PUTNAM VISTA FUND
FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
DECEMBER 1, 1995 , as revised August 1, 1996
This SAI is not a prospectus and is only authorized for
distribution when accompanied or preceded by the prospectus of
the fund dated December 1, 1995, as revised from time to time.
This SAI contains information which may be useful to investors
but which is not included in the prospectus. If the fund has
more than one form of current prospectus, each reference to the
prospectus in the SAI shall include all of the fund's
prospectuses unless otherwise noted. The SAI should be read
together with the applicable prospectus. Investors may obtain a
free copy of the applicable prospectus from Putnam Investor
Services, Mailing address: P.O. Box 41203, Providence, RI 02940-
1203.
Part I of this SAI contains specific information about the
fund. Part II includes information about the fund and the other
Putnam funds.
<PAGE>
Table of Contents
Part I Page
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . I-3
CHARGES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . .I-6
INVESTMENT PERFORMANCE. . . . . . . . . . . . . . . . . . . I-10
ADDITIONAL OFFICERS . . . . . . . . . . . . . . . . . . . . I-11
INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS . . . . . . I-11
Part II
MISCELLANEOUS INVESTMENT PRACTICES. . . . . . . . . . . . . . II-1
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . .II-25
MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . II- 30
DETERMINATION OF NET ASSET VALUE. . . . . . . . . . . . . . .II-40
HOW TO BUY SHARES . . . . . . . . . . . . . . . . . .II-
42
DISTRIBUTION PLANS. . . . . . . . . . . . . . . . . . . . . .II-54
INVESTOR SERVICES . . . . . . . . . . . . . . . . . . . . . .II-55
SIGNATURE GUARANTEES. . . . . . . . . . . . . . . . .II- 60
SUSPENSION OF REDEMPTIONS . . . . . . . . . . . . . . . . . .II-61
SHAREHOLDER LIABILITY . . . . . . . . . . . . . . . . . . . .II-61
STANDARD PERFORMANCE MEASURES . . . . . . . . . . . .II- 61
COMPARISON OF PORTFOLIO PERFORMANCE . . . . . . . . . . . . .II-63
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . .II-67
<PAGE>
SAI
PART I
INVESTMENT RESTRICTIONS
As fundamental investment restrictions, which may not be changed
without a vote of a majority of the outstanding voting
securities, the fund may not and will not:
(1) With respect to 75% of its total assets, invest in
the securities of any issuer if, immediately after such
investment , more than 5% of the total assets of the
fund (taken at current value) would be invested in
the securities of such issuer; provided that this
limitation does not apply to obligations issued or guaranteed as
to interest or principal by the U.S. government or its agencies
or instrumentalities.
(2) With respect to 75% of its total assets, acquire
more than 10% of the outstanding voting securities
of any issuer.
(3) Borrow money in excess of 10% of its net assets
(taken at current value) and then only as a temporary measure for
extraordinary or emergency reasons and not for investment
purposes. (The fund may borrow only from banks and immediately
after any such borrowings there must be an asset coverage (total
assets of the fund including the amount borrowed less
liabilities other than such borrowings) of at least 300% of the
amount of all borrowings. In the event that, due to market
decline or other reasons, such asset coverage should at any time
fall below 300%, the fund is required within three days not
including Sundays and holidays to reduce the amount of its
borrowings to the extent necessary to cause the asset coverage of
such borrowings to be at least 300%. If this should happen, the
fund may have to sell securities at a time when it would be
disadvantageous to do so.)
(4) Make loans, except by purchase of debt
obligations in which the fund may invest consistent with its
investment policies, by entering into repurchase agreements
, or by lending its portfolio securities .
(5) Purchase or sell real estate, although it may
purchase securities of issuers which deal in real estate
, securities which are secured by interests in real
estate , and securities which represent interests in real
estate, and it may acquire and dispose of real estate or
interests in real estate acquired through the exercise of its
rights as a holder of debt obligations secured by real estate or
interests therein.
(6) Underwrite securities issued by other persons
except to the extent that, in connection with the disposition of
its portfolio investments , it may be deemed to be an
underwriter under certain federal securities laws.
(7) Purchase securities (other than securities of the
U.S. government, its agencies or instrumentalities) if,
as a result of such purchase, more than
25% of the fund's total assets would be invested in
any one industry.
(8) Purchase or sell commodities or commodity contracts,
except that the fund may purchase and sell financial futures and
options and may enter into foreign exchange contracts and other
financial transactions not involving physical commodities.
It is contrary to the fund's present policy, which may be
changed without shareholder approval, to:
(1) Purchase securities on margin, except such short-term
credits as may be necessary for the clearance of purchases and
sales of securities, and except that it may make margin payments
in connection with financial futures contracts or options.
