Putnam
Money Market
Fund
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
3-31-00
[SCALE LOGO OMITTED]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[COPYRIGHT] Karsh, Ottawa
Dear Shareholder:
The past six months represented a relatively positive period for money
market investors. The transition from 1999 to 2000 brought little of the
disruption anticipated by many analysts, and the money market remained
fairly stable as the new year began. The economy has continued to grow,
and employment data have stayed strong. Inflation remains largely at
bay, providing solid underpinnings for the money market and attractive
results for Putnam Money Market Fund.
Total return for 6 months ended 3/31/00
Class A Class B Class C Class M
NAV NAV CDSC NAV CDSC NAV
- ----------------------------------------------------------------------
2.68% 2.42% -2.58% 2.42% 1.42% 2.60%
- ----------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods and explanation of performance
calculation methods begin on page 6.
* FED MAY BE NEARING END OF ITS CURRENT CYCLE OF TIGHTENING
Yields on money market securities have become attractive over the past
six months, especially relative to yields on longer-term bonds. The
Federal Reserve Board raised short-term interest rates five times over
the past nine months, taking back its three interest-rate reductions in
the fall of 1998 and then some.
At the same time, the federal government initiated a buy-back program
for 30-year Treasury bonds. The buy-back program, combined with the
tightening cycle, caused an inverted yield curve in the first quarter of
2000.
The Fed appears poised for another rate increase or two over the coming
months. In an inverted yield curve, yields on short-term money market
securities are higher than those on long-term Treasury bonds, which is
exactly the reverse of the normal upward-sloping relationship between
short- and long-term yields.
Demand for money market securities has grown substantially over the
period, as much as 18% year to year as of March 31, 2000. The higher
yields are among the reasons for the increase, along with the attractive
relative stability offered by money market instruments.
Supply has also been growing as more corporations seek their financing
through the short-term market rather than by issuing longer-term bonds.
New supply has not kept pace with demand, however, and the result has
been a favorable environment for investors in money market funds.
* NEUTRAL DURATION POSITIONS FUND WELL FOR HIGHER RATES
In this environment of higher interest rates, your fund's manager,
Joanne Driscoll, continued to use duration as an important tool for
managing the fund. For most of the semiannual period, she kept portfolio
duration neutral or slightly shorter than the market average for two
main reasons.
First, the money market experienced a great deal of volatility during
the period as investors responded to waves of volatility in the stock
market by moving assets in and out of money market funds. To invest
appropriately in such a changeable environment, Joanne needed to keep
the fund flexible.
Second, she had to try to anticipate the Fed's moves on short-term
interest rates. By keeping the portfolio's maturities barbelled, Joanne
has sought to maintain enough liquidity not only to make funds available
for redemptions by shareholders moving funds to other investments but
also to take advantage of higher rates as they become available in the
money market.
Over the period, Joanne has also sought to boost income by increasing
the fund's allocation to floating-rate money market instruments. Yields
on these securities are pegged to standard money market indexes that
reflect the most current money market rates. Because the yields are
reset frequently, investing in these securities allows the fund to
capture extra income when rates are rising, as has been the case over
the past six months.
As long as the economy continues to grow, the Fed may well continue
tightening interest rates gradually over the next several months. Should
inflation threaten to accelerate, the Fed may raise rates even more
dramatically. In either case, money market funds remain attractive for
investors seeking a combination of liquidity, superior quality, and
relative stability.
* UPCOMING TRANSITION
This is my last letter to you and other Putnam Money Market Fund
shareholders. After more than 30 years as Chairman of the Trustees and
President of the Putnam Funds, the time has come for me to step aside.
In June, John Hill will become Chairman. John is currently an
independent Trustee and has served on the Board for the past 14 years.
In addition, my son, George Putnam, III, will take on the role of
President. I am confident that the leadership of the funds will be in
exceptionally strong hands. I will become Chairman Emeritus, remain a
shareholder, and stay in close touch with the funds.
