PUTNAM VOYAGER FUND, 497, 1994-02-04

PUTNAM VOYAGER FUND
497, 1994-02-04

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

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

This Prospectus explains concisely what you should know before
investing in Class A and 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 AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY.

BOSTON * LONDON * TOKYO

<PAGE>

PUTNAM VOYAGER FUND (THE "FUND") SEEKS CAPITAL APPRECIATION,
PRIMARILY FROM A PORTFOLIO OF COMMON STOCKS. IT IS DESIGNED FOR
INVESTORS WILLING TO ASSUME ABOVE-AVERAGE RISK IN RETURN FOR
ABOVE-AVERAGE CAPITAL GROWTH POTENTIAL. THE FUND MAY USE
"LEVERAGE" -- THAT IS, IT MAY BORROW MONEY TO PURCHASE ADDITIONAL
PORTFOLIO SECURITIES. THE FUND MAY ALSO TRADE SECURITIES FOR
SHORT-TERM PROFITS. FOR A DESCRIPTION OF THESE STRATEGIES, AND
THE RELATED RISKS AND EXPENSES, SEE THE SECTION "HOW OBJECTIVE IS
PURSUED."

THIS PROSPECTUS 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
- - CLASS A AND B SHARES." FOR INFORMATION ABOUT VARIOUS EXPENSES
BORNE BY EACH CLASS, SEE "EXPENSES SUMMARY."
<PAGE>
ABOUT THE FUND

Expenses summary 3

............................................................

Financial highlights - Class A and B
shares 4

............................................................

Objective 8
............................................................
How objective is
pursued 8

............................................................

How performance is shown - Class A and B
shares 12
.........................................................
...
How the Fund is managed13

............................................................

Organization and history 13

ABOUT YOUR INVESTMENT

Alternative sales arrangements - Class A and B
shares 15

............................................................
How to buy Class A and B shares 16

............................................................

Class A and B Distribution Plans 19

............................................................

How to sell Class A and B shares 21

............................................................

How to exchange Class A and B shares22

............................................................

How the Fund values its shares 23

............................................................

How distributions are made; tax
information 23

ABOUT PUTNAM INVESTMENTS, INC. 24

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 Class A or Class B shares of
the Fund over specified periods.

CLASS A SHARES CLASS B
SHARES
SHAREHOLDER TRANSACTION EXPENSES

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

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

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

Management Fees 0.58% 0.58%
12b-1 Fees 0.25% 1.00%
Other Expenses 0.29% 0.29%
Total Fund Operating Expenses 1.12% 1.87%

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 $68 $91 $116 $186
CLASS B $69 $89 $121 $199***

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 $68 $91 $116 $186
CLASS B $19 $59 $101 $199** *

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 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 Class A and B 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 Class A and B shares - Class B
shares - Conversion of Class B shares."

The Fund also offers Class Y shares pursuant to a different
Prospectus to defined contribution plans that initially invest at
least $250 million in a combination of Putnam funds and other
investments managed by Putnam Management or its affiliates.
Class Y shares, which are sold at net asset value, are generally
subject to the same expenses as Class A and Class B shares, but
do not bear a 12b-1 fee. For information about Class Y shares,
call Putnam Investor Services at 1-800-752-9894.

FINANCIAL HIGHLIGHTS - CLASS A AND B SHARES

The following tables present per share financial information and
a summary of the use of borrowed money 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.
<PAGE>
<TABLE>
<CAPTION>

SUMMARY OF LEVERAGE OPERATIONS
- ------------------------------------------------------------------------
AMOUNT OF AVERAGE AVERAGE AVERAGE
DEBT AMOUNT NUMBER AMOUNT
YEAROUTSTANDING OF DEBT OF SHARES OF DEBT
ENDEDAT ENDOUTSTANDING OUTSTANDING PER SHARE
JULY 31OF YEARDURING YEAR DURING YEAR DURING YEAR
- ------------------------------------------------------------------------
<C> <C> <C> <C> <C>
1993
1992 --- --- --- ---
1991 --- --- --- ---
1990 --- --- --- ---
1989 --- --- --- ---
1988 --- --- --- ---
1987 --- $12,575,342 62,491,701 $.20
1986 --- 547,945 49,138,710 .01
1985 $10,000,000 1,698,630 45,516,594 .04
1984 --- --- --- ---

/TABLE
<PAGE>
FINANCIAL HIGHLIGHTS*
(FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR)

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

<C> <C> <C>
<C>
APRIL 27, 1992
(COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
JULY 31 JULY 31 YEAR ENDED JULY 31

1993 1992** 1993 1992
CLASS B CLASS A

NET ASSET VALUE, BEGINNING OF PERIOD $9.63 $9.34 $9.67 $9.00

INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.03) (.04) (.02) .02
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS 1.81 .33 1.89 1.16

TOTAL FROM INVESTMENT OPERATIONS 1.78 .29 1.87 1.18

LESS DISTRIBUTIONS FROM:
NET INVESTMENT INCOME -- -- -- (.03)
NET REALIZED GAIN ON INVESTMENTS (.52) -- (.52) (.48)

TOTAL DISTRIBUTIONS (.52) -- (.52) (.51)

NET ASSET VALUE, END OF PERIOD $10.89 $9.63 $11.02 $9.67

TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%) (B) 18.79 14.50(C) 19.69 13.39
<PAGE>
NET ASSETS, END OF PERIOD
(IN THOUSANDS) $408,361 $42,492 $2,403,332 $1,549,128

RATIO OF INTEREST EXPENSE TO AVERAGE
NET ASSETS (%) -- -- -- --
RATIO OF OTHER OPERATING EXPENSES
TO AVERAGE NET ASSETS (%) 1.87 .63(D) 1.12 1.20

RATIO OF TOTAL EXPENSES TO AVERAGE
NET ASSETS (%) 1.87 .63(D) 1.12 1.20
RATIO OF NET INVESTMENT INCOME
(LOSS) TO AVERAGE NET ASSETS (%) (.91) (.39)(D) (.14) .27
PORTFOLIO TURNOVER (%)*** 64.62 44.17 64.62 44.17

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

FINANCIAL HIGHLIGHTS*

(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)

YEAR ENDED JULY 31

1991 1990 1989 1988 1987 1986 1985 1984
CLASS A

NET ASSET VALUE, BEGINNING OF PERIOD $7.98 $8.51 $6.56 $8.71 $7.43 $6.05 $4.77 $6.36

INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) .02 .09 .08 .04(A) .02 .04 .05 .07
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS 1.70 .28 2.02 (.84) 2.22 1.71 1.64 (1.27)

TOTAL FROM INVESTMENT OPERATIONS 1.72 .37 2.10 (.80) 2.24 1.75 1.69 (.20)

LESS DISTRIBUTIONS FROM:
NET INVESTMENT INCOME (.07) (.10) (.02) (.03) (.05) (.05) (.05) (.03)
NET REALIZED GAIN ON INVESTMENTS (.63) (.80) (.13) (1.32) (.91) (.32) (.36) (.36)

TOTAL DISTRIBUTIONS (.70) (.90) (.15) (1.35) (.96) (.37) (.41) (.39)

NET ASSET VALUE, END OF PERIOD $9.00 $7.98 $8.51 $6.56 $8.71 $7.43 $6.05 $4.77

TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(B) 24.04 4.80 32.59 (10.26) 35.71 31.33 37.12 (20.01)

NET ASSETS, END OF PERIOD
(IN THOUSANDS) $1,016,539 $755,550 $697,248 $549,799 $610,966 $378,532 $282,868 $191,880
<PAGE>
RATIO OF INTEREST EXPENSE TO AVERAGE
NET ASSETS (%) -- -- -- -- .19 .01 .06 --
RATIO OF OTHER OPERATING EXPENSES
TO AVERAGE NET ASSETS (%) 1.10 .97 1.00 1.05(A) 1.01 .88 .96 1.04

RATIO OF TOTAL EXPENSES TO AVERAGE
NET ASSETS (%) 1.10 .97 1.00 1.05(A) 1.20 .89 1.02 1.04

RATIO OF NET INVESTMENT INCOME
(LOSS) TO AVERAGE NET ASSETS (%) .29 1.10 1.04 .68(A) .41 1.37
PORTFOLIO TURNOVER (%)*** 49.43 61.71 70.87 65.75 79.10 75.57 60.29 136.10

* FINANCIAL HIGHLIGHTS FOR PERIODS ENDED THROUGH JULY 31, 1992 HAVE BEEN RESTATED TO CONFORM WITH REQUIREMENTS ISSUED BY
THE SEC IN APRIL 1993. TABLE HAS BEEN RESTATED TO REFLECT A 3-FOR-1 SHARE SPLIT DECLARED BY THE FUND TO SHAREHOLDERS
OF RECORD ON OCTOBER 27, 1989, PAYABLE ON OCTOBER 28, 1989.

** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE BASIS OF THE WEIGHTED AV
DURING THE PERIOD.

***PORTFOLIO TURNOVER CALCULATIONS FOR FISCAL 1985 AND THEREAFTER INCLUDE TRANSACTIONS IN U.S. GOVERNMENT SECURITIES WITH
MATURITIES GREATER THAN ONE YEAR. PRIOR YEAR PORTFOLIO TURNOVER CALCULATIONS EXCLUDED ALL U.S. GOVERNMENT SECURITIES.

(A)REFLECTS AN EXPENSE LIMITATION DURING THE YEAR ENDED JULY 31, 1988. AS A RESULT OF SUCH LIMITATION, EXPENSES REFLECT A
REDUCTION OF LESS THAN $0.01 PER SHARE.

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

(C)ANNUALIZED.

(D)NOT ANNUALIZED.

/TABLE
<PAGE>
OBJECTIVE

PUTNAM VOYAGER FUND SEEKS CAPITAL APPRECIATION. THE FUND IS
DESIGNED FOR INVESTORS WILLING TO ASSUME ABOVE-AVERAGE RISK IN
RETURN FOR ABOVE-AVERAGE CAPITAL GROWTH POTENTIAL. 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 VOYAGER FUND INVESTS PRIMARILY IN COMMON STOCKS OF COMPANIES
WHICH PUTNAM INVESTMENT MANAGEMENT, INC., THE FUND'S INVESTMENT
MANAGER ("PUTNAM MANAGEMENT"), BELIEVES HAVE POTENTIAL FOR CAPITAL
APPRECIATION WHICH IS SIGNIFICANTLY GREATER THAN THAT OF THE MARKET
AVERAGES. The Fund does not choose investments for dividend and
interest income. The Fund may also purchase convertible bonds,
convertible preferred stocks, warrants, 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.

THE FUND GENERALLY INVESTS A SIGNIFICANT PORTION OF ITS ASSETS IN
THE SECURITIES OF SMALLER AND NEWER ISSUERS. These 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.

The Fund will also invest a portion of its assets in larger
companies where opportunities for above-average capital
appreciation appear favorable.

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 increase the portion of its assets
invested in debt securities or preferred stocks, or invest in any
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.

LEVERAGE

IN SEEKING ITS OBJECTIVE, THE FUND MAY BORROW MONEY TO INVEST IN
ADDITIONAL PORTFOLIO SECURITIES. THIS TECHNIQUE, KNOWN AS
"LEVERAGE," INCREASES THE FUND'S MARKET EXPOSURE AND RISK.

When the Fund has borrowed money for leverage and its investments
increase or decrease in value, the Fund's net asset value will
increase or decrease more than if it had not borrowed money for
this purpose. The interest that the Fund must pay on borrowed
money will reduce its net investment income, and may also either
offset any potential capital gains or increase any losses.

The Fund will not always borrow money for investment. The extent
to which the Fund will borrow money, and the amount it may borrow,
depend on market conditions and interest rates. Successful use of
leverage depends on Putnam Management's ability to predict market
movements correctly. A summary of the Fund's leverage operations
for its past ten fiscal years appears in the section "Financial
highlights - Class A and B shares."

It is a fundamental policy of the Fund that the amount of leverage
that can exist at any one time will not exceed 50% of the value of
the Fund's net assets.

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 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.

SHORT-TERM TRADING

UNDER CERTAIN MARKET CONDITIONS, THE FUND MAY SEEK PROFITS BY
SHORT-TERM TRADING. The length of time the Fund has held a
particular security is not generally a consideration in investment
decisions. A change in the securities owned by the Fund is known
as "portfolio turnover." To the extent short-term trading
strategies are used, 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 are
shown in the section "Financial highlights - Class A and B shares."

STOCK INDEX FUTURES AND OPTIONS

THE FUND MAY BUY AND SELL STOCK INDEX FUTURES CONTRACTS AND MAY BUY
OPTIONS ON INDEX FUTURES AND ON STOCK INDICES 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
writing covered call options on securities it owns
or in which it may invest. The Fund receives a premium from
writing a call 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. 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 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 total 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 any one
issuer* and investing more than: (a) 5% of its total assets in
securities of any one issuer (other than certain U.S. government
obligations);* (b) 5% of its net assets in companies that, together
with any predecessors, have been in operation less than three years
and in equity securities (other than securities restricted as to
resale) that do not have readily available market quotations;* (c)
5% of its net assets in securities restricted as to resale;* (d)
25% of its total assets in any one industry;* (e) 5% of its net
assets in warrants or more than 2% of its net assets in warrants
not listed on the New York or American Stock Exchange; or (f) 15%
of its net assets in any combination of securities that are not
readily marketable, in securities restricted as to resale
(excluding restricted securities that have been determined by the
Fund's Trustees (or the person designated by them 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 - CLASS A AND B SHARES

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 each 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. Matthew A. Weatherbie, Managing Director of Putnam
Management and Vice President of the Fund, has had primary
responsibility for the day-to-day management of the Fund's
portfolio since October 1983. Mr. Weatherbie has been employed by
Putnam Management since October 1983.

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 Voyager Fund is a Massachusetts business trust organized on
August 13, 1982 as the successor to Putnam Voyager Fund, Inc., a
Massachusetts corporation organized on June 10, 1968. 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 which 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
determine. The Fund currently
offers three classes of shares , two of which - Class
A shares and Class B shares , are
offered by this Prospectus. Class Y shares are offered by
another prospectus to certain eligible employer-sponsored defined
contribution plans . 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.

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 - CLASS A AND B SHARES

The Fund offers investors two classes of shares pursuant to this
Prospectus 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 Class A and B 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 Class A and B
shares -- Class B shares."

WHICH ARRANGEMENT IS BETTER FOR YOU? The decision as to which
class of shares provide 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 Class A and B shares."

HOW TO BUY CLASS A AND B 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 CLASS A AND B SHARES THROUGH PUTNAM MUTUAL FUNDS. Complete
an order form and return it with a check payable to Putnam Mutual
Funds, which will act as your agent in purchasing shares through
your designated investment dealer.

BUYING CLASS A AND B 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 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
$1,000,000 or more. However, Putnam Mutual Funds pays investment
dealers of record commissions on such sales at the rates shown in
the table below. If you redeem such shares within a certain period
of time after purchase, a contingent deferred sales charge ("CDSC")
will be imposed as follows:

COMMISSIONS PAID
TO INVESTMENT
DEALERS OF RECORD
AMOUNT OF TRANSACTION AND PERIOD AFTER PURCHASE
AT OFFERING PRICE APPLICABLE CDSC DURING WHICH CDSC APPLIES
------------------------- --------------- -------------------------
<C> <C> <C> <C> <C>
$1,000,000 but less than $2,500,000 1.00% 2 years
2,500,000 but less than 5,000,000 0.50% 1 year
5,000,000 and over 0.25% 1 year

/TABLE
<PAGE>
The CDSC is imposed on the lower of the cost and the current net
asset value of the shares redeemed. Putnam Mutual Funds receives
the entire amount of any CDSC you pay. Shares owned by certain tax-
qualified retirement plans may be redeemed without charge to pay
benefits. In addition, any shares acquired by reinvestment of
distributions will be redeemed without a CDSC. In determining
whether a CDSC is payable, the Fund will first redeem shares not
subject to any charge. See the Statement of Additional Information
for more information about the CDSC.

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. See "How to buy Class A and B 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 Class A and B shares." Putnam
Mutual Funds receives the entire amount of any CDSC you pay.

CONVERSION OF CLASS B SHARES. Class B shares automatically
convert to 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
classes of shares.

CLASS A AND B 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. 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. 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 for
shares acquired after that date (including shares acquired through
reinvestment of distributions ) .

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 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 Fund's 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 CLASS A AND B SHARES

You can sell your Class A or Class B 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.

<PAGE>
SELLING CLASS A OR CLASS B 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 CLASS A AND CLASS B SHARES THROUGH YOUR INVESTMENT DEALER.
Your dealer must receive your request before the close of regular
trading on the New York Stock Exchange and transmit it to Putnam
Mutual Funds before 5 p.m. Boston time 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 CLASS A AND CLASS B SHARES

You can exchange your Class A or Class B 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
Class A and B 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 A SHARE 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
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," 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).

ABOUT PUTNAM INVESTMENTS, INC.

PUTNAM MANAGEMENT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1937.
Putnam Mutual Funds 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 VOYAGER 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

Price Waterhouse
160 Federal Street
Boston, MA 02110

PUTNAMINVESTMENTS

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

PUTNAM VOYAGER FUND
ONE POST OFFICE SQUARE , BOSTON, MA 02109
INVESTMENT STRATEGY: GROWTH

PROSPECTUS - DECEMBER 1, 1993,
AS REVISED FEBRUARY 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"). FOR PROSPECTUSES REGARDING
OTHER CLASSES OF SHARES OR FOR CLASS A
SHARES FOR OTHER INVESTORS , CALL TOLL-FREE AT 1-800-225-1581.

This Prospectus explains concisely what you should know before
investing in 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, OR FOR OTHER INFORMATION, 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 INVESTMENTS

PUTNAM DEFINED
CONTRIBUTION PLANS

<PAGE>
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. .............................10
Organization and
history.............................10

ABOUT YOUR INVESTMENT

How to buy
shares. ...................................12
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 0.58%
12b-1 Fees 0.25%
Other Expenses 0.29%
Total Fund Operating Expenses 1.12%

EXAMPLE 1 3 5 10
YEAR YEARS YEARS YEARS

Your investment of
$1,000 would incur
the following
expenses, assuming
(1) 5% annual return
and (2) redemption
at the end of each
period: $11 $36 $62 $136

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 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 Class Y shares to defined contribution
plans that initially invest at least $250 million in a
combination of Putnam funds and other investments managed by
Putnam Management or its affiliates. Class Y shares, which are
sold at net asset value, generally bear the same expenses as the
Fund's other classes of shares, but do not bear a 12b-1 fee. For
more information about Class Y shares and other classes of
classes offered by the Fund, see "Organization and history."

FINANCIAL HIGHLIGHTS

The following tables present per share financial information for
the Fund's Class A shares and a summary of the use of borrowed
money 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.

<PAGE>
<TABLE>
<CAPTION>
SUMMARY OF LEVERAGE OPERATIONS

AMOUNT OF AVERAGE AVERAGE AVERAGE
DEBT AMOUNT NUMBER AMOUNT
12 MONTHS OUTSTANDING OF DEBT OF SHARES OF DEBT
ENDED AT END OUTSTANDING OUTSTANDING PER SHARE
JULY 31 OF YEAR DURING YEAR DURING YEAR DURING YEAR
- ------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
1993
1992 --- --- ---
1991 --- --- --- ---
1990 --- --- --- ---
1989 --- --- --- ---
1988 --- --- --- ---
1987 --- $12,575,342 62,491,701 $.20
1986 --- 547,945 49,138,710 .01
1985 $10,000,000 1,698,630 45,516,594 .04
1984 --- --- --- ---

/TABLE
<PAGE>
FINANCIAL HIGHLIGHTS*
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<PAGE>
<TABLE>
<CAPTION>

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

YEAR ENDED JULY 31

1993 1992 1991 1990 1989 1988 1987 1986
CLASS A

NET ASSET VALUE, BEGINNING OF PERIOD $9.67 $9.00 $7.98 $8.51 $6.56 $8.71 $7.43
$6.05
INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.02) .02 .02 .09 .08 .04(A) .02 .04
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS 1.89 1.16 1.70 .28 2.02 (.84) 2.22 1.71

TOTAL FROM INVESTMENT OPERATIONS 1.87 1.18 1.72 .37 2.10 (.80) 2.24 1.75

LESS DISTRIBUTIONS FROM:
NET INVESTMENT INCOME -- (.03) (.07) (.10) (.02) (.03) (.05) (.05)
NET REALIZED GAIN ON INVESTMENTS (.52) (.48) (.63) (.80) (.13) (1.32) (.91) (.32)

TOTAL DISTRIBUTIONS (.52) (.51) (.70) (.90) (.15) (1.35) (.96) (.37)

NET ASSET VALUE, END OF PERIOD $11.02 $9.67 $9.00 $7.98 $8.51 $6.56 $8.71 $7.43

TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(B) 19.69 13.39 24.04 4.80 32.59 (10.26) 35.71 31.33

NET ASSETS, END OF PERIOD
(IN THOUSANDS) $2,403,332 $1,549,128$1,016,539 $755,550 $697,248 $549,799 $610,966 $
<PAGE>
RATIO OF INTEREST EXPENSE TO AVERAGE
NET ASSETS (%) -- -- -- -- -- -- .19
.01
RATIO OF OTHER OPERATING EXPENSES
TO AVERAGE NET ASSETS (%) .10 .97 1.10 .97 1.00 1.05(A) 1.01
.88

RATIO OF TOTAL EXPENSES TO AVERAGE
NET ASSETS (%) 1.10 .97 1.10 .97 1.00 1.05(A) 1.20
.89

RATIO OF NET INVESTMENT INCOME
(LOSS) TO AVERAGE NET ASSETS (%) .29 1.10 .29 1.10 1.04 .68(A) .41
.72
PORTFOLIO TURNOVER (%)*** 49.43 61.71 49.43 61.71 70.87 65.75 79.10
75.57
<PAGE>
</TABLE>
<TABLE>
<CAPTION>

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

YEAR ENDED JULY 31

CLASS A

1985 1984

NET ASSET VALUE, BEGINNING OF PERIOD $4.77 $6.36
INVESTMENT OPERATIONS

NET INVESTMENT INCOME (LOSS) (.05) .07

NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS 1.64 1.27

TOTAL FROM INVESTMENT OPERATIONS 1.69 (.20)

LESS DISTRIBUTIONS FROM:
NET INVESTMENT INCOME (.05) (.03)
NET REALIZED GAIN ON INVESTMENTS (.36) (.36)

TOTAL DISTRIBUTIONS (.41) (.39)

NET ASSET VALUE, END OF PERIOD $6.05 $4.77

TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(B) 37.12 (20.01)

NET ASSETS, END OF PERIOD
(IN THOUSANDS) $282,868 $191,880
</TABLE>
<TABLE>
<CAPTION>

<S> <C> <C>
RATIO OF INTEREST EXPENSE TO AVERAGE
NET ASSETS (%) .06 --

RATIO OF OTHER OPERATING EXPENSES
TO AVERAGE NET ASSETS (%) .96 1.04

RATIO OF TOTAL EXPENSES TO AVERAGE
NET ASSETS (%) 1.02 1.04

RATIO OF NET INVESTMENT INCOME
(LOSS) TO AVERAGE NET ASSETS (%) .99 1.37

PORTFOLIO TURNOVER (%)*** 60.29 136.10

**PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE BASIS OF THE WEIGHTED AV
DURING THE PERIOD.

(A)REFLECTS AN EXPENSE LIMITATION DURING THE YEAR ENDED JULY 31, 1988. AS A RESULT OF SUCH LIMITATION, EXPENSES REFLECT A
REDUCTION OF LESS THAN $0.01 PER SHARE.

