PUTNAM INVESTORS FUND, 497, 1994-05-25

PUTNAM INVESTORS FUND
497, 1994-05-25

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PROSPECTUS
DECEMBER 1, 1993 , AS
REVISED JUNE 1, 1994

PUTNAM INVESTORS FUND
CLASS A AND B SHARES
INVESTMENT STRATEGY: GROWTH

This Prospectus explains concisely what you should know before
investing in Class A or B shares of the Fund. Please read
it carefully and keep it for future reference. You can find more
detailed information about the Fund in the December 1, 1993
Statement of Additional Information, as amended from time to
time. For a free copy of the Statement, call Putnam Investor
Services at 1-800-225-1581. The Statement has been filed with the
Securities and Exchange Commission and is incorporated into this
Prospectus by reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION , ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY , AND INVOLVE RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL .

BOSTON * LONDON * TOKYO
<PAGE>
PUTNAM INVESTORS FUND (THE "FUND") SEEKS LONG-TERM GROWTH OF
CAPITAL AND ANY INCREASED INCOME THAT RESULTS FROM THIS GROWTH.
THE FUND IS DESIGNED FOR INVESTORS SEEKING LONG-TERM CAPITAL
GROWTH FROM A PORTFOLIO PRIMARILY CONSISTING OF QUALITY COMMON
STOCKS.

THE FUND OFFERS TWO CLASSES OF SHARES: CLASS A AND CLASS B. EACH
CLASS IS SOLD PURSUANT TO DIFFERENT SALES ARRANGEMENTS AND BEARS
DIFFERENT EXPENSES. FOR MORE INFORMATION ABOUT THE DIFFERENT
SALES ARRANGEMENTS, SEE "ALTERNATIVE SALES ARRANGEMENTS." FOR
INFORMATION ABOUT VARIOUS EXPENSES BORNE BY EACH CLASS, SEE
"EXPENSES SUMMARY."

ABOUT THE FUND

Expenses summary 3
...........................................................<
/R> Financial highlights

4
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/R>
Objective

6
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/R>
How objective is pursued

6
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..
How performance is shown 10
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.
How the Fund is managed 10
.........................................................
.
Organization and history 11

ABOUT YOUR INVESTMENT

Alternative sales arrangements 13
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R>
How to buy shares

13
.........................................................
.
Distribution Plans 17
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How to sell shares

19
.........................................................
. How to exchange shares 20
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How the Fund values its shares

21
.........................................................
.
How distributions are made; tax information 21

ABOUT PUTNAM INVESTMENTS, INC. 23
<PAGE>
ABOUT THE FUND

EXPENSES SUMMARY

Expenses are one of several factors to consider when investing in
the Fund. The following table summarizes your maximum
transaction costs from investing in the Fund and expenses
incurred by the Fund based on its most recent fiscal year. The
Examples show the cumulative expenses attributable to a
hypothetical $1,000 investment in the Fund over specified
periods.

CLASS A CLASS B
SHARES SHARES
[C] [C]

SHAREHOLDER TRANSACTION EXPENSES

Maximum Sales Charge Imposed on
Purchases (as a percentage of
offering price) 5.75% NONE*

Deferred Sales Charge 5.0% in the
(as a percentage of the lower first year,
of original purchase price or declining to
redemption proceeds) NONE** 1.0% in the
sixth year ,
and
eliminated
thereafter

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

Management Fees 0.62% 0.62%
12b-1 Fees 0.25% 1.00%
Other Expenses 0.13% 0.13%
Total Fund Operating Expenses 1.00% 1.75%

EXAMPLES

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

CLASS A $67 $88 $110 $173
CLASS B $68 $85 $115 $186** *

Your investment of $1,000 would incur the following expenses,
assuming 5% annual return but no redemption:

1 3 5 10
year years years years

CLASS A $67 $88 $110 $173
CLASS B $18 $55 $ 95 $186** *

The table is provided to help you understand the expenses of
investing in the Fund and your share of the operating expenses
which the Fund incurs. The 12b-1 fees shown in the
table for Class A shares reflect the amount to
which payments are currently limited under the Class A
Distribution Plan, and the 12b-1 fees for Class B
shares reflect the maximum amount permitted under the Class B
Distribution Plan. Actual 12b-1 fees and total operating
expenses for Class A shares for fiscal 1993 were 0.15% and 0.90%,
respectively. Management fees and "Other Expenses" for
Class B shares are based on the operating expenses for Class
A shares. 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 has varied.

* Class B shares are sold without a front-end sales charge,
but their 12b-1 fees may cause long-term shareholders to pay
more than the economic equivalent of the maximum permitted
front-end sales charge .

** 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 as part of an investment of
$1 million or more. 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 "How to buy shares - Class B shares -
Conversion of Class B shares."

FINANCIAL HIGHLIGHTS

The table on the following page presents per share financial
information for the Fund's ten most recent fiscal years. This
information has been audited and reported on by the Fund's
independent accountants. The Report of Independent Accountants
and financial statements included in the Fund's Annual Report to
shareholders for the 1993 fiscal year are incorporated by
reference into this Prospectus. The Fund's Annual Report, which
contains additional unaudited performance information, will be
made available without charge upon request.

FINANCIAL HIGHLIGHTS*
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MARCH 1, 1993 SEVEN
(COMMENCEMENT MONTHS
OF OPERATIONS) TO ENDED
JULY 31 YEAR ENDED JULY 31 JULY 31 YEAR ENDED
1993 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
CLASS B CLASS A
NET ASSET VALUE,
BEGINNING OF PERIOD $8.32 $8.57 $9.20 $8.75 $8.73 $6.93 $6.59 $11.62 $11.90 $9.84 $11.42

INVESTMENT OPERATIONS
NET INVESTMENT
INCOME (LOSS) (.03) .08 .12 .15 .22 .17 .13 .15 .23 .25 .21
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS .61 1.45 .21 .89 .63 1.71 .36 .57 1.46 2.52 (.35)

TOTAL FROM INVESTMENT
OPERATIONS .58 1.53 .33 1.04 .85 1.88 .49 .72 1.69 2.77 (.14)

DISTRIBUTIONS TO
SHAREHOLDERS
FROM NET INVESTMENT
INCOME-- (.04) (.15) (.17) (.29) (.08) (.15) (.27) (.20) (.20) (.20)
IN EXCESS OF NET
INVESTMENT INCOME (.05) (.03) -- -- -- -- -- -- -- -- --
NET REALIZED GAIN
ON INVESTMENTS -- (1.16) (.81) (.42) (.54) -- -- (5.48) (1.77) (.51) (1.24)

TOTAL DISTRIBUTIONS (.05) (1.23) (.96) (.59) (.83) (.08) (.15) (5.75) (1.97) (.71) (1.44)

NET ASSET VALUE,
END OF PERIOD $8.85 $8.87 $8.57 $9.20 $8.75 $8.73 $6.93 $6.59 $11.62 $11.90 $9.84
TOTAL INVESTMENT RETURN AT
NET ASSET
VALUE (%) (B) 16.57(C) 19.24 4.49 13.32 10.3147.02(C) 7.48 4.00 15.74 29.20 0.15

NET ASSETS, END OF PERIOD
(IN THOUSANDS) $4,789 $804,731 $714,479 $739,775 $704,189 $699,176 $609,631 $765,538 $969,073 $1,075,052 $1,015,855

RATIO OF EXPENSES TO
AVERAGE
NET ASSETS (%) .73(A) .90 .94 .89 .81 .46(A) .68 .61 .49 .51 .51
RATIO OF NET INVESTMENT
INCOME (LOSS) TO AVERAGE
NET ASSETS (%) (.12)(A) .84 1.33 1.78 2.42 2.13(A) 1.84 1.48 2.00 2.33 2.19
PORTFOLIO
TURNOVER (%) 134.14(A) 134.14 100.26 58.30 51.47 31.96(A) 82.20 83.57 119.59 79.25 53.21

*FINANCIAL HIGHLIGHTS FOR PERIODS ENDED THROUGH JULY 31, 1992 HAVE BEEN RESTATED TO CONFORM WITH REQUIREMENTS ISSUED BY
THE SEC IN APRIL, 1993.

(A)NOT ANNUALIZED.

(B)TOTAL INVESTMENT RETURN ASSUMES DIVIDEND REINVESTMENT AND DOES NOT REFLECT THE EFFECT OF SALES CHARGES.

(C)ANNUALIZED.

</TABLE>
<PAGE>
OBJECTIVE

Putnam Investors Fund seeks long-term growth of capital and any
increased income that results from this growth. The Fund is
designed for investors seeking long-term growth of capital from a
portfolio primarily consisting of quality common stocks. The
Fund is not intended to be a complete investment program, and
there is no assurance it will achieve its objective.

HOW OBJECTIVE IS PURSUED

BASIC INVESTMENT STRATEGY

PUTNAM INVESTORS FUND INVESTS PRIMARILY IN COMMON STOCKS BECAUSE
PUTNAM INVESTMENT MANAGEMENT, INC. ("PUTNAM MANAGEMENT") BELIEVES
THAT EQUITY OWNERSHIP AFFORDS THE BEST OPPORTUNITY FOR CAPITAL
GROWTH OVER THE LONG TERM. Though common stocks are normally the
Fund's main investments, the Fund may also purchase convertible
bonds, convertible preferred stocks, preferred stocks and debt
securities if Putnam Management believes they would help achieve
the Fund's objective. The Fund may also hold a portion of its
assets in cash or money market instruments.

