20,000,000 Bankers Trust New York Corp. 4s 9/6/94 19,713,333
15,000,000 Bankers Trust New York Corp. 3.34s 7/6/94 14,906,758
40,000,000 Bell Atlantic Financial Services, Inc. 3.75s 5/4/94 39,983,333
14,000,000 Bell Atlantic Network Funding Corp. 3.82s 5/23/94 13,965,832
14,100,000 Champion Realty (LOC, Texas Commerce Bank)
3.8s 5/4/94 14,094,047
20,000,000 Ciesco, L.P. 3.85s 6/6/94 19,920,861
25,000,000 Ciesco, L.P. 3.62s 5/2/94 24,994,972
15,000,000 Corporate Asset Funding Co., Inc. 3.80s 5/19/94 14,969,917
15,000,000 Corporate Asset Funding Co., Inc. 3.09s 5/3/94 14,996,138
8,000,000 Corporate Receivables Corp. 4.1s 7/11/94 7,934,400
12,000,000 Corporate Receivables Corp. 3.95s 7/6/94 11,911,783
14,500,000 Corporate Receivables Corp. 3.62s 5/4/94 14,494,168
13,439,000 Delaware Funding Corp. 3.95s 6/9/94 13,380,018
6,532,000 Delaware Funding Corp. 3 3/4s 5/27/94 6,513,629
2,000,000 Delaware Funding Corp. 3 3/4s 5/24/94 1,995,000
25,000,000 Federal Home Loan Banks 4.34 10/17/94 24,487,639
15,000,000 Federal National Mortgage Assn. 3.34s 6/29/94 14,916,500
15,000,000 Federal National Mortgage Assn. 3.28s 6/23/94 14,926,200
15,000,000 Federal National Mortgage Assn. 3.27s 6/17/94 14,934,600
10,000,000 First Boston Group, Inc. 3.93s 6/27/94 9,935,592
25,000,000 First Boston Group, Inc. 3.74s 5/19/94 24,950,563
50,000,000 Ford Motor Credit Co. 3.73s 6/13/94 49,772,056
11,000,000 General Electric Capital Corp. 3.8s 5/9/94 10,989,550
20,000,000 General Motors Acceptance Corp. 3.9s 5/31/94 19,932,833
20,000,000 General Motors Acceptance Corp. 3.8s 5/9/94 19,981,000
25,000,000 Goldman Sachs Group L.P. 3.65s 5/5/94 24,987,326
20,000,000 Goldman Sachs Group L.P. 3.62s 5/17/94 19,965,811
8,000,000 Goldman Sachs Group L.P. 3.32s 10/3/94 7,884,907
25,000,000 IBM Credit Corp. 3.89s 6/6/94 24,897,347
15,000,000 Merrill Lynch & Co., Inc. 4.1s 7/18/94 14,865,042
15,000,000 Merrill Lynch & Co., Inc. 4s 7/6/94 14,888,333
10,000,000 Merrill Lynch & Co., Inc. 3.8s 6/23/94 9,943,000
5,000,000 Preferred Receivables Funding Corp. 3.65s 5/23/94 4,988,341
35,000,000 Preferred Receivables Funding Corp. 3.65s 5/18/94 34,936,125
8,000,000 Preferred Receivables Funding Corp. 3.65s 5/16/94 7,987,022
30,000,000 Smith Barney Shearson 3.65s 5/18/94 29,945,250
14,500,000 Wachovia Corp. 3.82s 5/19/94 14,707,948
---------------
$721,345,238
<PAGE>
<PAGE>
COMMERCIAL PAPER(80.8%)(a) (Continued)
Principal Amount Value
FOREIGN (22.3%)(b)
- -------------------------------------------------------------------------------
$ 10,000,000 Abbey National PLC 3.9s 7/21/94 $ 9,911,167
15,000,000 Abbey National PLC 3.56s 7/18/94 14,882,817
25,000,000 ABN-AMRO North America Finance Inc. 3.18s 5/3/94 24,993,375
11,125,000 AES Shady Point Inc. (LOC, Bank of Tokyo) 3.73s
5/4/94 11,120,389
35,000,000 BP Australia Finance 3.64s 5/16/94 34,943,378
9,000,000 Bombardier Capital Inc. (LOC,
National Westminster) 3.65s 5/17/94 8,984,488
25,000,000 Commerzbank AG 3.62S 5/11/94 24,972,347
15,000,000 DIC Americas (LOC, Mitsubishi Bank) 3.8s 6/7/94 14,939,833
30,000,000 Fletcher Challenge Finance U.S.A. Inc. (LOC,
National Westminster) 3.7s 5/10/94 29,969,167
7,285,000 FPL Fuels, Inc. (LOC, Sumitomo Bank) 3.74s 5/2/94 7,283,486
8,000,000 FPL Fuels, Inc. (LOC, Sumitomo Bank) 3.73s 5/2/94 7,998,342
4,380,000 Hartz 667 Commercial Paper Corp.
