Putnam
Money Market
Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
9-30-99
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
For most of the 12 months ended September 30, 1999, the money market
sustained positive momentum. The economy continued to grow, inflation
stayed in check, and interest rates trended upward. Elsewhere in the U.S.
financial universe, the stock market continued on its upward path while
the bond market suffered its second-worst year on record. Even within the
stock and money markets, there were pockets of volatility, especially
surrounding the Federal Reserve Board's two short-term interest rate
increases in June and August. Nonetheless, the money market remained one
of the calmest sectors in the financial marketplace, and funds such as
Putnam Money Market Fund continued to attract new assets.
Your fund's recent performance reflects the relatively favorable
atmosphere that prevailed in the money market sector over this period.
Total return for 12 months ended 9/30/99
Class A Class B Class C Class M
NAV NAV CDSC NAV CDSC NAV
- -----------------------------------------------------------------------
4.89% 4.37% -0.63% 4.45% 3.45% 4.73%
- -----------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods and explanation of performance calculation
methods begin on page 5.
* SLIGHTLY LONGER DURATION CAPTURES INCOME
What a difference a year makes. Just last September the economy appeared
so much in danger of stalling that the Fed lowered short-term interest
rates three times in just seven weeks. Since then, economic growth has
been fairly steady. In fact, over the summer, the Fed became concerned
that the economy was overheating and actually raised interest rates twice,
in June and again in August. The tightenings helped to slow second-quarter
growth to 1.6% -- compared to 4.3% in the first quarter of 1999. Despite
widespread expectations of a third increase, the Fed left rates alone at
its early October meeting. Nonetheless, current market interest rates
reflect an expectation that the Fed will raise rates again in the months
ahead. This expectation has driven up yields, and in fact, the Fed stated
its bias toward tightening rates should inflation appear stronger.
In this environment of higher interest rates, duration management was an
important tool for your fund's manager, Joanne Driscoll. In order to lock
in the highest available money market rates, she kept portfolio duration
slightly longer than the market average throughout the past six months.
Besides allowing the fund to capture additional income, this longer
duration also enables the fund to avoid reinvesting assets in January, a
time when money market yields traditionally drop due to increased demand
for money market assets.
* Y2K FEARS SPUR SUPPLY AND DEMAND
In recent months, expectations of interest-rate increases have not been
the only engine fueling rising money market yields. Since August, fears of
a funding crunch at the end of 1999 have spurred corporations to issue
more short-term securities than usual. Historically, this supply surge
occurs later in the year, typically in November and December. This year,
however, concerns that Y2K complications may affect financial markets --
along with a Bond Market Association recommendation to curtail security
issuance near the end of the year -- have corporations scrambling early to
cover their year-end financing needs.
Investors have been quick to take advantage of today's higher money market
yields. They have also been motivated at least partly by fears of Y2K
complications at year's end and have staged a flight to quality in
response. Indeed, assets invested in money market funds like this one have
grown dramatically over the past year. With new assets pouring into your
fund, Joanne has continued to seek out new investment opportunities. The
corporate sector has provided many of these opportunities, since yields
there are higher than in the government sector, in which a decreasing
supply has dampened yields. With its longer duration, the fund has been
well positioned to maximize the income advantage now being offered by
corporate year-end funding pressures.
In the coming months, Joanne will continue to take advantage of
opportunities for higher yield while keeping a firm grasp on superior
credit quality and capital preservation. As we approach the new year, when
yields on money market securities should decline gradually, she plans to
bring portfolio duration back to a more neutral position. As always, she
will remain focused on implementing the conservative strategies that have
served shareholders well thus far.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
November 17, 1999
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 9/30/99, there is no guarantee the fund will
continue to hold these securities in the future. An investment in the fund
is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although the fund seeks to preserve your
investment at $1.00 per share, it is possible to lose money by investing
in the fund.
PERFORMANCE COMPARISONS (9/30/99)
Current
return*
- -------------------------------------------------------------------------
Passbook savings account 1.25%
- -------------------------------------------------------------------------
Taxable money market fund (7-day yield) 4.82
- -------------------------------------------------------------------------
3-month certificate of deposit 3.85
- -------------------------------------------------------------------------
Putnam Money Market Fund (7-day yield)
- -------------------------------------------------------------------------
Class A 4.89
- -------------------------------------------------------------------------
Class B 4.38
- -------------------------------------------------------------------------
Class C 4.37
- -------------------------------------------------------------------------
Class M 4.73
- -------------------------------------------------------------------------
The net asset value of money market mutual funds is uninsured and designed
to be fixed, while distributions vary daily. Investment returns will
fluctuate. The principal value on passbook savings and on bank CDs is
generally insured up to certain limits by state and federal agencies.