In seeking the Fund's objective of long-term growth of capital,
Putnam Management considers three main factors:

1. The general outlook for the economy.

2. A study of various industries to determine those with
the best possibilities for long-term growth.

3. A detailed study of what appear to be the most
promising individual companies.

In the evaluation of a company, more consideration is given to
growth potential than to dividend income. Putnam Management
believes that evaluating a company's probable future earnings,
dividends, financial strength, working assets and competitive
position will prove more profitable in the long run than simply
seeking current dividend income. The Fund's investments are not
limited to any particular type of company, but quality growth
stocks are emphasized. Small- to medium-sized companies
generally have a proprietary product or profitable market niche
and the potential to grow very rapidly. Such companies may
present greater opportunities for capital appreciation because of
high potential earnings growth, but may also involve greater
risk. They may have limited product lines, markets or financial
resources, or may depend on a limited management group. Their
securities may trade less frequently and in limited volume, and
only in the over-the-counter market or on a regional securities
exchange. As a result, these securities may change in value more
than those of larger, more established companies.

At times Putnam Management may judge that conditions in the
securities markets make pursuing the Fund's basic investment
strategy inconsistent with the best interests of its
shareholders. At such times, Putnam Management may temporarily
use alternative strategies, primarily designed to reduce
fluctuations in the value of the Fund's assets. In implementing
these "defensive" strategies, the Fund may invest primarily in
debt securities, preferred stocks, U.S. government and agency
obligations, cash or money market instruments, or in other
securities Putnam Management considers consistent with such
defensive strategies. It is impossible to predict when, or for
how long, the Fund will use such alternative strategies.

FOREIGN INVESTMENTS

THE FUND MAY INVEST UP TO 20% OF ITS ASSETS IN SECURITIES
PRINCIPALLY TRADED IN FOREIGN MARKETS. The Fund may also
purchase Eurodollar certificates of deposit without regard to the
20% limit. Since foreign securities are normally denominated and
traded in foreign currencies, the values of the Fund's assets may
be affected favorably or unfavorably by currency exchange rates
and exchange control regulations. There may be less information
publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to
accounting, auditing and financial reporting standards and
practices comparable to those in the United States. The
securities of some foreign companies are less liquid and at times
more volatile than securities of comparable U.S. companies.
Foreign brokerage commissions and other fees are also generally
higher than in the United States. Foreign settlement procedures
and trade regulations may involve certain risks (such as delay in
payment or delivery of securities or in the recovery of the
Fund's assets held abroad) and expenses not present in the
settlement of domestic investments.

In addition, there may be a possibility of nationalization or
expropriation of assets, imposition of currency exchange
controls, confiscatory taxation, political or financial
instability and diplomatic developments which could affect the
value of the Fund's investments in certain foreign countries.
Legal remedies available to investors in certain foreign
countries may be more limited than those available with respect
to investments in the United States or in other foreign
countries. The laws of some foreign countries may limit the
Fund's ability to invest in securities of certain issuers located
in those foreign countries. Special tax considerations apply to
foreign securities.

The Fund may buy or sell foreign currencies and foreign currency
forward contracts for hedging purposes in connection with its
foreign investments.

A MORE DETAILED EXPLANATION OF FOREIGN INVESTMENTS, AND THE RISKS
AND SPECIAL TAX CONSIDERATIONS ASSOCIATED WITH THEM, IS INCLUDED
IN THE STATEMENT OF ADDITIONAL INFORMATION.

PORTFOLIO TURNOVER

The length of time the Fund has held a particular security is not
generally a consideration in investment decisions. A change in
the securities held by the Fund is known as "portfolio turnover."
As a result of the Fund's investment policies, under certain
market conditions the Fund's portfolio turnover rate may be
higher than that of other mutual funds. Portfolio turnover
generally involves some expense to the Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the
sale of securities and reinvestment in other securities. Such
transactions may result in realization of taxable capital gains.
Portfolio turnover rates for the ten most recent fiscal years of
the Fund are shown in the section "Financial highlights."

STOCK INDEX FUTURES AND OPTIONS

THE FUND MAY BUY AND SELL STOCK INDEX FUTURES CONTRACTS
FOR HEDGING PURPOSES. An "index future" is a contract to buy or
sell units of a particular stock index at an agreed price on a
specified future date. Depending on the change in value of the
index between the time when the Fund enters into and terminates
an index future or option transaction, the Fund realizes a gain
or loss. The Fund may buy and sell call and put options on index
futures or on stock indices in addition to or as an alternative
to purchasing or selling index futures or, to the extent
permitted by applicable law, to earn additional income.

THE USE OF INDEX FUTURES AND OPTIONS INVOLVES CERTAIN SPECIAL
RISKS. FUTURES AND OPTIONS TRANSACTIONS INVOLVE COSTS AND MAY
RESULT IN LOSSES. Certain risks arise because of the possibility
of imperfect correlations between movements in the prices of
index futures and options and movements in the prices of the
underlying stock index or of the common stocks in the Fund's
portfolio that are the subject of a hedge. The successful use of
the strategies described above further depends on Putnam
Management's ability to forecast market movements correctly.
Other risks arise from the Fund's potential inability to close
out its index futures or options positions, and there can be no
assurance that a liquid secondary market will exist for any index
future or option at any particular time. Certain provisions of
the Internal Revenue Code and certain regulatory requirements may
limit the Fund's ability to engage in index futures and options
transactions.

A more detailed explanation of index futures and options
transactions, including the risks associated with them, is
included in the Statement of Additional Information.

OTHER INVESTMENT PRACTICES

THE FUND MAY ALSO ENGAGE TO A LIMITED EXTENT IN THE FOLLOWING
INVESTMENT PRACTICES, EACH OF WHICH INVOLVES CERTAIN SPECIAL
RISKS. THE STATEMENT OF ADDITIONAL INFORMATION CONTAINS MORE
DETAILED INFORMATION ABOUT THESE PRACTICES, INCLUDING LIMITATIONS
DESIGNED TO REDUCE THESE RISKS.

OPTIONS. The Fund may seek to increase its current return by
buying and selling call and put options on securities it owns or
in which it may invest. The Fund will only write covered options.
The Fund receives a premium from writing a call or put option,
which increases the Fund's return if the option expires
unexercised or is closed out at a net profit. When the Fund
writes a call option, it gives up the opportunity to profit from
any increase in the price of a security above the exercise price
of the option; when it writes a put option, the Fund takes the
risk that it will be required to purchase a security from the
option holder at a price above the current market price of the
security. The Fund may terminate an option that it has written
prior to its expiration by entering into a closing purchase
transaction in which it purchases an option having the same terms
as the option written. The Fund may also buy and sell put and
call options for hedging purposes. The Fund may also from time
to time buy and sell combinations of put and call options on the
same underlying security to earn additional income. The
aggregate value of the securities underlying the options may not
exceed 25% of the Fund's assets. The Fund's use of these
strategies may be limited by applicable law.

SECURITIES LOANS, REPURCHASE AGREEMENTS AND FORWARD COMMITMENTS.
The Fund may lend portfolio securities amounting to not more than
25% of its assets to broker-dealers and may enter into repurchase
agreements on up to 25% of its assets. These
transactions must be fully collateralized at all times. The Fund
may also purchase securities for future delivery, which may
increase its overall investment exposure and involves a risk of
loss if the value of the securities declines prior to the
settlement date. These transactions involve some risk to
the Fund if the other party should default on its obligation and
the Fund is delayed or prevented from recovering the collateral
or completing the transaction.

LIMITING INVESTMENT RISK

SPECIFIC INVESTMENT RESTRICTIONS HELP THE FUND LIMIT INVESTMENT
RISKS FOR ITS SHAREHOLDERS. THESE RESTRICTIONS PROHIBIT THE FUND
FROM: acquiring more than 10% of the voting securities of an
issuer or more than 10% of any one class of the securities of an
issuer;* and investing more than (a) 5% of its total assets in
securities of any one issuer (other than the U.S. government);*
(b) 15% of its net assets in securities restricted as to resale,
(excluding securities determined by the Fund's Trustees (or the
person designated by the Fund's Trustees to make such
determinations) to be readily marketable);* (c) 25% of its total
assets in any one industry;* or (d) 15% of its net assets in any
combination of securities that are not readily marketable, in
securities restricted as to resale (excluding securities
determined by the Fund's Trustees (or the person designated by
the Fund's Trustees to make such determinations) to be
readily marketable), and in repurchase agreements maturing in
more than seven days.

Restrictions marked with an asterisk (*) above are summaries of
fundamental policies. See the Statement of Additional
Information for the full text of these policies and the Fund's
other fundamental policies. Except for investment policies
designated as fundamental in this Prospectus or the Statement,
the investment policies described in this Prospectus and in the
Statement are not fundamental policies. The Trustees may change
any non-fundamental investment policies without shareholder
approval. As a matter of policy, the Trustees would not
materially change the Fund's investment objective without
shareholder approval.

HOW PERFORMANCE IS SHOWN

TOTAL RETURN DATA MAY FROM TIME TO TIME BE INCLUDED IN
ADVERTISEMENTS ABOUT THE FUND. "Total return" for the one-,
five- and ten-year periods (or since the commencement of the
public offering of the shares of a class, if shorter) through the
most recent calendar quarter represents the average annual
compounded rate of return on an investment of $1,000 in the Fund
at the maximum public offering price (in the case of Class A
shares) or reflecting the deduction of any applicable contingent
deferred sales charge (in the case of Class B shares). Total
return may also be presented for other periods or based on
investment at reduced sales charge levels. Any quotation of
total return not reflecting the maximum initial sales charge or
contingent deferred sales charge would be reduced if such sales
charges were used. Quotations of total return for any period
when an expense limitation was in effect will be greater than if
the limitation had not been in effect. The Fund's performance
may be compared to various indices. See the Statement of
Additional Information.