Respectfully yours,
/S/ GEORGE PUTNAM
George Putnam
Chairman of the Trustees
May 17, 2000
The views expressed here are exclusively those of Putnam Management.
They are not meant as investment advice. Although the described holdings
were viewed favorably as of 3/31/00, 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 (3/31/00)
Current
return*
- ------------------------------------------------------------------------
Passbook savings account 1.09%
- ------------------------------------------------------------------------
Taxable money market fund 7-day yield 5.53
- ------------------------------------------------------------------------
3-month certificate of deposit 4.24
- ------------------------------------------------------------------------
Putnam Money Market Fund (7-day yield)
- ------------------------------------------------------------------------
Class A 5.49
- ------------------------------------------------------------------------
Class B 4.99
- ------------------------------------------------------------------------
Class C 5.01
- ------------------------------------------------------------------------
Class M 5.34
- ------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 3/31/00 (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
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
6 months 2.68% 2.42% -2.58% 2.42% 1.42% 2.60%
- ----------------------------------------------------------------------------------------
1 year 5.09 4.56 -0.44 4.58 3.58 4.93
- ----------------------------------------------------------------------------------------
5 years 28.88 25.70 23.70 25.79 25.79 27.90
Annual average 5.21 4.68 4.35 4.70 4.70 5.04
- ----------------------------------------------------------------------------------------
10 years 60.40 52.83 52.83 52.95 52.95 58.01
Annual average 4.84 4.33 4.33 4.34 4.34 4.68
- ----------------------------------------------------------------------------------------
Annual average
(life of fund) 7.25 6.72 6.72 6.72 6.72 7.09
- ----------------------------------------------------------------------------------------
Current return (end of period)
- ----------------------------------------------------------------------------------------
Current 7-day yield1 5.49% 4.99% 5.01% 5.34%
- ----------------------------------------------------------------------------------------
Current 30-day yield1 5.42 4.90 4.92 5.26
- ----------------------------------------------------------------------------------------
1 The 7-day and 30-day yields are the two most common gauges for measuring money market
mutual fund performance.
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 3/31/00
Lipper Money Consumer
Market Average price index
- ------------------------------------------------------------------------
6 months 2.50% 2.03%
- ------------------------------------------------------------------------
1 year 4.72 3.69
- ------------------------------------------------------------------------
5 years 27.20 13.15
Annual average 4.93 2.50
- ------------------------------------------------------------------------
10 years 58.84 33.02
Annual average 4.73 2.89
- ------------------------------------------------------------------------
Annual average
(life of fund) 5.17 4.74
- ------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
DISTRIBUTION INFORMATION 6 MONTHS ENDED 3/31/00
Class A Class B Class C Class M
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Distributions (numbe 6 6 6 6
- ---------------------------------------------------------------------------------------
Income $0.026487 $0.023943 $0.023956 $0.025731
- ---------------------------------------------------------------------------------------
Total $0.026487 $0.023943 $0.023956 $0.025731
- ---------------------------------------------------------------------------------------
</TABLE>
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 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 and assumes redemption at the
end of the period. The CDSC schedule will 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 sales charge, 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 constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values
as of the last day of the reporting period. Holdings are organized by
asset type and industry sector, country, or state to show areas of
concentration and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are
subtracted from this total. The result is divided by the number of
shares to determine the net asset value per share, which is calculated
separately for each class of shares. (For funds with preferred shares,
the amount subtracted from total assets includes the net assets
allocated to remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss
for the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that
remain in the portfolio -- any change in unrealized gains or losses over
the period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number
of the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed
here may not match the sources listed in the Statement of operations
because the distributions are determined on a tax basis and may be paid
in a different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment
results, per-share distributions, expense ratios, net investment income
ratios and portfolio turnover in one summary table, reflecting the five
most recent reporting periods. In a semiannual report, the highlight
table also includes the current reporting period. For open-end funds, a
separate table is provided for each share class.