Unlike stocks, which incur more risk, CDs offer a fixed rate of return.
Unlike money market funds, bank CDs may be subject to substantial
penalties for early withdrawals.
*Sources: BankBoston (passbook savings), Bank Rate Monitor (3-month CDs),
IBC/Donaghue's Money Fund Report (taxable money market fund compound 7-day
yield).
Performance summary
This section provides information about your fund's performance, which should
always be considered in light of its investment strategy. Putnam Money Market
Fund is designed for investors seeking current income consistent with capital
preservation, stable principal, and liquidity.
TOTAL RETURN FOR PERIODS ENDED 9/30/99 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (10/1/76) (4/27/92) (2/1/99) (12/8/94)
NAV NAV CDSC NAV CDSC NAV
- -------------------------------------------------------------------------------
1 year 4.89% 4.37% -0.63% 4.45% 3.45% 4.73%
- -------------------------------------------------------------------------------
5 years 28.70 25.52 23.52 25.62 25.62 27.74
Annual average 5.18 4.65 4.32 4.67 4.67 5.02
- -------------------------------------------------------------------------------
10 years 62.43 54.78 54.78 54.89 54.89 60.02
Annual average 4.97 4.46 4.46 4.47 4.47 4.81
- -------------------------------------------------------------------------------
Life of fund 404.16 350.04 350.04 350.38 350.38 387.05
Annual average 7.29 6.76 6.76 6.76 6.76 7.13
- -------------------------------------------------------------------------------
Current return (end of period)
- -------------------------------------------------------------------------------
Current 7-day yield1 4.89% 4.38% 4.37% 4.73%
- -------------------------------------------------------------------------------
Current 30-day yield1 4.82 4.31 4.30 4.66
- -------------------------------------------------------------------------------
1The 7-day and 30-day yields are the two most common gauges for measuring
money market mutual fund performance.
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 9/30/99
Lipper Money Consumer
Market Fund Average price index
- ------------------------------------------------------------------------
1 year 4.40% 2.75%
- ------------------------------------------------------------------------
5 years 27.25 12.38
Annual average 4.94 2.36
- ------------------------------------------------------------------------
10 years 61.05 34.32
Annual average 4.88 2.99
- ------------------------------------------------------------------------
Life of fund 407.69 191.49
Annual average 7.32 4.76
- ------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. Returns shown for class B and class
M shares for periods prior to their inception are derived from the
historical performance of class A shares, adjusted to reflect the higher
operating expenses applicable to such shares. One-, five- (ten-year when
available), and life of fund returns for class B shares reflect the
applicable contingent deferred sales charge (CDSC), which is 5% in the
first year, declines to 1% in the sixth year, and is eliminated
thereafter. For class C shares, returns for periods prior to their
inception are derived from the historical performance of class A shares,
adjusted to reflect both the CDSC currently applicable to class C shares,
which is 1% for the first year and is eliminated thereafter, and the
higher operating expenses applicable to class C shares. All returns assume
reinvestment of distributions at NAV. Fund performance data do not take
into account any adjustment for taxes payable on reinvested distributions.
Investment returns will fluctuate.
An investment in the fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
fund seeks to preserve your investment at $1.00 per share, it is possible
to lose money by investing in the fund. The fund's holdings do not match
those in the Lipper average. Yield data more closely reflect the current
earnings of the fund.
DISTRIBUTION INFORMATION 12 MONTHS ENDED 9/30/99
Class A Class B Class C Class M
- ------------------------------------------------------------------------------
Distributions (number) 12 12 8 12
- ------------------------------------------------------------------------------
Income $0.047821 $0.042867 $0.028384 $0.046323
- ------------------------------------------------------------------------------
Capital gains -- -- -- --
- ------------------------------------------------------------------------------
Total $0.047821 $0.042867 $0.028384 $0.046323
- ------------------------------------------------------------------------------
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.
Class A shares generally are fund shares purchased with an initial sales
charge. In the case of your fund, which has no class A 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 sales charge, however.
Class B and class C shares generally are fund shares purchased with no
initial sales charge but subject to a contingent deferred sales charge
(CDSC) upon redemption. However, class B and class C shares of your fund
can be acquired only through exchange of class B or class C shares from
another fund or purchased by certain systematic plan shareholders. A
contingent deferred sales charge is a charge applied at the time of
redemption of class B and class C shares. The CDSC schedule may vary
depending on whether the shares were acquired through exchange or through
a systematic investment plan purchase. Consult your prospectus for
details.