(LOC, Mitsubishi Bank) 3.27s 7/27/94 4,344,989
11,438,000 MP Funding Corp. (LOC, Credit Suisse) 3.65s 5/2/94 11,435,681
10,000,000 Omnicom Finance (LOC, Swiss Bank) 3.65s 5/12/94 9,987,833
7,000,000 Pemex Capital, Inc. (LOC, Swiss Bank) 3.9s 6/6/94 6,971,183
10,000,000 Pemex Capital, Inc. (LOC, Swiss Bank) 3.7s 5/17/94 9,982,528
10,000,000 Pemex Capital, Inc. (LOC, Swiss Bank) 3.65s 5/4/94 9,995,944
17,119,000 Queensland Alumina Ltd. (LOC, Credit Suisse) 3.85s
5/31/94 17,062,246
15,000,000 Southwest Gas Corp. (LOC,
Union Bank of Switzerland) 3.95s 6/14/94 14,925,938
---------------
$274,705,131
---------------
TOTAL COMMERCIAL PAPER (cost $996,050,369) $996,050,369
FLOATING RATE NOTES(6.9%)(a)
DOMESTIC (4.9%)
- -------------------------------------------------------------------------------
$ 10,000,000 Corporate Asset Funding Co., Inc. 3.681s 5/15/94 $ 9,998,000
15,000,000 Merrill Lynch & Co., Inc. 4.09s 11/28/94 15,000,000
20,000,000 Morgan Guaranty Trust 4s 4/18/95 19,996,000
15,000,000 Student Loan Marketing Assn. 3.95s 7/14/94 15,000,000
---------------
$ 59,994,000
FOREIGN (2.0%)(b)
- -------------------------------------------------------------------------------
$ 25,000,000 Abbey National PLC 4.065s 4/27/95 $ 25,000,000
---------------
TOTAL FLOATING RATE NOTES (cost $84,994,000) $ 84,994,000
<PAGE>
<PAGE>
BANK NOTES (6.3%)(a)
DOMESTIC
- -------------------------------------------------------------------------------
$ 20,000,000 First National Bank of Boston 4.05s 7/29/94 $ 20,067,500
20,000,000 First National Bank of Boston 4s 7/25/94 20,104,444
20,000,000 Pittsburgh National Bank 4.04s 4/21/95 20,010,320
17,000,000 Pittsburgh National Bank 3.53s 11/4/94 17,265,618
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TOTAL BANK NOTES (cost $77,447,882) $ 77,447,882
U.S. GOVERNMENT AND AGENCY OBLIGATIONS(2.8%)(a)
Principal Amount Value
- -------------------------------------------------------------------------------
$ 15,000,000 Federal National Mortgage Assn. 4.17s 10/17/94 $ 14,704,625
10,000,000 Federal National Mortgage Assn. 3.22s 6/30/94 9,945,439
10,000,000 Student Loan Marketing Assn. 3.62s 6/30/94 9,999,165
---------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(cost $34,649,229) $ 34,649,229
CERTIFICATES OF DEPOSIT(1.2%)(a)(b)(cost $14,749,944)
- -------------------------------------------------------------------------------
$ 15,000,000 Commerzbank AG 3.6s 2/1/95 $ 14,749,944
REPURCHASE AGREEMENT(4.4%)(a)(cost $53,820,000)
- -------------------------------------------------------------------------------
$ 53,820,000 Interest in $504,971,000 repurchase agreement
dated April 29, 1994 with Kidder Peabody & Co.,
Inc. due May 2, 1994 with respect to various U.S.