<TABLE>
<CAPTION>
The fund's portfolio
March 31, 2000 (Unaudited)
COMMERCIAL PAPER (83.5%) (a) MATURITY
PRINCIPAL AMOUNT DATE VALUE
<S> <C> <C> <C> <C>
Domestic (60.8%) (a)
- ----------------------------------------------------------------------------------------------------------------------------
$43,000,000 American General Finance Corp. 5.94s 5/30/00 $ 42,574,300
41,000,000 Asset Securitization Cooperative Corp. 5.9s 5/24/00 40,637,150
61,720,000 Associates Corp. of North America 6 1/4s 4/3/00 61,687,854
47,000,000 Banc One Financial Corp. 6.09s 5/24/00 46,570,655
42,000,000 Banc One Financial Corp. 5.96s 6/19/00 41,443,733
34,000,000 Bank Of America Corp. 6.07s 8/23/00 33,168,747
49,000,000 Bank Of New York Co. 6.08s 4/12/00 48,900,693
90,000,000 CIT Group, Inc. 6.3s 4/3/00 89,952,750
35,750,000 Citic Pacific Finance Ltd. (Bank of America (LOC)) 6.11s 6/14/00 35,294,932
45,500,000 Citic Pacific Finance Ltd. (Bank of America (LOC)) 5.965s 6/1/00 45,032,576
50,000,000 CXC Inc. 6.09s 5/22/00 49,560,167
30,000,000 CXC Inc. 5.92s 5/17/00 29,768,133
36,000,000 CXC Inc. 5.87s 4/4/00 35,976,520
40,000,000 Delaware Funding Corp. 6.13s 6/26/00 39,407,433
50,000,000 Eureka Securitization, Inc. 6.07s 5/12/00 49,645,917
50,000,000 Eureka Securitization, Inc. 6.03s 5/19/00 49,589,625
43,000,000 Eureka Securitization, Inc. 6.03s 5/4/00 42,755,115
78,000,000 Falcon Asset Securitization Corp. 6.08s 5/11/00 77,459,404
50,000,000 Falcon Asset Securitization Corp. 5.87s 4/7/00 49,942,931
25,000,000 Florens Container, Inc. (Bank of America (LOC)) 5.97s 5/1/00 24,871,479
25,000,000 Formosa Plastics Corp. (Bank of America (LOC)) 5.88s 4/10/00 24,959,167
50,000,000 General Electric Capital International Funding 5.93s 5/23/00 49,563,486
50,000,000 General Electric Capital International Funding 5.93s 5/3/00 49,728,208
35,000,000 General Electric Capital International Funding 5.9s 4/27/00 34,845,125
44,600,000 General Electric Capital International Funding 5.86s 4/6/00 44,556,441
27,000,000 Goldman Sachs 6.17s 8/22/00 26,333,640
41,000,000 Goldman Sachs 6s 5/25/00 40,624,167
45,000,000 Goldman Sachs 5.915s 5/10/00 44,704,250
128,000,000 Household Finance Corp. 6.31s 4/3/00 127,933,693
44,000,000 Merrill Lynch & Co., Inc. 5.89s 4/24/00 43,827,227
35,000,000 Merrill Lynch & Co., Inc. 5.88s 4/11/00 34,937,117
50,000,000 Merrill Lynch & Co., Inc. 5.86s 4/18/00 49,853,500
50,000,000 Merrill Lynch & Co., Inc. 5.85s 4/14/00 49,886,250
37,964,000 Metlife Funding 5.87s 4/6/00 37,926,859
40,000,000 Morgan Stanley Dean Witter & Co. 5.95s 5/26/00 39,629,778
54,000,000 Morgan Stanley Dean Witter & Co. 5.88s 4/25/00 53,779,500
44,000,000 Old Line Funding Corp. 5.97s 4/17/00 43,875,957
55,901,000 Old Line Funding Corp. 5.95s 5/5/00 55,572,193
44,000,000 Old Line Funding Corp. 5.91s 4/20/00 43,855,533