(2) Make short sales of securities or maintain a short position
for the account of the fund unless at all times when a short
position is open it owns an equal amount of such securities or
owns securities which, without payment of any further
consideration, are convertible into or exchangeable for
securities of the same issue as, and in equal amount to, the
securities sold short.
(3) Invest in securities of an issuer which, together with any
predecessors, controlling persons, general partners and
guarantors, have a record of less than three years' continuous
business operation or relevant business experience, if, as a
result, the aggregate of such investments would exceed 5% of the
value of the fund's net assets; provided, however, that this
restriction shall not apply to any obligations of the U.S.
government or its instrumentalities or agencies.
(4) Pledge, hypothecate, mortgage, or otherwise encumber its
assets in excess of 33 1/3% of its total assets (taken at costs)
in connection with permitted borrowings.
(5) Engage in puts, calls, straddles, spreads or any combination
thereof if, as a result, the value of such investments exceeds 5%
of the value of the fund's total assets, except that the fund may
buy and sell put and call options (and any combinations thereof)
on securities and securities indices.
(6) Invest in securities of any issuer, if, to the knowledge of
the fund, officers and Trustees of the fund and officers and
directors of Putnam Management who beneficially own more than
0.5% of the securities of that issuer together own more than 5%
of such securities.
(7) Buy or sell oil, gas or other mineral leases, rights or
royalty contracts, although it may purchase securities which
represent interests in, are secured by interests in, or which are
issued by issuers which deal in, such leases, rights, or
contracts, and it may acquire and dispose of such leases, rights
or contracts acquired through the exercise of its rights as a
holder of debt obligations secured thereby.
(8) Invest in (a) securities which at the time of such
investment are not readily marketable, (b) securities restricted
as to resale (excluding securities determined by the Trustees of
the fund (or the person designated by the Trustees of the fund
to make such determinations) to be readily marketable), and (c)
repurchase agreements maturing in more than seven days, if, as a
result, more than 15% of the fund's net assets (taken at current
value) would then be invested in the securities described in (a),
(b) and (c) above.
(9) Invest in securities of other registered open-end
investment trusts or companies.
(10) Invest in warrants if, as a result, such
investments (valued at the lower of cost or market) would exceed
5% of the value of the fund's net assets; provided that not more
than 2% of the fund's net assets may be invested in warrants not
listed on the New York or American Stock Exchanges.
(11) Purchase or sell real property (including limited
partnership interests), except that the fund may (a) purchase or
sell readily marketable interests in real estate investment
trusts or readily marketable securities of companies which invest
in real estate (b) purchase or sell securities that are secured
by interests in real estate or interests therein, or (c) acquire
real estate through exercise of its rights as a holder of
obligations secured by real estate or interests therein or sell
real estate so acquired.
--------------------
Although certain of the fund's fundamental investment
restrictions permit it to borrow money to a limited extent, it
does not currently intend to do so and did not do so last year.
--------------------
All percentage limitations on investments will apply at the time
of the making of an investment and shall not be considered
violated unless an excess or deficiency occurs or exists
immediately after and as a result of such investment.
The Investment Company Act of 1940 provides that a "vote of a
majority of the outstanding voting securities" of the fund means
the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
present at a meeting if more than 50% of the outstanding shares
of the fund are represented at the meeting in person or by proxy.
CHARGES AND EXPENSES
Management fees
Under a Management Contract dated July 8, 1993 the fund pays a
quarterly fee to Putnam Management based on the average net
assets of the fund, as determined at the close of each business
day during the quarter, at an annual rate of 0.65% of the first
$500 million of the fund's average net assets, 0.55% of the next
$500 million, 0.50% of the next $500 million, and 0.45% of any
amount over $1.5 billion. For the past three fiscal years,
pursuant to the Management Contract (and a management contract in
effect prior to July 8, 1993, under which the management fee
payable to Putnam Management was paid at the rate of 0.60% of the
first $100 million of the fund's average net assets, 0.50% of
the next $100 million, 0.40% of the next $300 million, 0.325% of
the next $500 million, and 0.30% of any amount over $1 billion),
the fund incurred the following fees:
Fiscal Management
year fee paid
------ ----------
1995 $5,415,742
1994 $3,944,002
1993 $1,895,152
Brokerage commissions
The following table shows brokerage commissions paid during the
fiscal periods indicated.