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

(C)ANNUALIZED.

(D)NOT ANNUALIZED.
</TABLE>
<PAGE>
OBJECTIVE

HOW OBJECTIVE IS PURSUED

BASIC INVESTMENT STRATEGY

The Fund will also invest a portion of its assets in larger
companies where opportunities for above-average capital
appreciation appear favorable.

LEVERAGE

IN SEEKING ITS OBJECTIVE, THE FUND MAY BORROW MONEY TO INVEST IN
ADDITIONAL PORTFOLIO SECURITIES. THIS TECHNIQUE, KNOWN AS
"LEVERAGE," INCREASES THE FUND'S MARKET EXPOSURE AND RISK.

It is a fundamental policy of the Fund that the amount of leverage
that can exist at any one time will not exceed 50% of the value of
the Fund's net assets.

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.

SHORT-TERM TRADING

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
writing covered call options on securities it owns
or in which it may invest. The Fund receives a premium from
writing a call 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. 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 call options for hedging purposes. 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 total 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.
All of 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

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. Any quotation
of total return not reflecting the maximum initial 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.
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.

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 and the Fund's operating
expenses. 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. Matthew A. Weatherbie, Managing Director of Putnam
Management and Vice President of the Fund, has had
primary responsibility for the day-to-day management of the
Fund's portfolio since October 1983. Mr. Weatherbie has been
employed by Putnam Management since October 1983.

ORGANIZATION AND HISTORY

The Fund is an open-end, diversified management investment company
with an unlimited number of authorized shares of beneficial
interest which 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 currently
offers three classes of shares . 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
CDSC upon redemption and bear a higher 12b-1
fee than Class A shares. Because Class B shares
generally bear greater expenses than Class A
shares or Class Y shares, total return of Class B shares will
be lower than that of other classes. Class Y
shares are sold at net asset value and do not
bear a 12b-1 fee . 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.

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 $1,000,000 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. Shares of the
Fund are offered to other shareholders pursuant to another
Prospectus at public offering prices that may include a sales
charge or which may be subject to a contingent deferred sales
charge. 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 shares 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. 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.

When Putnam Mutual Funds is not the dealer of record, 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 Fund shares and the maintenance of
shareholder accounts. 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). Putnam Mutual
Funds may suspend or modify these payments at any time, and
payments are subject to the continuation of the Fund's 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. If the Fund into which you
wish to exchange has more than one class of shares outstanding, you
may only exchange your shares for Class A shares of that Fund.
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.

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 income 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.

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).

ABOUT PUTNAM INVESTMENTS, INC.

PUTNAM MANAGEMENT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1937.
Putnam Mutual Funds 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>

PUTNAM VOYAGER FUND
ONE POST OFFICE SQUARE, BOSTON, MA 02109
INVESTMENT STRATEGY: GROWTH

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

THIS PROSPECTUS OFFERS CLASS Y SHARES. FOR
INFORMATION ABOUT VARIOUS EXPENSES BORNE BY CLASS Y SHARES, SEE
"EXPENSES SUMMARY." FOR MORE INFORMATION ABOUT CLASS A
SHARES OR CLASS B SHARES OFFERED BY THE
FUND /R>, SEE "ORGANIZATION AND HISTORY." TO OBTAIN A
PROSPECTUS FOR SUCH CLASS OF SHARES , CONTACT
PUTNAM INVESTOR SERVICES AT 1-800-225-1581.

This Prospectus explains concisely what you should know before
investing in Class Y 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, or for other
information, 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 Voyager Fund (the "Fund") seeks capital appreciation,
primarily from a portfolio of common stocks. It is designed for
investors willing to assume above-average risk in return for
above-average capital growth potential. The Fund may use
"leverage" -- that is, it may borrow money to purchase additional
portfolio securities. The Fund may also trade securities for
short-term profits. For a description of these strategies, and
the related risks and expenses, see the section "How objective is
pursued."

PUTNAM INVESTMENTS

PUTNAM DEFINED
CONTRIBUTION PLANS
<PAGE>
ABOUT THE FUND

Expenses
summary. ....................................2
Summary of leverage
operations.......................3

Objective.

...........................................3<
/R>
How objective is
pursued. ............................3
How performance is
shown. ............................7
How the Fund is
managed. .............................7
Organization and
history. ............................8

ABOUT YOUR INVESTMENT

How to buy
shares. ...................................9
How to sell
shares. .................................10
How to exchange
shares. .............................10
How the Fund values its
shares. .....................11
How distributions are made; tax
information. >........11

ABOUT PUTNAM INVESTMENTS, INC.
12
<PAGE>
ABOUT THE FUND

EXPENSES SUMMARY

Expenses are one of several factors to consider when investing in
Class Y shares of the Fund. The following table
summarizes your maximum transaction costs from investing in
Class Y shares of the Fund and expenses expected to
be incurred in the current fiscal year.
The Example shows the cumulative expenses attributable to a
hypothetical $1,000 investment in Class Y shares of the
Fund over specified periods.

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

Management Fees 0.58%
Other Expenses 0.29%
Total Fund Operating Expenses 0.87%

EXAMPLE 1 3 5 10
YEAR YEARS YEARS YEARS

Your investment of
$1,000 would incur
the following
expenses, assuming
(1) 5% annual return
and (2) redemption
at the end of each
period: $9 $28
$48$107

The table is provided to help you understand the expenses of
investing in Class Y shares of the Fund and your share of
the Fund's operating expenses
attributable to Class Y shares. The expenses shown in the
table are based on the operating expenses for the Fund's last
fiscal year . 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 will
vary .
The Example does not reflect any charges or expenses related to
your employer's plan.

SUMMARY OF LEVERAGE OPERATIONS

</TABLE>
<PAGE>
OBJECTIVE

PUTNAM VOYAGER FUND SEEKS CAPITAL APPRECIATION. THE FUND IS
DESIGNED FOR INVESTORS WILLING TO ASSUME ABOVE-AVERAGE RISK IN
RETURN FOR ABOVE-AVERAGE CAPITAL GROWTH POTENTIAL. 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 VOYAGER FUND INVESTS PRIMARILY IN COMMON STOCKS OF
COMPANIES WHICH PUTNAM INVESTMENT MANAGEMENT, INC., THE FUND'S
INVESTMENT MANAGER ("PUTNAM MANAGEMENT"), BELIEVES HAVE POTENTIAL
FOR CAPITAL APPRECIATION WHICH IS SIGNIFICANTLY GREATER THAN THAT
OF THE MARKET AVERAGES. The Fund does not choose investments for
dividend and interest income. The Fund may also purchase
convertible bonds, convertible preferred stocks, warrants,
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.

THE FUND GENERALLY INVESTS A SIGNIFICANT PORTION OF ITS ASSETS IN
THE SECURITIES OF SMALLER AND NEWER ISSUERS. These 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.

The Fund will also invest a portion of its assets in larger
companies where opportunities for above-average capital
appreciation appear favorable.

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 increase the portion
of its assets invested in debt securities or preferred stocks, or
invest in any 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.

LEVERAGE

IN SEEKING ITS OBJECTIVE, THE FUND MAY BORROW MONEY TO INVEST IN
ADDITIONAL PORTFOLIO SECURITIES. THIS TECHNIQUE, KNOWN AS
"LEVERAGE," INCREASES THE FUND'S MARKET EXPOSURE AND RISK.

The Fund will not always borrow money for investment. The extent
to which the Fund will borrow money, and the amount it may
borrow, depend on market conditions and interest rates.
Successful use of leverage depends on Putnam Management's ability
to predict market movements correctly. A summary of the Fund's
leverage operations for its past ten fiscal years appears in the
section "Summary of leverage operations. "

It is a fundamental policy of the Fund that the amount of
leverage that can exist at any one time will not exceed 50% of
the value of the Fund's net assets.

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 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.

SHORT-TERM TRADING

UNDER CERTAIN MARKET CONDITIONS, THE FUND MAY SEEK PROFITS BY
SHORT-TERM TRADING. The length of time the Fund has held a
particular security is not generally a consideration in
investment decisions. A change in the securities owned by the
Fund is known as "portfolio turnover." To the extent short-term
trading strategies are used, 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
fiscal 1993 and fiscal 1992 were 64.62% and
44.17%, respectively.

STOCK INDEX FUTURES AND OPTIONS

THE FUND MAY BUY AND SELL STOCK INDEX FUTURES CONTRACTS AND MAY
BUY OPTIONS ON INDEX FUTURES AND ON STOCK INDICES 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
writing covered call options on securities it owns or in which it
may invest. The Fund receives a premium from writing a call
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. 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
call options for hedging purposes. 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 total 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.
All of 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 any one
issuer* and investing more than: (a) 5% of its total assets in
securities of any one issuer (other than certain U.S. government
obligations);* (b) 5% of its net assets in companies that,
together with any predecessors, have been in operation less than
three years and in equity securities (other than securities
restricted as to resale) that do not have readily available
market quotations;* (c) 5% of its net assets in securities
restricted as to resale;* (d) 25% of its total assets in any one
industry;* (e) 5% of its net assets in warrants or more than 2%
of its net assets in warrants not listed on the New York or
American Stock Exchange; or (f) 15% of its net assets in any
combination of securities that are not readily marketable, in
securities restricted as to resale (excluding restricted
securities that have been determined by the Fund's Trustees (or
the person designated by them 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 CLASS Y SHARES .
"Total return" for the life of Class Y
shares through the most recent calendar quarter represents
the average annual compounded rate of return on an investment of
$1,000 in the Fund . Total return may also be
presented for other periods . 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 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 Voyager Fund is a Massachusetts business trust organized
on August 13, 1982 as the successor to Putnam Voyager Fund, Inc.,
a Massachusetts corporation organized on June 10, 1968. 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 which 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 currently offers three classes
of shares. Only the Fund's Class Y shares
are offered by this Prospectus. The Fund also offers Class A
shares and Class B shares through
participating dealers pursuant to a separate prospectus. Class A
and Class B shares bear the same expenses as Class Y shares and,
in addition, are subject to 12b-1 fees.
Class A shares are subject to a front-end sales
charge and Class B shares are subject to a
contingent deferred sales charge. Due to 12b-1 fees and sales
charges, the investment return of Class A and Class B
shares will be lower than the investment return
of Class Y shares . Sales personnel may
receive different compensation depending on which class of shares
they sell. 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.

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 Class Y shares , defined
contribution plans must initially invest at least
$250 million in a combination of Putnam funds and other
investments managed by Putnam Management or its affiliates .
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. Shares of the Fund are
offered to other shareholders pursuant to other
Prospectuses at public offering prices that may include a
sales charge or which may be subject to a contingent deferred
sales charge. 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.

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 Class Y shares at net asset
value for Class Y shares of any other Putnam
fund that offers Class Y shares and is
available through your plan. Not all Putnam funds offer Class Y
shares . 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

THE FUND CALCULATES THE NET ASSET VALUE OF A SHARE 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 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
income 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.

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).

ABOUT PUTNAM INVESTMENTS, INC.

PUTNAM MANAGEMENT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1937.
Putnam Mutual Funds 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>
PUTNAM VOYAGER FUND

FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 1, 1993 , AS REVISED FEBRUARY 1, 1994

This Statement of Additional Information is not a Prospectus
and is only authorized for distribution when accompanied or
preceded by a Prospectus of the Fund dated December 1, 1993, as
revised from time to time. This Statement 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 this Statement
shall include all the Fund's Prospectuses, unless otherwise
noted. The Statement 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 Statement contains specific information about
the Fund. Part II includes information about the Fund and the
other Putnam funds.

TABLE OF CONTENTS
PART I PAGE

INVESTMENT RESTRICTIONS OF THE FUND. . . . . . . . . . . . . . . . . . .I-3

FUND CHARGES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . .I-5

INVESTMENT PERFORMANCE OF THE FUND . . . . . . . . . . . . . . . . . . .I-7

ADDITIONAL OFFICERS OF THE FUND. . . . . . . . . . . . . . . . . . . . I-14

INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS . . . . . . . . . . . I-15
<PAGE>
PART II

MISCELLANEOUS INVESTMENT PRACTICES. . . . . . . . . . . . . . II-1

TAXES . . . . . . . . . . . . . . . . .II- 23

MANAGEMENT OF THE FUND. . . . . . . . .II- 28

DETERMINATION OF NET ASSET VALUE. . . .II- 37

HOW TO BUY SHARES . . . . . . . . . . .II- 39

DISTRIBUTION PLAN . . . . . . . . . . .II- 50

INVESTOR SERVICES . . . . . . . . . . .II- 51

SIGNATURE GUARANTEES. . . . . . . . . .II- 57

SUSPENSION OF REDEMPTIONS . . . . . . .II- 57

SHAREHOLDER LIABILITY . . . . . . . . .II- 58

STANDARD PERFORMANCE MEASURES . . . . .II- 58

COMPARISON OF PORTFOLIO PERFORMANCE . .II- 59

DEFINITIONS . . . . . . . . . . . . . .II- 64
<PAGE>
PUTNAM VOYAGER FUND

STATEMENT OF ADDITIONAL INFORMATION
PART I

INVESTMENT RESTRICTIONS OF THE FUND

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) Purchase any security (except certain U.S. government
obligations) if, as a result, more than 5% of the value of the
Fund's total assets would be invested in securities of that
issuer.

(2) Purchase securities on margin (but it may obtain such
short-term credits as may be necessary for the clearance of
purchases and sales of securities, and may make margin payments
in connection with transactions in stock index futures contracts
and options on stock index futures contracts).

(3) Make short sales of securities or maintain a short
position, unless at all times when a short position is open it
either owns an equal amount of such securities or owns securities
which, without payment of any further considerations, are
convertible into or exchangeable for securities of the same issue
as, and equal in amount to, the securities sold short. (A reason
for making such a sale would be to defer realization of gain or
loss for federal income tax purposes.)

(4) Acquire more than 10% of the voting securities of an
issuer.

(5) Borrow more than 50% of the value of its total assets
(excluding borrowings and stock index futures contracts and call
options on stock index futures contracts and stock indices) less
liabilities other than borrowings and stock index futures
contracts and call options on stock index futures contracts and
stock indices.

(6) Pledge its assets except in connection with the writing
of covered call options and except that the Fund may pledge up to
15% of its gross assets (taken at cost) to secure borrowings made
as a temporary measure for extraordinary or emergency purposes
which do not exceed 10% of its gross assets (taken at the lower
of cost or current value) less liabilities other than such
borrowings. (Any such temporary borrowings in excess of 5% of
the Fund's total assets are subject to the limitations provided
in restriction 5 above. For the purposes of this restriction,
collateral arrangements with respect to margin for stock index
futures contracts and options on stock index futures contracts
are not deemed to be a pledge of assets.)

(7) Invest in securities of an issuer which, together with
any predecessor, has been in operation for less than three years,
and in equity securities of issuers for which market quotations
are not readily available (but excluding restricted securities
limited by restriction 15 below) if, as a result, more than 5% of
the Fund's current net assets would then be invested in such
securities.

(8) Invest in securities of any company, if officers and
Trustees of the Fund and officers and directors of Putnam
Management who beneficially own more than 0.5% of the shares or
securities of that company together own more than 5%.

(9) Make loans, except by purchase of marketable bonds,
debentures, commercial paper or corporate notes, and similar
marketable evidences of indebtedness which are a part of an issue
to the public or to financial institutions, by entry into
repurchase agreements with respect to not more than 25% of its
total assets, or through the lending of its portfolio securities
with respect to not more than 25% of its total assets.

(10) Buy or sell oil, gas, or other mineral leases, rights
or royalty contracts or commodities or commodity contracts,
except stock index futures contracts.

(11) Buy or sell real estate, although it may purchase
securities of companies which deal in real estate, including
securities of real estate investment trusts, and may purchase
securities which are secured by interests in real estate.

(12) Act as an underwriter except to the extent that, in
connection with the disposition of its portfolio securities, it
may be deemed to be an underwriter under certain federal
securities laws.

(13) Make investments for the purpose of gaining control of
a company's management.

(14) Invest in securities of other investment companies,
except by purchases in the open market involving only customary
brokers' commissions.

(15) Purchase securities the disposition of which is
restricted under federal securities laws if as a result such
investments would exceed 5% of the value of the Fund's net
assets.

(16) Concentrate its investments in particular industries
and in no event invest more than 25% of the value of its total
assets in any one industry.

IT IS CONTRARY TO THE FUND'S PRESENT POLICY, WHICH MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL, TO:

(1) Engage in puts, calls, straddles, spreads or any
combination thereof, except that the Fund may buy and sell put
and call options (and any combination thereof) on securities, on
financial futures contracts, and on securities indices.

(2) Invest in warrants (other than warrants acquired by the
Fund as a part of a unit or attached to securities at the time of
purchase) 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 (of which not more than 2% of the Fund's net assets may be
invested in warrants not listed on the New York or American Stock
Exchange).

(3) 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 be invested in securities described in (a), (b) and
(c) above.

(4) 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.

-----------------------------------

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 are represented at the meeting in person or by proxy.

FUND CHARGES AND EXPENSES

MANAGEMENT FEES

Under a Management Contract dated July 11, 1991, 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 0.70% of
the first $500 million of average net assets, 0.60% of the next
$500 million, 0.55% of the next $500 million and 0.50% of any
amount over $1.5 billion. For its 1991, 1992 and 1993 fiscal
years, pursuant to the Management Contract and a management
contract in effect prior to July 11, 1991 under which the
management fee payable to Putnam Management was 0.75% of the
first $100 million of average net assets, 0.65% of the next $100
million, 0.55% of the next $300 million and 0.50% of any amount
over $500 million, the Fund incurred fees of $4,654,955,
$8,124,998 and $12,313,406, respectively.

BROKERAGE COMMISSIONS

During fiscal 1991, 1992 and 1993, the Fund incurred
brokerage commissions aggregating $1,179,856, $1,502,902 and
$1,359,040, respectively, on agency transactions. In fiscal
1991, 1992 and 1993, the Fund incurred underwriting commissions
aggregating $881,194, $2,225,536 and $796,438, respectively, on
underwritten transactions. In fiscal 1993, Putnam Management, on
behalf of the Fund, placed agency and underwritten transactions
having an approximate aggregate dollar value of $471,623,780
(52.37% of the Fund's agency and underwritten transactions, on
which approximately $1,128,726 of commissions were paid) with
brokers and dealers to recognize research, statistical and
quotation services Putnam Management considered to be
particularly useful to it and its affiliates.

ADMINISTRATIVE EXPENSE REIMBURSEMENT

The Fund reimbursed Putnam Management $74,833 for
administrative services in fiscal 1993, including $67,503 for the
compensation of certain officers of the Fund and their staff and
contributions to the Putnam Investments, Inc. Profit Sharing
Retirement Plan for their benefit.

TRUSTEE FEES

Each Trustee of the Fund receives an annual fee of $5,160
and an additional fee for each Trustees' meeting attended.
Trustees who are not interested persons of Putnam Management and
who serve on committees of the Trustees receive additional fees
for attendance at certain committee meetings. The Fund incurred
Trustees' fees aggregating $49,671 in fiscal 1993.

OWNERSHIP OF FUND SHARES

At October 31, 1993 the officers and Trustees of the Fund as
a group owned less than 1% of the outstanding shares of either
class of the Fund, and to the knowledge of the Fund no person
owned of record or beneficially 5% or more of the shares of
either class of the Fund.

CLASS A SALES CHARGES, CONTINGENT DEFERRED SALES CHARGES AND
12B-1 FEES

During fiscal 1991, 1992 and 1993, Putnam Mutual Funds
received $4,567,949, $14,497,362 and $15,957,485, respectively,
in sales charges on sales of Class A shares of the Fund, of which
it retained $753,770, $2,217,882 and $2,417,709, respectively,
after allowance of dealer concessions. During fiscal 1991,
Putnam Mutual Funds did not receive any contingent deferred sales
charges upon redemptions of Class A shares of the Fund. During
fiscal 1992 and 1993, Putnam Mutual Funds received $33,505 and
$5,674, respectively, in contingent deferred sales charges upon
redemptions of Class A shares of the Fund. During fiscal 1993,
the Fund incurred $4,797,211 in 12b-1 fees to Putnam Mutual Funds
pursuant to the Fund's Class A Distribution Plan.