Treasury obligations--maturity value of
$53,835,922 for an effective yield of 3.55% $ 53,820,000
---------------
TOTAL INVESTMENTS (cost $1,261,711,424)(c) $1,261,711,424
Notes
(a) Percentages are based on total net assets of $1,232,613,790, which corres-
pond to a net asset value per share of $1.00 for both class A and class B
shares.
(b) U.S. dollar-denominated.
(c) The aggregate identified cost on a tax basis is the same.
Rates shown on Floating Rate Notes are the current interest rates on April 30,
1994, which are subject to change based on the terms of the security.
Percentage of total net assets invested in foreign countries at April 30,1994:
Switzerland 6.4%
United Kingdom 4.0
Japan 3.6
Netherlands 3.2
Australia 2.8
The accompanying notes are an integral part of these financial statements.
<PAGE>
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<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1994 (Unaudited)
ASSETS
---------------------------------------------------------------------------------------
<S> <C>
Investments in securities, at amortized
cost (Note 1) $ 1,261,711,424
---------------------------------------------------------------------------------------
Cash 1,376
---------------------------------------------------------------------------------------
Interest and other receivables 409,914
---------------------------------------------------------------------------------------
Receivable for shares of the Fund sold 10,176,498
---------------------------------------------------------------------------------------
TOTAL ASSETS $ 1,272,299,212
LIABILITIES
---------------------------------------------------------------------------------------
Payable for securities purchased $20,010,320
---------------------------------------------------------------------------------------
Payable for shares of the Fund repurchased 18,100,500
---------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 3) 865,804
---------------------------------------------------------------------------------------
Payable for administrative services (Note 3) 5,086
---------------------------------------------------------------------------------------
Payable for investor servicing and custodian (Note 3) 430,803
---------------------------------------------------------------------------------------
Payable for distribution fees (Note 3) 82,417
---------------------------------------------------------------------------------------
Other accrued expenses 190,492
---------------------------------------------------------------------------------------
TOTAL LIABILITIES 39,685,422
---------------------------------------------------------------------------------------
NET ASSETS $ 1,232,613,790
REPRESENTED BY
---------------------------------------------------------------------------------------
Paid-in capital (Note 4) $ 1,232,613,790
---------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
class A share ($1,049,146,360 divided by 1,049,146,360 shares)* $1.00
---------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($183,467,430 divided by 183,467,430 shares)** $1.00
---------------------------------------------------------------------------------------
<FN>
* Class A shares are offered at net asset value.
** Class B shares are available only by exchange from class B shares of other Putnam Funds.
The applicable contingent deferred sales charge will depend upon the Fund from which you
exchanged.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six months ended April 30, 1994 (Unaudited)
<S> <C>
INTEREST INCOME $ 14,326,430
EXPENSES:
---------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 1,512,800
---------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 875,790
---------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 10,355
---------------------------------------------------------------------------------------
Reports to shareholders 20,713
---------------------------------------------------------------------------------------
Auditing 17,458
---------------------------------------------------------------------------------------
Legal 7,078
---------------------------------------------------------------------------------------
Postage 28,058
---------------------------------------------------------------------------------------
Administrative services (Note 2) 7,398
---------------------------------------------------------------------------------------
Registration fees 46,602
---------------------------------------------------------------------------------------
Distribution fees - Class B (Note 2) 170,163
---------------------------------------------------------------------------------------
Other 34,257
---------------------------------------------------------------------------------------
Total expenses 2,730,672
---------------------------------------------------------------------------------------
Net investment income 11,595,758
---------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 42
---------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 11,595,800
---------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six months ended Year ended
April 30 October 31
1994* 1993
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
---------------------------------------------------------------------------------------
OPERATIONS:
---------------------------------------------------------------------------------------
Net investment income $ 11,595,758 $ 15,628,626
---------------------------------------------------------------------------------------
Net realized gain on investments 42 1,728
---------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 11,595,800 15,630,354
---------------------------------------------------------------------------------------
Distribution to shareholders from:
---------------------------------------------------------------------------------------