Class M shares generally have a lower initial sales charge and a higher
12b-1 fee than class A shares and no sales charge on redemption. In the
case of your fund, which has no class M sales charge, the reference is to
shares purchased or acquired through the exchange of class M shares from
another Putnam fund. Exchange of your fund's class M shares into another
fund may involve a sales charge, however.
Comparative benchmarks
Lipper Money Market 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. It is not possible to invest directly in an index.
Consumer price index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
A guide to the financial statements
These sections of the report, preceded by the Report of independent
accountants, 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 non-investment 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-ended funds, a separate
table is provided for each share class.
Report of independent accountants
For the fiscal year ended September 30, 1999
To the Trustees and Shareholders of
Putnam Money Market Fund
In our opinion, the accompanying statement of assets and liabilities,
including the fund's portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly,
in all material respects, the financial position of Putnam Money Market
Fund (the "fund") at September 30, 1999, and the results of its
operations, the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the
fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of investments owned at September 30, 1999 by correspondence
with the custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 9, 1999
<TABLE>
<CAPTION>
The fund's portfolio
September 30, 1999
COMMERCIAL PAPER (89.6%) (a) MATURITY
PRINCIPAL AMOUNT DATE VALUE
<S> <C> <C> <C>
Domestic (62.6%) (a)
- --------------------------------------------------------------------------------------------------------------------------
$ 25,000,000 American General Finance Corp. 5.32s 11/23/99 $ 24,800,500
40,000,000 American General Finance Corp. 5.30s 10/5/99 39,970,556
41,000,000 Asset Securitization Co-op Corp. 5.93s 1/28/00 40,189,567
189,000,000 Associates Corp. of North America 5.58s 10/1/99 188,970,705
27,000,000 Bankamerica Corp. 4.81s 11/3/99 26,877,345
39,000,000 Bank Of America FSB 5.31s 11/19/99 38,712,375
44,000,000 Bank Of New York Co. 5.31s 10/25/99 43,837,750
34,000,000 Bank One Corp. 5.32s 12/14/99 33,623,167
40,000,000 Chase Manhattan Corp. 5.32s 11/17/99 39,716,267
30,000,000 Chase Manhattan Corp. 5.32s 11/1/99 29,858,133
30,000,000 Chevron Transport Corp. 5.70s 2/24/00 29,301,750
30,000,000 Chevron Transport Corp. 5.32s 11/15/99 29,796,067
25,000,000 Chevron UK Investment PLC 5.33s 11/18/99 24,818,632
47,156,000 Ciesco L.P. 5.32s 10/20/99 47,016,628
39,000,000 Citicorp 5.27s 10/1/99 38,994,291
43,000,000 Corporate Asset Funding Co. Inc. 5.16s 10/27/99 42,833,590
50,000,000 Corporate Receivables Corp. 5.40s 11/9/99 49,700,000
40,000,000 Corporate Receivables Corp. 5.36s 12/1/99 39,630,756
31,000,000 Corporate Receivables Corp. 5.35s 10/28/99 30,871,006
50,000,000 Corporate Receivables Corp. 5.35s 10/18/99 49,866,250
43,000,000 CXC Inc. 5.37s 11/9/99 42,743,433
43,000,000 CXC Inc. 5.35s 10/26/99 42,833,853
50,000,000 DaimlerChrysler NA Holding Corp. 5.33s 10/25/99 49,814,931
31,056,000 Delaware Funding Corp. 5.38s 11/12/99 30,856,431
40,000,000 Delaware Funding Corp. 5.32s 10/6/99 39,964,533
42,000,000 Delaware Funding Corp. 5.17s 10/21/99 41,873,335
43,000,000 Eureka Securitization Inc. 5.712s 2/22/00 43,000,000
35,000,000 Eureka Securitization Inc. 5.38s 12/14/99 34,607,708