24,501,000 Old Line Funding Corp. 5.9s 4/14/00 24,444,784
35,000,000 Park Avenue Receivables Corp. 6.12s 4/5/00 34,970,250
42,000,000 PNC Funding Corp. 5.88s 4/11/00 41,924,540
44,000,000 Preferred Receivables Funding Corp. 6.08s 5/8/00 43,717,618
35,650,000 Preferred Receivables Funding Corp. 5.95s 5/30/00 35,296,471
42,240,000 Preferred Receivables Funding Corp. 5.95s 4/27/00 42,051,504
35,000,000 Salomon Smith Barney Holding Sales 5.95s 5/19/00 34,716,549
25,000,000 Salomon Smith Barney Holding Sales 5.87s 4/20/00 24,918,472
50,000,000 Salomon Smith Barney Holding Sales 5.87s 4/17/00 49,861,403
20,135,000 Salomon Smith Barney Holding Sales 5.86s 4/10/00 20,102,225
50,000,000 Salomon Smith Barney Holding Sales 5.85s 4/12/00 49,902,500
85,500,000 Sheffield Receivables Corp. 5.88s 4/3/00 85,457,271
26,000,000 Sigma Finance, Inc. 6.05s 7/28/00 25,480,036
35,000,000 Sigma Finance, Inc. 5.99s 6/6/00 34,609,818
26,936,000 Sigma Finance, Inc. 5.93s 4/28/00 26,811,765
42,300,000 Sigma Finance, Inc. 5.82s 5/31/00 41,882,852
42,000,000 Sigma Finance, Inc. 5.569s 4/28/00 42,000,000
27,393,000 Thunder Bay Funding Inc. 5.95s. 5/2/00 27,248,121
78,538,000 Thunder Bay Funding Inc. 5.935s 4/19/00 78,291,382
26,098,000 Thunder Bay Funding Inc. 5.93s 4/27/00 25,981,929
22,165,000 Thunder Bay Funding Inc. 5.92s 4/10/00 22,128,366
23,700,000 Windmill Funding Corp. 6.07s 6/19/00 23,380,313
81,400,000 Windmill Funding Corp. 5.86s 4/13/00 81,227,127
----------------
2,747,037,501
Foreign (22.7%) (a)
- ----------------------------------------------------------------------------------------------------------------------------
43,000,000 Abbey National North America Corp. 6.35s
(United Kingdom) 12/22/00 40,982,464
45,000,000 Aegon Funding Corp. 6.3s (Netherlands) 9/27/00 43,582,500
25,500,000 Banco Bradesco S.A. (Barclays Bank (LOC))
5.98s (United Kingdom) 9/28/00 24,733,314
50,000,000 Banco Bradesco S.A. (Barclays Bank (LOC))
5.485s (United Kingdom) 6/16/00 49,385,872
43,000,000 Banco De Galicia Y Buenos Aires S.A.
(Bayerische Hypo-und Vereinsbank AG (LOC))
5.9s (Germany) 4/18/00 42,873,150
30,000,000 Banca Serfin, SA (Barclays Bank (LOC))
6.07s (United Kingdom) 6/9/00 29,645,917
43,000,000 Bank Of Nova Scotia 6.55s (Canada) 1/24/01 42,983,266
50,000,000 Credit Suisse First Boston 5.95s (Switzerland) 6/15/00 49,371,944
27,225,000 Credit Suisse First Boston International Guernsey
6.09s (Switzerland) 6/16/00 26,870,372
34,400,000 Credit Suisse First Boston International Guernsey
6.02s (Switzerland) 6/13/00 33,974,319
50,000,000 Credit Suisse First Boston International Guernsey
5.99s (Switzerland) 6/22/00 49,309,486
50,000,000 DaimlerChrysler NA Holding Corp.
5.93s (Germany) 5/15/00 49,629,375
36,000,000 DaimlerChrysler NA Holding Corp.
5.92s (Germany) 6/30/00 35,461,280
23,000,000 DaimlerChrysler NA Holding Corp.