ALL DATA IS BASED ON THE FUND'S PAST INVESTMENT RESULTS AND DOES
NOT PREDICT FUTURE PERFORMANCE. Investment performance, which
will vary, is based on many factors, including market conditions,
the composition of the Fund's portfolio, the Fund's operating
expenses and which class of shares you purchase. Investment
performance also often reflects the risks associated with the
Fund's investment objective and policies. These factors should
be considered when comparing the Fund's investment results to
those of other mutual funds and other investment vehicles.

HOW THE FUND IS MANAGED

THE TRUSTEES OF THE FUND ARE RESPONSIBLE FOR GENERALLY OVERSEEING
THE CONDUCT OF THE FUND'S BUSINESS. Subject to such policies as
the Trustees may determine, Putnam Management furnishes a
continuing investment program for the Fund and makes investment
decisions on its behalf. Subject to the control of the Trustees,
Putnam Management also manages the Fund's other affairs and
business. Brooke A. Cobb, Senior Vice President of Putnam
Management , Christopher Ainley, Vice President of Putnam
Management, and David Santos, Vice President of Putnam
Management, each of whom is also a Vice President of the
Fund, are primarily responsible for the day-to-day
management of the Fund's portfolio . Mr. Cobb has had
this responsibility since June, 1988, and Messrs. Ainley and
Santos have had this responsibility since April, 1994. Mr.
Ainley has been employed by Putnam Management since March, 1992.
Prior to joining Putnam Management, Mr. Ainley was a Vice
President at J.P. Morgan Investment Management for more than four
years. Messrs. Cobb and Santos have been employed by Putnam
Management for the past five years.

The Fund pays all expenses not assumed by Putnam Management,
including Trustees' fees, auditing, legal, custodial, investor
servicing and shareholder reporting expenses, and payments under
its Distribution Plans (which are in turn allocated to the
relevant class of shares). The Fund also reimburses Putnam
Management for the compensation and related expenses of certain
officers of the Fund and their staff who provide administrative
services to the Fund. The total reimbursement is determined
annually by the Trustees.

Putnam Management places all orders for purchases and sales of
the Fund's securities. In selecting broker-dealers, Putnam
Management may consider research and brokerage services furnished
to it and its affiliates. Subject to seeking the most favorable
price and execution available, Putnam Management may consider
sales of shares of the Fund (and, if permitted by law, of the
other Putnam funds) as a factor in the selection of broker-
dealers.

ORGANIZATION AND HISTORY

Putnam Investors Fund is one of the three pioneer U.S. mutual
funds. The Fund is a Massachusetts business trust organized on
August 13, 1982 as the successor to Putnam Investors Fund, Inc.,
a Massachusetts corporation organized on November 23, 1925. A
copy of the Agreement and Declaration of Trust, which is governed
by Massachusetts law, is on file with the Secretary of State of
The Commonwealth of Massachusetts.

The Fund is an open-end, diversified management investment
company with an unlimited number of authorized shares of
beneficial interest. Shares of the Fund may, without shareholder
approval, be divided into two or more classes of shares having
such preferences and special or relative rights and privileges as
the Trustees may determine. The Fund's shares are currently
divided into three classes , two of which-Class A shares and
Class B shares, are offered by this Prospectus . Each share
has one vote, with fractional shares voting proportionally.
Shares of each class will vote together as a single class except
when required by law or as determined by the Trustees. Shares
are freely transferable, are entitled to dividends as declared by
the Trustees, and, if the Fund were liquidated, would receive the
net assets of the Fund. The Fund may suspend the sale of shares
at any time and may refuse any order to purchase shares.
Although the Fund is not required to hold annual meetings of its
shareholders, shareholders holding at least 10% of the
outstanding shares entitled to vote have the right to call a
meeting to elect or remove Trustees, or to take other actions as
provided in the Declaration of Trust.

If you own fewer shares than a minimum amount set by the Trustees
(presently 20 shares), the Fund may choose to redeem your shares
and pay you for them. You will receive at least 30 days' written
notice before the Fund redeems your shares, and you may purchase
additional shares at any time to avoid a redemption. The Fund
may also redeem shares if you own shares above a maximum amount
set by the Trustees. There is presently no maximum, but the
Trustees may establish one at any time, which could apply to both
present and future shareholders.
<PAGE>
THE FUND'S TRUSTEES: GEORGE PUTNAM,* CHAIRMAN. President of the
Putnam funds. Chairman and Director of Putnam Management and
Putnam Mutual Funds Corp. ("Putnam Mutual Funds"). Director,
Marsh & McLennan Companies, Inc.; WILLIAM F. POUNDS, VICE
CHAIRMAN. Professor of Management, Alfred P. Sloan School of
Management, M.I.T. ; JAMESON ADKINS BAXTER, President, Baxter
Associates, Inc. ; HANS H. ESTIN, Vice Chairman, North
American Management; JOHN A. HILL, Principal and Managing
Director, First Reserve Corporation; ELIZABETH T. KENNAN,
President, Mount Holyoke College; LAWRENCE J. LASSER,* Vice
President of the Putnam funds. President, Chief Executive
Officer and Director of Putnam Investments, Inc. and Putnam
Management. Director, Marsh & McLennan Companies, Inc.; ROBERT
E. PATTERSON, Executive Vice President, Cabot Partners Limited
Partnership; DONALD S. PERKINS, Director of various corporations,
including AT&T, K mart Corporation and Time Warner Inc.; GEORGE
PUTNAM, III,* President, New Generation Research, Inc.; A.J.C.
SMITH,* Chairman, Chief Executive Officer and Director, Marsh &
McLennan Companies, Inc.; and W. NICHOLAS THORNDIKE, Director of
various corporations and charitable organizations, including
Providence Journal Co. Also, Trustee and President,
Massachusetts General Hospital and Trustee of Eastern Utilities
Associates. The Fund's Trustees are also Trustees of the other
Putnam funds. Those marked with an asterisk (*) are "interested
persons" of the Fund, Putnam Management or Putnam Mutual Funds.

ABOUT YOUR INVESTMENT

ALTERNATIVE SALES ARRANGEMENTS

This Prospectus offers investors two classes of shares
which bear sales charges in different forms and amounts and which
bear different levels of expenses:

CLASS A SHARES. An investor who purchases Class A shares pays a
sales charge at the time of purchase. As a result, Class A
shares are not subject to any charges when they are redeemed
(except for sales at net asset value in excess of $1 million
which are subject to a contingent deferred sales charge).
Certain purchases of Class A shares qualify for reduced sales
charges. Class A shares currently bear a 12b-1 fee at the annual
rate of 0.25% of the Fund's average net assets attributable to
Class A shares. See "How to buy shares -- Class A
shares . "

CLASS B SHARES. Class B shares are sold without an initial sales
charge, but are subject to a contingent deferred sales charge of
up to 5% if redeemed within six years. Class B shares also bear
a higher 12b-1 fee than Class A shares, currently at the annual
rate of 1.00% of the Fund's average net assets attributable to
Class B shares. Class B shares will automatically convert into
Class A shares, based on relative net asset value, approximately
eight years after purchase. Class B shares provide an investor
the benefit of putting all of the investor's dollars to work from
the time the investment is made, but (until conversion) will have
a higher expense ratio and pay lower dividends than Class A
shares due to the higher 12b-1 fee. See "How to buy shares --
Class B shares . "

WHICH ARRANGEMENT IS BETTER FOR YOU? The decision as to which
class of shares provides a more suitable investment for an
investor depends on a number of factors, including the amount and
intended length of the investment. Investors making investments
that qualify for reduced sales charges might consider Class A
shares. Investors who prefer not to pay an initial sales charge
might consider Class B shares. Orders for Class B shares for
$250,000 or more will be treated as orders for Class A shares or
declined. For more information about these sales arrangements,
consult your investment dealer or Putnam Investor Services.
Sales personnel may receive different compensation depending on
which class of shares they sell. Shares may only be exchanged
for shares of the same class of another Putnam fund. See "How to
exchange shares . "

HOW TO BUY SHARES

You can open a Fund account with as little as $500 and make
additional investments at any time with as little as $50. You
can buy Fund shares three ways - through most investment dealers,
through Putnam Mutual Funds (at 1-800-225-1581), or through a
systematic investment plan. If you do not have a dealer, Putnam
Mutual Funds can refer you to one.

BUYING SHARES THROUGH PUTNAM MUTUAL FUNDS. Complete an order
form and return it with a check payable to the Fund to Putnam
Mutual Funds, which will act as your agent in purchasing shares
through your designated investment dealer.

BUYING SHARES THROUGH SYSTEMATIC INVESTING. You can make regular
investments of $25 or more per month through automatic deductions
from your bank checking account. Application forms are available
from your investment dealer or through Putnam Investor Services.

Shares are sold at the public offering price based on the net
asset value next determined after Putnam Investor Services
receives your order. In most cases, in order to receive that
day's public offering price, Putnam Investor Services must
receive your order before the close of regular trading on the New
York Stock Exchange. If you buy shares through your investment
dealer, the dealer must receive your order before the close of
regular trading on the New York Stock Exchange to receive that
day's public offering price.