CLASS B CONTINGENT DEFERRED SALES CHARGES AND 12B-1 FEES

During fiscal 1992 and 1993, Putnam Mutual Funds received
$3,793 and $264,112, respectively, in contingent deferred sales
charges upon redemptions of Class B shares of the Fund. During
fiscal 1993, the Fund incurred $1,919,839 in 12b-1 fees to Putnam
Mutual Funds pursuant to the Fund's Class B Distribution Plan.

INVESTOR SERVICING AND CUSTODY FEES AND EXPENSES

During the 1993 fiscal year, the Fund incurred $5,063,212
in fees and out-of-pocket expenses for investor servicing and
custody services provided by Putnam Fiduciary Trust Company.

INVESTMENT PERFORMANCE OF THE FUND

STANDARD PERFORMANCE MEASURES

The Fund's average annual total return (compounded
annually) for Class A shares for the one-, five- and ten-year
periods ended July 31, 1993 was +12.80%, +17.14% and +14.48%,
respectively, adjusted to reflect deduction of the maximum sales
charge of 5.75%. The average annual total return (compounded
annually) for Class B shares for the one-year period and the life
of the Class B shares through July 31, 1993 was +13.79% and
+15.01%, respectively, adjusted to reflect deduction of the
applicable contingent deferred sales charges of 5.00% and 4.00%,
respectively. See "Standard Performance Measures" in Part II of
this Statement for information on how the Fund's total return is
calculated.

PERFORMANCE RATINGS

For the 1993 fiscal year, the Class A shares of the Fund
were ranked 34 of 124 capital appreciation funds by Lipper
Analytical Services, Inc. and 35 of 104 maximum capital gain
funds by CDA/Wiesenberger's Management Results. As of the end of
the fiscal year, Class A Shares were given a 4-star rating (out
of 5 stars) by Morningstar, Inc. For the 1993 fiscal year, the
Class B shares of the Fund were ranked 40 of 124 capital
appreciation funds by Lipper Analytical Services, Inc. and 40 of
104 maximum capital gain funds by CDA/Wiesenberger's Management
Results. See "Comparison of Portfolio Performance" in Part II of
this Statement for information about how these rankings are
determined. Past performance is no guarantee of future results.

OTHER PERFORMANCE INFORMATION

The tables below show total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment
in one share of the Fund during the life of the Fund. This was a
period of fluctuating security prices. The tables do not project
the future performance of the Fund. <PAGE>
<TABLE>
<CAPTION>
CLASS A SHARES
CUMULATIVE
MAXIMUM NET ASSET DISTRIBUTIONS NET ASSET VALUE
FISCALOFFERING VALUE --------------------- AT YEAR-END
YEARPRICE AT------------------ FROM FROM WITH ALL
ENDEDBEGINNING BEGINNING END OF INVESTMENT CAPITALDISTRIBUTIONS
JULY 31 OF YEAR OF YEAR YEAR INCOME GAINS REINVESTED
- ----------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
1969 (1) $3.64 $3.43 $2.87 $ -- $ -- $2.87
1970 3.05 2.87 1.86 -- -- 1.86
1971 1.97 1.86 2.39 -- -- 2.39
1972 2.54 2.39 3.74 -- -- 3.74
1973 3.97 3.74 3.47 -- -- 3.47
1974 3.68 3.47 2.53 .024 -- 2.54
1975 2.68 2.53 3.43 .082 -- 3.58
1976 3.64 3.43 3.99 -- -- 4.16
1977 4.23 3.99 4.12 -- .177 4.50
1978 4.37 4.12 4.62 .048 .463 5.74
1979 4.90 4.62 4.42 .108 .602 6.45
1980 4.69 4.42 5.00 .178 .608 8.72
1981 5.31 5.00 5.30 .130 .673 10.86
1982 5.62 5.30 3.57 .077 .79 9.02
1983 3.79 3.57 6.36 .080 -- 16.40
1984 6.75 6.36 4.77 .032 .358 13.11
1985 5.06 4.77 6.05 .057 .357 17.98
1986 6.42 6.05 7.43 .048 .322 23.62
1987 7.88 7.43 8.71 .050 .910 32.05
1988 9.24 8.71 6.56 .035 1.315 28.76
1989 6.96 6.56 8.51 .020 .127 38.13
1990(2)(3) 9.03 8.51 7.98 .098 .803 39.96
/TABLE
<PAGE>
<TABLE>
<CAPTION>
CLASS A SHARES
CUMULATIVE
MAXIMUM NET ASSET DISTRIBUTIONS NET ASSET VALUE
FISCALOFFERING VALUE ---------------------- AT YEAR-END
YEARPRICE AT------------------ FROM FROM WITH ALL
ENDEDBEGINNING BEGINNING END OF INVESTMENT CAPITALDISTRIBUTIONS
JULY 31 OF YEAR OF YEAR YEAR INCOME GAINS REINVESTED
- ----------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
1991 8.47 7.98 9.00 .070 .630 49.57
1992 9.55 9.00 9.67 .026 .479 56.21
1993 10.26 9.67 11.02 .001 .520 67.27

Total distributions $1.164 $9.134
------ ------
------ ------
(1) Investment operations began April 1, 1969.

(2) Figures prior to October 27, 1989 have been restated to reflect a three-for-one share split on that date.

(3) Figures prior to January 1, 1990 have been restated to reflect a change in the maximum offering price effective as
of that date.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE CHANGES DURING LIFE OF FUND (CLASS A SHARES)

PUTNAM VOYAGER FUND
- ----------------------------------------

MAXIMUM OFFERING NET ASSET VALUE STANDARD & POOR'S
PRICE TO NET TO NET 500 COMPOSITE STOCK DOW JONES NASDAQ CONSUMER
FISCAL ASSET VALUE ASSET VALUE PRICE INDEX INDUSTRIAL INDUSTRIAL PRICE INDEX
YEAR AVERAGE AVERAGE*
ENDED CUMULA- CUMULA- CUMULA- CUMULA- CUMULA- CUMULA-
JULY 31 ANNUAL TIVE ANNUAL TIVE ANNUAL TIVE ANNUAL TIVE ANNUAL TIVE ANNUAL TIVE

- ------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1969(1) --- -21.3% --- -16.3% --- -8.8% --- -12.0% --- --- --- +1.9%
1970 -38.7 -48.8 -35.0 -45.6 -11.8 -19.6 -6.2 -17.5 --- --- +6.0 +8.0
1971 +20.9 -34.3 +28.4 -30.2 +26.6 +1.8 +21.4 +0.2 --- +5.8% +4.4 +12.7
1972 +47.2 +2.8 +56.3 +9.1 +15.7 +17.8 +11.4 +11.6 +27.5% +34.9 +3.0 +16.1
1973 -12.7 -4.8 -7.3 +1.2 +3.7 +22.2 +3.7 +15.8 -24.5 +1.8 +5.7 +22.7
1974 -30.9 -30.1 -26.6 -25.8 -24.0 -7.2 -14.7 -1.2 -31.2 -30.0 +11.5 +36.8
1975 +32.6 -1.7 +40.7 +4.4 +17.5 +9.1 +16.0 +14.6 +26.0 -11.8 +9.7 +50.1
1976+9.5 +14.4 +16.3 +21.5 +21.3 +32.3 +23.5 +41.5 +8.4 -4.3 +5.4 +58.2
1977+1.9 +23.7 +8.1 +31.4 -0.3 +31.9 -5.4 +33.9 +8.2 +3.5 +6.8 +69.0
1978 +20.3 +57.8 +27.6 +67.6 +7.3 +41.4 +2.6 +37.3 +34.2 +38.9 +7.7 +82.0
1979+5.7 +77.1 +12.2 +88.1 +8.7 +53.7 +4.2 +43.0 +12.1 +55.6 +11.3 +102.5
1980 +27.5 +139.6 +35.3 +154.5 +23.8 +90.3 +17.6 +68.2 +33.5 +107.8 +13.1 +129.1
1981 +17.3 +198.4 +24.6 +217.0 +12.9 +114.8 +7.8 +81.4 +25.2 +160.1 +10.8 +153.7
1982 -21.7 +147.8 -17.0 +163.3 -13.2 +86.4 -9.3 +64.5 -26.4 +91.3 +6.4 +170.1
1983 +71.5 +350.4 +81.8 +378.5 +59.3 +196.9 +56.0 +156.7 +93.0 +269.3 +2.5 +176.7
1984 -24.6 +260.3 -20.0 +282.7 -3.0 +187.9 -2.4 +150.4 -30.7 +156.1 +4.2 +188.4
1985 +29.4 +394.0 +37.1 +424.8 +32.4 +281.1 +26.9 +217.7 +21.4 +210.7 +3.6 +198.6
1986 +23.8 +548.8 +31.3 +589.2 +28.3 +389.1 +37.1 +335.7 +17.8 +266.2 +1.6 +203.3
1987 +27.9 +780.4 +35.7 +835.3 +39.4 +581.5 +49.8 +552.7 +26.5 +363.2 +3.9 +215.2
1988 -15.4 +690.1 -10.3 +739.3 -11.7 +501.9 -14.3 +459.1 -14.1 +297.8 +4.1 +228.3
1989 +25.0 +947.5 +32.6 +1012.8 +31.8 +693.3 +30.2 +627.7 +10.9 +341.1 +5.0 +244.6
1990(2) -1.2 +997.8 +4.8 +1066.2 +6.4 +743.9 +13.4 +725.2 +7.2 +372.8 +4.8 +261.2
1991 +16.9 +1,261.8 +24.0 +1,346.6 +12.8 +851.9 +8.0 +791.1 +17.8 +457.0 +4.5 +277.3
1992+6.9 +1,444.1 +13.4 +1,540.3 +12.8 +973.4 +15.6 +930.2 +11.4 +520.7 +3.2
+289.2
1993 +12.8 +1,748.1 +19.7 +1,863.2 +8.7 +1,066.5 +7.3+1,007.2 +15.5 +617.1 +2.8 +300.0
<PAGE>
(1) Investment operations began April 1, 1969.

(2) Figures prior to January 1, 1990 have been restated to reflect a change in the maximum offering price effective as
of that date.

* Beginning date: January 1, 1971.

/TABLE
<PAGE>
<TABLE>
<CAPTION>
CLASS B SHARES

CUMULATIVE
NET ASSET DISTRIBUTIONS NET ASSET VALUE
VALUE ------------------- AT YEAR-END
FISCAL ------------------ FROM FROM WITH ALL
YEAR BEGINNING END OF INVESTMENT CAPITAL DISTRIBUTIONS
ENDED OF YEAR YEAR INCOME GAINS REINVESTED
- --------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
07/31/92(1) $9.28 $9.63 --- --- $9.63
07/31/93 $9.63 $10.89 --- 0.520 $11.44

_____ ______
Total distributions --- 0.520

(1) Class B shares were offered beginning April 27, 1992.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE CHANGES SINCE COMMENCEMENT OF THE PUBLIC OFFERING OF CLASS B SHARES

PUTNAM VOYAGER FUND
--------------------------
NET ASSET VALUE
TO NET STANDARD & POOR'S 500 DOW JONES NASDAQ CONSUMER
FISCAL ASSET VALUE COMPOSITE STOCK INDEX INDUSTRIAL INDUSTRIAL PRICE INDEX
YEAR AVERAGE AVERAGE

ENDED CUMULA- CUMULA- CUMULA- CUMULA- CUMULA-
ANNUAL TIVE ANNUAL TIVE ANNUAL TIVE ANNUAL TIVE ANNUAL
TIVE
- -----------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/92 (1) --- +3.8 --- + 3.0 --- +1.8 --- -1.4 --- +
.7
07/31/93 +18.8 +23.3 +8.7 +12.0 +7.3 +9.0 +15.5 +13.9 +2.8 +3.5

(1) Class B shares were offered beginning April 27, 1992.
/TABLE
<PAGE>
The tables are not adjusted for any payments under the
Fund's Class A Distribution Plan prior to its implementation in
fiscal 1990 or taxes payable on reinvested distributions. The
total values for the Fund as of the end of each period reflect
reinvestment of all distributions and all changes in net asset
value.

Standard & Poor's 500 Composite Stock Price Index and the
Dow Jones Industrial Average of 30 stocks are unmanaged lists of
common stocks frequently used as general measures of stock market
performance. The NASDAQ Industrial Average is an unmanaged list
of stocks traded in the NASDAQ National Market System. Standard
& Poor's performance figures reflect changes of market prices and
reinvestment of all regular cash dividends but are not adjusted
for commissions or other costs. The Dow Jones performance
figures reflect changes of market prices and reinvestment of all
distributions but are not adjusted for commissions or other
costs. The NASDAQ Industrial Average performance figures reflect
changes of market prices but do not reflect reinvestment of cash
dividends. Performance figures for Standard & Poor's and Dow
Jones reflect the performance of stocks which may involve less
risk than stocks in which the Fund customarily invests.
Because the Fund is a managed portfolio investing in common
stocks and other securities, the securities it owns will not
match those in the indices.

The Consumer Price Index, prepared by the U.S. Bureau of
Labor Statistics, is a commonly used measure of the rate of
inflation. The index shows the average change in the cost of
selected consumer goods and services and does not represent a
return on an investment vehicle.

ADDITIONAL OFFICERS OF THE FUND

In addition to the persons listed as officers of the Fund
in Part II of this Statement, the following persons are also
officers of the Fund. Officers of Putnam Management hold the
same offices in Putnam Management's parent company, Putnam
Investments, Inc.

PETER CARMAN, Vice President. Senior Managing Director of
Putnam Management. Vice President of certain of the Putnam
funds. Prior to August 1, 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.

MATTHEW A. WEATHERBIE, Vice President. Managing Director
of Putnam Management. Vice President of certain of the Putnam
funds.

FRANCIS J. MULLIN, Vice President. Managing Director of
Putnam Management. Vice President of certain of the Putnam
funds.
<PAGE>
INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS

Price Waterhouse 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 and financial
statements included in the Fund's Annual Report for the fiscal
year ended July 31, 1993, filed electronically on September 30,
1993 (811-1682), are incorporated by reference into this
Statement of Additional Information. The financial highlights
included in the Prospectus and the financial statements
incorporated by reference into the Prospectus and the Statement
of Additional Information 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.

TABLE OF CONTENTS

MISCELLANEOUS INVESTMENT PRACTICES. . . . . . . . . . . . . . . . II-1

TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .II-23

MANAGEMENT OF THE FUND. . . . . . . . . . . . . . . . . . . . . .II-28

DETERMINATION OF NET ASSET VALUE. . . . . . . . . . . . . . . . .II-37

HOW TO BUY SHARES . . . . . . . . . . . . . . . . . . . . . . . .II-39

DISTRIBUTION PLAN . . . . . . . . . . . . . . . . . . . . . . . .II-50

INVESTOR SERVICES . . . . . . . . . . . . . . . . . . . . . . . .II-51

SIGNATURE GUARANTEES. . . . . . . . . . . . . . . . . . . . . . .II-57

SUSPENSION OF REDEMPTIONS . . . . . . . . . . . . . . . . . . . .II-57

SHAREHOLDER LIABILITY . . . . . . . . . . . . . . . . . . . . . .II-58

STANDARD PERFORMANCE MEASURES . . . . . . . . . . . . . . . . . .II-58

COMPARISON OF PORTFOLIO PERFORMANCE . . . . . . . . . . . . . . .II-59

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .II-64

<PAGE>

THE PUTNAM FUNDS
STATEMENT OF ADDITIONAL INFORMATION
PART II

The following information applies generally to your Fund
and to the other Putnam funds. In certain cases the discussion
applies to some but not all of the funds or their shareholders,
and you should refer to your Prospectus to determine whether the
matter is applicable to you or your Fund. You will also be
referred to Part I for certain information applicable to your
particular Fund. Shareholders who purchase shares at net asset
value through employer-sponsored defined contribution plans
should also consult their employer for information about the
extent to which the matters described below apply to them.

MISCELLANEOUS INVESTMENT PRACTICES

YOUR FUND'S PROSPECTUS STATES WHICH OF THE FOLLOWING
INVESTMENT PRACTICES ARE AVAILABLE TO YOUR FUND. THE FACT THAT
YOUR FUND IS AUTHORIZED TO ENGAGE IN A PARTICULAR PRACTICE DOES
NOT NECESSARILY MEAN THAT IT WILL ACTUALLY DO SO. YOU SHOULD
DISREGARD ANY PRACTICE DESCRIBED BELOW WHICH IS NOT MENTIONED IN
THE PROSPECTUS.

SHORT-TERM TRADING

In seeking the Fund's objective, Putnam Management will
buy or sell portfolio securities whenever Putnam Management
believes it appropriate to do so. In deciding whether to sell a
portfolio security, Putnam Management does not consider how long
the Fund has owned the security. From time to time the Fund will
buy securities intending to seek short-term trading profits. A
change in the securities held by the Fund is known as "portfolio
turnover" and generally involves some expense to the Fund. These
expenses may include brokerage commissions or dealer mark-ups and
other transaction costs on both the sale of securities and the
reinvestment of the proceeds in other securities. If sales of
portfolio securities cause the Fund to realize net short-term
capital gains, such gains will be taxable as ordinary income. 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 rate for a fiscal
year is the ratio of the lesser of purchases or sales of
portfolio securities to the monthly average of the value of
portfolio securities -- excluding securities whose maturities at
acquisition were one year or less. The Fund's portfolio turnover
rate is not a limiting factor when Putnam Management considers a
change in the Fund's portfolio.

LOWER-RATED SECURITIES

The Fund may invest in lower-rated fixed-income
securities, (commonly known as "junk bonds") to the extent
described in the Prospectus. The lower ratings of certain
securities held by the Fund reflect a greater possibility that
adverse changes in the financial condition of the issuer or in
general economic conditions, or both, or an unanticipated rise in
interest rates, may impair the ability of the issuer to make
payments of interest and principal. The inability (or perceived
inability) of issuers to make timely payment of interest and
principal would likely make the values of securities held by the
Fund more volatile and could limit the Fund's ability to sell its
securities at prices approximating the values the Fund had placed
on such securities. In the absence of a liquid trading market
for securities held by it, the Fund may be unable at times to
establish the fair value of such securities. The rating assigned
to a security by Moody's Investors Service, Inc. or Standard &
Poor's Corporation (or by any other nationally recognized
securities rating organization) does not reflect an assessment of
the volatility of the security's market value or the liquidity of
an investment in the security. See the Prospectus or Part I of
this Statement for a description of security ratings.

Like those of other fixed-income securities, the values of
lower-rated securities fluctuate in response to changes in
interest rates. Thus, a decrease in interest rates will
generally result in an increase in the value of the Fund's
assets. Conversely, during periods of rising interest rates, the
value of the Fund's assets will generally decline. In addition,
the values of such securities are also affected by changes in
general economic conditions and business conditions affecting the
specific industries of their issuers. Changes by recognized
rating services in their ratings of any fixed-income security and
in the ability of an issuer to make payments of interest and
principal may also affect the value of these investments.
Changes in the value of portfolio securities generally will not
affect cash income derived from such securities, but will affect
the Fund's net asset value. The Fund will not necessarily
dispose of a security when its rating is reduced below its rating
at the time of purchase, although Putnam Management will monitor
the investment to determine whether its retention will assist in
meeting the Fund's investment objective.

At times, a substantial portion of the Fund's assets may
be invested in securities as to which the Fund, by itself or
together with other funds and accounts managed by Putnam
Management and its affiliates, holds a major portion or all of
such securities. Although Putnam Management generally considers
such securities to be liquid because of the availability of an
institutional market for such securities, it is possible that,
under adverse market or economic conditions or in the event of
adverse changes in the financial condition of the issuer, the
Fund could find it more difficult to sell such securities when
Putnam Management believes it advisable to do so or may be able
to sell such securities only at prices lower than if such
securities were more widely held. Under such circumstances, it
may also be more difficult to determine the fair value of such
securities for purposes of computing the Fund's net asset value.
In order to enforce its rights in the event of a default under
such securities, the Fund may be required to take possession of
and manage assets securing the issuer's obligations on such
securities, which may increase the Fund's operating expenses and
adversely affect the Fund's net asset value. In the case of
tax-exempt funds, any income derived from the Fund's ownership or
operation of such assets would not be tax-exempt. In addition,
the Fund's intention to qualify as a "regulated investment
company" under the Internal Revenue Code may limit the extent to
which the Fund may exercise its rights by taking possession of
such assets.

Certain securities held by the Fund may permit the issuer
at its option to "call", or redeem, its securities. If an issuer
were to redeem securities held by the Fund during a time of
declining interest rates, the Fund may not be able to reinvest
the proceeds in securities providing the same investment return
as the securities redeemed.

The Fund may invest without limit in so-called
"zero-coupon" bonds and "payment-in-kind" bonds identified in the
Prospectus, unless otherwise specified in the Prospectus.
Zero-coupon bonds are issued at a significant discount from their
principal amount in lieu of paying interest periodically.
Payment-in-kind bonds allow the issuer, at its option, to make
current interest payments on the bonds either in cash or in
additional bonds. Because zero-coupon bonds do not pay current
interest, their value is subject to greater fluctuation in
response to changes in market interest rates than bonds which pay
interest currently. Both zero-coupon and payment-in-kind bonds
allow an issuer to avoid the need to generate cash to meet
current interest payments. Accordingly, such bonds may involve
greater credit risks than bonds paying interest currently. Even
though such bonds do not pay current interest in cash, the Fund
is nonetheless required to accrue interest income on such
investments and to distribute such amounts at least annually to
shareholders. Thus, the Fund could be required at times to
liquidate investments in order to satisfy its dividend
requirements.

The amount of information about the financial condition of
an issuer of tax exempt securities may not be as extensive as
that which is made available by corporations whose securities are
publicly traded. Therefore, to the extent the Fund invests in
tax exempt securities in the lower rating categories, the
achievement of the Fund's goals is more dependent on Putnam
Management's investment analysis than would be the case if the
Fund were investing in securities in the higher rating
categories.