40,000,000 Eureka Securitization Inc. 5.38s 12/6/99 39,599,489
40,000,000 Eureka Securitization Inc. 5.35s 11/2/99 39,803,833
30,000,000 Eureka Securitization Inc. 5.34s 10/28/99 29,875,400
74,000,000 Falcon Asset Securitization Corp. 5.39s 11/10/99 73,545,743
37,342,000 Falcon Asset Securitization Corp. 5.36s 10/27/99 37,191,885
36,000,000 Falcon Asset Securitization Corp. 5.32s 10/15/99 35,920,200
44,852,000 Falcon Asset Securitization Corp. 5.22s 11/8/99 44,598,362
25,000,000 Fleet Financial Group 5.77s 3/8/00 24,358,889
34,000,000 Fleet Financial Group 5.75s 2/25/00 33,196,278
32,500,000 Florens Containers, Inc. (Bank of America
(LOC)) 5.30s 11/3/99 32,337,319
19,000,000 Formosa Plastics Corp. (Bank of America
(LOC)) 5.24s 12/10/99 18,803,646
35,000,000 Formosa Plastics Corp. (Bank of America
(LOC)) 5.19s 10/14/99 34,929,358
50,000,000 General Electric Capital Corp. 5.33s 11/26/99 49,578,042
49,000,000 General Electric Capital Corp. 5.33s 10/13/99 48,905,689
50,000,000 General Electric Capital Corp. 5.30s 10/4/99 49,970,556
23,000,000 General Electric Capital Corp. 5.02s 10/7/99 22,977,549
34,000,000 Goldman Sachs 4.82s 10/15/99 33,931,717
135,000,000 Household Finance Corp. 5.60s 10/1/99 134,979,000
35,000,000 International Business Machines Corp. 6.25s 1/19/00 34,787,326
40,000,000 International Business Machines Corp. 5.30s 10/8/99 39,952,889
42,000,000 Lehman Brothers Hldg. 5.40s 11/15/99 41,710,200
30,000,000 Merrill Lynch & Co., Inc. 5.29s 10/5/99 29,977,958
50,000,000 Metlife Funding 5.30s 11/5/99 49,735,000
40,000,000 Metlife Funding 5.30s 10/26/99 39,846,889
35,000,000 Metlife Funding 5.29s 10/19/99 34,902,282
54,000,000 Metlife Funding 5.29s 10/7/99 53,944,455
34,500,000 Morgan Stanley Dean Witter & Co. 5.43s 2/4/00 33,839,124
43,000,000 PNC Bank NA 5.41s 11/29/99 42,612,283
42,000,000 PNC Bank NA 5.41s 11/22/99 41,665,482
40,000,000 Preferred Receivables Funding Corp. 5.87s 1/31/00 39,197,767
40,000,000 Preferred Receivables Funding Corp. 5.42s 11/2/99 39,801,267
25,750,000 Preferred Receivables Funding Corp. 4.82s 10/29/99 25,650,018
30,170,000 Sheffield Receivables Corp. 5.39s 11/15/99 29,962,212
63,050,000 Sheffield Receivables Corp. 5.37s 10/14/99 62,918,331
46,000,000 Sigma Finance, Inc. 5.40s 11/24/99 45,620,500
40,000,000 Sigma Finance, Inc. 5.39s 11/16/99 39,718,522
45,500,000 Sigma Finance, Inc. 5.21s 10/15/99 45,401,227
25,000,000 Sigma Finance, Inc. 4.86s 10/8/99 24,973,000
35,000,000 Sigma Finance, Inc. 4.86s 10/7/99 34,966,925
45,600,000 Wal-Mart Stores, Inc. 5.29s 11/30/99 45,191,259
40,000,000 Wal-Mart Stores, Inc. 5.28s 10/12/99 39,929,600
36,200,000 Windmill Funding Corp. 5.86s 1/14/00 35,575,389
25,000,000 Windmill Funding Corp. 5.83s 1/18/00 24,554,653
36,000,000 Windmill Funding Corp. 5.39s 11/22/99 35,714,330
25,000,000 Windmill Funding Corp. 5.38s 12/16/99 24,712,319
25,000,000 Windmill Funding Corp. 5.38s 11/4/99 24,869,236
--------------
3,061,312,957
Foreign (27.0%) (a)
- --------------------------------------------------------------------------------------------------------------------------
29,000,000 Abbey National North America Corp.
4.74s (United Kingdom) 10/29/99 28,889,268
90,000,000 Aegon Funding Corp. 5.76s (Netherlands) 3/29/00 87,395,611
25,000,000 Banco Bradesco S.A. (Barclays (LOC))
5.485s (United Kingdom) 6/16/00 24,009,653
27,000,000 Banco Bradesco S.A. (Barclays (LOC))
5.20s (United Kingdom) 12/20/99 26,684,100
45,000,000 Banco De Galicia Y Buenos Aires S.A.
(Bayerische Vereninsbank (LOC))
5.40s (Germany) 11/23/99 44,635,500
20,000,000 Banco Mercantil Del Norte S.A.