5.92s (Germany) 5/8/00 22,856,276
25,000,000 ED&F Man Finance, Inc. (Rabobank Nederland (LOC))
6.27s (Netherlands) 9/21/00 24,242,375
39,000,000 ED&F Man Finance, Inc. (Rabobank Nederland (LOC))
6.11s (Netherlands) 6/21/00 38,457,228
44,000,000 Merita North America Inc. 5.85s (Sweden) 4/5/00 43,964,250
30,000,000 Nacional Financiera, S.N.C. (Barclays Bank Plc (LOC)) 5.93s,
5/9/00 (United Kingdom) 5/9/00 29,807,275
48,000,000 Nordbanken NA, Inc. 6.12s (Sweden) 6/28/00 47,273,760
43,000,000 Societe Generale 6.37s (France) 12/26/00 40,945,675
147,000,000 United Bank of Switzerland 6.28s (Switzerland) 4/3/00 146,924,070
42,000,000 Unibanco (Barclays Bank (LOC)) 5.95s
(United Kingdom) 4/19/00 41,867,887
21,000,000 Unibanco-Grand Cayman (WestDeutsche
Landesbank (LOC)) 5.4s (Germany) 7/13/00 20,672,400
50,000,000 Westpac Banking Corp. 5.9s (Australia) 4/26/00 49,786,944
----------------
1,025,601,399
----------------
Total Commercial Paper (cost $3,772,638,900) $ 3,772,638,900
CERTIFICATES OF DEPOSITS (10.4%) (a) MATURITY
PRINCIPAL AMOUNT DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
$34,000,000 ABN AMRO Bank N.V. 5.7s (United Kingdom) 7/10/00 $ 33,995,381
43,000,000 Bank Of Nova Scotia 6.72s (Canada) 2/12/01 42,981,982
34,000,000 Bank Of Nova Scotia 5.57s (Canada) 6/12/00 33,998,002
35,000,000 Bayerische Hypo-und Verinsbank AG
5.15s (Germany) 4/20/00 34,999,077
39,000,000 Bayerische Landesbank Girozentrale
6.674s (Germany) 2/28/01 38,982,579
35,000,000 Commerzbank AG 5.65s (Germany) 6/26/00 34,996,722
35,000,000 Commerzbank AG 5.265s (Germany) 5/18/00 34,997,786
34,000,000 Commerzbank AG 5.22s (Germany) 5/12/00 33,998,118
43,000,000 Deutsche Bank 6 3/4s (Germany) 2/22/01 42,981,678
25,000,000 Deutsche Bank 5.36s (Germany) 5/22/00 24,998,243
42,000,000 Merita Bank, Ltd. 5.853s (Sweden) 3/1/01 41,984,962
42,000,000 Societe Generale 6.56s (France) 1/16/01 41,983,862
30,000,000 UBS AG 5.48s (Switzerland) 6/2/00 29,998,012
----------------
Total Certificates of Deposit (cost $470,896,408) $ 470,896,404
CORPORATE BONDS AND NOTES (7.9%) (a) MATURITY
PRINCIPAL AMOUNT DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
$39,000,000 Abbey National Treasury Service FRN
6.235s (United Kingdom) 5/1/00 $ 38,974,650
39,000,000 Bank One Corp. sr. notes Ser. B, FRN, 6.11s 11/17/00 38,995,050
43,000,000 Bank One Corp. sr. notes Ser. B, FRN, 6.031s 10/5/00 42,989,199
43,000,000 FleetBoston Financial Corp. sr. notes Ser. P,
FRN, 6.038s 3/13/01 42,970,868
35,000,000 Goldman Sachs Group, Inc. notes Ser. A, FRN, 6.22s 1/25/01 35,052,326
34,000,000 Goldman Sachs Group Inc. notes Ser. B, 6s 8/7/00 34,000,000
44,000,000 Morgan (J.P.) & Co., Inc. notes Ser. A, FRN, 5.994s 3/16/01 44,000,000
43,000,000 Morgan Stanley Dean Witter notes Ser. C.,
FRN 5.998s 3/16/01 42,995,877
35,000,000 National Rural Utilities notes Ser. C, 6.208s 6/26/00 35,000,000
----------------
Total Corporate Bonds and Notes
(cost $354,977,970) $ 354,977,970
U. S. GOVERNMENT & AGENCY OBLIGATIONS (0.9%) (a)
(cost $43,335,600) MATURITY
PRINCIPAL AMOUNT DATE VALUE
- ----------------------------------------------------------------------------------------------------------------------------
$44,000,000 Federal National Mortgage Corp. 6.04s 6/29/00 $ 43,335,600
- ----------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $4,641,848,874) (b) $ 4,641,848,874
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Percentages indicated are based on net assets of $4,520,894,445.