SECURITIES LOANS

The Fund may make secured loans of its portfolio
securities, on either a short-term or long-term basis, amounting
to not more than 25% of its total assets, thereby realizing
additional income. The risks in lending portfolio securities, as
with other extensions of credit, consist of possible delay in
recovery of the securities or possible loss of rights in the
collateral should the borrower fail financially. As a matter of
policy, securities loans are made to broker-dealers pursuant to
agreements requiring that loans be continuously secured by
collateral consisting of cash or short-term debt obligations at
least equal at all times to the value of the securities on loan,
"marked-to-market" daily. The borrower pays to the Fund an
amount equal to any dividends or interest received on securities
lent. The Fund retains all or a portion of the interest received
on investment of the cash collateral or receives a fee from the
borrower. Although voting rights, or rights to consent, with
respect to the loaned securities pass to the borrower, the Fund
retains the right to call the loans at any time on reasonable
notice, and it will do so to enable the Fund to exercise voting
rights on any matters materially affecting the investment. The
Fund may also call such loans in order to sell the securities.

FORWARD COMMITMENTS

The Fund may enter into contracts to purchase securities
for a fixed price at a future date beyond customary settlement
time ("forward commitments") if the Fund holds, and maintains
until the settlement date in a segregated account, cash or
high-grade debt obligations in an amount sufficient to meet the
purchase price, or if the Fund enters into offsetting contracts
for the forward sale of other securities it owns. In the case of
to-be-announced ("TBA") purchase commitments, the unit price and
the estimated principal amount are established when the Fund
enters into a contract, with the actual principal amount being
within a specified range of the estimate. Forward commitments
may be considered securities in themselves, and involve a risk of
loss if the value of the security to be purchased declines prior
to the settlement date, which risk is in addition to the risk of
decline in the value of the Fund's other assets. Where such
purchases are made through dealers, the Fund relies on the dealer
to consummate the sale. The dealer's failure to do so may result
in the loss to the Fund of an advantageous yield or price.
Although the Fund will generally enter into forward commitments
with the intention of acquiring securities for its portfolio or
for delivery pursuant to options contracts it has entered into,
the Fund may dispose of a commitment prior to settlement if
Putnam Management deems it appropriate to do so. The Fund may
realize short-term profits or losses upon the sale of forward
commitments.

The Fund may enter into TBA sale commitments to hedge its
portfolio positions or to sell mortgage-backed securities it owns
under delayed delivery arrangements. Proceeds of TBA sale
commitments are not received until the contractual settlement
date. During the time a TBA sale commitment is outstanding,
equivalent deliverable securities, or an offsetting TBA purchase
commitment deliverable on or before the sale commitment date, are
held as "cover" for the transaction. Unsettled TBA sale
commitments are valued at current market value of the underlying
securities. If the TBA sale commitment is closed through the
acquisition of an offsetting purchase commitment, the Fund
realizes a gain or loss on the commitment without regard to any
unrealized gain or loss on the underlying security. If the Fund
delivers securities under the commitment, the Fund realizes a
gain or loss from the sale of the securities based upon the unit
price established at the date the commitment was entered into.

REPURCHASE AGREEMENTS

The Fund may enter into repurchase agreements up to the
limit specified in the Prospectus. A repurchase agreement is a
contract under which the Fund acquires a security for a
relatively short period (usually not more than one week) subject
to the obligation of the seller to repurchase and the Fund to
resell such security at a fixed time and price (representing the
Fund's cost plus interest). It is the Fund's present intention
to enter into repurchase agreements only with commercial banks
and registered broker-dealers and only with respect to
obligations of the U.S. government or its agencies or
instrumentalities. Repurchase agreements may also be viewed as
loans made by the Fund which are collateralized by the securities
subject to repurchase. Putnam Management will monitor such
transactions to ensure that the value of the underlying
securities will be at least equal at all times to the total
amount of the repurchase obligation, including the interest
factor. If the seller defaults, the Fund could realize a loss on
the sale of the underlying security to the extent that the
proceeds of sale including accrued interest are less than the
resale price provided in the agreement including interest. In
addition, if the seller should be involved in bankruptcy or
insolvency proceedings, the Fund may incur delay and costs in
selling the underlying security or may suffer a loss of principal
and interest if the Fund is treated as an unsecured creditor and
required to return the underlying collateral to the seller's
estate.

Pursuant to an exemptive order issued by the Securities
and Exchange Commission, the Fund may transfer uninvested cash
balances into a joint account, along with cash of other Putnam
funds and certain other accounts. These balances may be invested
in one or more repurchase agreements and/or short-term money
market instruments.

OPTIONS ON SECURITIES

WRITING COVERED OPTIONS. The Fund may write covered call
options and covered put options on optionable securities held in
its portfolio, when in the opinion of Putnam Management such
transactions are consistent with the Fund's investment objectives
and policies. Call options written by the Fund give the
purchaser the right to buy the underlying securities from the
Fund at a stated exercise price; put options give the purchaser
the right to sell the underlying securities to the Fund at a
stated price.

The Fund may write only covered options, which means that,
so long as the Fund is obligated as the writer of a call option,
it will own the underlying securities subject to the option (or
comparable securities satisfying the cover requirements of
securities exchanges). In the case of put options, the Fund will
hold cash and/or high-grade short-term debt obligations equal to
the price to be paid if the option is exercised. In addition,
the Fund will be considered to have covered a put or call option
if and to the extent that it holds an option that offsets some or
all of the risk of the option it has written. The Fund may write
combinations of covered puts and calls on the same underlying
security.

The Fund will receive a premium from writing a put or call
option, which increases the Fund's return on the underlying
security in the event the option expires unexercised or is closed
out at a profit. The amount of the premium reflects, among other
things, the relationship between the exercise price and the
current market value of the underlying security, the volatility
of the underlying security, the amount of time remaining until
expiration, current interest rates, and the effect of supply and
demand in the options market and in the market for the underlying
security. By writing a call option, the Fund limits its
opportunity to profit from any increase in the market value of
the underlying security above the exercise price of the option
but continues to bear the risk of a decline in the value of the
underlying security. By writing a put option, the Fund assumes
the risk that it may be required to purchase the underlying
security for an exercise price higher than its then-current
market value, resulting in a potential capital loss unless the
security subsequently appreciates in value.

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 offsetting option. The
Fund realizes a profit or loss from a closing transaction if the
cost of the transaction (option premium plus transaction costs)
is less or more than the premium received from writing the
option. Because increases in the market price of a call option
generally reflect increases in the market price of the security
underlying the option, any loss resulting from a closing purchase
transaction may be offset in whole or in part by unrealized
appreciation of the underlying security owned by the Fund.

If the Fund writes a call option but does not own the
underlying security, and when it writes a put option, the Fund
may be required to deposit cash or securities with its broker as
"margin", or collateral, for its obligation to buy or sell the
underlying security. As the value of the underlying security
varies, the Fund may have to deposit additional margin with the
broker. Margin requirements are complex and are fixed by
individual brokers, subject to minimum requirements currently
imposed by the Federal Reserve Board and by stock exchanges and
other self-regulatory organizations.

PURCHASING PUT OPTIONS. The Fund may purchase put options
to protect its portfolio holdings in an underlying security
against a decline in market value. Such protection is provided
during the life of the put option since the Fund, as holder of
the option, is able to sell the underlying security at the put
exercise price regardless of any decline in the underlying
security's market price. In order for a put option to be
profitable, the market price of the underlying security must
decline sufficiently below the exercise price to cover the
premium and transaction costs. By using put options in this
manner, the Fund will reduce any profit it might otherwise have
realized from appreciation of the underlying security by the
premium paid for the put option and by transaction costs.

PURCHASING CALL OPTIONS. The Fund may purchase call
options to hedge against an increase in the price of securities
that the Fund wants ultimately to buy. Such hedge protection is
provided during the life of the call option since the Fund, as
holder of the call option, is able to buy the underlying security
at the exercise price regardless of any increase in the
underlying security's market price. In order for a call option
to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the
premium and transaction costs.

RISK FACTORS IN OPTIONS TRANSACTIONS

The successful use of the Fund's options strategies
depends on the ability of Putnam Management to forecast correctly
interest rate and market movements. For example, if the Fund
were to write a call option based on Putnam Management's
expectation that the price of the underlying security would fall,
but the price were to rise instead, the Fund could be required to
sell the security upon exercise at a price below the current
market price. Similarly, if the Fund were to write a put option
based on Putnam Management's expectation that the price of the
underlying security would rise, but the price were to fall
instead, the Fund could be required to purchase the security upon
exercise at a price higher than the current market price.

When the Fund purchases an option, it runs the risk that
it will lose its entire investment in the option in a relatively
short period of time, unless the Fund exercises the option or
enters into a closing sale transaction before the option's
expiration. If the price of the underlying security does not
rise (in the case of a call) or fall (in the case of a put) to an
extent sufficient to cover the option premium and transaction
costs, the Fund will lose part or all of its investment in the
option. This contrasts with an investment by the Fund in the
underlying security, since the Fund will not realize a loss if
the security's price does not change.

The effective use of options also depends on the Fund's
ability to terminate option positions at times when Putnam
Management deems it desirable to do so. There is no assurance
that the Fund will be able to effect closing transactions at any
particular time or at an acceptable price.

If a secondary market in options were to become
unavailable, the Fund could no longer engage in closing
transactions. Lack of investor interest might adversely affect
the liquidity of the market for particular options or series of
options. A market may discontinue trading of a particular option
or options generally. In addition, a market could become
temporarily unavailable if unusual events -- such as volume in
excess of trading or clearing capability -- were to interrupt its
normal operations.

A market may at times find it necessary to impose
restrictions on particular types of options transactions, such as
opening transactions. For example, if an underlying security
ceases to meet qualifications imposed by the market or the
Options Clearing Corporation, new series of options on that
security will no longer be opened to replace expiring series, and
opening transactions in existing series may be prohibited. If an
options market were to become unavailable, the Fund as a holder
of an option would be able to realize profits or limit losses
only by exercising the option, and the Fund, as option writer,
would remain obligated under the option until expiration or
exercise.

Disruptions in the markets for the securities underlying
options purchased or sold by the Fund could result in losses on
the options. If trading is interrupted in an underlying
security, the trading of options on that security is normally
halted as well. As a result, the Fund as purchaser or writer of
an option will be unable to close out its positions until options
trading resumes, and it may be faced with considerable losses if
trading in the security reopens at a substantially different
price. In addition, the Options Clearing Corporation or other
options markets may impose exercise restrictions. If a
prohibition on exercise is imposed at the time when trading in
the option has also been halted, the Fund as purchaser or writer
of an option will be locked into its position until one of the
two restrictions has been lifted. If the Options Clearing
Corporation were to determine that the available supply of an
underlying security appears insufficient to permit delivery by
the writers of all outstanding calls in the event of exercise, it
may prohibit indefinitely the exercise of put options. The Fund,
as holder of such a put option, could lose its entire investment
if the prohibition remained in effect until the put option's
expiration.

Special risks are presented by internationally-traded
options. Because of time differences between the United States
and various foreign countries, and because different holidays are
observed in different countries, foreign options markets may be
open for trading during hours or on days when U.S. markets are
closed. As a result, option premiums may not reflect the current
prices of the underlying interest in the United States.

OVER-THE-COUNTER OPTIONS

The Staff of the Division of Investment Management of the
Securities and Exchange Commission has taken the position that
over-the-counter ("OTC") options purchased by the Fund and assets
held to cover OTC options written by the Fund are illiquid
securities. Although the Staff has indicated that it is
continuing to evaluate this issue, pending further developments,
the Fund intends to enter into OTC options transactions only with
primary dealers in U.S. Government Securities and, in the case of
OTC options written by the Fund, only pursuant to agreements that
will assure that the Fund will at all times have the right to
repurchase the option written by it from the dealer at a
specified formula price. The Fund will treat the amount by which
such formula price exceeds the amount, if any, by which the
option may be "in-the-money" as an illiquid investment. It is
the present policy of the Fund not to enter into any OTC option
transaction if, as a result, more than 15% of the Fund's net
assets would be invested in (i) illiquid investments (determined
under the foregoing formula) relating to OTC options written by
the Fund, (ii) OTC options purchased by the Fund, (iii)
securities which are not readily marketable, and (iv) repurchase
agreements maturing in more than seven days.

FUTURES CONTRACTS AND RELATED OPTIONS

The Fund may invest without limit in the futures contracts
and related options identified in the Prospectus unless otherwise
specified in the Prospectus. A financial futures contract sale
creates an obligation by the seller to deliver the type of
financial instrument called for in the contract in a specified
delivery month for a stated price. A financial futures contract
purchase creates an obligation by the purchaser to take delivery
of the type of financial instrument called for in the contract in
a specified delivery month at a stated price. The specific
instruments delivered or taken, respectively, at settlement date
are not determined until on or near that date. The determination
is made in accordance with the rules of the exchange on which the
futures contract sale or purchase was made. Futures contracts
are traded in the United States only on commodity exchanges or
boards of trade -- known as "contract markets" -- approved for
such trading by the Commodity Futures Trading Commission (the
"CFTC"), and must be executed through a futures commission
merchant or brokerage firm which is a member of the relevant
contract market.

Although futures contracts by their terms call for actual
delivery or acceptance of commodities or securities, in most
cases the contracts are closed out before the settlement date
without the making or taking of delivery. Closing out a futures
contract sale is effected by purchasing a futures contract for
the same aggregate amount of the specific type of financial
instrument or commodity with the same delivery date. If the
price of the initial sale of the futures contract exceeds the
price of the offsetting purchase, the seller is paid the
difference and realizes a gain. Conversely, if the price of the
offsetting purchase exceeds the price of the initial sale, the
seller realizes a loss. Similarly, the closing out of a futures
contract purchase is effected by the purchaser's entering into a
futures contract sale. If the offsetting sale price exceeds the
purchase price, the purchaser realizes a gain, and if the
purchase price exceeds the offsetting sale price, he realizes a
loss. In general 40% of the gain or loss arising from the
closing out of a futures contract traded on an exchange approved
by the CFTC is treated as short-term gain or loss, and 60% is
treated as long-term gain or loss.

Unlike when the Fund purchases or sells a security, no
price is paid or received by the Fund upon the purchase or sale
of a futures contract. Upon entering into a contract, the Fund
is required to deposit with its custodian in a segregated account
in the name of the futures broker an amount of cash and/or U.S.
Government Securities. This amount is known as "initial margin."
The nature of initial margin in futures transactions is different
from that of margin in security transactions in that futures
contract margin does not involve the borrowing of funds to
finance the transactions. Rather, initial margin is similar to a
performance bond or good faith deposit which is returned to the
Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied. Futures contracts
also involve brokerage costs.

Subsequent payments, called "variation margin" or
"maintenance margin", to and from the broker (or the custodian)
are made on a daily basis as the price of the underlying security
or commodity fluctuates, making the long and short positions in
the futures contract more or less valuable, a process known as
"marking to the market." For example, when the Fund has
purchased a futures contract on a security and the price of the
underlying security has risen, that position will have increased
in value and the Fund will receive from the broker a variation
margin payment based on that increase in value. Conversely, when
the Fund has purchased a security futures contract and the price
of the underlying security has declined, the position would be
less valuable and the Fund would be required to make a variation
margin payment to the broker.

The Fund may elect to close some or all of its futures
positions at any time prior to their expiration in order to
reduce or eliminate a hedge position then currently held by the
Fund. The Fund may close its positions by taking opposite
positions which will operate to terminate the Fund's position in
the futures contracts. Final determinations of variation margin
are then made, additional cash is required to be paid by or
released to the Fund, and the Fund realizes a loss or a gain.
Such closing transactions involve additional commission costs.

OPTIONS ON FUTURES CONTRACTS. The Fund may purchase and
write call and put options on futures contracts it may buy or
sell and enter into closing transactions with respect to such
options to terminate existing positions. Options on future
contracts give the purchaser the right in return for the premium
paid to assume a position in a futures contract at the specified
option exercise price at any time during the period of the
option. The Fund may use options on futures contracts in lieu of
writing or buying options directly on the underlying securities
or purchasing and selling the underlying futures contracts. For
example, to hedge against a possible decrease in the value of its
portfolio securities, the Fund may purchase put options or write
call options on futures contracts rather than selling futures
contracts. Similarly, the Fund may purchase call options or
write put options on futures contracts as a substitute for the
purchase of futures contracts to hedge against a possible
increase in the price of securities which the Fund expects to
purchase. Such options generally operate in the same manner as
options purchased or written directly on the underlying
investments.

As with options on securities, the holder or writer of an
option may terminate his position by selling or purchasing an
offsetting option. There is no guarantee that such closing
transactions can be effected.

The Fund will be required to deposit initial margin and
maintenance margin with respect to put and call options on
futures contracts written by it pursuant to brokers' requirements
similar to those described above in connection with the
discussion of futures contracts.

RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED
OPTIONS. Successful use of futures contracts by the Fund is
subject to Putnam Management's ability to predict movements in
the direction of interest rates and other factors affecting
securities markets. For example, if the Fund has hedged against
the possibility of decline in the values of its investments and
the values of its investments increase instead, the Fund will
lose part or all of the benefit of the increase through payments
of daily maintenance margin. The Fund may have to sell
investments at a time when it may be disadvantageous to do so in
order to meet margin requirements.

Compared to the purchase or sale of futures contracts, the
purchase of call or put options on futures contracts involves
less potential risk to the Fund because the maximum amount at
risk is the premium paid for the options (plus transaction
costs). However, there may be circumstances when the purchase of
a call or put option on a futures contract would result in a loss
to the Fund when the purchase or sale of a futures contract would
not, such as when there is no movement in the prices of the
hedged investments. The writing of an option on a futures
contract involves risks similar to those risks relating to the
sale of futures contracts.

There is no assurance that higher than anticipated trading
activity or other unforeseen events might not, at times, render
certain market clearing facilities inadequate, and thereby result
in the institution by exchanges of special procedures which may
interfere with the timely execution of customer orders.

To reduce or eliminate a hedge position held by the Fund,
the Fund may seek to close out a position. The ability to
establish and close out positions will be subject to the
development and maintenance of a liquid secondary market. It is
not certain that this market will develop or continue to exist
for a particular futures contract or option. Reasons for the
absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in
certain contracts or options; (ii) restrictions may be imposed by
an exchange on opening transactions or closing transactions or
both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of
contracts or options, or underlying securities; (iv) unusual or
unforeseen circumstances may interrupt normal operations on an
exchange; (v) the facilities of an exchange or a clearing
corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic
or other reasons, decide or be compelled at some future date to
discontinue the trading of contracts or options (or a particular
class or series of contracts or options), in which event the
secondary market on that exchange for such contracts or options
(or in the class or series of contracts or options) would cease
to exist, although outstanding contracts or options on the
exchange that had been issued by a clearing corporation as a
result of trades on that exchange would continue to be
exercisable in accordance with their terms.

U.S. TREASURY SECURITY FUTURES CONTRACTS AND OPTIONS. If
the Fund invests in tax-exempt securities issued by a
governmental entity, the Fund may purchase and sell futures
contracts and related options on U.S. Treasury securities when,
in the opinion of Putnam Management, price movements in Treasury
security futures and related options will correlate closely with
price movements in the tax-exempt securities which are the
subject of the hedge. U.S. Treasury security futures contracts
require the seller to deliver, or the purchaser to take delivery
of, the type of U.S. Treasury security called for in the contract
at a specified date and price. Options on U.S. Treasury security
futures contracts give the purchaser the right in return for the
premium paid to assume a position in a U.S. Treasury security
futures contract at the specified option exercise price at any
time during the period of the option.

Successful use of U.S. Treasury security futures contracts
by the Fund is subject to Putnam Management's ability to predict
movements in the direction of interest rates and other factors
affecting markets for debt securities. For example, if the Fund
has sold U.S. Treasury security futures contracts in order to
hedge against the possibility of an increase in interest rates
which would adversely affect tax-exempt securities held in its
portfolio, and the prices of the Fund's tax-exempt securities
increase instead as a result of a decline in interest rates, the
Fund will lose part or all of the benefit of the increased value
of its securities which it has hedged because it will have
offsetting losses in its futures positions. In addition, in such
situations, if the Fund has insufficient cash, it may have to
sell securities to meet daily maintenance margin requirements at
a time when it may be disadvantageous to do so.

There is also a risk that price movements in U.S. Treasury
security futures contracts and related options will not correlate
closely with price movements in markets for tax-exempt
securities. For example, if the Fund has hedged against a
decline in the values of tax-exempt securities held by it by
selling Treasury security futures and the values of Treasury
securities subsequently increase while the values of its
tax-exempt securities decrease, the Fund would incur losses on
both the Treasury security futures contracts written by it and
the tax-exempt securities held in its portfolio. Putnam
Management will seek to reduce this risk by monitoring movements
in markets for U.S. Treasury security futures and options and for
tax-exempt securities closely. The Fund will only purchase or
sell Treasury security futures or related options when, in the
opinion of Putnam Management, price movements in Treasury
security futures and related options will correlate closely with
price movements in tax-exempt securities in which the Fund
invests.

INDEX FUTURES CONTRACTS. An index futures contract is a
contract to buy or sell units of an index at a specified future
date at a price agreed upon when the contract is made. Entering
into a contract to buy units of an index is commonly referred to
as buying or purchasing a contract or holding a long position in
the index. Entering into a contract to sell units of an index is
commonly referred to as selling a contract or holding a short
position. A unit is the current value of the index. The Fund
may enter into stock index futures contracts, debt index futures
contracts, or other index futures contracts appropriate to its
objective. The Fund may also purchase and sell options on index
futures contracts.