CLASS A SHARES

The public offering price of Class A shares is the net
asset value plus a sales charge. The Fund receives the net asset
value. The sales charge varies depending on the size of your
purchase and is allocated between your investment dealer and
Putnam Mutual Funds. The current sales charges are:<PAGE>
<TABLE>
<CAPTION>
SALES CHARGE AMOUNT OF
AS A PERCENTAGE OF: SALES CHARGE
------------------- REALLOWED
NET TO DEALERS
AMOUNT OF TRANSACTION AMOUNT OFFERING AS A PERCENTAGE
AT OFFERING PRICE INVESTED PRICE OF OFFERING PRICE*
- ------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
Less than $ 50,000 6.10% 5.75% 5.00%
$ 50,000 but less than 100,000 4.71 4.50 3.75
100,000 but less than 250,000 3.63 3.50 2.75
250,000 but less than 500,000 2.56 2.50 2.00
500,000 but less than 1,000,000 2.04 2.00 1.75
- ------------------------------------------------------------------------------------------
* At the discretion of Putnam Mutual Funds, however, the entire sales charge may at times
be reallowed to dealers. The Staff of the Securities and Exchange Commission has
indicated that dealers who receive more than 90% of the sales charge may be considered
underwriters.

/TABLE
<PAGE>
There is no initial sales charge on purchases of Class A shares
of $1 million or more. However, a contingent
deferred sales charge ("CDSC") of 1.00% or 0.50%,
respectively, is imposed on redemptions of such
shares within the first or second year after purchase,
based on lower of the shares' cost and current
net asset value . Any shares acquired by reinvestment of
distributions will be redeemed without a CDSC. In addition,
shares purchased by certain investors investing $1 million or
more that have made arrangements with Putnam Mutual Funds and
whose dealer of record waived the commission described in the
next paragraph are not subject to the CDSC. In determining
whether a CDSC is payable, the Fund will first redeem shares not
subject to any charge. Putnam Mutual Funds receives the
entire amount of any CDSC you pay. See the Statement of
Additional Information for more information about the CDSC.

Except as stated below, Putnam Mutual Funds pays investment
dealers of record commissions on sales of Class A shares of $1
million or more based on an investor's cumulative purchases
during the one-year period beginning with the date of the initial
purchase at net asset value and each subsequent one-year period
beginning with the first net asset value purchase following the
end of the prior period. Such commissions are paid at the rate
of 1.00% of the amount under $3 million, 0.50% of the next $47
million and 0.25% thereafter. On sales at net asset value to a
participant-directed qualified retirement plan initially
investing less than $20 million in Putnam funds and other
investments managed by Putnam Management or its affiliates
(including a plan sponsored by an employer with more than 750
employees), Putnam Mutual Funds pays commissions on cumulative
purchases during the life of the account at the rate of 1.00% of
the amount under $3 million and 0.50% thereafter. On sales at
net asset value to all other participant-directed qualified
retirement plans, Putnam Mutual Funds pays commissions on the
initial investment and on subsequent net quarterly sales at the
rate of 0.15%.

YOU MAY BE ELIGIBLE TO BUY CLASS A SHARES AT REDUCED SALES
CHARGES. Consult your investment dealer or Putnam Mutual Funds
for details about Putnam's Combined Purchase Privilege,
Cumulative Quantity Discount, Statement of Intention, Group Sales
Plan, Employee Benefit Plans and other plans. Descriptions are
also included in the order form and in the Statement of
Additional Information. Shares may also be sold at net asset
value to certain categories of investors , and the CDSC may be
waived under certain circumstances . See "How to buy shares -
- -General" below.

CLASS B SHARES

Class B shares are sold without an initial sales charge,
although a CDSC will be imposed if you redeem shares within six
years of purchase. The following types of shares may be
redeemed without charge at any time: (i) shares acquired by
reinvestment of distributions and (ii) shares otherwise exempt
from the CDSC, as described below. Subject to the foregoing
exclusions, the amount of the charge is determined as a
percentage of the lesser of the current market value or the cost
of the shares being redeemed. Therefore when a share is
redeemed, any increase in its value above the initial purchase
price is not subject to any CDSC. The amount of the CDSC
will depend on the number of years since you invested and the
dollar amount being redeemed, according to the following table:

CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF
YEARS SINCE PURCHASE DOLLAR AMOUNT
PAYMENT MADE SUBJECT TO CHARGE

0-1 5.0%
1-2 4.0%
2-3 3.0%
3-4 3.0%
4-5 2.0%
5-6 1.0%
6 and thereafter NONE

In determining whether a CDSC is payable on any redemption, the
Fund will first redeem shares not subject to any charge, and then
shares held longest during the six-year period. For
information on how sales charges are calculated if you exchange
your shares, see "How to exchange shares." Putnam Mutual Funds
receives the entire amount of any CDSC you pay.

CONVERSION OF CLASS B SHARES. Class B shares will automatically
convert into Class A shares at the end of the month eight years
after the purchase date, except as noted below. Class B shares
acquired by exchange from Class B shares of another Putnam
fund will convert into Class A shares based on the time of the
initial purchase. Class B shares acquired through reinvestment
of distributions will convert into Class A shares based on the
date of the initial purchase to which such shares relate. For
this purpose, Class B shares acquired through reinvestment of
distributions will be attributed to particular purchases of Class
B shares in accordance with such procedures as the Trustees may
determine from time to time. The conversion of Class B shares to
Class A shares is subject to the continuing availability of a
ruling from the Internal Revenue Service or an opinion of counsel
that such conversions will not constitute taxable events for
Federal tax purposes. There can be no assurance that such ruling
or opinion will be available, and the conversion of Class B
shares to Class A shares will not occur if such ruling or opinion
is not available. In such event, Class B shares would
continue to be subject to higher expenses than Class A shares for
an indefinite period.

GENERAL

The Fund may sell Class A and Class B shares at net asset
value without an initial sales charge or a CDSC to the Fund's
current and retired Trustees (and their families), current and
retired employees (and their families) of Putnam Management and
affiliates, registered representatives and other employees (and
their families) of broker-dealers having sales agreements with
Putnam Mutual Funds, employees (and their families) of financial
institutions having sales agreements with Putnam Mutual Funds (or
otherwise having an arrangement with a broker-dealer or financial
institution with respect to sales of Fund shares), financial
institution trust departments investing an aggregate of $1
million or more in Putnam funds, clients of certain
administrators of tax-qualified plans, employee benefit plans of
companies with more than 750 employees, tax-qualified plans when
proceeds from repayments of loans to participants are invested
(or reinvested) in Putnam funds, "wrap accounts" for the benefit
of clients of broker-dealers, financial institutions or
financial planners adhering to certain standards established by
Putnam Mutual Funds, and investors meeting certain requirements
who sold shares of certain Putnam closed-end funds pursuant to a
tender offer by the closed-end fund. In addition, the Fund may
sell shares at net asset value without an initial sales charge or
a CDSC in connection with the acquisition by the Fund of assets
of an investment company or personal holding company, and the
CDSC will be waived on redemptions of shares arising out
of death or disability or in connection with certain withdrawals
from IRA or other retirement plans. Up to 12% of the value of
Class B shares subject to a Systematic Withdrawal Plan may also
be redeemed each year without a CDSC. See the Statement of
Additional Information.

Shareholders of other Putnam funds may be entitled to exchange
their shares for, or reinvest distributions from their funds in,
shares of the Fund at net asset value.

If you are considering redeeming or exchanging shares or
transferring shares to another person shortly after purchase, you
should pay for those shares with a certified check to avoid any
delay in redemption, exchange or transfer. Otherwise the Fund
may delay payment until the purchase price of those shares has
been collected or, if you redeem by telephone, until 15 calendar
days after the purchase date.

To eliminate the need for safekeeping, the Fund will not issue
certificates for your shares unless you request them. Putnam
Mutual Funds may, at its expense, provide additional promotional
incentives or payments to dealers that sell shares of the Putnam
funds. In some instances, these incentives or payments may be
offered only to certain dealers who have sold or may sell
significant amounts of shares . Certain dealers may not
sell all class of shares.

DISTRIBUTION PLANS

CLASS A DISTRIBUTION PLAN. The purpose of the Class A Plan is to
permit the Fund to compensate Putnam Mutual Funds for services
provided and expenses incurred by it in promoting the sale of
Class A shares of the Fund, reducing redemptions, or maintaining
or improving services provided to shareholders by Putnam Mutual
Funds or dealers. The Class A Plan provides for payments by the
Fund to Putnam Mutual Funds at the annual rate of up to 0.35% of
the Fund's average net assets attributable to Class A shares,
subject to the authority of the Fund's Trustees to reduce the
amount of payments or to suspend the Class A Plan for such
periods as they may determine. Subject to these limitations, the
amount of such payments and the specific purposes for which they
are made shall be determined by the Trustees of the Fund. At
present, the Trustees have approved payments under the Class A
Plan at the annual rate of 0.25% of the Fund's average net assets
attributable to Class A shares for the purpose of compensating
Putnam Mutual Funds for services provided and expenses incurred
by it as principal underwriter of the Fund's Class A shares,
including payments made by it to dealers under the Service
Agreements referred to below. Should the Trustees decide in the
future to approve payments in excess of this amount, shareholders
will be notified and this Prospectus will be revised.