(Bayerische Vereninsbank (LOC))
5.24s (Germany) 11/29/99 19,825,333
43,000,000 CBA Delaware Finance 5.37s (Australia) 12/3/99 42,589,493
35,000,000 CBA Delaware Finance 5.35s (Australia) 12/17/99 34,594,292
42,000,000 CBA Delaware Finance 5.35s (Australia) 12/2/99 41,606,775
53,000,000 Credit Suisse First Boston 5.80s (Switzerland) 2/10/00 51,864,328
30,000,000 Credit Suisse First Boston 5.70s (Switzerland) 2/9/00 29,373,000
34,000,000 Credit Suisse First Boston International Guernsey
5.82s (Switzerland) 2/14/00 33,246,957
32,000,000 Credit Suisse First Boston International Guernsey
5.80s (Switzerland) 3/2/00 31,206,044
39,400,000 Credit Suisse First Boston International Guernsey
5.79s (Switzerland) 3/6/00 38,398,780
27,500,000 Demir Funding Corp. (Bayerische Vereinsbank
(LOC)) 5.19s (Germany) 10/12/99 27,452,425
36,880,000 Den Danske Corp. Inc. 5.18s (Denmark) 10/22/99 36,763,254
42,000,000 Den Danske Corp. Inc. 4.83s (Denmark) 11/30/99 41,656,265
41,000,000 Deutsche Bank Financial Inc. 5.17s (Germany) 12/15/99 40,552,508
30,000,000 ED & F Man Finance Inc. (Rabobank New York
(LOC)) 5.40s (Netherlands) 12/7/99 29,694,000
30,000,000 ED & F Man Finance Inc. (Rabobank New York
(LOC)) 5.38s (Netherlands) 12/10/99 29,681,683
44,400,000 ED & F Man Finance Inc. (Rabobank New York
(LOC)) 5.34s (Netherlands) 10/13/99 44,314,382
25,000,000 Formosa Plastics Corp. (ABN AMRO Bank N.V.
(LOC)) 5.87s (Netherlands) 2/18/00 24,425,229
26,000,000 Formosa Plastics Corp. (ABN AMRO Bank N.V.
(LOC)) 5.18s (Netherlands) 10/19/99 25,928,919
45,500,000 Formosa Plastics Corp. (ABN AMRO Bank N.V.
(LOC)) 5.15s (Netherlands) 10/13/99 45,415,383
18,000,000 Nacional Financiera, S.N.C. (Barclays (LOC)) 4.87s
(United Kingdom) 11/12/99 17,895,295
24,850,000 Northern Rock PLC 5.36s (United Kingdom) 11/3/99 24,724,204
25,000,000 Northern Rock PLC 5.34s (United Kingdom) 11/9/99 24,851,667
45,000,000 PEMEX Capital, Inc.(Societe General (LOC))
5.25s (France) 10/29/99 44,809,688
30,000,000 Toronto Dominion Holdings 4.77s (Canada) 11/5/99 29,856,900
20,000,000 Transportation de Gas del Sur S.A. (Dresdner
Bank AG (LOC)) 5.21s (Germany) 10/22/99 19,936,322
20,000,000 Transportation de Gas del Sur S.A. (Dresdner
Bank AG (LOC)) 5.19s (Germany) 10/20/99 19,942,333
20,000,000 Transportation de Gas del Sur S.A. (Dresdner
Bank AG (LOC)) 5.18s (Germany) 10/18/99 19,948,200
30,425,000 United Bank of Switzerland 5.60s (Switzerland) 10/1/99 30,420,267
30,000,000 United Bank of Switzerland 5.52s (Switzerland) 6/2/00 29,992,236
25,000,000 United Bank of Switzerland 4.79s (Switzerland) 10/12/99 24,960,083
21,000,000 Unibanco-Grand Cayman (WestDeutscke
Landesbank (LOC)) 5.40s (Germany) 7/13/00 20,095,950
43,000,000 Union Bank Of Switzerland 4.84s (Switzerland) 12/13/99 42,572,198
50,000,000 United Mexican States (Barclays (LOC))
5.35s (Mexico) 10/22/99 49,836,528
38,300,000 Westpac Capital Corp. 5.33s (Australia) 11/16/99 38,033,485
--------------
1,318,078,538
--------------
Total Commercial Paper (cost $4,379,391,495) $4,379,391,495
CERTIFICATES OF DEPOSIT (10.5%) (a) MATURITY
PRINCIPAL AMOUNT DATE VALUE
- --------------------------------------------------------------------------------------------------------------------------
$34,000,000 ABN AMRO Bank N.V. 5.70s (Netherlands) 7/10/00 $ 33,987,202
34,000,000 Bank Of Nova Scotia 5.57s (Canada) 6/12/00 33,993,047
35,000,000 Bayerische Hypo-und Verinsbank AG
5.15s (Germany) 4/20/00 34,990,627
53,000,000 Bayerische Landesbank Girozentrale
5.12s (Germany) 3/21/00 52,944,950
35,000,000 Canadian Imperial Bank Of Commerce
5.12s (Canada) 2/23/00 34,993,256
34,000,000 Chase Manhattan Corp. 5.61s 2/15/00 34,000,000
30,000,000 Chase Manhattan Corp. 4.93s 10/6/99 30,000,000
35,000,000 Commerzbank AG 5.65s (Germany) 6/26/00 34,989,917
35,000,000 Commerzbank AG 5.27s (Germany) 5/18/00 34,989,346
34,000,000 Commerzbank AG 5.22s (Germany) 5/12/00 33,989,915
30,000,000 Commerzbank AG 5.09s (Germany) 2/16/00 29,996,696
25,000,000 Deutsche Bank. 5.41s (Germany) 5/22/00 24,992,125
30,000,000 Deutsche Bank 5.10s (Germany) 2/8/00 29,995,848
