THE GEORGE PUTNAM FUND OF BOSTON
Prospectus Supplement dated August 1, 1996 to the
Class A, B and M 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, annual fund operating expenses
are as follows:
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Total fund
Management 12b-1 Other operating
fees fees expenses expenses
---------- ----- -------- ---------
Class A 0.58% 0.25% 0.28% 1.11%
Class B 0.58% 1.00% 0.28% 1.86%
Class M 0.58% 0.75% 0.28% 1.61%
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 were 0.38% and 0.91%, respectively, for class
A shares, and 0.38% and 1.66%, respectively, for class B shares.
The 12b-1 fees for class M shares reflect the amount currently
payable under the class M distribution plan. For class M shares,
management fees and "Other expenses" are based on the
corresponding expenses for class A shares.
EXAMPLES
Your investment of $1,000 would incur the following expenses,
assuming 5% annual return and, except as indicated, redemption at
the end of each period:
<PAGE>
1 3 5 10
year years years years
CLASS A $68 $91 $115 $185
CLASS B $69 $88 $121 $198***
CLASS B (NO REDEMPTION) $19 $58 $101 $198***
CLASS M $51 $84 $120 $220
The examples do not represent past or future expense levels.
Actual expenses may be greater or less than those shown. Federal
regulations require the examples to assume a 5% annual return,
but actual annual return varies.
* The higher 12b-1 fees borne by class B and class M shares
may cause long-term shareholders to pay more than the
economic equivalent of the maximum permitted front-end sales
charge on class A shares.
** A deferred sales charge of up to 1.00% is assessed on
certain redemptions of class A shares that were purchased
without an initial sales charge. See "How to buy shares -
Class A shares."
*** Reflects conversion of class B shares to class A shares
(which pay lower ongoing expenses) approximately eight years
after purchase. See "Alternative sales arrangements."
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 outstanding voting
securities of any issuer with respect to 25% of its total
assets; and
- invest more than 5% of its net assets in any one issuer
(other than securities of the U.S. government, its
agencies or instrumentalities) with respect to 25% of its
total assets.
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 13 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 10 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.
************
The second and third paragraph and the first sentence of the
fourth paragraph under the heading "How to buy shares -- Class A
shares" is replaced with the following:
There is no initial sales charge on purchases of class A
shares of $1 million or more. However, a CDSC of 1.00% or
0.50%, respectively, will be imposed on redemptions (other
than redemptions by certain participant-directed qualified
retirement plans, which are subject to a two-year CDSC of
1.00%, as described below) within the first or second year
after purchase.
There are also no initial sales charges on class A shares
purchased by participant-directed qualified retirement plans
with at least 200 eligible employees. A CDSC of 1.00% will,
however, be imposed upon the redemption of shares purchased
after July 31, 1996 at net asset value by a participant-
directed qualified retirement plan (including a plan with at
least 200 eligible employees) that initially invested less
than $20 million in Putnam funds and other investments
managed by Putnam Management or its affiliates and that
sells 90% or more of the amount initially invested within
two years after its initial purchase.
Any CDSC will be based on the lower of the shares' cost and
current net asset value. Any shares acquired by
reinvestment of distributions will be redeemed without a
CDSC.
Shares purchased by certain investors (including
participant-directed qualified retirement plans with at
least 200 eligible employees) investing $1 million or more
who have made arrangements with Putnam Mutual Funds and
whose dealer of record waived the commission as described
below are not subject to the CDSC.
26992 8/96
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