(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 March 31, 2000, which are subject to change based on the
terms of the security.
DIVERSIFICATION BY COUNTRY
Distribution of investments by country of issue at March 31, 2000:
(as percentage of Market Value)
Australia 1.1%
Canada 2.6
France 1.8
Germany 9.0
Netherlands 2.3
Sweden 2.0
Switzerland 7.2
United Kingdom 6.2
United States 67.8
-------
Total 100.0%
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
Statement of assets and liabilities
March 31, 2000 (Unaudited)
<S> <C>
Assets
- ----------------------------------------------------------------------------------------------
Investments in securities, at amortized cost (Note 1) $4,641,848,874
- ----------------------------------------------------------------------------------------------
Cash 25,685
- ----------------------------------------------------------------------------------------------
Interest and other receivables 19,138,192
- ----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 38,697,356
- ----------------------------------------------------------------------------------------------
Total assets 4,699,710,107
Liabilities
- ----------------------------------------------------------------------------------------------
Distributions payable to shareholders 68,061
- ----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 174,442,111
- ----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 3,537,095
- ----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 243,459
- ----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 39,331
- ----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 7,452
- ----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 385,231
- ----------------------------------------------------------------------------------------------
Other accrued expenses 92,922
- ----------------------------------------------------------------------------------------------
Total liabilities 178,815,662
- ----------------------------------------------------------------------------------------------
Net assets $4,520,894,445
Represented by
- ----------------------------------------------------------------------------------------------
Paid-in capital (Note 4) $4,520,894,445
- ----------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per class
A share ($3,602,842,054 divided by 3,602,842,054 shares)* $1.00
- ----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($777,260,921 divided by 777,260,921 shares)** $1.00
- ----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($25,631,917 divided by 25,631,917 shares)** $1.00
- ----------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per class M share
($115,159,553 divided by 115,159,553 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
Six months ended March 31, 2000 (Unaudited)
<S> <C>
Interest income $137,359,328
- ----------------------------------------------------------------------------------------------
Expenses:
- ----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 7,375,148
- ----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 3,018,373
- ----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 35,312
- ----------------------------------------------------------------------------------------------
Administrative services (Note 2) 15,335
- ----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 2,307,086
- ----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 40,956
- ----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 92,526
- ----------------------------------------------------------------------------------------------
Reports to shareholders 23,329
- ----------------------------------------------------------------------------------------------
Registration fees 274,362
- ----------------------------------------------------------------------------------------------
Auditing 24,755
- ----------------------------------------------------------------------------------------------
Legal 18,785
- ----------------------------------------------------------------------------------------------
Postage 231,099
- ----------------------------------------------------------------------------------------------
Other 805,881
- ----------------------------------------------------------------------------------------------
Total expenses 14,262,947
- ----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (585,141)
- ----------------------------------------------------------------------------------------------
Net expenses 13,677,806
- ----------------------------------------------------------------------------------------------
Net investment income 123,681,522
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $123,681,522
- ----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
March 31 September 30
2000* 1999
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- -------------------------------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------------------------------
Net investment income $ 123,681,522 $ 190,719,005
- -------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 123,681,522 190,719,005
- -------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- -------------------------------------------------------------------------------------------------------
From net investment income
Class A (97,617,809) (151,295,146)
- -------------------------------------------------------------------------------------------------------
Class B (22,442,575) (34,510,760)
- -------------------------------------------------------------------------------------------------------
Class C (399,418) (151,030)
- -------------------------------------------------------------------------------------------------------