35,000,000 Deutsche Bank 5.10s (Germany) 1/13/00 34,997,088
34,000,000 National Westminster Bank PLC Euro
5.42s (United Kingdom) 12/21/99 34,000,202
--------------
Total Certificates of Deposit (cost $512,860,219) $ 512,860,219
CORPORATE BONDS AND NOTES (2.8%) (a) MATURITY
PRINCIPAL AMOUNT DATE VALUE
- --------------------------------------------------------------------------------------------------------------------------
$39,000,000 Abbey National Treasury Service FRN
5.38s (United Kingdom) 5/1/00 $ 38,974,650
34,000,000 Goldman Sachs Group, Inc. notes 6.00s 8/7/00 34,000,000
35,000,000 National Rural Utilities notes 5.59s 6/26/00 35,000,000
30,000,000 Wells Fargo & Co. notes 5.35s 3/31/00 29,988,477
--------------
Total Corporate Bonds and Notes
(cost $137,963,127) $ 137,963,127
U.S. GOVERNMENT & AGENCY OBLIGATIONS (0.6%) (a)
(cost $31,195,104) MATURITY
PRINCIPAL AMOUNT DATE VALUE
- --------------------------------------------------------------------------------------------------------------------------
$31,471,000 Federal Home Loan Banks 5.26s 11/29/99 $ 31,195,104
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $5,061,409,945) (b) $5,061,409,945
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $4,886,152,923.
(b) The aggregate identified cost on a tax basis is the same.
The rates shown on Floating Rate Notes (FRN) are the current interest rates shown at September 30, 1999, which are
subject to change based on the terms of the security.
DIVERSIFICATION BY COUNTRY
Distribution of investments by country of issue at September 30, 1999: (as percentage of Market Value)
Australia 2.4%
Canada 2.0
Denmark 1.5
France 1.0
Germany 10.3
Mexico 1.0
Netherlands 6.3
Switzerland 6.2
United Kingdom 4.4
United States 64.9
-----
Total 100.0%
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
September 30, 1999
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at amortized cost (Note 1) $5,061,409,945
- -----------------------------------------------------------------------------------------------
Cash 5,035
- -----------------------------------------------------------------------------------------------
Interest and other receivables 15,892,605
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 31,496,312
- -----------------------------------------------------------------------------------------------
Total assets 5,108,803,897
Liabilities
- -----------------------------------------------------------------------------------------------
Distributions payable to shareholders 729,522
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 34,787,326
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 182,172,389
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 3,646,384
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 283,058
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 36,233
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 7,938
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 465,973
- -----------------------------------------------------------------------------------------------
Other accrued expenses 522,151
- -----------------------------------------------------------------------------------------------
Total liabilities 222,650,974
- -----------------------------------------------------------------------------------------------
Net assets $4,886,152,923
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Note 4) $4,886,152,923
- -----------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per class
A share ($3,691,475,399 divided by 3,691,475,399 shares) * $1.00
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($1,041,452,406 divided by 1,041,452,406 shares)** $1.00
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($17,090,859 divided by 17,090,859 shares)** $1.00
- -----------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per class M share
($136,134,259 divided by 136,134,259 shares)* $1.00
- -----------------------------------------------------------------------------------------------
* Offered at net asset value.