In order to compensate investment dealers (including, for this
purpose, certain financial institutions) for services provided in
connection with sales of Class A shares and the maintenance of
shareholder accounts, Putnam Mutual Funds makes quarterly
payments to qualifying dealers based on the average net asset
value of Class A shares of the Fund which are attributable
to shareholders for whom the dealers are designated as the dealer
of record. This calculation excludes until one year after
purchase shares purchased at net asset value after March 31, 1994
by shareholders investing $1 million or more and by participant-
directed qualified retirement plans sponsored by employers with
more than 750 employees ("NAV Shares"), except for shares owned
by certain investors investing $1 million or more that have made
arrangements with Putnam Mutual Funds and whose dealer of record
waived the sales commission. Except as stated below, Putnam
Mutual Funds makes such payments at the annual rate of 0.20% of
such average net asset value for Class A shares outstanding as of
December 31, 1989 and 0.25% of such average net asset value
of shares acquired after that date (including shares
acquired through reinvestment of distributions). For
participant-directed qualified retirement plans initially
investing less than $20 million in Putnam funds and other
investments managed by Putnam Management or its affiliates,
Putnam Mutual Funds' payments to qualifying dealers on NAV Shares
are 100% of the rate stated above if average plan assets in
Putnam funds (excluding money market funds) during the quarter
are less than $20 million, 60% of the stated rate if average plan
assets are at least $20 million but less than $30 million, and
40% of the stated rate if average plans assets are $30 million or
more. For all other participant-directed qualified retirement
plans purchasing NAV Shares, Putnam Mutual Funds makes quarterly
payments to qualifying dealers at the annual rate of 0.10% of the
average net asset value of such shares.

CLASS B DISTRIBUTION PLAN. The Class B Plan provides for
payments by the Fund to Putnam Mutual Funds at the annual rate of
up to 1.00% of the Fund's average net assets attributable to
Class B shares, subject to the authority of the Trustees to
reduce the amount of payments or to suspend the Class B Plan for
such periods as they may determine. Putnam Mutual Funds also
receives the proceeds of any CDSC imposed on redemptions of such
shares.

Although Class B shares are sold without an initial sales charge,
Putnam Mutual Funds pays a sales commission equal to 4.00% of the
amount invested to dealers who sell Class B shares. These
commissions are not paid on exchanges from other Putnam funds and
sales to investors exempt from the CDSC. In addition, in order
to further compensate dealers (including, for this purpose,
certain financial institutions) for services provided in
connection with sales of Class B shares and the maintenance of
shareholder accounts, Putnam Mutual Funds makes quarterly
payments to qualifying dealers based on the average net asset
value of Class B shares which are attributable to shareholders
for whom the dealers are designated as the dealer of record.
Putnam Mutual Funds makes such payments at an annual rate of
0.25% of such average net asset value of such shares.

GENERAL. Putnam Mutual Funds may suspend or modify the payments
made to dealers described above, and such payments are subject to
the continuation of the relevant Plan described above, the terms
of Service Agreements between dealers and Putnam Mutual Funds,
and any applicable limits imposed by the National Association of
Securities Dealers, Inc.

HOW TO SELL SHARES

You can sell your shares to the Fund any day the New York Stock
Exchange is open, either directly to the Fund or through your
investment dealer. The Fund will only repurchase shares for
which it has received payment.

SELLING SHARES DIRECTLY TO THE FUND. Send a signed letter of
instruction or stock power form to Putnam Investor Services,
along with any certificates that represent shares you want to
sell. The price you will receive is the next net asset value
calculated after the Fund receives your request in proper form
less any applicable CDSC. In order to receive that day's net
asset value, Putnam Investor Services must receive your request
before the close of regular trading on the New York Stock
Exchange. If you sell shares having a net asset value of
$100,000 or more, the signatures of registered owners or their
legal representatives must be guaranteed by a bank, broker-dealer
or certain other financial institutions. See the Statement of
Additional Information for more information about where to obtain
a signature guarantee. Stock power forms are available from your
investment dealer, Putnam Investor Services and many commercial
banks. If you want your redemption proceeds sent to an address
other than your address as it appears on Putnam's records, a
signature guarantee is required. Putnam Investor Services
usually requires additional documentation for the sale of shares
by a corporation, partnership, agent or fiduciary, or a surviving
joint owner. Contact Putnam Investor Services for details.

THE FUND GENERALLY SENDS YOU PAYMENT FOR YOUR SHARES THE BUSINESS
DAY AFTER YOUR REQUEST IS RECEIVED. Under unusual circumstances,
the Fund may suspend repurchases, or postpone payment for more
than seven days, as permitted by federal securities law.

You may use Putnam's Telephone Redemption Privilege to redeem
shares valued up to $100,000 from your account unless you have
notified Putnam Investor Services of an address change within the
preceding 15 days. Unless an investor indicates otherwise on the
Account Application, Putnam Investor Services will be authorized
to act upon redemption and transfer instructions received by
telephone from a shareholder, or any person claiming to act as
his or her representative, who can provide Putnam Investor
Services with his or her account registration and address as it
appears on Putnam Investor Services' records. Putnam Investor
Services will employ these and other reasonable procedures to
confirm that instructions communicated by telephone are genuine;
if it fails to employ reasonable procedures, Putnam Investor
Services may be liable for any losses due to unauthorized or
fraudulent instructions. For information, consult Putnam Investor
Services. During periods of unusual market changes and
shareholder activity, you may experience delays in contacting
Putnam Investor Services by telephone in which case you may wish
to submit a written redemption request, as described above, or
contact your investment dealer, as described below. The
Telephone Redemption Privilege is not available if you were
issued certificates for your shares which remain outstanding.
The Telephone Redemption Privilege may be modified or terminated
without notice.

SELLING SHARES THROUGH YOUR INVESTMENT DEALER. Your dealer must
receive your request before the close of regular trading on the
New York Stock Exchange to receive that day's net asset
value. Your dealer will be responsible for furnishing all
necessary documentation to Putnam Investor Services, and may
charge for its services.

HOW TO EXCHANGE SHARES

You can exchange your shares for shares of the same class of
certain other Putnam funds at net asset value beginning 15 days
after purchase. Not all Putnam funds offer more than one class
of shares. If the other Putnam fund offers only one class of
shares, only Class A shares may be exchanged for such class. If
you exchange shares subject to a CDSC, the transaction will not
be subject to the CDSC. However, when you redeem the shares
acquired through the exchange, the redemption may be subject to
the CDSC, depending upon when you originally purchased the shares
and using the schedule of any fund into or from which you have
exchanged your shares that would result in your paying the
highest CDSC applicable to your class of shares. For purposes of
computing the CDSC, the length of time you have owned your shares
will be measured from the date of original purchase and will not
be affected by any exchange.

To exchange your shares, simply complete an Exchange
Authorization Form and send it to Putnam Investor Services.
Exchange Authorization Forms are available by calling or writing
Putnam Investor Services. For federal income tax purposes, an
exchange is treated as a sale of shares and generally results in
a capital gain or loss. A Telephone Exchange Privilege is
currently available for amounts up to $500,000. Putnam Investor
Services' procedures for telephonic transactions are described
above under "How to sell shares." The Telephone Exchange
Privilege is not available if you were issued certificates for
shares which remain outstanding. Ask your investment dealer or
Putnam Investor Services for prospectuses of other Putnam funds.
Shares of certain Putnam funds are not available to residents of
all states.

The exchange privilege is not intended as a vehicle for
short-term trading. Excessive exchange activity may interfere
with portfolio management and have an adverse effect on all
shareholders. In order to limit excessive exchange activity and
in other circumstances where the Trustees or Putnam Management
believes doing so would be in the best interests of the Fund, the
Fund reserves the right to revise or terminate the exchange
privilege, limit the amount or number of exchanges or reject any
exchange. Shareholders would be notified of any such action to
the extent required by law. Consult Putnam Investor Services
before requesting an exchange. See the Statement of Additional
Information to find out more about the exchange privilege .

HOW THE FUND VALUES ITS SHARES

THE FUND CALCULATES THE NET ASSET VALUE OF EACH CLASS BY DIVIDING
THE TOTAL VALUE OF ITS ASSETS, LESS LIABILITIES, BY THE NUMBER OF
ITS SHARES OUTSTANDING. SHARES ARE VALUED AS OF THE CLOSE OF
REGULAR TRADING ON THE NEW YORK STOCK EXCHANGE EACH DAY THE
EXCHANGE IS OPEN. Portfolio securities for which market
quotations are readily available are stated at market value.
Short-term investments that will mature in 60 days or less are
stated at amortized cost, which approximates market value. All
other securities and assets are valued at their fair value
following procedures approved by the Trustees.

HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION

THE FUND DISTRIBUTES ANY NET INVESTMENT INCOME AND ANY NET
REALIZED CAPITAL GAINS AT LEAST ANNUALLY. Distributions from net
investment income, if any, are expected to be small.
Distributions from net capital gains are made after applying any
available capital loss carryovers. Distributions paid by the
Fund with respect to Class A shares will generally be greater
than those paid with respect to Class B shares because expenses
attributable to Class B shares will generally be higher.

YOU CAN CHOOSE FROM THREE DISTRIBUTION OPTIONS: (1) reinvest all
distributions in additional Fund shares without a sales charge;
(2) receive distributions from net investment income in cash
while reinvesting capital gains distributions in additional
shares without a sales charge; or (3) receive all distributions
in cash. You can change your distribution option by notifying
Putnam Investor Services in writing. If you do not select an
option when you open your account, all distributions will be
reinvested. All distributions not paid in cash will be
reinvested in shares of the class on which the distribution is
paid. You will receive a statement confirming reinvestment of
distributions in additional Fund shares (or in shares of other
Putnam funds for Dividends Plus accounts) promptly following the
quarter in which the reinvestment occurs.

If a check representing a Fund distribution is not cashed within
a specified period, Putnam Investor Services will notify you that
you have the option of requesting another check or reinvesting
the distribution in the Fund or in another Putnam Fund. If
Putnam Investor Services does not receive your election, the
distribution will be reinvested in the Fund . Similarly,
if correspondence sent by the Fund or Putnam Investor Services is
returned as "undeliverable , " the Fund distributions
will automatically be reinvested in the Fund or in another Putnam
fund.