Fiscal Brokerage
year commissions
------ ------------
1995 $2,690,939
1994 $1,819,833
1993 $1,367,582
The following table shows transactions placed with brokers and
dealers during the most recent fiscal year to recognize research,
statistical and quotation services Putnam Management considered
to be particularly useful to it and its affiliates.
Dollar
value Percent of
of these total Amount of
transactions transactions commissions
------------ ------------ -----------
$966,859,514 68.01% $1,943,307
Administrative expense reimbursement
The fund reimbursed Putnam Management in the following amount
for administrative services during fiscal 1995, including the
following amount for the compensation of certain officers of the
fund and contributions to the Putnam Investments, Inc. Profit
Sharing Retirement Plan for their benefit:
Portion of total
reimbursement for
Total compensation
reimbursement and contributions
------------- ----------------
$19,879 $18,518
Trustee fees
Each Trustee receives a fee for his or her services. Each
Trustee also receives fees for serving as Trustee of other Putnam
funds. The Trustees periodically review their fees to assure
that such fees continue to be appropriate in light of their
responsibilities as well as in relation to fees paid to trustees
of other mutual fund complexes. The Trustees meet monthly over a
two-day period, except in August. The Compensation Committee,
which consists solely of Trustees not affiliated with Putnam
Management and is responsible for recommending Trustee
compensation, estimates that Committee and Trustee meeting time
together with the appropriate preparation requires the equivalent
of at least three business days per Trustee meeting. The
following table shows the year each Trustee was first elected a
Trustee of the Putnam funds, the fees paid to each Trustee by the
fund for fiscal 1995 and the fees paid to each Trustee by all of
the Putnam funds during calendar year 1994:
<PAGE>
COMPENSATION TABLE
Total
Aggregate compensation
compensation from all
Trustees from the fund* Putnam funds**
- --------------------------------------------------------------
Jameson A. Baxter/1994 $1,869 $135,850
Hans H. Estin/1972 1,870 141,850
John A. Hill/1985 1,853 143,850
Elizabeth T. Kennan/1992 1,843 141,850
Lawrence J. Lasser/1992 1,870 141,850
Robert E. Patterson/1984 1,896 144,850
Donald S. Perkins/1982 1,870 139,850
William F. Pounds/1971 1,883 143,850
George Putnam/1957 1,870 141,850
George Putnam, III/1984 1,870 141,850
Eli Shapiro/1995*** 473 N/A
A.J.C. Smith/1986 1,834 137,850
W. Nicholas Thorndike/1992 1,896 144,850
* Includes an annual retainer and an attendance fee for each
meeting attended.
** Reflects total payments received from all Putnam funds in
the most recent calendar year. As of December 31, 1994,
there were 86 funds in the Putnam family.
*** Elected as a Trustee in April 1995. For the calendar year
ended December 31, 1994, Dr. Shapiro received $38,577 in
retirement benefits from the Putnam funds in respect of his
prior service as a Trustee from 1984 to 1989, which benefits
terminated at the end of 1994.
The Trustees have approved Retirement Guidelines for Trustees of
the Putnam funds. These Guidelines provide generally that a
Trustee who retires after reaching age 72 and who has at least 10
years of continuous service will be eligible to receive a
retirement benefit from each Putnam fund for which he or she
served as a Trustee. The amount and form of such benefit is
subject to determination annually by the Trustees and, unless
otherwise determined by the Trustees, will be an annual cash
benefit payable for life equal to one-half of the Trustee
retainer fees paid by each fund at the time of retirement.
Several retired Trustees are currently receiving benefits
pursuant to the Guidelines and it is anticipated that the current
Trustees will receive similar benefits upon their retirement. A
Trustee who retired in calendar 1994 and was eligible to receive
benefits under these Guidelines would have received an annual
benefit of $60,425, based upon the aggregate retainer fees paid
by the Putnam funds for such year. The Trustees reserve the
right to amend or terminate such Guidelines and the related
payments at any time, and may modify or waive the foregoing
eligibility requirements when deemed appropriate.
For additional information concerning the Trustees, see
"Management" in Part II of this SAI.
Share ownership
At October 31, 1995 the officers and Trustees of the fund as a
group owned less than 1% of the outstanding shares of each class,
and, except as noted below, to the knowledge of the fund no
person owned of record or beneficially 5% or more of the shares
of any class of the fund.
Shareholder name Percentage
Class and address* owned
----- ---------------------- --------
Y Hanford Operations and 88.69%
Engineering Investment Plan
Y Hanford Contractors Multi-Employer 15.38%
Savings Plan for HAMTC Represented
Employees
* The address for the names listed is:
c/o Putnam Fiduciary Trust Company, as trustee or agent, 859
Willard Street, Quincy, MA 02269.