For example, the Standard & Poor's Composite 500 Stock
Price Index ("S&P 500") is composed of 500 selected common
stocks, most of which are listed on the New York Stock Exchange.
The S&P 500 assigns relative weightings to the common stocks
included in the Index, and the value fluctuates with changes in
the market values of those common stocks. In the case of the S&P
500, contracts are to buy or sell 500 units. Thus, if the value
of the S&P 500 were $150, one contract would be worth $75,000
(500 units x $150). The stock index futures contract specifies
that no delivery of the actual stocks making up the index will
take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the
difference between the contract price and the actual level of the
stock index at the expiration of the contract. For example, if
the Fund enters into a futures contract to buy 500 units of the
S&P 500 at a specified future date at a contract price of $150
and the S&P 500 is at $154 on that future date, the Fund will
gain $2,000 (500 units x gain of $4). If the Fund enters into a
futures contract to sell 500 units of the stock index at a
specified future date at a contract price of $150 and the S&P 500
is at $152 on that future date, the Fund will lose $1,000 (500
units x loss of $2).

There are several risks in connection with the use by the
Fund of index futures as a hedging device. One risk arises
because of the imperfect correlation between movements in the
prices of the index futures and movements in the prices of
securities which are the subject of the hedge. Putnam Management
will, however, attempt to reduce this risk by buying or selling,
to the extent possible, futures on indices the movements of which
will, in its judgment, have a significant correlation with
movements in the prices of the securities sought to be hedged.

Successful use of index futures by the Fund for hedging
purposes is also subject to Putnam Management's ability to
predict movements in the direction of the market. It is possible
that, where the Fund has sold futures to hedge its portfolio
against a decline in the market, the index on which the futures
are written may advance and the value of securities held in the
Fund's portfolio may decline. If this occurred, the Fund would
lose money on the futures and also experience a decline in value
in its portfolio securities. It is also possible that, if the
Fund has hedged against the possibility of a decline in the
market adversely affecting securities held in its portfolio and
securities prices increase instead, the Fund will lose part or
all of the benefit of the increased value of those securities it
has hedged because it will have offsetting losses in its futures
positions. In addition, in such situations, if the Fund has
insufficient cash, it may have to sell securities to meet daily
variation margin requirements at a time when it is
disadvantageous to do so.

In addition to the possibility that there may be an
imperfect correlation, or no correlation at all, between
movements in the index futures and the portion of the portfolio
being hedged, the prices of index futures may not correlate
perfectly with movements in the underlying index due to certain
market distortions. First, all participants in the futures
market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through
offsetting transactions which could distort the normal
relationship between the index and futures markets. Second,
margin requirements in the futures market are less onerous than
margin requirements in the securities market, and as a result the
futures market may attract more speculators than the securities
market does. Increased participation by speculators in the
futures market may also cause temporary price distortions. Due
to the possibility of price distortions in the futures market and
also because of the imperfect correlation between movements in
the index and movements in the prices of index futures, even a
correct forecast of general market trends by Putnam Management
may still not result in a successful hedging transaction over a
short time period.

OPTIONS ON STOCK INDEX FUTURES. Options on index futures
are similar to options on securities except that options on index
futures give the purchaser the right, in return for the premium
paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during
the period of the option. Upon exercise of the option, the
delivery of the futures position by the writer of the option to
the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's futures margin account which
represents the amount by which the market price of the index
futures contract, at exercise, exceeds (in the case of a call) or
is less than (in the case of a put) the exercise price of the
option on the index future. If an option is exercised on the
last trading day prior to its expiration date, the settlement
will be made entirely in cash equal to the difference between the
exercise price of the option and the closing level of the index
on which the future is based on the expiration date. Purchasers
of options who fail to exercise their options prior to the
exercise date suffer a loss of the premium paid.

OPTIONS ON INDICES

As an alternative to purchasing call and put options on
index futures, the Fund may purchase and sell call and put
options on the underlying indices themselves. Such options would
be used in a manner identical to the use of options on index
futures.

INDEX WARRANTS

The Fund may purchase put warrants and call warrants whose
values vary depending on the change in the value of one or more
specified securities indices ("index warrants"). Index warrants
are generally issued by banks or other financial institutions and
give the holder the right, at any time during the term of the
warrant, to receive upon exercise of the warrant a cash payment
from the issuer based on the value of the underlying index at the
time of exercise. In general, if the value of the underlying
index rises above the exercise price of the index warrant, the
holder of a call warrant will be entitled to receive a cash
payment from the issuer upon exercise based on the difference
between the value of the index and the exercise price of the
warrant; if the value of the underlying index falls, the holder
of a put warrant will be entitled to receive a cash payment from
the issuer upon exercise based on the difference between the
exercise price of the warrant and the value of the index. The
holder of a warrant would not be entitled to any payments from
the issuer at any time when, in the case of a call warrant, the
exercise price is greater than the value of the underlying index,
or, in the case of a put warrant, the exercise price is less than
the value of the underlying index. If the Fund were not to
exercise an index warrant prior to its expiration, then the Fund
would lose the amount of the purchase price paid by it for the
warrant.

The Fund will normally use index warrants in a manner
similar to its use of options on securities indices. The risks
of the Fund's use of index warrants are generally similar to
those relating to its use of index options. Unlike most index
options, however, index warrants are issued in limited amounts
and are not obligations of a regulated clearing agency, but are
backed only by the credit of the bank or other institution which
issues the warrant. Also, index warrants generally have longer
terms than index options. Although the Fund will normally invest
only in exchange-listed warrants, index warrants are not likely
to be as liquid as certain index options backed by a recognized
clearing agency. In addition, the terms of index warrants may
limit the Fund's ability to exercise the warrants at such time,
or in such quantities, as the Fund would otherwise wish to do.

FOREIGN SECURITIES

Under its current policy, which may be changed without
shareholder approval, the Fund may invest up to the limit of its
total assets specified in its Prospectus in securities
principally traded in markets outside the United States.
Eurodollar certificates of deposit are excluded for purposes of
this limitation. Foreign investments can be affected favorably
or unfavorably by changes in currency exchange rates and in
exchange control regulations. There may be less publicly
available information about a foreign company than about a U.S.
company, and foreign companies may not be subject to accounting,
auditing and financial reporting standards and requirements
comparable to those applicable to U.S. companies. Securities of
some foreign companies are less liquid or more volatile than
securities of U.S. companies, and foreign brokerage commissions
and custodian fees are generally higher than in the United
States. Investments in foreign securities can involve other
risks different from those affecting U.S. investments, including
local political or economic developments, expropriation or
nationalization of assets and imposition of withholding taxes on
dividend or interest payments. To hedge against possible
variations in foreign exchange rates, the Fund may purchase and
sell forward foreign currency contracts. These represent
agreements to purchase or sell specified currencies at specified
dates and prices. The Fund will only purchase and sell forward
foreign currency contracts in amounts Putnam Management deems
appropriate to hedge existing or anticipated portfolio positions
and will not use such forward contracts for speculative purposes.
Foreign securities, like other assets of the Fund, will be held
by the Fund's custodian or by a subcustodian.

FOREIGN CURRENCY TRANSACTIONS

The Fund may engage in currency exchange transactions to
protect against uncertainty in the level of future currency
exchange rates. In addition, the Fund may write covered call and
put options on foreign currencies for the purpose of increasing
its current return.

Generally, the Fund may engage in both "transaction
hedging" and "position hedging". When it engages in transaction
hedging, the Fund enters into foreign currency transactions with
respect to specific receivables or payables, generally arising in
connection with the purchase or sale of portfolio securities.
The Fund will engage in transaction hedging when it desires to
"lock in" the U.S. dollar price of a security it has agreed to
purchase or sell, or the U.S. dollar equivalent of a dividend or
interest payment in a foreign currency. By transaction hedging
the Fund will attempt to protect itself against a possible loss
resulting from an adverse change in the relationship between the
U.S. dollar and the applicable foreign currency during the period
between the date on which the security is purchased or sold, or
on which the dividend or interest payment is earned, and the date
on which such payments are made or received.

The Fund may purchase or sell a foreign currency on a spot
(or cash) basis at the prevailing spot rate in connection with
the settlement of transactions in portfolio securities
denominated in that foreign currency. The Fund may also enter
into contracts to purchase or sell foreign currencies at a future
date ("forward contracts") and purchase and sell foreign currency
futures contracts.

For transaction hedging purposes the Fund may also
purchase exchange-listed and over-the-counter call and put
options on foreign currency futures contracts and on foreign
currencies. A put option on a futures contract gives the Fund
the right to assume a short position in the futures contract
until the expiration of the option. A put option on a currency
gives the Fund the right to sell the currency at an exercise
price until the expiration of the option. A call option on a
futures contract gives the Fund the right to assume a long
position in the futures contract until the expiration of the
option. A call option on a currency gives the Fund the right to
purchase the currency at the exercise price until the expiration
of the option.

When it engages in position hedging, the Fund enters into
foreign currency exchange transactions to protect against a
decline in the values of the foreign currencies in which its
portfolio securities are denominated (or an increase in the value
of currency for securities which the Fund expects to purchase,
when the Fund holds cash or short-term investments). In
connection with position hedging, the Fund may purchase put or
call options on foreign currency and on foreign currency futures
contracts and buy or sell forward contracts and foreign currency
futures contracts. The Fund may also purchase or sell foreign
currency on a spot basis.

The precise matching of the amounts of foreign currency
exchange transactions and the value of the portfolio securities
involved will not generally be possible since the future value of
such securities in foreign currencies will change as a
consequence of market movements in the value of those securities
between the dates the currency exchange transactions are entered
into and the dates they mature.

It is impossible to forecast with precision the market
value of portfolio securities at the expiration or maturity of a
forward or futures contract. Accordingly, it may be necessary
for the Fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market
value of the security or securities being hedged is less than the
amount of foreign currency the Fund is obligated to deliver and a
decision is made to sell the security or securities and make
delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency
received upon the sale of the portfolio security or securities if
the market value of such security or securities exceeds the
amount of foreign currency the Fund is obligated to deliver.

Transaction and position hedging do not eliminate
fluctuations in the underlying prices of the securities which the
Fund owns or intends to purchase or sell. They simply establish
a rate of exchange which one can achieve at some future point in
time. Additionally, although these techniques tend to minimize
the risk of loss due to a decline in the value of the hedged
currency, they tend to limit any potential gain which might
result from the increase in value of such currency.

The Fund may seek to increase its current return or to
offset some of the costs of hedging against fluctuations in
current exchange rates by writing covered call options and
covered put options on foreign currencies. The Fund receives a
premium from writing a call or put option, which increases the
Fund's current return if the option expires unexercised or is
closed out at a net profit. 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's currency hedging transactions may call for the
delivery of one foreign currency in exchange for another foreign
currency and may at times not involve currencies in which its
portfolio securities are then denominated. Putnam Management
will engage in such "cross hedging" activities when it believes
that such transactions provide significant hedging opportunities
for the Fund. Cross hedging transactions by the Fund involve the
risk of imperfect correlation between changes in the values of
the currencies to which such transactions relate and changes in
the value of the currency or other asset or liability which is
the subject of the hedge.

CURRENCY FORWARD AND FUTURES CONTRACTS. A forward foreign
currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number
of days from the date of the contract as agreed by the parties,
at a price set at the time of the contract. In the case of a
cancelable forward contract, the holder has the unilateral right
to cancel the contract at maturity by paying a specified fee.
The contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial
banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage
for trades. A foreign currency futures contract is a
standardized contract for the future delivery of a specified
amount of a foreign currency at a future date at a price set at
the time of the contract. Foreign currency futures contracts
traded in the United States are designed by and traded on
exchanges regulated by the CFTC, such as the New York Mercantile
Exchange.

Forward foreign currency exchange contracts differ from
foreign currency futures contracts in certain respects. For
example, the maturity date of a forward contract may be any fixed
number of days from the date of the contract agreed upon by the
parties, rather than a predetermined date in a given month.
Forward contracts may be in any amounts agreed upon by the
parties rather than predetermined amounts. Also, forward foreign
exchange contracts are traded directly between currency traders
so that no intermediary is required. A forward contract
generally requires no margin or other deposit.

At the maturity of a forward or futures contract, the Fund
either may accept or make delivery of the currency specified in
the contract, or at or prior to maturity enter into a closing
transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts
are usually effected with the currency trader who is a party to
the original forward contract. Closing transactions with respect
to futures contracts are effected on a commodities exchange; a
clearing corporation associated with the exchange assumes
responsibility for closing out such contracts.

Positions in the foreign currency futures contracts may be
closed out only on an exchange or board of trade which provides a
secondary market in such contracts. Although the Fund intends to
purchase or sell foreign currency futures contracts only on
exchanges or boards of trade where there appears to be an active
secondary market, there is no assurance that a secondary market
on an exchange or board of trade will exist for any particular
contract or at any particular time. In such event, it may not be
possible to close a futures position and, in the event of adverse
price movements, the Fund would continue to be required to make
daily cash payments of variation margin.

FOREIGN CURRENCY OPTIONS. In general, options on foreign
currencies operate similarly to options on securities and are
subject to many similar risks. Foreign currency options are
traded primarily in the over-the-counter market, although options
on foreign currencies have recently been listed on several
exchanges. Options are traded not only on the currencies of
individual nations, but also on the European Currency Unit
("ECU"). The ECU is composed of amounts of a number of
currencies, and is the official medium of exchange of the
European Community's European Monetary System.

The Fund will only purchase or write foreign currency
options when Putnam Management believes that a liquid secondary
market exists for such options. There can be no assurance that a
liquid secondary market will exist for a particular option at any
specific time. Options on foreign currencies are affected by all
of those factors which influence foreign exchange rates and
investments generally.

The value of any currency, including U.S. dollars and
foreign currencies, may be affected by complex political and
economic factors applicable to the issuing country. In addition,
the exchange rates of foreign currencies (and therefore the
values of foreign currency options) may be affected
significantly, fixed, or supported directly or indirectly by U.S.
and foreign government actions. Government intervention may
increase risks involved in purchasing or selling foreign currency
options, since exchange rates may not be free to fluctuate in
response to other market forces.

The value of a foreign currency option reflects the value
of an exchange rate, which in turn reflects relative values of
two currencies, the U.S. dollar and the foreign currency in
question. Because foreign currency transactions occurring in the
interbank market involve substantially larger amounts than those
that may be involved in the exercise of foreign currency options,
investors may be disadvantaged by having to deal in an odd lot
market for the underlying foreign currencies in connection with
options at prices that are less favorable than for round lots.
Foreign governmental restrictions or taxes could result in
adverse changes in the cost of acquiring or disposing of foreign
currencies.

There is no systematic reporting of last sale information
for foreign currencies and there is no regulatory requirement
that quotations available through dealers or other market sources
be firm or revised on a timely basis. Available quotation
information is generally representative of very large round-lot
transactions in the interbank market and thus may not reflect
exchange rates for smaller odd-lot transactions (less than $1
million) where rates may be less favorable. The interbank market
in foreign currencies is a global, around-the-clock market. To
the extent that options markets are closed while the markets for
the underlying currencies remain open, significant price and rate
movements may take place in the underlying markets that cannot be
reflected in the options markets.

SETTLEMENT PROCEDURES. Settlement procedures relating to
the Fund's investments in foreign securities and to the Fund's
foreign currency exchange transactions may be more complex than
settlements with respect to investments in debt or equity
securities of U.S. issuers, and may involve certain risks not
present in the Fund's domestic investments. For example,
settlement of transactions involving foreign securities or
foreign currency may occur within a foreign country, and the Fund
may be required to accept or make delivery of the underlying
securities or currency in conformity with any applicable U.S. or
foreign restrictions or regulations, and may be required to pay
any fees, taxes or charges associated with such delivery. Such
investments may also involve the risk that an entity involved in
the settlement may not meet its obligations.

FOREIGN CURRENCY CONVERSION. Although foreign exchange
dealers do not charge a fee for currency conversion, they do
realize a profit based on the difference (the "spread") between
prices at which they are buying and selling various currencies.
Thus, a dealer may offer to sell a foreign currency to the Fund
at one rate, while offering a lesser rate of exchange should the
Fund desire to resell that currency to the dealer.

RESTRICTED SECURITIES

The SEC Staff currently takes the view that any
designation by the Trustees of the authority to determine that a
restricted security is readily marketable (as described in the
investment restrictions of the Funds) must be pursuant to written
procedures established by the Trustees. It is the present
intention of the Funds' Trustees that, if the Trustees decide to
delegate such determinations to Putnam Management or another
person, they would do so pursuant to written procedures,
consistent with the Staff's position. Should the Staff modify
its position in the future, the Trustees would consider what
action would be appropriate in light of the Staff's position at
that time.

TAXES

TAXATION OF THE FUND. The Fund intends to qualify each
year as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). In order
so to qualify and to qualify for the special tax treatment
accorded regulated investment companies and their shareholders,
the Fund must, among other things:

(a) Derive at least 90% of its gross income from
dividends, interest, payments with respect to certain securities
loans, and gains from the sale of stock, securities and foreign
currencies, or other income (including but not limited to gains
from options, futures, or forward contracts) derived with respect
to its business of investing in such stock, securities, or
currencies;

(b) derive less than 30% of its gross income from the
sale or other disposition of certain assets (including stock or
securities and certain options, futures contracts and forward
contracts) held for less than three months;

(c) distribute with respect to each taxable year at least
90% of the sum of its taxable net investment income, its net
tax-exempt income, and the excess, if any, of net short-term
capital gains over net long-term capital losses for such year;
and

(d) diversify its holdings so that, at the end of each
fiscal quarter, (i) at least 50% of the market value of the
Fund's assets is represented by cash and cash items, U.S.
Government securities, securities of other regulated investment
companies, and other securities limited in respect of any one
issuer to a value not greater than 5% of the value of the Fund's
total assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its assets is
invested in the securities (other than those of the U.S.
Government or other regulated investment companies) of any one
issuer or of two or more issuers which the Fund controls and
which are engaged in the same, similar, or related trades or
businesses.

If the Fund qualifies as a regulated investment company
that is accorded special tax treatment, the Fund will not be
subject to federal income tax on income paid to its shareholders
in the form of dividends (including capital gain dividends).

If the Fund failed to qualify as a regulated investment
company accorded special tax treatment in any taxable year, the
Fund would be subject to tax on its taxable income at corporate
rates, and all distributions from earnings and profits, including
any distributions of net tax-exempt income and net long-term
capital gains, would be taxable to shareholders as ordinary
income. In addition, the Fund could be required to recognize
unrealized gains, pay substantial taxes and interest and make
substantial distributions before requalifying as a regulated
investment company that is accorded special tax treatment.

If the Fund fails to distribute in a calendar year
substantially all of its ordinary income for such year and
substantially all of its capital gain net income for the one-year
period ending October 31 (or later if the Fund is permitted so to
elect and so elects), plus any retained amount from the prior
year, the Fund will be subject to a 4% excise tax on the
undistributed amounts. A dividend paid to shareholders by the
Fund in January of a year generally is deemed to have been paid
by the Fund on December 31 of the preceding year, if the dividend
was declared and payable to shareholders of record on a date in
October, November or December of that preceding year. The Fund
intends generally to make distributions sufficient to avoid
imposition of the 4% excise tax.

EXEMPT-INTEREST DIVIDENDS. The Fund will be qualified to
pay exempt-interest dividends to its shareholders only if, at the
close of each quarter of the Fund's taxable year, at least 50% of
the total value of the Fund's assets consists of obligations the
interest on which is exempt from federal income tax.
Distributions that the Fund properly designates as exempt-
interest dividends are treated by shareholders as interest
excludable from their gross income for federal income tax
purposes but may be taxable for federal alternative minimum tax
purposes. If the Fund intends to be qualified to pay
exempt-interest dividends, the Fund may be limited in its ability
to engage in such taxable transactions as forward commitments,
repurchase agreements, financial futures, and options contracts
on financial futures, tax-exempt bond indices, and other assets.
Part or all of the interest on indebtedness, if any, incurred or
continued by a shareholder to purchase or carry shares of a Fund
paying exempt-interest dividends is not deductible. The portion
of interest that is not deductible is equal to the total interest
paid or accrued on the indebtedness, multiplied by the percentage
of the Fund's total distributions (not including distributions
from net long-term capital gains) paid to the shareholder that
are exempt-interest dividends. Under rules used by the Internal
Revenue Service for determining when borrowed funds are
considered used for the purpose of purchasing or carrying
particular assets, the purchase of shares may be considered to
have been made with borrowed funds even though such funds are not
directly traceable to the purchase of shares.

In general, exempt-interest dividends, if any,
attributable to interest received on certain private activity
obligations and certain industrial development bonds will not be
tax-exempt to any shareholders who are "substantial users" of the
facilities financed by such obligations or bonds or who are
"related persons" of such substantial users.

A Fund which is qualified to pay exempt-interest dividends
will inform investors within 60 days of the Fund's fiscal
year-end of the percentage of its income distributions designated
as tax-exempt. The percentage is applied uniformly to all
distributions made during the year. The percentage of income
designated as tax-exempt for any particular distribution may be
substantially different from the percentage of the Fund's income
that was tax-exempt during the period covered by the
distribution.

HEDGING TRANSACTIONS. If the Fund engages in
transactions, including hedging transactions in options, futures
contracts, and straddles, or other similar transactions, it will
be subject to special tax rules (including mark-to-market,
straddle, wash sale, and short sale rules), the effect of which
may be to accelerate income to the Fund, defer losses to the
Fund, cause adjustments in the holding periods of the Fund's
securities, or convert short-term capital losses into long-term
capital losses. These rules could therefore affect the amount,
timing and character of distributions to shareholders. The Fund
will endeavor to make any available elections pertaining to such
transactions in a manner believed to be in the best interests of
the Fund.

Under the 30% of gross income test described above (see
"Taxation of the Fund"), the Fund will be restricted in selling
assets held or considered under Code rules to have been held for
less than three months, and in engaging in certain hedging
transactions (including hedging transactions in options and
futures) that in some circumstances could cause certain Fund
assets to be treated as held for less than three months.