** Class B and class C shares are available only by exchange of class B and class C
shares from other Putnam funds and to certain systematic investment plan investors. For
investors who acquired class B and class C shares through an exchange, the applicable
contingent deferred sales charge will depend upon the fund which you exchanged.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended September 30, 1999
<S> <C>
Interest income $213,889,955
- -----------------------------------------------------------------------------------------------
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 12,884,015
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 5,286,055
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 55,500
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 31,766
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 4,057,955
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 18,723
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 158,302
- -----------------------------------------------------------------------------------------------
Reports to shareholders 124,190
- -----------------------------------------------------------------------------------------------
Registration fees 812,898
- -----------------------------------------------------------------------------------------------
Auditing 42,402
- -----------------------------------------------------------------------------------------------
Legal 25,116
- -----------------------------------------------------------------------------------------------
Postage 442,678
- -----------------------------------------------------------------------------------------------
Other 60,854
- -----------------------------------------------------------------------------------------------
Total expenses 24,000,454
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (829,504)
- -----------------------------------------------------------------------------------------------
Net expenses 23,170,950
- -----------------------------------------------------------------------------------------------
Net investment income 190,719,005
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $190,719,005
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended September 30
-------------------------------
1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 190,719,005 $ 139,881,316
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 190,719,005 139,881,316
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income
Class A (151,295,146) (113,849,258)
- ---------------------------------------------------------------------------------------------------------------
Class B (34,510,760) (22,607,932)
- ---------------------------------------------------------------------------------------------------------------
Class C (151,030) --
- ---------------------------------------------------------------------------------------------------------------
Class M (4,762,069) (3,424,126)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 1,432,680,477 849,862,355
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets 1,432,680,477 849,862,355
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of year 3,453,472,446 2,603,610,091
- ---------------------------------------------------------------------------------------------------------------
End of year $4,886,152,923 $3,453,472,446
- ---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .0478 .0517 .0505 .0507 .0521
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0478 .0517 .0505 .0507 .0521
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.0478) (.0517) (.0505) (.0507) (.0521)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return
at net asset value (%)(a) 4.89 5.29 5.17 5.19 5.33
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $3,691,475 $2,598,891 $2,134,223 $1,659,288 $1,189,640
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .48 .58 .57 .57 .62
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.73 5.20 5.06 5.00 5.23
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements. (Note 2)
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .0429 .0468 .0455 .0457 .0469
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0429 .0468 .0455 .0457 .0469
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.0429) (.0468) (.0455) (.0457) (.0469)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return
at net asset value (%)(a) 4.37 4.78 4.65 4.67 4.80
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,041,452 $759,748 $410,885 $438,316 $256,533
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .98 1.08 1.07 1.07 1.12
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.24 4.69 4.57 4.51 4.75
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements. (Note 2)
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share February 1, 1999+
operating performance to September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value,
beginning of period $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .0284
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0284
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.0284)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return
at net asset value (%)(a) 2.87*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $17,091
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .65*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.83*
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements. (Note 2)
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share Dec. 8, 1994+
operating performance Year ended September 30 to Sept. 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .0463 .0502 .0490 .0490 .0434
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0463 .0502 .0490 .0490 .0434
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.0463) (.0502) (.0490) (.0490) (.0434)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return
at net asset value (%)(a) 4.73 5.14 5.01 5.02 4.43*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $136,134 $94,833 $58,502 $29,075 $8,440
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .63 .73 .72 .72 .67*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.58 5.04 4.92 4.82 4.29*
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements. (Note 2)
</TABLE>
Notes to financial statements
September 30, 1999
Note 1
Significant accounting policies
Putnam Money Market Fund (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
industry and in commercial paper and short-term corporate obligations of
issuers in the personal credit institution and business credit industries.
The fund offers class A, class B, class C, and class M shares. The fund
began offering class C shares on February 1, 1999. Each class of shares is
sold without a front-end sales charge. Class B and class C shares are
offered only in exchange for class B and class C shares of other Putnam
funds, or purchased by certain systemic investments plans. Class B shares,
which convert to class A shares after approximately eight years, pay an
ongoing distribution fee, and are subject to a contingent deferred sales
charge, if those shares are redeemed within six years of purchase
(including any holding period of the shares in other Putnam funds). Class
C shares are subject to the same fees and expenses as class B shares,
except that class C shares have a one-year 1.00% contingent deferred sales
charge and do not convert to class A shares. Shareholders who acquired
class B and class C shares through an exchange are subject to the same
contingent deferred sales charge schedule as the fund from which they were
exchanged. Class M shares pay an ongoing distribution fee lower than class
B and class C shares but are not subject to a contingent deferred sales
charge.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class
(including the distribution fees applicable to such class). Each class
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 that fund were liquidated. In addition, the
Trustees declare separate dividends on each class of shares.
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
at the date 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 The valuation of the fund's portfolio instruments is
determined 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 determined by valuing it at cost originally and thereafter
amortizing any discount or premium from its face value at a constant rate
until maturity.
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) Security transactions 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.
D) 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.
E) Interest income and distributions to shareholders Interest is recorded
on the accrual basis. Income dividends are recorded daily by the fund and
are distributed monthly to the shareholders. Distributions of realized
gains, if any, are paid at least annually.
