THE GEORGE PUTNAM FUND OF BOSTON
Prospectus Supplement dated August 1, 1996 to the
Class Y Prospectus dated December 1, 1995
MANAGEMENT FEES
On July 11, 1996, shareholders of the fund approved a proposal to
increase the fees payable to Putnam Investment Management, Inc.
("Putnam Management") under the fund's Management Contract.
Management fees will be paid at the annual rate of 0.65% of the
first $500 million of average net assets, 0.55% of the next $500
million, 0.50% of the next $500 million, 0.45% of the next $5
billion, 0.425% of the next $5 billion, 0.405% of the next $5
billion, 0.39% of the next $5 billion, and 0.38% of any amount
thereafter.
As a result of the increased fees, the annual funds operating
expenses are as follows:
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Total fund
Management Other operating
fees expenses expenses
---------- ----- --------
0.58% 0.28% 0.86%
The table is provided to help you understand the expenses of
investing in the fund and your share of the operating expenses
that the fund incurs. The annual management fees and total fund
operating expenses shown in the table have been restated to
reflect the proposed increase in the management fees payable to
Putnam Management. Actual management fees and total fund
operating expenses for class Y shares were 0.38% and 0.66%,
respectively.
EXAMPLE
Your investment of $1,000 would incur the following expenses,
assuming 5% annual return and redemption at the end of each
period:
1 3 5 10
year years years years
$9 $27 $48 $106
The example does not represent past or future expense levels.
Actual expenses may be greater or less than those shown. Federal
regulations require the example to assume a 5% annual return, but
actual annual return varies. The example does not reflect any
charges or expenses related to your employer's plan.
INVESTMENT RESTRICTIONS
Also at the July 11 meeting, which was adjourned to July 31,
1996, shareholders approved amendments to certain of the fund's
fundamental investment restrictions, including the elimination of
certain restrictions. As a result, the fund may now:
- acquire more than 10% of the voting securities of any
issuer with respect to 25% of its total assets; and
- invest more than 5% of its total assets in securities of
any issuer with respect to 25% of its assets.
(Investments in obligations issued or guaranteed as to
interest or principal by the U.S. government or its
agencies or instrumentalities are not subject to any
limitation.)
The policies set forth above are fundamental and may not be
changed without shareholder approval. See the fund's Statement
of Additional Information for the full text of these policies as
well as the fund's other fundamental policies, some of which were
also changed by vote of shareholders.
To the extent the fund invests a significant portion of its
assets in the securities of a particular issuer, the fund will be
subject to an increased risk of loss if the market value of such
issuer's securities declines.
************
The first sentence under the heading "Other investment practices
- - Securities loans, repurchase agreements and forward
commitments" on page 8 of the prospectus is replaced with the
following:
The fund may lend portfolio securities to broker-dealers and
may enter into repurchase agreements without limit.
************
The first sentence in the second paragraph under the heading
"Risk factors" on page 5 of the prospectus is replaced with the
following:
The fund will invest in securities rated at the time of
purchase at least B by Moody's Investors Service, Inc.
("Moody's") or Standard & Poor's ("S&P"), or in unrated
securities which Putnam Management determines are of
comparable quality.
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