All Fund distributions will be taxable to you as ordinary income,
except that any distributions of net long-term capital gains will
be taxed as such, regardless of how long you have held the
shares. Distributions will be taxable as described above whether
received in cash or in shares through the reinvestment of
distributions.

Early in each year the Fund will notify you of the amount and tax
status of distributions paid to you by the Fund for the preceding
year.

The foregoing is a summary of certain federal income tax
consequences of investing in the Fund. You should consult your
tax adviser to determine the precise effect of an investment in
the Fund on your particular tax situation (including possible
liability for state and local taxes).

To permit the Fund to maintain a more stable distribution, the
Fund may from time to time pay out less than the entire amount of
net investment income earned in any particular period. Any such
amount retained by the Fund would be available to stabilize
future distributions. As a result, the distributions paid by the
Fund for any particular period may be more or less than the
amount of net investment income actually earned by the Fund
during such period.
<PAGE>
ABOUT PUTNAM INVESTMENTS, INC.

PUTNAM MANAGEMENT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1937.
Putnam Mutual Funds Corp. is the principal underwriter of the
Fund and of other Putnam funds. Putnam Fiduciary Trust Company
is the Fund's custodian. Putnam Investor Services, a division of
Putnam Fiduciary Trust Company, is the Fund's investor servicing
and transfer agent.

Putnam Management, Putnam Mutual Funds and Putnam Fiduciary Trust
Company are subsidiaries of Putnam Investments, Inc., which is
wholly-owned by Marsh & McLennan Companies, Inc., a publicly
owned holding company whose principal businesses are
international insurance and reinsurance brokerage, employee
benefit consulting and investment management.

<PAGE>
PUTNAM INVESTORS FUND

One Post Office Square
Boston, MA 02109

FUND INFORMATION:
INVESTMENT MANAGER

Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109

MARKETING SERVICES

Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109

INVESTOR SERVICING AGENT

Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203

CUSTODIAN

Putnam Fiduciary Trust Company
One Post Office Square
Boston, MA 02109

LEGAL COUNSEL

Ropes & Gray
One International Place
Boston, MA 02110

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand
One Post Office Square
Boston, MA 02109

PUTNAMINVESTMENTS
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581

<PAGE>

PUTNAM
INVESTORS
FUND

ONE POST OFFICE SQUARE, BOSTON, MA 02109

CLASS A SHARES
INVESTMENT STRATEGY: GROWTH
PROSPECTUS DECEMBER 1, 1993 ,
AS REVISED JUNE 1, 1994

THIS PROSPECTUS RELATES ONLY TO CLASS A SHARES OF THE FUND
OFFERED WITHOUT A SALES CHARGE THROUGH ELIGIBLE EMPLOYER-
SPONSORED DEFINED CONTRIBUTION PLANS ("DEFINED CONTRIBUTION
PLANS").

This Prospectus explains concisely what you should know before
investing in Class A shares of the Fund offered without
a Sales Charge through eligible employer-sponsored defined
contribution plans ("defined contribution plans") . Please
read it carefully and keep it for future reference. You can find
more detailed information about the Fund in the December 1, 1993
Statement of Additional Information, as amended from time to
time. For a free copy of the Statement or for other
information, including Prospectuses regarding other classes of
Fund shares or Class A shares for other investors, call
Putnam Investor Services at 1-800-752-9894. The Statement has
been filed with the Securities and Exchange Commission and is
incorporated into this Prospectus by reference.

PUTNAM INVESTORS FUND (THE "FUND") SEEKS LONG-TERM GROWTH OF
CAPITAL AND ANY INCREASED INCOME THAT RESULTS FROM THIS GROWTH.
THE FUND IS DESIGNED FOR INVESTORS SEEKING LONG-TERM CAPITAL
GROWTH FROM A PORTFOLIO PRIMARILY CONSISTING OF QUALITY COMMON
STOCKS.

PUTNAMINVESTMENT
S

PUTNAM DEFINED
CONTRIBUTION PLANS

ABOUT THE FUND

Expenses summary......................................2
Financial highlights..................................3
Objective.............................................5
How objective is pursued..............................5
How performance is shown..............................9
How the Fund is managed...............................9
Organization and history.............................10

ABOUT YOUR INVESTMENT

How to buy shares....................................11
Distribution
Plan. ...................................12
How to sell shares. ..................................13
How to exchange shares...............................13
How the Fund values its shares. ......................14
How distributions are made; tax information. .........14

ABOUT PUTNAM INVESTMENTS, INC. 15

<PAGE>
ABOUT THE FUND

EXPENSES SUMMARY

Expenses are one of several factors to consider when investing in
the Fund. The following table summarizes your maximum
transaction costs from investing in the Fund and expenses
incurred by the Fund based on its most recent fiscal year. The
Example shows the cumulative expenses attributable to a
hypothetical $1,000 investment in the Fund over specified
periods.

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

Management Fees 0.62%
12b-1 Fees 0.25%
Other Expenses 0.13%
Total Fund Operating Expenses 1.00%

EXAMPLE

Your investment of $1,000 would incur the
following expenses, assuming (1) 5% annual return
and (2) redemption at the end of each
period:

1 YEAR 3 YEARS 5 YEARS 10 YEARS

$10 $32 $55
$122

The table is provided to help you understand the expenses of
investing in the Fund and your share of the operating expenses
which the Fund incurs. The 12b-1 fees shown in the table
reflect the amount to which payments are currently limited under
the Distribution Plan. Actual 12b-1 fees and total Fund
operating expenses for fiscal 1993 were 0.15% and 0.90%,
respectively. 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 has varied. The
Example does not reflect any charges or expenses related to your
employer's plan.

The fund also offers another class of shares. See
"Organization and history" for additional information.

FINANCIAL HIGHLIGHTS

The table on the following page presents per share financial
information for the Fund's ten most recent fiscal years. This
information has been derived from the Fund's financial
statements, which have been audited and reported on by the
Fund's independent accountants. The Report of Independent
Accountants and financial statements included in the Fund's
Annual Report to shareholders for the 1993 fiscal year are
incorporated by reference into this Prospectus. The Fund's
Annual Report, which contains additional unaudited performance
information, will be made available without charge upon
request.

FINANCIAL HIGHLIGHTS*
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SEVEN
MONTHS
ENDED
YEAR ENDED JULY 31 JULY 31 YEAR ENDED
1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
CLASS A
NET ASSET VALUE,
BEGINNING OF PERIOD $8.57 $9.20 $8.75 $8.73 $6.93 $6.59 $11.62 $11.90 $9.84 $11.42

INVESTMENT OPERATIONS
NET INVESTMENT
INCOME (LOSS) .08 .12 .15 .22 .17 .13 .15 .23 .25 .21
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS 1.45 .21 .89 .63 1.71 .36 .57 1.46 2.52 (.35)

TOTAL FROM INVESTMENT
OPERATIONS 1.53 .33 1.04 .85 1.88 .49 .72 1.69 2.77 (.14)

DISTRIBUTIONS TO
SHAREHOLDERS
FROM NET INVESTMENT
INCOME (.04) (.15) (.17) (.29) (.08) (.15) (.27) (.20) (.20) (.20)
IN EXCESS OF NET
INVESTMENT INCOME (.03) -- -- -- -- -- -- -- -- --
NET REALIZED GAIN
ON INVESTMENTS (1.16) (.81) (.42) (.54) -- -- (5.48) (1.77) (.51) (1.24)

TOTAL DISTRIBUTIONS (1.23) (.96) (.59) (.83) (.08) (.15) (5.75) (1.97) (.71) (1.44)

NET ASSET VALUE,
END OF PERIOD $8.87 $8.57 $9.20 $8.75 $8.73 $6.93 $6.59 $11.62 $11.90 $9.84
TOTAL INVESTMENT RETURN AT
NET ASSET
VALUE (%) (B) 19.24 4.49 13.32 10.3147.02(C) 7.48 4.00 15.74 29.20 0.15

NET ASSETS, END OF PERIOD
(IN THOUSANDS) $804,731 $714,479 $739,775 $704,189 $699,176 $609,631 $765,538 $969,073 $1,075,052 $1,015,855

RATIO OF EXPENSES TO
AVERAGE
NET ASSETS (%) .90 .94 .89 .81 .46(A) .68 .61 .49 .51 .51
RATIO OF NET INVESTMENT
INCOME (LOSS) TO AVERAGE
NET ASSETS (%) .84 1.33 1.78 2.42 2.13(A) 1.84 1.48 2.00 2.33 2.19
PORTFOLIO
TURNOVER (%) 134.14 100.26 58.30 51.47 31.96(A) 82.20 83.57 119.59 79.25 53.21

*FINANCIAL HIGHLIGHTS FOR PERIODS ENDED THROUGH JULY 31, 1992 HAVE BEEN RESTATED TO CONFORM WITH REQUIREMENTS ISSUED BY
THE SEC IN APRIL, 1993.

(A)NOT ANNUALIZED.

(B)TOTAL INVESTMENT RETURN ASSUMES DIVIDEND REINVESTMENT AND DOES NOT REFLECT THE EFFECT OF SALES CHARGES.

(C)ANNUALIZED.

</TABLE>
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OBJECTIVE

HOW OBJECTIVE IS PURSUED

BASIC INVESTMENT STRATEGY

In seeking the Fund's objective of long-term growth of capital,
Putnam Management considers three main factors:

1. The general outlook for the economy.

2. A study of various industries to determine those with the
best possibilities for long-term growth.

3. A detailed study of what appear to be the most promising
individual companies.

FOREIGN INVESTMENTS

The Fund may buy or sell foreign currencies and foreign currency
forward contracts for hedging purposes in connection with its
foreign investments.