F) Amortization of bond premium and accretion of bond discount Premiums
and discounts from purchases of short-term investments are
amortized/accreted using the straight-line method.
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: 0.50% of the first $100
million of average net assets, 0.40% of the next $100 million, 0.35% of
the next $300 million, 0.325% of the next $500 million, and 0.30%
thereafter.
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 year ended September 30, 1999, fund expenses were reduced by
$829,504 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 $2,933
has been allocated to the fund, and an additional fee for each Trustee's
meeting attended. Trustees who are not interested persons of Putnam
Management and who serve on committees of the 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.
The fund has adopted a distribution plan (the "Plans") with respect to its
class B, class C and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam
Investments, Inc., for services provided and expenses incurred by it in
distributing shares of the fund. The Plans provide for payment by the fund
to Putnam Mutual Funds Corp. at an annual rate of up to 0.75%, 0.75% and
1.00% of the fund's average net assets attributable to class B, class C
and class M shares, respectively. The Trustees have approved payment by
the fund to an annual rate of 0.50%, 0.50% and 0.15% of the average net
assets attributable to class B, class C and class M shares, respectively.
For the year ended September 30, 1999, Putnam Mutual Funds Corp., acting
as underwriter received $5,738,943 and $4,937 in contingent deferred sales
charges from redemptions of class B and class C shares, respectively. A
deferred sales charge of up to 1% is assessed on certain redemptions of
class A shares. For the year ended September 30, 1999, Putnam Mutual
Funds, Corp., acting as the underwriter received no monies in contingent
deferred sales charges from redemptions of class A shares acquired through
an exchange from another fund.
Note 3
Purchases and sales of securities
During the year ended September 30, 1999, purchases and sales (including
maturities) of investment securities (all short-term obligations)
aggregated $76,248,853,478 and $110,713,122, respectively. In determining
the net gain or loss on securities sold, the cost of securities has been
determined on the identified cost basis.
Note 4
Capital shares
At September 30, 1999, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares at a
constant net asset value of $1.00 per share were as follows:
Year ended September 30
- -----------------------------------------------------------------------------
1999 1998
- -----------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------
Shares sold 10,270,592,982 6,667,169,273
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 145,761,022 108,688,157
- -----------------------------------------------------------------------------
10,416,354,004 6,775,857,430
Shares
repurchased (9,323,769,763) (6,311,189,399)
- -----------------------------------------------------------------------------
Net increase 1,092,584,241 464,668,031
- -----------------------------------------------------------------------------
Year ended September 30
- -----------------------------------------------------------------------------
1999 1998
- -----------------------------------------------------------------------------
Class B
- -----------------------------------------------------------------------------
Shares sold 2,660,145,189 2,232,701,520
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 32,075,627 20,739,502
- -----------------------------------------------------------------------------
2,692,220,816 2,253,441,022
Shares
repurchased (2,410,516,905) (1,904,577,891)
- -----------------------------------------------------------------------------
Net increase 281,703,911 348,863,131
- -----------------------------------------------------------------------------
For the period February 1, 1999
(commencement of operations)
to September 30, 1999
- -----------------------------------------------------------------------------
Class C
- -----------------------------------------------------------------------------
Shares sold 29,815,064
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 151,030
- -----------------------------------------------------------------------------
29,966,094
Shares
repurchased (12,875,235)
- -----------------------------------------------------------------------------
Net increase 17,090,859
- -----------------------------------------------------------------------------
Year ended September 30
- -----------------------------------------------------------------------------
1999 1998
- -----------------------------------------------------------------------------
Class M
- -----------------------------------------------------------------------------
Shares sold 829,077,838 361,506,694
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 4,690,359 3,282,134
- -----------------------------------------------------------------------------
833,768,197 364,788,828
Shares
repurchased (792,466,731) (328,457,635)
- -----------------------------------------------------------------------------
Net increase 41,301,466 36,331,193
- -----------------------------------------------------------------------------
Federal tax information
(Unaudited)
The Form 1099 you receive in January 2000 will show the tax status of all
distributions paid to your account in calendar 1999.
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 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.
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
INDEPENDENT
ACCOUNTANTS
PricewaterhouseCoopers LLP
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
Edward H. D'Alelio
Vice President
Joanne Driscoll
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam Money Market
Fund. 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, and the most
recent copy of Putnam's Quarterly Performance Summary. For more
information or to request a prospectus, call toll free: 1-800-225-1581.
You can also learn more at Putnam Investments' Web site: www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
AN039 56145 010/879/534 11/99