Net investment income
---------------------------------------------------------------------------------------
Class A (10,789,336) (15,452,211)
---------------------------------------------------------------------------------------
Class B (806,422) (176,415)
---------------------------------------------------------------------------------------
Net realized gain on investments
---------------------------------------------------------------------------------------
Class A (40) (1,713)
---------------------------------------------------------------------------------------
Class B (2) (15)
---------------------------------------------------------------------------------------
Increase (decrease) from capital share
transactions (Note 4) 622,915,832 (232,350,806)
---------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 622,915,832 (232,350,806)
NET ASSETS
---------------------------------------------------------------------------------------
Beginning of period 609,697,958 842,048,764
---------------------------------------------------------------------------------------
End of period $1,232,613,790 $609,697,958
---------------------------------------------------------------------------------------
<FN>
* Unaudited
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS*
(For a share outstanding throughout the period)
Six April 27,1992 Six
months (Commencement months
ended Year ended of operations to ended
April 30 October 31 October 31 April 30
1994** 1993 1992 1994** 1993
- ---------------------------------------------------------------------------------------------------------------------------------
Class B Class A
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Operations
Net Investment Income $ .0112 $ .0195 $ .0151 $ .0138 $ .0246
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain
on Investments --- --- --- --- ---
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .0112 .0195 .0151 .0138 .0246
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions $ (.0112) $ (.0195) $ (.0151) $ (.0138) $ (.0246)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investment Return
at Net Asset Value (%) (a) 2.24(b) 1.98 2.98(b) 2.78(b) 2.49
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period
(in thousands) $183,467 $ 22,777 $ 2,864 $1,049,146 $586,920
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets (%) 1.09(b) 1.20 1.37(b) .60(b) .70
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets (%) 2.40(b) 1.98 2.93(b) 2.76(b) 2.48
- ---------------------------------------------------------------------------------------------------------------------------------
See page 17 for notes to Financial Highlights.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS* (continued)
(For a share outstanding throughout the period)
Ten
months
ended
Year ended October 31 October 31
1992 1991 1990 1989 1988 1987 1986 1985
- ---------------------------------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Operations
Net Investment Income $ .0353 $ .0598 $ .0764 $ .0853 $ .0655 $ .0568 $ .0642 $ .0633
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain
on Investments --- .0001 --- --- --- --- --- .0001
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .0353 .0599 .0764 .0853 .0655 .0568 .0642 .0634
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions $(.0353) $(.0599) $(.0764) $(.0853) $(.0655) $(.0568) $(.0642) $(.0634)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investment Return at
Net Asset Value (%) (a) 3.58 6.16 7.92 8.87 6.75 5.83 6.61 7.86(b)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period
(in thousands) $839,185 $684,987 $904,186 $797,395 $659,590 $775,954 $320,874 $275,901
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets (%) .86 .77 .74 .85 .91 1.01 .89 .85(b)
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets (%) 3.56 6.04 7.63 8.51 6.67 5.65 6.32 7.56(b)
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
* Financial Highlights for periods ended through October 31, 1992 have been restated to conform with requirements issued by the
SEC in April, 1993.
** Unaudited.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Annualized.
</TABLE>
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1994 (Unaudited)
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940, as amended, as
a diversified, open-end management investment company. The Fund seeks current
income consistent with preservation of capital and maintenance of liquidity. The
Fund achieves its objective by investing in a portfolio of high-grade short-term
obligations. The Fund may invest up to 100% of its assets in the banking indus-
try and in commercial paper and short-term corporate obligations of issuers in
the personal credit institution and business credit institution industries.
The Fund offers both class A and class B shares. The Fund commenced its public
offering of class B shares on April 27, 1992. Class A and class B shares are
sold without a front-end sales charge. Class B shares are offered only in ex-
changes for class B shares of other Putnam funds. They pay an ongoing distri-
bution fee, and are subject to a contingent deferred sales charge if the shares
are redeemed within six years of purchase (including any holding period of the
shares in the other Putnam fund). In addition, the Trustees declare separate di-
vidends on each class of shares. Each class bears expenses unique to that class
(including the distribution fees applicable to class B shares) and votes as a
class only with respect to its own distribution plan or other matters on which a
class vote is required by law or determined by the Trustees. Shares of each
class would receive their pro-rata share of the net assets of the Fund if the
Fund were liquidated.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The poli-
cies are in conformity with generally accepted accounting principles.