A MORE DETAILED EXPLANATION OF FOREIGN INVESTMENTS, AND THE RISKS
AND SPECIAL TAX CONSIDERATIONS ASSOCIATED WITH THEM, IS INCLUDED
IN THE STATEMENT OF ADDITIONAL INFORMATION.

PORTFOLIO TURNOVER

STOCK INDEX FUTURES AND OPTIONS

A more detailed explanation of index futures and options
transactions, including the risks associated with them, is
included in the Statement of Additional Information.

OTHER INVESTMENT PRACTICES

OPTIONS. The Fund may seek to increase its current return by
buying and selling call and put options on securities it owns or
in which it may invest. The Fund will only write covered
options. The Fund receives a premium from writing a call or put
option, which increases the Fund's return if the option expires
unexercised or is closed out at a net profit. When the Fund
writes a call option, it gives up the opportunity to profit from
any increase in the price of a security above the exercise price
of the option; when it writes a put option, the Fund takes the
risk that it will be required to purchase a security from the
option holder at a price above the current market price of the
security. The Fund may terminate an option that it has written
prior to its expiration by entering into a closing purchase
transaction in which it purchases an option having the same terms
as the option written. The Fund may also buy and sell put and
call options for hedging purposes. The Fund may also from time
to time buy and sell combinations of put and call options on the
same underlying security to earn additional income. The
aggregate value of the securities underlying the options may not
exceed 25% of the Fund's assets. The Fund's use of these
strategies may be limited by applicable law.

SECURITIES LOANS, REPURCHASE AGREEMENTS AND FORWARD COMMITMENTS.
The Fund may lend portfolio securities amounting to not more than
25% of its assets to broker-dealers and may enter into repurchase
agreements on up to 25% of its assets. These
transactions must be fully collateralized at all times .
The Fund may also purchase securities for future delivery, which
may increase its overall investment exposure and involves a risk
of loss if the value of the securities declines prior to the
settlement date. These transactions involve some risk to
the Fund if the other party should default on its obligation and
the Fund is delayed or prevented from recovering the collateral
or completing the transaction .

LIMITING INVESTMENT RISK

SPECIFIC INVESTMENT RESTRICTIONS HELP THE FUND LIMIT INVESTMENT
RISKS FOR ITS SHAREHOLDERS. THESE RESTRICTIONS PROHIBIT THE FUND
FROM: acquiring more than 10% of the voting securities of an
issuer or more than 10% of any one class of the securities of an
issuer;* and investing more than (a) 5% of its total assets in
securities of any one issuer (other than the U.S. government);*
(b) 15% of its net assets in securities restricted as to resale
(excluding securities determined by the Fund's Trustees (or the
person designated by the Fund's Trustees to make such
determinations) to be readily marketable);* (c) 25% of its total
assets in any one industry;* or (d) 15% of its net assets in any
combination of securities that are not readily marketable, in
securities restricted as to resale (excluding securities
determined by the Fund's Trustees (or the person designated by
the Fund's Trustees to make such determinations) to be readily
marketable), and in repurchase agreements maturing in more than
seven days.

HOW PERFORMANCE IS SHOWN

TOTAL RETURN DATA MAY FROM TIME TO TIME BE INCLUDED IN
ADVERTISEMENTS ABOUT THE FUND. "Total return" for the one-,
five- and ten-year periods through the most recent calendar
quarter represents the average annual compounded rate of return
on an investment of $1,000 in the Fund at the maximum public
offering price. Total return may also be presented for other
periods or based on investment at reduced sales charge levels.
Quotations of total return for any period when an expense
limitation was in effect will be greater than if the limitation
had not been in effect. The Fund's performance may be compared
to various indices. See the Statement of Additional Information.
Because shares sold through eligible defined contribution plans
are sold without a sales charge, quotations of total return
reflecting the deduction of a sales charge will be lower than the
actual total return on shares purchased through such plans.

HOW THE FUND IS MANAGED

THE TRUSTEES OF THE FUND ARE RESPONSIBLE FOR GENERALLY OVERSEEING
THE CONDUCT OF THE FUND'S BUSINESS. Subject to such policies as
the Trustees may determine, Putnam Management furnishes a
continuing investment program for the Fund and makes investment
decisions on its behalf. Subject to the control of the Trustees,
Putnam Management also manages the Fund's other affairs and
business. Brooke A. Cobb, Senior Vice President of Putnam
Management , Christopher Ainley, Vice President of Putnam
Management, and David Santos, Vice President of Putnam
Management, each of whom is also a Vice President of the
Fund, are primarily responsible for the day-to-day
management of the Fund's portfolio . Mr. Cobb has had
this responsibility since June, 1988, and Messrs. Ainley and
Santos have had this responsibility since April, 1994. Mr Ainley
has been employed by Putnam Management since March, 1992. Prior
to joining Putnam Management, Mr. Ainley was a Vice President at
J.P. Morgan Investment Management for more than four years.
Messrs. Cobb and Santos have been employed by Putnam
Management for the past five years.

The Fund pays all expenses not assumed by Putnam Management,
including Trustees' fees, auditing, legal, custodial, investor
servicing and shareholder reporting expenses, and payments under
its Distribution Plan (which are in turn allocated to the
relevant class of shares) . The Fund also reimburses Putnam
Management for the compensation and related expenses of certain
officers of the Fund and their staff who provide administrative
services to the Fund. The total reimbursement is determined
annually by the Trustees.

ORGANIZATION AND HISTORY

The Fund is an open-end, diversified management investment
company with an unlimited number of authorized shares of
beneficial interest. Shares of the Fund may, without shareholder
approval, be divided into two or more classes of shares having
such preferences and special or relative rights and privileges as
the Trustees may determine. The Fund's shares are currently
divided into three classes, two of which -Class A shares and
Class B shares, are currently being offered. Only the Fund's
Class A shares are offered by this Prospectus. Class B shares
are sold at net asset value, but are subject to a
contingent deferred sales charge upon redemption and
bear a higher 12b-1 fee than Class A shares. Because
Class A shares generally bear lower expenses than
Class B shares , the investment return of
Class A shares will be higher than that of
Class B shares. Each share has one vote, with fractional
shares voting proportionally. Shares of each class will vote
together as a single class except when required by law or as
determined by the Trustees. Shares are freely transferable, are
entitled to dividends as declared by the Trustees, and, if the
Fund were liquidated, would receive the net assets of the Fund.
The Fund may suspend the sale of shares at any time and may
refuse any order to purchase shares. Although the Fund is not
required to hold annual meetings of its shareholders,
shareholders holding at least 10% of the outstanding shares
entitled to vote have the right to call a meeting to elect or
remove Trustees, or to take other actions as provided in the
Declaration of Trust.

THE FUND'S TRUSTEES: GEORGE PUTNAM,* CHAIRMAN. President of the
Putnam funds. Chairman and Director of Putnam Management and
Putnam Mutual Funds Corp. ("Putnam Mutual Funds"). Director,
Marsh & McLennan Companies, Inc.; WILLIAM F. POUNDS, VICE
CHAIRMAN. Professor of Management, Alfred P. Sloan School of
Management, M.I.T. ; JAMESON ADKINS BAXTER, President, Baxter
Associates, Inc. ; HANS H. ESTIN, Vice Chairman, North
American Management; JOHN A. HILL, Principal and Managing
Director, First Reserve Corporation; ELIZABETH T. KENNAN,
President, Mount Holyoke College; LAWRENCE J. LASSER,* Vice
President of the Putnam funds. President, Chief Executive Officer
and Director of Putnam Investments, Inc. and Putnam Management.
Director, Marsh & McLennan Companies, Inc.; ROBERT E. PATTERSON,
Executive Vice President, Cabot Partners Limited Partnership;
DONALD S. PERKINS, Director of various corporations, including
AT&T, K mart Corporation and Time Warner Inc.; GEORGE PUTNAM,
III,* President, New Generation Research, Inc.; A.J.C. SMITH,*
Chairman, Chief Executive Officer and Director, Marsh & McLennan
Companies, Inc.; and W. NICHOLAS THORNDIKE, Director of various
corporations and charitable organizations, including Providence
Journal Co. Also, Trustee and President, Massachusetts General
Hospital and Trustee of Eastern Utilities Associates. The Fund's
Trustees are also Trustees of the other Putnam funds. Those
marked with an asterisk (*) are "interested persons" of the Fund,
Putnam Management or Putnam Mutual Funds.

ABOUT YOUR INVESTMENT

HOW TO BUY SHARES

ALL ORDERS TO PURCHASE SHARES MUST BE MADE THROUGH YOUR
EMPLOYER'S DEFINED CONTRIBUTION PLAN. FOR MORE INFORMATION ABOUT
HOW TO PURCHASE SHARES OF THE FUND THROUGH YOUR EMPLOYER'S PLAN
OR LIMITATIONS ON THE AMOUNT THAT MAY BE PURCHASED, PLEASE
CONSULT YOUR EMPLOYER. Shares are sold to eligible defined
contribution plans at the net asset value per share next
determined after receipt of an order by Putnam Mutual Funds.
Orders must be received by Putnam Mutual Funds before the close
of regular trading on the New York Stock Exchange in order to
receive that day's net asset value. In order to be eligible to
purchase shares at net asset value, defined contribution plans
must initially invest at least $1 million or be sponsored
by companies with more than 750 employees. Eligible plans may
make additional investments of any amount at any time. To
eliminate the need for safekeeping, the Fund will not issue
certificates for your shares.