Distribution fees
During fiscal 1995, the fund paid the following 12b-1 fees to
Putnam Mutual Funds :
Class A Class B Class M
-------------- -------
$1,770,716 $1,770,220 $5,168
Class A sales charges and contingent deferred sales charges
Putnam Mutual Funds received sales charges with respect to class
A shares in the following amounts during the periods indicated:
Sales charges
retained by Putnam Contingent
Total Mutual Funds deferred
front-endafter dealer sales
Fiscal year sales charges concessions charges
- ----------- ------------- ------------------ --------
1995 $2,010,262 $318,917 $8,762
1994 $3,136,213 $348,616 $7,341
1993 $1,819,263 $ 1,972 $2,139
<PAGE>
Class B contingent deferred sales charges
Putnam Mutual Funds received contingent deferred sales charges
upon redemptions of class B shares in the following amounts
during the periods indicated:
Contingent deferred
Fiscal year sales charges
- ----------- -------------------
1995 $376,476
1994 $108,999
1993 $ 2,281
Class M sales charges
Putnam Mutual Funds received sales charges with respect to class
M shares in the following amount during the 1995 fiscal year:
Sales charges
retained by Putnam
Mutual Funds
Total after dealer
sales charges concessions
------------- ------------------
$36,878 $5,652
Investor servicing and custody fees and expenses
During the 1995 fiscal year, the fund incurred $1,521,147 in
fees and out-of-pocket expenses for investor servicing and
custody services provided by Putnam Fiduciary Trust Company.
INVESTMENT PERFORMANCE
Standard performance measures
(for periods ended July 31, 1995)
Class A Class B Class M+ Class Y+
Inception date: 6/3/68 3/1/93 12/8/94 3/28/95
Total
return NAV* POP** NAV CDSC NAV POP NAV
- --------------------------------------------------------------
1 year 31.22% 23.71% 30.19% 25.19% N/A N/A N/A
5 years 16.90 15.51 N/A N/A N/A N/A N/A
10 years 15.41 14.73 N/A N/A N/A N/A N/A
Life of class 10.49 10.26 14.87 13.85 37.63% 32.90% 18.01%
*net asset value
**public offering price
+Figures represent cumulative total return since inception
<PAGE>
Data represent past performance and are not indicative of future
results. Total return at POP for class A and class M shares
reflect the deduction of the maximum sales charge of 5.75% and
3.50%, respectively. Total return at CDSC for class B shares
reflects the deduction of the applicable contingent deferred
sales charge (CDSC). The maximum class B CDSC is 5.0%. See
"Standard performance measures" in Part II of this SAI for
information on how performance is calculated. Past performance
is no guarantee of future results.
ADDITIONAL OFFICERS
In addition to the persons listed as officers of the fund in Part
II of this SAI, each of the following persons is a Vice President
of the fund and Vice President of certain of the Putnam funds.
Officers of Putnam Management hold the same offices in Putnam
Management's parent company, Putnam Investments, Inc.
Peter Carman, Senior Managing Director of Putnam Management.
Vice President of certain of the Putnam funds. Prior to August,
1993, Mr. Carman was Chief Investment Officer, Chairman of the
U.S. Equity Investment Policy Committee and a Director of Sanford
C. Bernstein & Company,Inc.
Brett C. Browchuk, Managing Director of Putnam Management. Prior
to April, 1994, Mr. Browchuk was Managing Director at Fidelity
Investments.
John J. Morgan, Jr., Managing Director of Putnam Management.
Carol C. McMullen, Managing Director of Putnam Management. Prior
to June, 1995, Ms. McMullen was Senior Vice President of Baring
Asset Management.
Jennifer K. Silver, Senior Vice President of Putnam Management.
Anthony C. Santosus, Vice President of Putnam Management.
Michael J. Mufson, Vice President of Putnam Management. Prior
to June 1993, Mr. Mufson was Senior Equity Analyst at Stein Roe &
Farnham.
INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
Price Waterhouse LLP, 160 Federal Street, Boston , Massachusetts
02110, are the fund's independent accountants, providing audit
services, tax return review and other tax consulting services and
assistance and consultation in connection with the review of
various Securities and Exchange Commission filings. The Report
of Independent Accountants, financial highlights and financial
statements included in the fund's Annual Report for the fiscal
year ended July 31, 1995, filed electronically on September 29,
1995 (File No. 811-1561), are incorporated by reference into
this SAI. The financial highlights included in the prospectus
and the financial statements incorporated by reference into the
prospectus and this SAI have been so included and incorporated in
reliance upon the report of the independent accountants, given on
their authority as experts in auditing and accounting.