A) SECURITY VALUATION The valuation of the Fund's portfolio instruments is de-
termined by means of the amortized cost method as set forth in Rule 2a-7 under
the Investment Company Act of 1940. The amortized cost of an instrument is de-
termined by valuing it at cost originally and thereafter amortizing any dis-
count or premium from its face value at a constant rate until maturity.
B) JOINT TRADING ACCOUNT Pursuant to an exemptive order issued by the Securi-
ties and Exchange Commission the Fund may transfer uninvested cash balances into
a joint trading account along with the cash of other registered investment com-
panies managed by Putnam Investment Management, Inc., (Putnam Management) the
Fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc. and cer-
tain other accounts. 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,
<PAGE>
<PAGE>
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. The Fund's Mana-
ger 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) FEDERAL TAXES It is the policy of the Fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the In-
ternal 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. There-
fore, no provision has been made for federal income and excise taxes on income
and capital gains.
E) INTEREST INCOME AND DIVIDENDS TO SHAREHOLDERS Interest income is recorded on
the accrual basis. Income dividends are declared daily by the Fund and are dis-
tributed monthly.
NOTE 2
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Management for management and investment advisory servi-
ces is paid quarterly based on the average net assets of the Fund for the quar-
ter. Such fee is based on the following annual rates: 0.5% of the first $100 mi-
llion of average net assets, 0.4% of the next $100 million, 0.35% of the next
$300 million, 0.325% of the next $500 million, and 0.3% of any amount over $1
billion, subject, under current law, to reduction in any year to the extent that
expenses (exclusive of brokerage, interest and taxes) of the Fund exceed 2.5% of
the first $30 million of average net assets, 2.0% of the next $70 million and
1.5% of any amount over $100 million and by the amount of certain brokerage
commissions and fees (less expenses) received by affiliates of the Manager on
the Fund's portfolio transactions.
The Fund also reimburses the Manager for the compensation and related expenses
of certain officers of the Fund and their staff who provide administrative ser-
vices to the Fund. The aggregate amount of all such reimbursements is deter-
mined annually by the Trustees. For the six months ended April 30, 1994, the
Fund paid $7,398 for these services.
Trustees of the Fund receive an annual Trustee's fee of $1,340 and an additional
fee for each Trustees' meeting attended. Trustees who are not interested persons
of the Manager and who serve on committees of the Trustees receive additional
fees for attendance at certain committee meetings.
Custodial functions are being provided to the Fund by Putnam Fiduciary Trust
Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc. Investor
servicing agent functions are currently provided by Putnam Investor Services, a
division of PFTC. Fees paid for these investor servicing and custodial functions
for the six months ended April 30, 1994, amounted to $875,790.
Investor servicing and custodian fees reported in the Statement of operations
for the six months ended April 30, 1994, have been reduced by credits allowed
by PFTC.
The Fund has adopted a distribution plan with respect to its class B shares
<PAGE>
<PAGE>
(the "Class B Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940. The purpose of the Class B Plan is to compensate Putnam Mutual Funds
Corp., a wholly-owned subsidiary of Putnam Investments, Inc. for services provi-
ded and expenses incurred by it in distributing class B shares. The Class B Plan
provides payments currently limited by the Trustees to .50% of the Fund's avera-
ge net assets attributable to class B shares, but may increase with the Trustees
approval to an amount not exceeding .75% of average net assets. For the six
months ended April 30, 1994, the Fund paid Putnam Mutual Funds Corp. distribu-
tion fees of $170,163 for class B shares.
A deferred sales charge of up to 1.00% is assessed on certain redemptions of
class A shares purchased as part of an investment of $1 million or more and were
acquired by an exchange from another Putnam fund. For the six months ended April
30, 1994, Putnam Mutual Funds Corp., acting as an underwriter, received no mo-
nies on such redemptions.
Putnam Mutual Funds Corp. also receives the proceeds on the contingent deferred
sales charges on its class B share redemptions. The charge is based on declining
rates, which begin at 5.00% of the net asset value of the redeemed shares.
Putnam Mutual Funds Corp. has informed the fund that it received no monies from
redemptions during the six months ended April 30, 1994.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the six months ended April 30, 1994, purchases and sales (including matu-
rities) of investment securities (all short-term obligations) aggregated
$11,549,559,741 and $10,917,101,013, respectively. In determining the net gain
or loss on securities sold, the cost of securities has been determined on the
identified cost basis.