Class M (3,221,720) (4,762,069)
- -------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) (365,258,478) 1,432,680,477
- -------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (365,258,478) 1,432,680,477
Net assets
- -------------------------------------------------------------------------------------------------------
Beginning of period 4,886,152,923 3,453,472,446
- -------------------------------------------------------------------------------------------------------
End of period $4,520,894,445 $4,886,152,923
- -------------------------------------------------------------------------------------------------------
* Unaudited
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
- --------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share March 31
operating performance (Unaudited) Year ended September 30
- --------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Net investment income .0265 .0478 .0517 .0505 .0507 .0521
- --------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0265 .0478 .0517 .0505 .0507 .0521
- --------------------------------------------------------------------------------------------------------------------------
Total distributions (.0265) (.0478) (.0517) (.0505) (.0507) (.0521)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------
Total return
at net asset value (%)(a) 2.68* 4.89 5.29 5.17 5.19 5.33
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $3,602,842 $3,691,475 $2,598,891 $2,134,223 $1,659,288 $1,189,640
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .25* .48 .58 .57 .57 .62
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.67* 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
- --------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share March 31
operating performance (Unaudited) Year ended September 30
- --------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Net investment income .0239 .0429 .0468 .0455 .0457 .0469
- --------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0239 .0429 .0468 .0455 .0457 .0469
- --------------------------------------------------------------------------------------------------------------------------
Total distributions (.0239) (.0429) (.0468) (.0455) (.0457) (.0469)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------
Total return
at net asset value (%)(a) 2.42* 4.37 4.78 4.65 4.67 4.80
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $777,261 $1,041,452 $759,748 $410,885 $438,316 $256,533
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .50* .98 1.08 1.07 1.07 1.12
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.42* 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
- -----------------------------------------------------------------------------
Six months
ended For the period
Per-share March 31 Feb. 1, 1999+
operating performance (Unaudited) to Sept.30
- -----------------------------------------------------------------------------
2000 1999
- -----------------------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $1.00 $1.00
- -----------------------------------------------------------------------------
Net investment income .0240 .0284
- -----------------------------------------------------------------------------
Total from
investment operations .0240 .0284
- -----------------------------------------------------------------------------
Total distributions (.0240) (.0284)
- -----------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00
- -----------------------------------------------------------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------
Total return
at net asset value (%)(a) 2.42* 2.87*
- -----------------------------------------------------------------------------
Net assets, end of period
(in thousands) $25,632 $17,091
- -----------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .50* .65*
- -----------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.40* 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
- --------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share March 31 Dec. 8, 1994+
operating performance (Unaudited) Year ended September 30 to Sept. 30
- --------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Net investment income .0257 .0463 .0502 .0490 .0490 .0434
- --------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0257 .0463 .0502 .0490 .0490 .0434
- --------------------------------------------------------------------------------------------------------------------------
Total distributions (.0257) (.0463) (.0502) (.0490) (.0490) (.0434)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------
Total return
at net asset value (%)(a) 2.60* 4.73 5.14 5.01 5.02 4.43*
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $115,160 $136,134 $94,833 $58,502 $29,075 $8,440
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .33* .63 .73 .72 .72 .67*
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.59* 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
March 31, 2000 (Unaudited)
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. 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 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 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 funds' 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 and related investment income Security
transactions are accounted for on the trade date (date the order to buy
or sell is executed). Gains or losses on securities sold are determined
on the identified cost basis.
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 paid 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 at a constant rate until maturity.