Certain of the Fund's hedging activities (including its
transactions, if any, in foreign currencies or foreign
currency-denominated instruments) are likely to produce a
difference between its book income and its taxable income. If
the Fund's book income exceeds its taxable income, the
distribution (if any) of such excess will be treated as a
dividend to the extent of the Fund's remaining earnings and
profits, and thereafter as a return of capital or as gain from
the sale or exchange of a capital asset, as the case may be. If
the Fund's book income is less than its taxable income, the Fund
could be required to make distributions exceeding book income to
qualify as a regulated investment company that is accorded
special tax treatment.

RETURN OF CAPITAL DISTRIBUTIONS. If the Fund makes a
distribution to you in excess of its current and accumulated
"earnings and profits" in any taxable year, the excess
distribution will be treated as a return of capital to the extent
of your tax basis in your shares, and thereafter as capital gain.
A return of capital is not taxable, but it reduces your tax basis
in your shares.

SECURITIES ISSUED OR PURCHASED AT A DISCOUNT. The Fund's
investment in securities issued at a discount and certain other
obligations will (and investments in securities purchased at a
discount may) require the Fund to accrue and distribute income
not yet received. In order to generate sufficient cash to make
the requisite distributions, the Fund may be required to sell
securities in its portfolio that it otherwise would have
continued to hold.

CAPITAL LOSS CARRYOVER. The amounts and expiration dates
of any capital loss carryovers available to the Fund are shown in
Note 1 (Federal income taxes) to the financial statements
included in Part I of this Statement or incorporated by reference
into this Statement.

FOREIGN CURRENCY-DENOMINATED SECURITIES AND RELATED
HEDGING TRANSACTIONS. The Fund's transactions in foreign
currency-denominated debt securities, certain foreign currency
options, futures contracts, and forward contracts may give rise
to ordinary income or loss to the extent such income or loss
results from fluctuations in the value of the foreign currency
concerned.

If more than 50% of the Fund's assets at year end consists
of the debt and equity securities of foreign corporations, the
Fund may elect to permit shareholders to claim a credit or
deduction on their income tax returns for their pro rata portion
of qualified taxes paid by the Fund to foreign countries. In
such a case, shareholders will include in gross income from
foreign sources their pro rata shares of such taxes. A
shareholder's ability to claim a foreign tax credit or deduction
in respect of foreign taxes paid by the Fund may be subject to
certain limitations imposed by the Code, as a result of which a
shareholder may not get a full credit or deduction for the amount
of such taxes. Shareholders who do not itemize on their federal
income tax returns may claim a credit (but no deduction) for such
foreign taxes.

Investment by the Fund in certain "passive foreign
investment companies" could subject the Fund to a U.S. federal
income tax or other charge on the proceeds from the sale of its
investment in such a company; however, this tax can be avoided by
making an election to mark such investments to market annually or
to treat the passive foreign investment company as a "qualified
electing fund."

SALE OR REDEMPTION OF SHARES. The sale, exchange or
redemption of Fund shares may give rise to a gain or loss. In
general, any gain or loss realized upon a taxable disposition of
shares will be treated as long-term capital gain or loss if the
shares have been held for more than 12 months, and otherwise as
short-term capital gain or loss. However, if a shareholder sells
shares at a loss within six months of purchase, any loss will be
disallowed for Federal income tax purposes to the extent of any
exempt-interest dividends received on such shares. In addition,
any loss (not already disallowed as provided in the preceding
sentence) realized upon a taxable disposition of shares held for
six months or less will be treated as long-term, rather than
short-term, to the extent of any long-term capital gain
distributions received by the shareholder with respect to the
shares. All or a portion of any loss realized upon a taxable
disposition of Fund shares will be disallowed if other Fund
shares are purchased within 30 days before or after the
disposition. In such a case, the basis of the newly purchased
shares will be adjusted to reflect the disallowed loss.

SHARES PURCHASED THROUGH TAX-QUALIFIED PLANS. Special tax
rules apply to investments though defined contribution plans and
other tax-qualified plans. Shareholders should consult their tax
adviser to determine the suitability of shares of a fund as an
investment through such plans and the precise effect of an
investment on their particular tax situation.

BACKUP WITHHOLDING. The Fund generally is required to
withhold and remit to the U.S. Treasury 31% of the taxable
dividends and other distributions paid to any individual
shareholder who fails to furnish the Fund with a correct taxpayer
identification number, who has underreported dividends or
interest income, or who fails to certify to the Fund that he or
she is not subject to such withholding. An individual's taxpayer
identification number is his or her social security number.

MANAGEMENT OF THE FUND

TRUSTEES

*+GEORGE PUTNAM, Chairman and President. Chairman and
Director of Putnam Investment Management, Inc. and Putnam Mutual
Funds. Director, The Boston Company, Inc., Boston Safe Deposit
and Trust Company, Freeport-McMoRan, Inc., General Mills, Inc.,
Houghton Mifflin Company, Marsh & McLennan Companies, Inc. and
Rockefeller Group, Inc.

+WILLIAM F. POUNDS, Vice Chairman. Professor of
Management, Alfred P. Sloan School of Management, Massachusetts
Institute of Technology. Director of Fisher Price, Inc., IDEXX,
M/A-COM, Inc., EG&G, Inc. and Sun Company, Inc.

JAMESON A. BAXTER, Trustee. President, Baxter Associates,
Inc. (consultants to management). Director of Banta Corporation,
Avondale Federal Savings Bank and ASHTA Chemicals, Inc. Chairman
of the Board of Trustees, Mount Holyoke College.

+HANS H. ESTIN, Trustee. Vice Chairman, North American
Management Corp. (a registered investment adviser). Director of
The Boston Company, Inc. and Boston Safe Deposit and Trust
Company.

ELIZABETH T. KENNAN, Trustee. President of Mount Holyoke
College. Director, NYNEX Corporation, Northeast Utilities and
the Kentucky Home Life Insurance Companies and Trustee of the
University of Notre Dame.

*LAWRENCE J. LASSER, Trustee and Vice President.
President, Chief Executive Officer and Director of Putnam
Investments, Inc. and Putnam Investment Management, Inc.
Director of Marsh & McLennan Companies, Inc. Vice President of
the Putnam funds.

John A. Hill, Trustee. Chairman and Managing Director,
First Reserve Corporation (a registered investment adviser).
Director, Lantana Corporation, Maverick Tube Corporation, Snyder
Oil Corporation and various First Reserve Funds.

+ROBERT E. PATTERSON, Trustee. Executive Vice President,
Cabot Partners Limited Partnership (a registered investment
adviser).

DONALD S. PERKINS, Trustee. Director of various
corporations, including American Telephone & Telegraph Company,
AON Corp., Cummins Engine Company, Inc., Illinois Power Company,
Inland Steel Industries, Inc., K mart Corporation, LaSalle Street
Fund, Inc., Springs Industries, Inc., TBG, Inc. and Time Warner
Inc.

*#GEORGE PUTNAM, III, Trustee. President, New Generation
Research, Inc. (publisher of bankruptcy information). Director,
World Environment Center.

*A.J.C. SMITH, Trustee. Chairman, Chief Executive Officer
and Director, Marsh & McLennan Companies, Inc.

W. NICHOLAS THORNDIKE, Trustee. Director of various
corporations and charitable organizations, including Providence
Journal Co. and Courier Corporation. Also, Trustee and President
of Massachusetts General Hospital and Trustee of Bradley Real
Estate Trust and Eastern Utilities Associates.

Officers

CHARLES E. PORTER, Executive Vice President. Managing
Director of Putnam Investments, Inc. and Putnam Investment
Management, Inc. Executive Vice President of the Putnam funds.

PATRICIA C. FLAHERTY, Senior Vice President. Senior Vice
President of Putnam Investments, Inc. and Putnam Investment
Management, Inc.

WILLIAM N. SHIEBLER, Vice President. Director and Senior
Managing Director of Putnam Investments, Inc. President, Chief
Operating Officer and Director of Putnam Mutual Funds. Vice
President of the Putnam funds.

GORDON H. SILVER, Vice President. Senior Managing
Director of Putnam Investments, Inc. and Putnam Investment
Management, Inc. Director, Putnam Investments, Inc. and Putnam
Investment Management, Inc. Vice President of the Putnam funds.

JOHN R. VERANI, Vice President. Senior Vice President of
Putnam Investments, Inc. and Putnam Investment Management, Inc.
Vice President of the Putnam funds.

PAUL M. O'NEIL, Vice President. Vice President of Putnam
Investments, Inc. and Putnam Investment Management, Inc. Vice
President of the Putnam funds.

JOHN D. HUGHES, Vice President and Treasurer. Vice
President and Treasurer of the Putnam funds.

BEVERLY MARCUS, Clerk and Assistant Treasurer. Clerk and
Assistant Treasurer of the Putnam funds.

*Trustees who are "interested persons" (as defined in the
Investment Company Act of 1940) of the Fund, Putnam Management or
Putnam Mutual Funds.

+Members of the Executive Committee of the Trustees. The
Executive Committee meets between regular meetings of the
Trustees as may be required to review investment matters and
other affairs of the Fund and may exercise all of the powers of
the Trustees.

#George Putnam, III is the son of George Putnam.

-----------------

Certain other officers of Putnam Management are officers
of your Fund. SEE "ADDITIONAL OFFICERS OF THE FUND" IN PART I OF
THIS STATEMENT. The mailing address of each of the officers and
Trustees is One Post Office Square, Boston, Massachusetts 02109.

Except as stated below, the principal occupations of the
officers and Trustees for the last five years have been with the
employers as shown above, although in some cases they have held
different positions with such employers. Also, prior to January,
1992, Ms. Baxter was Vice President and Principal, Regency Group,
Inc. and Consultant, The First Boston Corporation. Prior to May,
1991, Mr. Pounds was Senior Advisor to the Rockefeller Family and
Associates, Chairman of Rockefeller Trust Company and Director of
Rockefeller Group, Inc. Prior to November, 1990, Mr. Shiebler
was President and Chief Operating Officer of the Intercapital
Division of Dean Witter Reynolds, Inc., Vice President of the
Dean Witter Funds and Director of Dean Witter Trust Company.

Each Trustee of the Fund receives an annual fee and an
additional fee for each Trustees' meeting attended. Trustees who
are not interested persons of Putnam Management and who serve on
committees of the Trustees receive additional fees for attendance
at certain committee meetings and for special services rendered
in that connection. All of the Trustees are Trustees of all the
Putnam funds and each receives fees for his or her services. FOR
DETAILS OF TRUSTEES' FEES PAID BY THE FUND, SEE "FUND CHARGES AND
EXPENSES" IN PART I OF THIS STATEMENT.

The Agreement and Declaration of Trust of the Fund
provides that the Fund will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices
with the Fund, except if it is determined in the manner specified
in the Agreement and Declaration of Trust that they have not
acted in good faith in the reasonable belief that their actions
were in the best interests of the Fund or that such
indemnification would relieve any officer or Trustee of any
liability to the Fund or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
his or her duties. The Fund, at its expense, provides liability
insurance for the benefit of its Trustees and officers.

Putnam Management, Putnam Mutual Funds and Putnam
Fiduciary Trust Company are subsidiaries of Putnam Investments,
Inc., a holding company which is in turn wholly owned by Marsh &
McLennan Companies, Inc., a publicly owned holding company whose
principal operating subsidiaries are international insurance and
reinsurance brokers, investment managers and management
consultants.

Trustees and officers of the Fund who are also officers of
Putnam Management or its affiliates or who are stockholders of
Marsh & McLennan Companies, Inc. will benefit from the advisory
fees, sales commissions, distribution fees (if any), custodian
fees and transfer agency fees paid or allowed by the Fund.

PUTNAM MANAGEMENT

Putnam Management is one of America's oldest and largest
money management firms. Putnam Management's staff of experienced
portfolio managers and research analysts selects securities and
constantly supervises the Fund's portfolio. By pooling an
investor's money with that of other investors, a greater variety
of securities can be purchased than would be the case
individually; the resulting diversification helps reduce
investment risk. Putnam Management has been managing mutual funds
since 1937. Today, the firm serves as the investment manager for
the funds in the Putnam Family, with over $64 billion in assets
in nearly 3.5 million shareholder accounts at December 31, 1993.
An affiliate, The Putnam Advisory Company, Inc., manages domestic
and foreign institutional accounts and mutual funds, including
the accounts of many Fortune 500 companies. Another affiliate,
Putnam Fiduciary Trust Company, provides investment advice to
institutional clients under its banking and fiduciary powers. At
December 31, 1993, Putnam Management and its affiliates managed
nearly $91 billion in assets, including over $17 billion in tax
exempt securities and nearly $31 billion in retirement plan
assets.
<PAGE>
THE MANAGEMENT CONTRACT

Under a Management Contract between the Fund and Putnam
Management, subject to such policies as the Trustees may
determine, Putnam Management, at its expense, furnishes
continuously an investment program for the Fund and makes
investment decisions on behalf of the Fund. Subject to the
control of the Trustees, Putnam Management also manages,
supervises and conducts the other affairs and business of the
Fund, furnishes office space and equipment, provides bookkeeping
and clerical services (including determination of the Fund's net
asset value, but excluding shareholder accounting services) and
places all orders for the purchase and sale of the Fund's
portfolio securities. Putnam Management may place Fund portfolio
transactions with broker-dealers which furnish Putnam Management,
without cost to it, certain research, statistical and quotation
services of value to Putnam Management and its affiliates in
advising the Fund and other clients. In so doing, Putnam
Management may cause the Fund to pay greater brokerage
commissions than it might otherwise pay.

FOR DETAILS OF PUTNAM MANAGEMENT'S COMPENSATION UNDER THE
MANAGEMENT CONTRACT, SEE "FUND CHARGES AND EXPENSES" IN PART I OF
THIS STATEMENT. Putnam Management's compensation under the
Management Contract may be reduced in any year if the Fund's
expenses exceed the limits on investment company expenses imposed
by any statute or regulatory authority of any jurisdiction in
which shares of the Fund are qualified for offer or sale. The
term "expenses" is defined in the statutes or regulations of such
jurisdictions, and generally, excludes brokerage commissions,
taxes, interest, extraordinary expenses and, if the Fund has a
Distribution Plan, payments made under such Plan. The only such
limitation as of the date of this Statement (applicable to any
Fund registered for sale in California) was 2.5% of the first $30
million of average net assets, 2% of the next $70 million and
1.5% of any excess over $100 million.

Under the Management Contract, Putnam Management may
reduce its compensation to the extent that the Fund's expenses
exceed such lower expense limitation as Putnam Management may, by
notice to the Fund, declare to be effective. The expenses
subject to this limitation are exclusive of brokerage
commissions, interest, taxes, deferred organizational and
extraordinary expenses and, if the Fund has a Distribution Plan,
payments required under such Plan. THE TERMS OF ANY EXPENSE
LIMITATION FROM TIME TO TIME IN EFFECT ARE DESCRIBED IN EITHER
THE PROSPECTUS OR PART I OF THIS STATEMENT.

In addition to the fee paid to Putnam Management, the Fund
reimburses Putnam Management for the compensation and related
expenses of certain officers of the Fund and their assistants who
provide certain administrative services for the Fund and the
other funds in the Putnam Family, each of which bears an
allocated share of the foregoing costs. The aggregate amount of
all such payments and reimbursements is determined annually by
the Trustees. THE AMOUNT OF THIS REIMBURSEMENT FOR THE FUND'S
MOST RECENT FISCAL YEAR IS INCLUDED IN "FUND CHARGES AND
EXPENSES" IN PART I OF THIS STATEMENT. Putnam Management pays
all other salaries of officers of the Fund. The Fund pays all
expenses not assumed by Putnam Management including, without
limitation, auditing, legal, custodial, investor servicing and
shareholder reporting expenses. The Fund pays the cost of
typesetting for its Prospectuses and the cost of printing and
mailing any Prospectuses sent to its shareholders. Putnam Mutual
Funds pays the cost of printing and distributing all other
Prospectuses.

The Management Contract provides that Putnam Management
shall not be subject to any liability to the Fund or to any
shareholder of the Fund for any act or omission in the course of
or connected with rendering services to the Fund in the absence
of willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties on the part of Putnam Management.

The Management Contract may be terminated without penalty
by vote of the Trustees or the shareholders of the Fund, or by
Putnam Management, on 30 days' written notice. It may be amended
only by a vote of the shareholders of the Fund. The Management
Contract also terminates without payment of any penalty in the
event of its assignment. The Management Contract provides that
it will continue in effect only so long as such continuance is
approved at least annually by vote of either the Trustees or the
shareholders, and, in either case, by a majority of the Trustees
who are not "interested persons" of Putnam Management or the
Fund. In each of the foregoing cases, the vote of the
shareholders is the affirmative vote of a "majority of the
outstanding voting securities" as defined in the Investment
Company Act of 1940.

PORTFOLIO TRANSACTIONS

INVESTMENT DECISIONS. Investment decisions for the Fund
and for the other investment advisory clients of Putnam
Management and its affiliates are made with a view to achieving
their respective investment objectives. Investment decisions are
the product of many factors in addition to basic suitability for
the particular client involved. Thus, a particular security may
be bought or sold for certain clients even though it could have
been bought or sold for other clients at the same time.
Likewise, a particular security may be bought for one or more
clients when one or more other clients are selling the security.
In some instances, one client may sell a particular security to
another client. It also sometimes happens that two or more
clients simultaneously purchase or sell the same security, in
which event each day's transactions in such security are, insofar
as possible, averaged as to price and allocated between such
clients in a manner which in Putnam Management's opinion is
equitable to each and in accordance with the amount being
purchased or sold by each. There may be circumstances when
purchases or sales of portfolio securities for one or more
clients will have an adverse effect on other clients.

BROKERAGE AND RESEARCH SERVICES. Transactions on U.S.
stock exchanges, commodities markets and futures markets and
other agency transactions involve the payment by the Fund of
negotiated brokerage commissions. Such commissions vary among
different brokers. A particular broker may charge different
commissions according to such factors as the difficulty and size
of the transaction. Transactions in foreign investments often
involve the payment of fixed brokerage commissions, which may be
higher than those in the United States. There is generally no
stated commission in the case of securities traded in the
over-the-counter markets, but the price paid by the Fund usually
includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by the Fund includes a
disclosed, fixed commission or discount retained by the
underwriter or dealer. It is anticipated that most purchases and
sales of securities by funds investing primarily in tax-exempt
securities and certain other fixed-income securities will be with
the issuer or with underwriters of or dealers in those
securities, acting as principal. Accordingly, those funds would
not ordinarily pay significant brokerage commissions with respect
to securities transactions. SEE "FUND CHARGES AND EXPENSES" IN
PART I OF THIS STATEMENT FOR INFORMATION CONCERNING COMMISSIONS
PAID BY THE FUND.

It has for many years been a common practice in the
investment advisory business for advisers of investment companies
and other institutional investors to receive brokerage and
research services (as defined in the Securities Exchange Act of
1934, as amended (the "1934 Act")) from broker-dealers that
execute portfolio transactions for the clients of such advisers
and from third parties with which such broker-dealers have
arrangements. Consistent with this practice, Putnam Management
receives brokerage and research services and other similar
services from many broker-dealers with which Putnam Management
places the Fund's portfolio transactions and from third parties
with which these broker-dealers have arrangements. These
services include such matters as general economic and market
reviews, industry and company reviews, evaluations of
investments, recommendations as to the purchase and sale of
investments, newspapers, magazines, pricing services, quotation
services, news services and personal computers utilized by Putnam
Management's managers and analysts. Where the services referred
to above are not used exclusively by Putnam Management for
research purposes, Putnam Management, based upon its own
allocations of expected use, bears that portion of the cost of
these services which directly relates to their non-research use.
Some of these services are of value to Putnam Management and its
affiliates in advising various of their clients (including the
Fund), although not all of these services are necessarily useful
and of value in managing the Fund. The management fee paid by
the Fund is not reduced because Putnam Management and its
affiliates receive these services even though Putnam Management
might otherwise be required to purchase some of these services
for cash.

Putnam Management places all orders for the purchase and
sale of portfolio investments for the Fund and buys and sells
investments for the Fund through a substantial number of brokers
and dealers. In so doing, Putnam Management uses its best
efforts to obtain for the Fund the most favorable price and
execution available, except to the extent it may be permitted to
pay higher brokerage commissions as described below. In seeking
the most favorable price and execution, Putnam Management, having
in mind the Fund's best interests, considers all factors it deems
relevant, including, by way of illustration, price, the size of
the transaction, the nature of the market for the security or
other investment, the amount of the commission, the timing of the
transaction taking into account market prices and trends, the
reputation, experience and financial stability of the
broker-dealer involved and the quality of service rendered by the
broker-dealer in other transactions.

As permitted by Section 28(e) of the 1934 Act, and by the
Management Contract, Putnam Management may cause the Fund to pay
a broker-dealer which provides "brokerage and research services"
(as defined in the 1934 Act) to Putnam Management an amount of
disclosed commission for effecting securities transactions on
stock exchanges and other transactions for the Fund on an agency
basis in excess of the commission which another broker-dealer
would have charged for effecting that transaction. Putnam
Management's authority to cause the Fund to pay any such greater
commissions is also subject to such policies as the Trustees may
adopt from time to time. Putnam Management does not currently
intend to cause the Fund to make such payments. It is the
position of the staff of the Securities and Exchange Commission
that Section 28(e) does not apply to the payment of such greater
commissions in "principal" transactions. Accordingly Putnam
Management will use its best effort to obtain the most favorable
price and execution available with respect to such transactions,
as described above.

The Management Contract provides that commissions, fees,
brokerage or similar payments received by Putnam Management or an
affiliate in connection with the purchase and sale of portfolio
investments of the Fund, less any direct expenses approved by the
Trustees, shall be recaptured by the Fund through a reduction of
the fee payable by the Fund under the Management Contract.
Putnam Management seeks to recapture for the Fund soliciting
dealer fees on the tender of the Fund's portfolio securities in
tender or exchange offers. Any such fees which may be recaptured
are likely to be minor in amount.

Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. and subject to seeking
the most favorable price and execution available and such other
policies as the Trustees may determine, 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 to execute portfolio transactions for the Fund.