<PAGE>
<PAGE>
NOTE 4
CAPITAL SHARES
At April 30, 1994, there was an unlimited number of shares of beneficial inte-
rest authorized, divided into two classes, designated class A and class B capi-
tal stock. Transactions in capital stock were as follows:
Six months ended Year ended
April 30 October 31
1994 1993
- -------------------------------------------------------------------------------
CLASS A
- -------------------------------------------------------------------------------
Shares sold $1,975,737,215 $1,954,667,214
Shares issued in connection with
reinvestment of distributions 10,404,284 16,002,778
- -------------------------------------------------------------------------------
1,986,141,499 1,970,669,992
Shares repurchased (1,523,915,601) (2,222,934,715)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) $462,225,898 $(252,264,723)
- -------------------------------------------------------------------------------
Six months ended Year ended
April 30 October 31
1994 1993
- -------------------------------------------------------------------------------
CLASS B
- -------------------------------------------------------------------------------
Shares sold $347,543,965 $66,254,392
Shares issued in connection with
reinvestment of distributions 717,350 156,162
- -------------------------------------------------------------------------------
348,261,315 66,410,554
Shares repurchased (187,571,381) (46,496,637)
- -------------------------------------------------------------------------------
NET INCREASE $160,689,934 $19,913,917
- -------------------------------------------------------------------------------
<PAGE>
<PAGE>
OUR COMMITMENT TO QUALITY SERVICE
CHOOSE AWARD-WINNING SERVICE
Putnam Investor Services has won the DALBAR Quality Tested Service Seal every
year since the award's 1990 inception. DALBAR, an independent research firm, ran
more than 10,000 tests of 38 shareholder service components. In every category,
Putnam outperformed the industry standard.
HELP YOUR INVESTMENT GROW
You can set up a regular program for investing with as little as $25 a month
from a Putnam money market fund or your own bank account.*
SWITCH FUNDS EASILY
You can move money from one account to another with the same class of shares
without a service charge. (This privilege is subject to change or termination.)
ACCESS YOUR MONEY EASILY
You can get checks sent regularly or redeem shares any business day at the then-
current net asset value, which may be more or less than their original cost.
Ask a helpful Putnam representative or your financial advisor for details about
any of these or other services, or see your prospectus.
To make an additional investment in this or any other Putnam fund, contact your
financial advisor or call our toll-free number:
1-800-225-1581.
* Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market. Investors should consider their ability to
continue purchasing shares during periods of low price levels.
<PAGE>
<PAGE>
FUND INFORMATION
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 Pounds, Vice Chairman
Jameson Adkins Baxter Hans H. Estin
John A. Hill Elizabeth T. Kennan
Lawrence J. Lasser Donald S. Perkins
Robert E. Patterson George Putnam, III
A.J.C. Smith W. Nicholas Thorndike
OFFICERS
George Putnam Charles E. Porter
President Executive Vice President
Patricia C. Flaherty Lawrence J. Lasser
Senior Vice President Vice President
Gordon H. Silver Gary N. Coburn
Vice President Vice President
William F. McGue Lindsey M. Callen
Vice President Vice President and Fund Manager
William N. Shiebler John R. Verani
Vice President Vice President
Paul M. O'Neil John D. Hughes
Vice President Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Daily Dividend
Trust. It may also be used as sales literature when preceded or accompanied
by the current prospectus, which gives details of sales charges, investment
objectives, and operating policies of the fund.
<PAGE>
<PAGE>
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, MA 02109
Bulk Rate
U.S. Postage
Paid
Boston, MA Permit No. 53749
010/879-12426
<PAGE>
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND
EDGAR-FILED TEXTS:
(1) Boldface typeface is displayed with capital letters, italic typeface is
displayed in normal type.
(2) Because the printed page breaks are not reflected, certain tabular and
columnar headings and symbols are displayed differently in this filing.
(3) Bullet points and similar graphic signals are omitted.
(4) Page numbering has been omitted.
(5) The trademark symbol has been replaced by (TM).
(6) The copyright symbol has been replaced by (C).
(7) The dagger symbol has been replaced by (+).