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 six months ended March 31, 2000, fund expenses were reduced by
$585,141 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 $3,025
has been allocated to the fund, and an additional fee for each Trustees
meeting attended. Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
invested in certain Putnam funds until distribution in accordance with
the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as a 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 distribution plans (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 payments by
the fund to Putnam Mutual Funds Corp. at an annual rate up to 0.75%,
0.75% and 1.00% of the average net assets attributable to class B, class
C and class M shares, respectively. The Trustees have approved payment
by the fund at 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 six months ended March 31, 2000, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $3,337,592 and $32,959
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 six months
ended March 31, 2000, 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 exchanges
from another fund.
Note 3
Purchases and sales of securities
During the six months ended March 31, 2000, cost of purchases
and proceeds from sales (including maturities) of investment securities
(all short-term obligations) aggregated $45,171,459,765 and
$45,591,023,341, respectively.
Note 4
Capital shares
At March 31, 2000, 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:
Six months
ended Year ended
March 31 September 30
- ---------------------------------------------------------------------------
Class A 2000 1999
- ---------------------------------------------------------------------------
Shares sold 6,728,856,420 10,270,592,982
- ---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 92,895,735 145,761,022
- ---------------------------------------------------------------------------
6,821,752,155 10,416,354,004
Shares
repurchased (6,910,385,500) (9,323,769,763)
- ---------------------------------------------------------------------------
Net increase
(decrease) (88,633,345) 1,092,584,241
- ---------------------------------------------------------------------------
Six months
ended Year ended
March 31 September 30
- ---------------------------------------------------------------------------
Class B 2000 1999
- ---------------------------------------------------------------------------
Shares sold 1,411,989,010 2,660,145,189
- ---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 20,137,751 32,075,627
- ---------------------------------------------------------------------------
1,432,126,761 2,692,220,816
Shares
repurchased (1,696,318,246) (2,410,516,905)
- ---------------------------------------------------------------------------
Net increase
(decrease) (264,191,485) 281,703,911
- ---------------------------------------------------------------------------
For the period
February 1, 1999
Six months (commencement
ended of operations) to
March 31 September 30
- ---------------------------------------------------------------------------
Class C 2000 1999
- ---------------------------------------------------------------------------
Shares sold 96,257,568 29,815,064
- ---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 373,360 151,030
- ---------------------------------------------------------------------------
96,630,928 29,966,094
Shares
repurchased (88,089,870) (12,875,235)
- ---------------------------------------------------------------------------
Net increase 8,541,058 17,090,859
- ---------------------------------------------------------------------------
Six months
ended Year ended
March 31 September 30
- ---------------------------------------------------------------------------
Class M 2000 1999
- ---------------------------------------------------------------------------
Shares sold 495,312,740 829,077,838
- ---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,047,818 4,690,359
- ---------------------------------------------------------------------------
498,360,558 833,768,197
Shares
repurchased (519,335,264) (792,466,731)
- ---------------------------------------------------------------------------
Net increase
(decrease) (20,974,706) 41,301,466
- ---------------------------------------------------------------------------
Our commitment to quality service
* CHOOSE AWARD-WINNING SERVICE
Putnam Investments has won the DALBAR Service Award 8 times in the past
9 years. In 1997 and 1998, Putnam was the only company to win all three
DALBAR awards: for service to investors, to financial advisors, and to
variable annuity contract holders.*
* HELP YOUR INVESTMENTS GROW
Set up a systematic program for investing with as little as $25 a month
from a Putnam money market fund or from your checking or savings
account.+
* SWITCH FUNDS EASILY
Within the same class of shares, you can move money from one account to
another without a service charge. (This privilege is subject to change
or termination.)
* ACCESS YOUR MONEY QUICKLY
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 the
original cost of the shares.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a
helpful Putnam representative. To learn more about Putnam, visit our Web
site.
www.putnaminv.com
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
*DALBAR, Inc., an independent research firm, presents the awards to financial
services firms that provide consistently excellent service.
+Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market.
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
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Century Growth Fund
New Opportunities Fund
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
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
Richard G. Leibovitch
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 Of_ce 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
SA039-60369 010/879/534 5/00