PRINCIPAL UNDERWRITER

Putnam Mutual Funds is the principal underwriter of shares
of the Fund and the other continuously offered Putnam funds.
Putnam Mutual Funds is not obligated to sell any specific amount
of shares of the Fund and will purchase shares for resale only
against orders for shares. SEE "FUND CHARGES AND EXPENSES" IN
PART I OF THIS STATEMENT FOR INFORMATION ON SALES CHARGES AND
OTHER PAYMENTS RECEIVED BY PUTNAM MUTUAL FUNDS.

INVESTOR SERVICING AGENT AND CUSTODIAN

Putnam Investor Services, a division of Putnam Fiduciary
Trust Company ("PFTC"), is the Fund's investor servicing agent
(transfer, plan and dividend disbursing agent), for which it
receives fees which are paid monthly by the Fund as an expense of
all its shareholders. The fee paid to Putnam Investor Services
is determined by the Trustees taking into account the number of
shareholder accounts and transactions. Putnam Investor Services
earned the DALBAR Quality Tested Service Seal in 1990, 1991 and
1992. Over 10,000 tests of 38 separate shareholders service
components demonstrated that Putnam Investor Services exceeded
the industry standard in all categories.

PFTC is the custodian of the Fund's assets. In carrying
out its duties under its custodian contract, PFTC may employ one
or more subcustodians whose responsibilities will include
safeguarding and controlling the Fund's cash and securities,
handling the receipt and delivery of securities and collecting
interest and dividends on the Fund's investments. PFTC and any
subcustodians employed by it have a lien on the securities of the
Fund (to the extent permitted by the Fund's investment
restrictions) to secure charges and any advances made by such
subcustodians at the end of any day for the purpose of paying for
securities purchased by the Fund. The Fund expects that such
advances will exist only in unusual circumstances. Neither PFTC
nor any subcustodian determines the investment policies of the
Fund or decides which securities the Fund will buy or sell. PFTC
pays the fees and other charges of any subcustodians employed by
it. The Fund may from time to time pay custodial expenses in
full or in part through the placement by Putnam Management of the
Fund's portfolio transactions with the subcustodians or with a
third-party broker having an agreement with the subcustodians.
The Fund pays PFTC an annual fee based on the Fund's assets,
securities transactions and securities holdings and reimburses
PFTC for certain out-of-pocket expenses incurred by it or any
subcustodian employed by it in performing custodial services.

SEE "FUND CHARGES AND EXPENSES" IN PART I OF THIS
STATEMENT FOR INFORMATION ON FEES AND REIMBURSEMENTS FOR INVESTOR
SERVICING AND CUSTODY RECEIVED BY PFTC. The fees may be reduced
by credits allowed by PFTC.

DETERMINATION OF NET ASSET VALUE

The Fund determines net asset value per share of each
class of shares once each day the New York Stock Exchange (the
"Exchange") is open. Currently, the Exchange is closed
Saturdays, Sundays and the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, the Fourth of July,
Labor Day, Thanksgiving and Christmas. The Fund determines net
asset value as of the close of regular trading on the Exchange.
However, equity options held by the Fund are priced as of the
close of trading at 4:10 p.m., and futures contracts on U.S.
Government securities and index options held by the Fund are
priced as of their close of trading at 4:15 p.m.

Securities for which market quotations are readily
available are valued at prices which, in the opinion of the
Trustees or Putnam Management, most nearly represent the market
values of such securities. Currently, such prices are determined
using the last reported sale price or, if no sales are reported
(as in the case of some securities traded over-the-counter), the
last reported bid price, except that certain U.S. Government
securities are stated at the mean between the last reported bid
and asked prices. Short-term investments having remaining
maturities of 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. Liabilities are deducted from the total, and the
resulting amount is divided by the number of shares of the class
outstanding.

Reliable market quotations are not considered to be
readily available for long-term corporate bonds and notes,
certain preferred stocks, tax-exempt securities, or certain
foreign securities. These investments are stated at fair value
on the basis of valuations furnished by pricing services approved
by the Trustees, which determine valuations for normal,
institutional-size trading units of such securities using methods
based on market transactions for comparable securities and
various relationships between securities which are generally
recognized by institutional traders.

If any securities held by a Fund are restricted as to
resale, Putnam Management determines their fair value following
procedures approved by the Trustees. The fair value of such
securities is generally determined as the amount which the Fund
could reasonably expect to realize from an orderly disposition of
such securities over a reasonable period of time. The valuation
procedures applied in any specific instance are likely to vary
from case to case. However, consideration is generally given to
the financial position of the issuer and other fundamental
analytical data relating to the investment and to the nature of
the restrictions on disposition of the securities (including any
registration expenses that might be borne by the Fund in
connection with such disposition). In addition, specific factors
are also generally considered, such as the cost of the
investment, the market value of any unrestricted securities of
the same class (both at the time of purchase and at the time of
valuation), the size of the holding, the prices of any recent
transactions or offers with respect to such securities and any
available analysts' reports regarding the issuer.

Generally, trading in certain securities (such as foreign
securities) is substantially completed each day at various times
prior to the close of the Exchange. The values of these
securities used in determining the net asset value of the Fund's
shares are computed as of such times. Also, because of the
amount of time required to collect and process trading
information as to large numbers of securities issues, the values
of certain securities (such as convertible bonds, U.S. Government
securities, and tax-exempt securities) are determined based on
market quotations collected earlier in the day at the latest
practicable time prior to the close of the Exchange.
Occasionally, events affecting the value of such securities may
occur between such times and the close of the Exchange which will
not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such
securities occur during such period, then these securities will
be valued at their fair value following procedures approved by
the Trustees.

Money market funds generally value their portfolio
securities at amortized cost according to Rule 2a-7 under the
Investment Company Act of 1940.

HOW TO BUY SHARES

General

The Prospectus contains a general description of how
investors may buy shares of the Fund and states whether the Fund
offers more than one class of shares. This Statement contains
additional information which may be of interest to investors.

Class A shares are sold with a sales charge payable at the
time of purchase (except for Class A shares of money market
funds). As used in this Statement and unless the context
requires otherwise, the term "Class A shares" includes shares of
Funds that offer only one class of shares. The Prospectus
contains a table of applicable sales charges. For information
about how to purchase Class A shares of a Putnam fund at net
asset value through an employer's defined contribution plan,
please consult your employer. Certain purchases of Class A
shares may be exempt from a sales charge or may be subject to a
contingent deferred sales charge. See "General--Sales without
sales charges or contingent deferred sales charges", "Additional
Information About Class A Shares", and "Contingent Deferred Sales
Charges--Class A shares".

Class B shares are sold subject to a contingent deferred
sales charge payable upon redemption within a specified period
after purchase. The Prospectus contains a table of applicable
contingent deferred sales charges.

Class Y shares, which are available only to employer-
sponsored defined contribution plans initially investing at least
$250 million in a combination of Putnam funds and other
investments managed by Putnam Management or its affiliates, are
not subject to sales charges or contingent deferred sales
charges.

Certain purchase programs described below are not
available to defined contribution plans. Consult your employer
for information on how to purchase shares through your plan.

The Fund is currently making a continuous offering of its
shares. The Fund receives the entire net asset value of shares
sold. The Fund will accept unconditional orders for shares to be
executed at the public offering price based on the net asset
value per share next determined after the order is placed. In
the case of Class A shares, the public offering price is the net
asset value plus the applicable sales charge, if any. No sales
charge is included in the public offering price of other classes
of shares. In the case of orders for purchase of shares placed
through dealers, the public offering price will be based on the
net asset value determined on the day the order is placed, but
only if the dealer receives the order before the close of regular
trading on the Exchange. If the dealer receives the order after
the close of the Exchange, the price will be based on the net
asset value next determined. If funds for the purchase of shares
are sent directly to Putnam Investor Services, they will be
invested at the public offering price based on the net asset
value next determined after receipt. Payment for shares of the
Fund must be in U.S. dollars; if made by check, the check must be
drawn on a U.S. bank.

Initial and subsequent purchases must satisfy the minimums
stated in the Prospectus, except that (i) individual investments
under certain employee benefit plans or Tax Qualified Retirement
Plans may be lower, (ii) persons who are already shareholders may
make additional purchases of $50 or more by sending funds
directly to Putnam Investor Services (see "Your Investing
Account" below), and (iii) for investors participating in
systematic investment plans and military allotment plans, the
initial and subsequent purchases must be $25 or more.
Information about these plans is available from investment
dealers or from Putnam Mutual Funds.

As a convenience to investors, shares may be purchased
through a systematic investment plan. Preauthorized monthly bank
drafts for a fixed amount (at least $25) are used to purchase
Fund shares at the applicable public offering price next
determined after Putnam Mutual Funds receives the proceeds from
the draft (normally the 20th of each month, or the next business
day thereafter). Further information and application forms are
available from investment dealers or from Putnam Mutual Funds.

Except as described below, distributions to be reinvested
are reinvested without a sales charge in shares of the same class
as of the ex-dividend date using the net asset value determined
on that date, and are credited to a shareholder's account on the
payment date. Distributions for Putnam Tax Exempt Income Fund,
Putnam Arizona Tax Exempt Income Fund, Putnam California Tax
Exempt Income Fund, Putnam Municipal Income Fund, Putnam Florida
Tax Exempt Income Fund, Putnam Massachusetts Tax Exempt Income
Fund II, Putnam Michigan Tax Exempt Income Fund II, Putnam
Minnesota Tax Exempt Income Fund II, Putnam New Jersey Tax Exempt
Income Fund, Putnam New York Tax Exempt Income Fund, Putnam New
York Tax Exempt Opportunities Fund, Putnam Ohio Tax Exempt Income
Fund II, Putnam Pennsylvania Tax Exempt Income Fund and Putnam
Texas Tax Exempt Income Fund are reinvested without a sales
charge as of the next day following the period for which
distributions are paid using the net asset value determined on
that date, and are credited to a shareholder's account on the
payment date. Distributions for Putnam Tax-Free Income Trust and
Putnam Corporate Asset Trust are reinvested without a sales
charge as of the last day of the period for which distributions
are paid using the net asset value determined on that date, and
are credited to a shareholder's account on the payment date.
Dividends for Putnam money market funds are credited to a
shareholder's account on the payment date.

PAYMENT IN SECURITIES. In addition to cash, the Fund may
accept securities as payment for Fund shares at the applicable
net asset value. Generally, the Fund will only consider
accepting securities to increase its holdings in a portfolio
security, or if Putnam Management determines that the offered
securities are a suitable investment for the Fund and in a
sufficient amount for efficient management.

While no minimum has been established, it is expected that
the Fund would not accept securities with a value of less than
$100,000 per issue as payment for shares. The Fund may reject in
whole or in part any or all offers to pay for purchases of Fund
shares with securities, may require partial payment in cash for
such purchases to provide funds for applicable sales charges, and
may discontinue accepting securities as payment for Fund shares
at any time without notice. The Fund will value accepted
securities in the manner described in the section "Determination
of Net Asset Value" for valuing shares of the Fund. The Fund
will only accept securities which are delivered in proper form.
The Fund will not accept options or restricted securities as
payment for shares. The acceptance of securities by the Fund in
exchange for Fund shares must comply with applicable regulations
of certain states. In addition, Putnam Global Governmental
Income Trust may accept only investment grade bonds with prices
regularly stated in publications generally accepted by investors,
such as the London Financial Times and the Association of
International Bond Dealers manual, or securities listed on the
New York or American Stock Exchanges or with NASDAQ, and Putnam
Diversified Income Trust may accept only bonds with prices
regularly stated in publications generally accepted by investors.
For federal income tax purposes, a purchase of Fund shares with
securities will be treated as a sale or exchange of such
securities on which the investor will realize a taxable gain or
loss. The processing of a purchase of Fund shares with
securities involves certain delays while the Fund considers the
suitability of such securities and while other requirements are
satisfied. For information regarding procedures for payment in
securities, contact Putnam Mutual Funds. Investors should not
send securities to the Fund except when authorized to do so and
in accordance with specific instructions received from Putnam
Mutual Funds.

SALES WITHOUT SALES CHARGES OR CONTINGENT DEFERRED SALES
CHARGES. The Fund may sell shares without a sales charge or
contingent deferred sales charge to:

(i) current and retired Trustees of the Fund; officers of
the Fund; directors and current and retired U.S. full-time
employees of Putnam Management, Putnam Mutual Funds, their
parent corporations and certain corporate affiliates;
family members of and employee benefit plans for the
foregoing; and partnerships, trusts or other entities in
which any of the foregoing has a substantial interest;

(ii) employee benefit plans, for the repurchase of shares
in connection with repayment of plan loans made to plan
participants (if the sum loaned was obtained by redeeming
shares of a Putnam fund sold with a sales charge) (not
offered by tax-exempt funds);

(iii) clients of administrators of tax-qualified employee
benefit plans which have entered into agreements with
Putnam Mutual Funds (not offered by tax-exempt funds);

(iv) registered representatives and other employees of
broker-dealers having sales agreements with Putnam Mutual
Funds; employees of financial institutions having sales
agreements with Putnam Mutual Funds or otherwise having an
arrangement with any such broker-dealer or financial
institution with respect to sales of Fund shares; and
their spouses and children under age 21 (Putnam Mutual
Funds is regarded as the dealer of record for all such
accounts);

(v) investors meeting certain requirements who sold shares
of certain Putnam closed-end funds pursuant to a tender
offer by such closed-end fund;

(vi) a trust department of any financial institution
purchasing shares of the Fund in its capacity as trustee
of any trust, if the value of the shares of the Fund and
other Putnam funds purchased or held by all such trusts
exceeds $1 million in the aggregate; and

(vii) "wrap accounts" maintained for clients of broker-
dealers, financial institutions or financial planners who
have entered into agreements with Putnam Mutual Funds with
respect to such accounts.

In addition, the Fund may issue its shares at net asset
value or more in connection with the acquisition of substantially
all of the securities owned by other investment companies or
personal holding companies.

PAYMENTS TO DEALERS. Putnam Mutual Funds may, at its
expense, pay concessions in addition to the payments disclosed in
the Prospectus to dealers which satisfy certain criteria
established from time to time by Putnam Mutual Funds relating to
increasing net sales of shares of the Putnam funds over prior
periods, and certain other factors.

ADDITIONAL INFORMATION ABOUT CLASS A SHARES

The underwriter's commission is the sales charge shown in
the Prospectus less any applicable dealer discount. The dealer
discount is the same for all dealers, except that Putnam Mutual
Funds retains the entire sales charge on any retail sales made by
it. Putnam Mutual Funds will give dealers ten days' notice of
any changes in the dealer discount.

Putnam Mutual Funds offers several plans by which an
investor may obtain reduced sales charges on purchases of Class A
shares. The variations in sales charges reflect the varying
efforts required to sell shares to separate categories of
purchasers. These plans may be altered or discontinued at any
time.

COMBINED PURCHASE PRIVILEGE. The following persons may
qualify for the sales charge reductions or eliminations shown in
the Prospectus by combining into a single transaction the
purchase of Class A shares with other purchases of any class of
shares:

(i) an individual, or a "company" as defined in Section
2(a)(8) of the Investment Company Act of 1940 (which
includes corporations which are corporate affiliates of
each other);

(ii) an individual, his or her spouse and their children
under twenty-one, purchasing for his, her or their own
account;

(iii) a trustee or other fiduciary purchasing for a single
trust estate or single fiduciary account (including a
pension, profit-sharing, or other employee benefit trust
created pursuant to a plan qualified under Section 401 of
the Internal Revenue Code);

(iv) tax-exempt organizations qualifying under Section
501(c)(3) of the Internal Revenue Code (not including
403(b) plans); and

(v) employee benefit plans of a single employer or of
affiliated employers, other than 403(b) plans.

A combined purchase currently may also include shares of
any class of other continuously offered Putnam funds (other than
money market funds) purchased at the same time through a single
investment dealer, if the dealer places the order for such shares
directly with Putnam Mutual Funds.

CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION). A
purchaser of Class A shares may qualify for a cumulative quantity
discount by combining a current purchase (or combined purchases
as described above) with certain other shares of any class of
Putnam funds already owned. The applicable sales charge is based
on the total of:

(i) the investor's current purchase; and

(ii) the maximum public offering price (at the close of
business on the previous day) of:

(a) all shares held by the investor in all of the
Putnam funds (except money market funds); and

(b) any shares of money market funds acquired by
exchange from other Putnam funds; and

(iii) the maximum public offering price of all shares
described in paragraph (ii) owned by another shareholder
eligible to participate with the investor in a "combined
purchase" (see above).

To qualify for the combined purchase privilege or to
obtain the cumulative quantity discount on a purchase through an
investment dealer, when each purchase is made the investor or
dealer must provide Putnam Mutual Funds with sufficient
information to verify that the purchase qualifies for the
privilege or discount. The shareholder must furnish this
information to Putnam Investor Services when making direct cash
investments.

STATEMENT OF INTENTION. Investors may also obtain the
reduced sales charges for Class A shares shown in the Prospectus
for investments of a particular amount by means of a written
Statement of Intention, which expresses the investor's intention
to invest that amount (including certain "credits," as described
below) within a period of 13 months in shares of any class of the
Fund or any other continuously offered Putnam fund (excluding
money market funds). Each purchase of Class A shares under a
Statement of Intention will be made at the public offering price
applicable at the time of such purchase to a single transaction
of the total dollar amount indicated in the Statement. A
Statement of Intention may include purchases of shares made not
more than 90 days prior to the date that an investor signs a
Statement; however, the 13-month period during which the
Statement is in effect will begin on the date of the earliest
purchase to be included.

An investor may receive a credit toward the amount
indicated in the Statement equal to the maximum public offering
price as of the close of business on the previous day of all
shares he or she owns on the date of the Statement which are
eligible for purchase under a Statement (plus any shares of money
market funds acquired by exchange of such eligible shares).
Investors do not receive credit for shares purchased by the
reinvestment of distributions. Investors qualifying for the
"combined purchase privilege" (see above) may purchase shares
under a single Statement of Intention.

The Statement of Intention is not a binding obligation
upon the investor to purchase the full amount indicated. The
minimum initial investment under a Statement of Intention is 5%
of such amount, and must be invested immediately. Class A shares
purchased with the first 5% of such amount will be held in escrow
to secure payment of the higher sales charge applicable to the
shares actually purchased if the full amount indicated is not
purchased. When the full amount indicated has been purchased,
the escrow will be released. If an investor desires to redeem
escrowed shares before the full amount has been purchased, the
shares will be released from escrow only if the investor pays the
sales charge that, without regard to the Statement of Intention,
would apply to the total investment made to date.

To the extent that an investor purchases more than the
dollar amount indicated on the Statement of Intention and
qualifies for a further reduced sales charge, the sales charge
will be adjusted for the entire amount purchased at the end of
the 13-month period, upon recovery from the investor's dealer of
its portion of the sales charge adjustment. Once received from
the dealer, which may take a period of time or may never occur,
the sales charge adjustment will be used to purchase additional
shares at the then current offering price applicable to the
actual amount of the aggregate purchases. These additional
shares will not be considered as part of the total investment for
the purpose of determining the applicable sales charge pursuant
to the Statement of Intention. No sales charge adjustment will
be made unless and until the investor's dealer returns any excess
commissions previously received.

To the extent that an investor purchases less than the
dollar amount indicated on the Statement of Intention within the
13-month period, the sales charge will be adjusted upward for the
entire amount purchased at the end of the 13-month period. This
adjustment will be made by redeeming shares from the account to
cover the additional sales charge, the proceeds of which will be
paid to the investor's dealer and Putnam Mutual Funds in
accordance with the Prospectus. If the account exceeds an amount
that would otherwise qualify for a reduced sales charge, that
reduced sales charge will be applied.

Statements of Intention are not available for certain
employee benefit plans.

Statement of Intention forms may be obtained from Putnam
Mutual Funds or from investment dealers. Interested investors
should read the Statement of Intention carefully.

REDUCED SALES CHARGE FOR GROUP PURCHASES. Members of
qualified groups may purchase Class A shares of the Fund at a
group sales charge rate of 4.5% of the public offering price
(4.71% of the net amount invested). The dealer discount on such
sales is 3.75% of the offering price.

To receive the group rate, group members must purchase
Class A shares through a single investment dealer designated by
the group. The designated dealer must transmit each member's
initial purchase to Putnam Mutual Funds, together with payment
and completed application forms. After the initial purchase, a
member may send funds for the purchase of Class A shares directly
to Putnam Investor Services. Purchases of Class A shares are
made at the public offering price based on the net asset value
next determined after Putnam Mutual Funds or Putnam Investor
Services receives payment for the shares. The minimum investment
requirements described above apply to purchases by any group
member. Only Class A shares are included in calculating the
purchased amount.

Qualified groups include the employees of a corporation or
a sole proprietorship, members and employees of a partnership or
association, or other organized groups of persons (the members of
which may include other qualified groups) provided that: (i) the
group has at least 25 members of which at least 10 members
participate in the initial purchase; (ii) the group has been in
existence for at least six months; (iii) the group has some
purpose in addition to the purchase of investment company shares
at a reduced sales charge; (iv) the group's sole organizational
nexus or connection is not that the members are credit card
holders of a company, policy holders of an insurance company,
customers of a bank or broker-dealer, clients of an investment
adviser or security holders of a company; (v) the group agrees to
provide its designated investment dealer access to the group's
membership by means of written communication or direct
presentation to the membership at a meeting on not less
frequently than an annual basis; (vi) the group or its investment
dealer will provide annual certification in form satisfactory to
Putnam Investor Services that the group then has at least 25
members and that at least ten members participated in group
purchases during the immediately preceding 12 calendar months;
and (vii) the group or its investment dealer will provide
periodic certification in form satisfactory to Putnam Investor
Services as to the eligibility of the purchasing members of the
group.