On sales at net asset value to a participant-directed
qualified retirement plan initially investing less than $20
million in Putnam funds and other investments managed by Putnam
Management or its affiliates (including a plan sponsored by an
employer with more than 250 employees), Putnam Mutual Funds pays
commissions on cumulative purchases during the life of the
account at the rate of 1.00% of the amount under $3 million and
0.50% thereafter. On sales at net asset value to all other
participant-directed qualified retirement plans, Putnam Mutual
Funds pays commissions on the initial investment and on
subsequent net quarterly sales at the rate of 0.15% . Putnam
Mutual Funds may, at its expense, provide additional promotional
incentives or payments to dealers that sell shares of the Putnam
funds. In some instances, these incentives or payments may be
offered only to certain dealers who have sold or may sell
significant amounts of shares .

DISTRIBUTION PLAN

The purpose of the Plan is to permit the Fund to compensate
Putnam Mutual Funds for services provided and expenses incurred
by it in promoting the sale of the Fund, reducing redemptions, or
maintaining or improving services provided to shareholders by
Putnam Mutual Funds or dealers. The Plan provides for payments
by the Fund to Putnam Mutual Funds at the annual rate of up to
0.35% of the Fund's average net assets attributable to Class A
shares, subject to the authority of the Fund's Trustees to reduce
the amount of payments or to suspend the Plan for such periods as
they may determine. Subject to these limitations, the amount of
such payments and the specific purposes for which they are made
shall be determined by the Trustees of the Fund. At present, the
Trustees have approved payments under the Plan at the annual rate
of 0.25% of the Fund's average net assets attributable to Class A
shares for the purpose of compensating Putnam Mutual Funds for
services provided and expenses incurred by it as principal
underwriter of the Fund's shares, including payments made by it
to dealers under the Service Agreements referred to below.
Should the Trustees decide in the future to approve payments in
excess of this amount, shareholders will be notified and this
Prospectus will be revised.

Putnam Mutual Funds makes quarterly payments to
qualifying dealers based on the average net asset value of Class
A shares which are attributable to shareholders for whom
the dealers are designated as the dealer of record in order to
compensate such dealers (including, for this purpose, certain
financial institutions) for services provided in connection with
sales of Class A shares and the maintenance of shareholder
accounts. This calculation excludes until one year after
purchase shares purchased at net asset value after March 31, 1994
by shareholders investing $1 million or more and by participant-
directed qualified retirement plans sponsored by employers with
more than 750 employees ("NAV Shares"), except for shares owned
by certain investors investing $1 million or more that have made
arrangements with Putnam Mutual Funds and whose dealer of record
waived the sales commission. Except as stated below, Putnam
Mutual Funds makes such payments at the annual rate of 0.20% of
such average net asset value for shares outstanding as of
December 31, 1989 and 0.25% of such average net asset value for
shares acquired after that date (including shares acquired
through reinvestment of distributions). For participant-
directed qualified retirement plans initially investing less than
$20 million in Putnam funds and other investments managed by
Putnam Management or its affiliates, Putnam Mutual Funds'
payments to qualifying dealers on NAV Shares are 100% of the rate
stated above if average plan assets in Putnam funds (excluding
money market funds) during the quarter are less than $20 million,
60% of the stated rate if average plan assets are at least $20
million but less than $30 million, and 40% of the stated rate if
average plan assets are $30 million or more. For all other
participant-directed qualified retirement plans purchasing NAV
Shares, Putnam Mutual Funds makes quarterly payments to
qualifying dealers at the annual rate of 0.10% of the average net
asset value of such shares. Putnam Mutual Funds may suspend
or modify these payments at any time, and payments are subject to
the continuation of the Distribution Plan described above, the
terms of Service Agreements between dealers and Putnam Mutual
Funds, and any applicable limits imposed by the National
Association of Securities Dealers, Inc.

HOW TO SELL SHARES

SUBJECT TO ANY RESTRICTIONS IMPOSED BY YOUR EMPLOYER'S PLAN, YOU
CAN SELL YOUR SHARES THROUGH THE PLAN TO THE FUND ANY DAY THE NEW
YORK STOCK EXCHANGE IS OPEN. For more information about how to
sell shares of the Fund through your employer's plan, including
any charges that may be imposed by the plan, please consult with
your employer.

Your plan administrator must send a signed letter of instruction
to Putnam Investor Services. The price you will receive is the
next net asset value calculated after the Fund receives your
request in proper form. All requests must be received by the
Fund prior to the close of regular trading on the New York Stock
Exchange in order to receive that day's net asset value. If you
sell shares having a net asset value of $100,000 or more,
the signatures of registered owners or their legal
representatives must be guaranteed by a bank, broker-dealer or
certain other financial institutions. See the Statement of
Additional Information for more information about where to obtain
a signature guarantee.

THE FUND GENERALLY PROVIDES PAYMENT FOR YOUR SHARES THE BUSINESS
DAY AFTER THE REQUEST IS RECEIVED. Under unusual circumstances,
the Fund may suspend repurchases, or postpone payment for more
than seven days, as permitted by federal securities law. The
Fund will only repurchase shares for which it has received
payment.

HOW TO EXCHANGE SHARES

Subject to any restrictions contained in your plan, you can
exchange your shares for shares of other Putnam funds available
through your plan at net asset value. Contact your plan
administrator or Putnam Investor Services on how to exchange your
shares or how to obtain prospectuses of other Putnam funds in
which you may invest. Shares of certain Putnam funds are not
available to residents of all states.

The exchange privilege is not intended as a vehicle for short-
term trading. Excessive exchange activity may interfere with
portfolio management and have an adverse effect on all
shareholders. In order to limit excessive exchange activity and
in other circumstances where the Trustees or Putnam Management
believes doing so would be in the best interests of the Fund, the
Fund reserves the right to revise or terminate the exchange
privilege, limit the amount or number of exchanges or reject any
exchange. Shareholders would be notified of any such action to
the extent required by law. Consult Putnam Investor Services
before requesting an exchange. See the Statement of Additional
Information to find out more about the exchange privilege.

HOW THE FUND VALUES ITS SHARES

HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION

The terms of your plan will govern how your plan may receive
distributions from the Fund. Generally, periodic distributions
from the Fund to your plan are reinvested in additional Fund
shares, although your plan may permit Fund distributions from net
investment income to be received by you in cash while reinvesting
capital gains distributions in additional shares or all Fund
distributions to be received in cash. If another option is not
selected, all distributions will be reinvested in additional Fund
shares.

The Fund intends to qualify as a "regulated investment company"
for federal income tax purposes and to meet all other
requirements that are necessary for it to be relieved of federal
taxes on income and gains it distributes. The Fund will
distribute substantially all of its ordinary income and
capital gain net income on a current basis. Generally,
Fund distributions are taxable as ordinary income, except that
any distributions of net long-term capital gains will be taxed as
such. However, distributions by the Fund to employer-sponsored
defined contribution plans that qualify for tax-exempt treatment
under federal income tax laws will not be taxable. Special tax
rules apply to investments through such plans. You should
consult your tax adviser to determine the suitability of the Fund
as an investment through such a plan and the tax treatment of
distributions (including distributions of amounts attributable to
an investment in the Fund) from such a plan.

ABOUT PUTNAM INVESTMENTS, INC.

PUTNAM MANAGEMENT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1937.
Putnam Mutual Funds Corp. is the principal underwriter of the
Fund and of other Putnam funds. Putnam Defined Contribution
Plans is a division of Putnam Mutual Funds. Putnam Fiduciary
Trust Company is the Fund's custodian. Putnam Investor Services,
a division of Putnam Fiduciary Trust Company, is the Fund's
investor servicing and transfer agent.

Putnam Management, Putnam Mutual Funds and Putnam Fiduciary Trust
Company are located at One Post Office Square, Boston,
Massachusetts, 02109 and are subsidiaries of Putnam Investments,
Inc., which is wholly-owned by Marsh & McLennan Companies, Inc.,
a publicly owned holding company whose principal businesses are
international insurance and reinsurance brokerage, employee
benefit consulting and investment management.

<PAGE>
Differences between the typeset (printed) prospectus and the
EDGAR filing version.

1. Each interior page of the prospectus
includes the word "prospectus" at the
bottom of the page.

2. Pagination is different in printed
prospectus.

3. Section headings and subheadings in the
printed prospectus are printed in
boldface type with colored ink.

4. The first page of the printed
prospectus contains an illustration of
balanced scales, Putnam's logo.

5. The last page of the printed prospectus
contains a graphic recyclable logo.
<PAGE>

DIFFERENCES BETWEEN THE TYPESET DEFINED CONTRIBUTION AND CLASS Y
(PRINTED)
PROSPECTUS AND THE EDGAR FILING VERSION.

1. PAGINATION IS DIFFERENT IN PRINTED PROSPECTUS

2. SECTION HEADINGS AND SUBHEADINGS IN THE PRINTED PROSPECTUS

ARE PRINTED IN BOLDFACE TYPE

3. THE FIRST FEW DESCRIPTIVE LINES OF CERTAIN PARAGRAPHS, AND

CERTAIN OTHER EMPHASIZED PHRASES, ARE PRINTED IN BOLDFACE
TYPE

4. IN THE PRINTED PROSPECTUS, THE DASHES AT THE BEGINNING OF
CERTAIN SENTENCES ARE REPLACED BY A SOLID BOX

5. THE FIRST PAGE OF THE PRINTED PROSPECTUS CONTAINS A BOX
WITH AN ILLUSTRATION OF THE BALANCE SCALES, THE PUTNAM
LOGO

<PAGE>