Members of a qualified group include: (i) any group which
meets the requirements stated above and which is a constituent
member of a qualified group; (ii) any individual purchasing for
his or her own account who is carried on the records of the group
or on the records of any constituent member of the group as being
a good standing employee, partner, member or person of like
status of the group or constituent member; or (iii) any fiduciary
purchasing shares for the account of a member of a qualified
group or a member's beneficiary. For example, a qualified group
could consist of a trade association which would have as its
members individuals, sole proprietors, partnerships and
corporations. The members of the group would then consist of the
individuals, the sole proprietors and their employees, the
members of the partnerships and their employees, and the
corporations and their employees, as well as the trustees of
employee benefit trusts acquiring Class A shares for the benefit
of any of the foregoing.

A member of a qualified group may, depending upon the
value of Class A shares of the Fund owned or proposed to be
purchased by the member, be entitled to purchase Class A shares
of the Fund at non-group sales charge rates shown in the
Prospectus which may be lower than the group sales charge rate,
if the member qualifies as a person entitled to reduced non-group
sales charges. Such a group member will be entitled to purchase
at the lower rate if, at the time of purchase, the member or his
or her investment dealer furnishes sufficient information for
Putnam Mutual Funds or Putnam Investor Services to verify that
the purchase qualifies for the lower rate.

Interested groups should contact their investment dealer
or Putnam Mutual Funds. The Fund reserves the right to revise
the terms of or to suspend or discontinue group sales at any
time.

EMPLOYEE BENEFIT PLANS; INDIVIDUAL ACCOUNT PLANS. The
term "employee benefit plan" means any plan or arrangement,
whether or not tax-qualified, which provides for the purchase of
Class A shares. The term "affiliated employer" means employers
who are affiliated with each other within the meaning of Section
2(a)(3)(C) of the Investment Company Act of 1940. The term
"individual account plan" means any employee benefit plan whereby
(i) Class A shares are purchased through payroll deductions or
otherwise by a fiduciary or other person for the account of
participants who are employees (or their spouses) of an employer,
or of affiliated employers, and (ii) a separate Investing Account
is maintained in the name of such fiduciary or other person for
the account of each participant in the plan.

The table of sales charges in the Prospectus applies to
sales to employee benefit plans, except that the Fund may sell
Class A shares at net asset value to employee benefit plans,
including individual account plans, of employers or of affiliated
employers which have at least 750 employees to whom such plan is
made available, in connection with a payroll deduction system of
plan funding (or other system acceptable to Putnam Investor
Services) by which contributions or account information for plan
participation are transmitted to Putnam Investor Services by
methods acceptable to Putnam Investor Services. The Fund may
also sell Class A shares at net asset value to employee benefit
plans of employers or of affiliated employers which have at least
750 employees, if such plans are qualified under Section 401 of
the Internal Revenue Code.

Additional information about employee benefit plans and
individual account plans is available from investment dealers or
from Putnam Mutual Funds.

CONTINGENT DEFERRED SALES CHARGES

Class A shares. The Fund exempts purchases of $1 million
or more of Class A shares from front-end sales charges. Putnam
Mutual Funds pays commissions at the rates shown in the table
below to investment dealers of record on any such sales,
including purchases pursuant to any Combined Purchase Privilege,
Right of Accumulation or Statement of Intention. Shareholders
will be charged a contingent deferred sales charge ("Class A
CDSC") if those shares are redeemed within the period shown
below:

Commissions
paid to
investment
dealers of
record and Period after
Amount of transaction applicable purchase during
at offering price CDSC which CDSC applies

- --------------------------------------------- -----------------
$1,000,000 but less than $2,500,000 1.00% 2 years
2,500,000 but less than 5,000,000 0.50% 1 year
5,000,000 and over 0.25% 1 year

The Class A CDSC is imposed on the lower of the cost and
the current net asset value of the shares redeemed.

Shares of the Fund sold without a sales charge through
defined contribution plans are not subject to the Class A CDSC.
Putnam Mutual Funds may make payments out of its own assets to
certain brokers and financial consultants in connection with
purchases of shares of the Fund at net asset value by such plans,
subject to the right of Putnam Mutual Funds to reclaim such
payments if such shares are redeemed. The payments will be made
by Putnam Mutual Funds as follows: (1) for purchases of at least
$1,000,000 but less than $2,500,000, at the rate of 1.00%,
subject to reclaim if the shares are redeemed within two years;
(2) for purchases of at least $2,500,000 but less than
$5,000,000, at the rate of 0.50%, subject to reclaim if the
shares are redeemed within one year; and (3) for purchases of
$5,000,000 or more, at a rate of up to 0.25%, subject to reclaim
if the shares are redeemed within one year. For the purpose of
these payments, Putnam Mutual Funds will treat plans that are
purchasing shares of the Fund in an amount less than $1,000,000
but that are sponsored by employers with more than 750 employees
as if they were plans purchasing shares of the Fund in an amount
of at least $1,000,000 but less than $2,500,000.

CLASS B SHARES. Investors who set up a Systematic
Withdrawal Plan (SWP) for a Class B share account (see "Plans
Available To Shareholders -- Automatic Cash Withdrawal Plan") may
withdraw through the SWP up to 12% of the net asset value of the
account (calculated as set forth below) each year without
incurring any CDSC. Shares not subject to a CDSC (such as shares
representing reinvestment of distributions) will be redeemed
first and will count toward the 12% limitation. If there are
insufficient shares not subject to a CDSC, shares subject to the
lowest CDSC liability will be redeemed next until the 12% limit
is reached. The 12% figure is calculated on a pro rata basis at
the time of the first payment made pursuant to a SWP and
recalculated thereafter on a pro rata basis at the time of each
SWP payment. Therefore, shareholders who have chosen a SWP based
on a percentage of the net asset value of their account of up to
12% will be able to receive SWP payments without incurring a
CDSC. However, shareholders who have chosen a specific dollar
amount (for example, $100 per month from a fund that pays income
distributions monthly) for their periodic SWP payment should be
aware that the amount of that payment not subject to a CDSC may
vary over time depending on the net asset value of their account.
For example, if the net asset value of the account is $10,000 at
the time of payment, the shareholder will receive $100 free of
the CDSC (12% of $10,000 divided by 12 monthly payments).
However, if at the time of the next payment the net asset value
of the account has fallen to $9,400, the shareholder will receive
$94 free of any CDSC (12% of $9,400 divided by 12 monthly
payments) and $6 subject to the lowest applicable CDSC. This SWP
privilege may be revised or terminated at any time.

ALL SHARES. No CDSC is imposed on shares of any class
subject to a CDSC ("CDSC Shares") to the extent that the CDSC
Shares redeemed (i) are no longer subject to the holding period
therefor, (ii) resulted from reinvestment of distributions on
CDSC Shares, or (iii) were exchanged for shares of another Putnam
fund, provided that the shares acquired in such exchange or
subsequent exchanges (including shares of a Putnam money market
fund) will continue to remain subject to the CDSC, if applicable,
until the applicable holding period expires. In determining
whether the CDSC applies to each redemption of CDSC Shares, CDSC
Shares no longer subject to a CDSC and CDSC Shares representing
reinvestment of distributions are redeemed first.

The Fund will waive any CDSC on redemptions, in the case
of individual or Uniform Transfers to Minors Act accounts, in
case of death or disability or for the purpose of paying benefits
pursuant to tax-qualified retirement plans. Such payments
currently include, without limitation, (1) distributions from an
IRA due to death or disability, (2) a return of excess
contributions to an IRA or 401(k) plan, and (3) distributions
from retirement plans qualified under section 401(a) or section
403(b)(7) (a "403(b) plan") of the Internal Revenue Code of 1986,
as amended (the "Code"), due to death, disability, retirement or
separation from service. The Fund will also waive any CDSC in
the case of the death of one joint tenant. These waivers may be
changed at any time. Additional waivers may apply to IRA
accounts opened prior to February 1, 1994.

DISTRIBUTION PLAN

If the Fund or a class of shares of the Fund has adopted a
Distribution Plan, the Prospectus describes the principal
features of the Plan. This Statement contains additional
information which may be of interest to investors.

Continuance of a Plan is subject to annual approval by a
vote of the Trustees, including a majority of the Trustees who
are not interested persons of the Fund and who have no direct or
indirect interest in the Plan or related arrangements (the
"Qualified Trustees"), cast in person at a meeting called for
that purpose. All material amendments to a Plan must be likewise
approved by the Trustees and the Qualified Trustees. No Plan may
be amended in order to increase materially the costs which the
Fund may bear for distribution pursuant to such Plan without also
being approved by a majority of the outstanding voting securities
of the Fund or the relevant class of the Fund, as the case may
be. A Plan terminates automatically in the event of its
assignment and may be terminated without penalty, at any time, by
a vote of a majority of the Qualified Trustees or by a vote of a
majority of the outstanding voting securities of the Fund or the
relevant class of the Fund, as the case may be.

If Plan payments are made to reimburse Putnam Mutual Funds
for payments to dealers based on the average net asset value of
Fund shares attributable to shareholders for whom the dealers are
designated as the dealer of record, "average net asset value"
attributable to a shareholder account means the product of (i)
the Fund's average daily share balance of the account and (ii)
the Fund's average daily net asset value per share (or the
average daily net asset value per share of the class, if
applicable). For administrative reasons, Putnam Mutual Funds may
enter into agreements with certain dealers providing for the
calculation of "average net asset value" on the basis of assets
of the accounts of the dealer's customers on an established day
in each quarter.

INVESTOR SERVICES

SHAREHOLDER INFORMATION

Each time shareholders buy or sell shares, they will
receive a statement confirming the transaction and listing their
current share balance. (Under certain investment plans, a
statement may only be sent quarterly.) Shareholders 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. To help shareholders take full
advantage of their Putnam investment, they will receive a Welcome
Kit and a periodic publication covering many topics of interest
to investors. The Fund also sends annual and semiannual reports
that keep shareholders informed about its portfolio and
performance, and year-end tax information to simplify their
recordkeeping. Easy-to-read, free booklets on special subjects
such as the Exchange Privilege and IRAs are available from Putnam
Investor Services. Shareholders may call Putnam Investor
Services toll-free weekdays at 1-800-225-1581 between 8:30 a.m.
and 7:00 p.m. Boston time for more information, including account
balances.

YOUR INVESTING ACCOUNT

The following information provides more detail concerning
the operation of a Putnam Investing Account. For further
information or assistance, investors should consult Putnam
Investor Services. Shareholders who purchase shares through a
defined contribution plan should note that not all of the
services or features described below may be available to them,
and they should contact their employer for details.

A shareholder may reinvest a recent cash distribution
without a front-end sales charge or without the reinvested shares
being subject to a CDSC, as the case may be, by delivering to
Putnam Investor Services the uncashed distribution check,
endorsed to the order of the Fund. Putnam Investor Services must
receive the properly endorsed check within 30 days after the date
of the check. Upon written notice to shareholders, the Fund may
permit shareholders who receive cash distributions to reinvest
amounts representing returns of capital without a sales charge or
without being subject to the CDSC.

The Investing Account also provides a way to accumulate
shares of the Fund. In most cases, after an initial investment
of $500, a shareholder may send checks to Putnam Investor
Services for $50 or more, made payable to the Fund, to purchase
additional shares at the applicable public offering price next
determined after Putnam Investor Services receives the check.
For Putnam Corporate Asset Trust, the minimum initial investment
is $25,000 and the minimum subsequent investment is $5,000.
Checks must be drawn on a U.S. bank and must be payable in U.S.
dollars.

Putnam Investor Services acts as the shareholder's agent
whenever it receives instructions to carry out a transaction on
the shareholder's account. Upon receipt of instructions that
shares are to be purchased for a shareholder's account, shares
will be purchased through the investment dealer designated by the
shareholder. Shareholders may change investment dealers at any
time by written notice to Putnam Investor Services, provided the
new dealer has a sales agreement with Putnam Mutual Funds.

Shares credited to an account are transferable upon
written instructions in good order to Putnam Investor Services
and may be sold to the Fund as described under "How to buy
shares, sell shares and exchange shares" in the Prospectus.
Money market funds and certain other funds will not issue share
certificates. A shareholder may send any certificates which have
been previously issued to Putnam Investor Services for
safekeeping at no charge to the shareholder.

Putnam Mutual Funds, at its expense, may provide certain
additional reports and administrative material to qualifying
institutional investors with fiduciary responsibilities to assist
these investors in discharging their responsibilities.
Institutions seeking further information about this service
should contact Putnam Mutual Funds, which may modify or terminate
this service at any time.

Putnam Investor Services may make special services
available to shareholders with investments exceeding $1,000,000.
Contact Putnam Investor Services for details.

The Fund pays Putnam Investor Services' fees for
maintaining Investing Accounts.

REINSTATEMENT PRIVILEGE

CLASS A SHARES

An investor who has sold shares to the Fund may reinvest
(within 90 days) the proceeds of such sale in shares of the Fund,
or may be able to reinvest (within 90 days) the proceeds in
shares of the other continuously offered Putnam funds (through
the Exchange Privilege described in the Prospectus and below).
Any such reinvestment would be at the net asset value of the
shares of the fund(s) the investor selects, next determined after
Putnam Mutual Funds receives a Reinstatement Authorization and
will not be subject to any sales charge, including a contingent
deferred sales charge.

CLASS B SHARES

An investor who has sold Class B shares to the Fund may
reinvest (within 90 days) the proceeds of such sale in Class B
shares of the Fund, or may be able to reinvest (within 90 days)
the proceeds in Class B shares of other Putnam funds (through the
Exchange Privilege described in the Prospectus and below). Upon
such reinvestment, the investor would receive Class B shares at
the net asset value next determined after Putnam Mutual Funds
receives a Reinstatement Authorization subject to the applicable
contingent deferred sales charge calculated for this purpose
using the date of the original purchase.

ALL SHARES

Exercise of the Reinstatement Privilege does not alter the
federal income tax treatment of any capital gains realized on a
sale of Fund shares, but to the extent that any shares are sold
at a loss and the proceeds are reinvested in shares of the Fund,
some or all of the loss may be disallowed as a deduction.
Consult your tax adviser.

Investors who desire to exercise this Privilege should
contact their investment dealer or Putnam Investor Services.

EXCHANGE PRIVILEGE

Except as otherwise set forth in this section, by calling
Putnam Investor Services, investors may exchange shares valued up
to $500,000 between accounts with identical registrations,
provided that no certificates are outstanding for such shares and
no address change has been made within the preceding 15 days.
During periods of unusual market changes and shareholder
activity, shareholders may experience delays in contacting Putnam
Investor Services by telephone to exercise the Telephone Exchange
Privilege.

Putnam Investor Services also makes exchanges promptly
after receiving a properly completed Exchange Authorization Form
and, if issued, share certificates. If the shareholder is a
corporation, partnership, agent, or surviving joint owner, Putnam
Investor Services will require additional documentation of a
customary nature. Because an exchange of shares involves the
redemption of Fund shares and reinvestment of the proceeds in
shares of another Putnam fund, completion of an exchange may be
delayed under unusual circumstances if the Fund were to suspend
redemptions or postpone payment for the Fund shares being
exchanged, in accordance with federal securities laws. Exchange
Authorization Forms and prospectuses of the other Putnam funds
are available from Putnam Mutual Funds or investment dealers
having sales contracts with Putnam Mutual Funds. The prospectus
of each fund describes its investment objective(s) and policies,
and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
Shares of certain Putnam funds are not available to residents of
all states. The Fund reserves the right to change or suspend the
Exchange Privilege at any time. Shareholders would be notified
of any change or suspension. Additional information is available
from Putnam Investor Services.

Shares of the Fund must be held at least 15 days by the
shareholder desiring an exchange. There is no holding period if
the shareholder acquired the shares to be exchanged through
reinvestment of distributions, transfer from another shareholder,
prior exchange or certain employer-sponsored defined contribution
plans. In all cases, the shares to be exchanged must be
registered on the records of the Fund in the name of the
shareholder desiring the exchange.

Shareholders of other Putnam funds may also exchange their
shares at net asset value for shares of the Fund, as set forth in
the current prospectus of each fund.

For federal income tax purposes, an exchange is a sale on
which the investor generally will realize a capital gain or loss
depending on whether the net asset value at the time of the
exchange is more or less than the investor's cost. The Exchange
Privilege may be revised or terminated at any time. Shareholders
would be notified of any such change or suspension.

DIVIDENDS PLUS

Shareholders may invest the Fund's distributions of net
investment income or distributions combining net investment
income and short-term capital gains in shares of the same class
of another continuously offered Putnam fund (the "receiving
fund") using the net asset value per share of the receiving fund
determined on the date the Fund's distribution is payable. No
sales charge or contingent deferred sales charge will apply to
the purchased shares unless the Fund is a money market fund. The
prospectus of each fund describes its investment objective(s) and
policies, and shareholders should obtain a prospectus and
consider these objective(s) and policies carefully before
investing their distributions in the receiving fund. Shares of
certain Putnam funds are not available to residents of all
states.

The minimum account size requirement for the receiving
fund will not apply if the current value of your account in this
Fund is more than $5,000.

Shareholders of other Putnam funds (except for money
market funds, whose shareholders must pay a sales charge or
become subject to a contingent deferred sales charge) may also
use their distributions to purchase shares of the Fund at net
asset value.

For federal tax purposes, distributions from the Fund
which are reinvested in another fund are treated as paid by the
Fund to the shareholder and invested by the shareholder in the
receiving fund and thus, to the extent comprised of taxable
income and deemed paid to a taxable shareholder, are taxable.

The Dividends PLUS program may be revised or terminated at
any time.

PLANS AVAILABLE TO SHAREHOLDERS

The Plans described below are fully voluntary and may be
terminated at any time without the imposition by the Fund or
Putnam Investor Services of any penalty. All Plans provide for
automatic reinvestment of all distributions in additional shares
of the Fund at net asset value. The Fund, Putnam Mutual Funds or
Putnam Investor Services may modify or cease offering these Plans
at any time.

AUTOMATIC CASH WITHDRAWAL PLAN. An investor who owns or
buys shares of the Fund valued at $10,000 or more at the current
public offering price may open a Withdrawal Plan and have a
designated sum of money ($50 or more) paid monthly, quarterly,
semi-annually or annually to the investor or another person.
(Payments from the Fund can be combined with payments from other
Putnam funds into a single check through a Designated Payment
Plan.) Shares are deposited in a Plan account, and all
distributions are reinvested in additional shares of the Fund at
net asset value (except where the Plan is utilized in connection
with a charitable remainder trust). Shares in a Plan account are
then redeemed at net asset value to make each withdrawal payment.
Payment will be made to any person the investor designates;
however, if shares are registered in the name of a trustee or
other fiduciary, payment will be made only to the fiduciary,
except in the case of a profit-sharing or pension plan where
payment will be made to a designee. As withdrawal payments may
include a return of principal, they cannot be considered a
guaranteed annuity or actual yield of income to the investor.
The redemption of shares in connection with a Withdrawal Plan
generally will result in a gain or loss for tax purposes. Some
or all of the losses realized upon redemption may be disallowed
pursuant to the so-called wash sale rules if shares of the same
fund from which shares were redeemed are purchased (including
through the reinvestment of fund distributions) within a period
beginning 30 days before, and ending 30 days after, such
redemption. In such a case, the basis of the replacement shares
will be increased to reflect the disallowed loss. Continued
withdrawals in excess of income will reduce and possibly exhaust
invested principal, especially in the event of a market decline.
The maintenance of a Withdrawal Plan concurrently with purchases
of additional shares of the Fund would be disadvantageous to the
investor because of the sales charge payable on such purchases.
For this reason, the minimum investment accepted while a
Withdrawal Plan is in effect is $1,000, and an investor may not
maintain a Plan for the accumulation of shares of the Fund (other
than through reinvestment of distributions) and a Withdrawal Plan
at the same time. The cost of administering these Plans for the
benefit of those shareholders participating in them is borne by
the Fund as an expense of all shareholders. The Fund, Putnam
Mutual Funds or Putnam Investor Services may terminate or change
the terms of the Withdrawal Plan at any time. A Withdrawal Plan
will be terminated if communications mailed to the shareholder
are returned as undeliverable.

Investors should consider carefully with their own
financial advisers whether the Plan and the specified amounts to
be withdrawn are appropriate in their circumstances. The Fund
and Putnam Investor Services make no recommendations or
representations in this regard.

TAX QUALIFIED RETIREMENT PLANS; 403(B) AND SEP PLANS.
(NOT OFFERED BY FUNDS INVESTING PRIMARILY IN TAX-EXEMPT
SECURITIES.) Investors may purchase shares of the Fund through
the following Tax Qualified Retirement Plans, available to
qualified individuals or organizations:

Standard and variable profit-sharing (including 401(k))
and money purchase pension plans; and

Individual Retirement Account Plans (IRAs).

Each of these Plans has been qualified as a prototype plan
by the Internal Revenue Service. Putnam Investor Services will
furnish services under each plan at a specified annual cost.
Putnam Fiduciary Trust Company serves as trustee under each of
these Plans.

Forms and further information on these Plans are available
from investment dealers or from Putnam Mutual Funds. In
addition, specialized professional plan administration services
are available on an optional basis; contact Putnam Defined
Contribution Plan Services at 1-800-225-2465, extension 8600.

A 403(b) Retirement Plan is available for employees of
public school systems and organizations which meet the
requirements of Section 501(c)(3) of the Internal Revenue Code.
Forms and further information on the 403(b) Plan are also
available from investment dealers or from Putnam Mutual Funds.
Shares of the Fund may also be used in simplified employee
pension (SEP) plans. For further information on the Putnam
prototype SEP plan, contact an investment dealer or Putnam Mutual
Funds.

Consultation with a competent financial and tax adviser
regarding these Plans and consideration of the suitability of
Fund shares as an investment under the Employee Retirement Income
Security Act of 1974 or otherwise is recommended.

SIGNATURE GUARANTEES

Redemption requests for shares having a net asset value of
$100,000 or more must be signed by the registered owners or their
legal representatives and must be guaranteed by a bank,
broker/dealer, municipal securities dealer or broker, government
securities dealer or broker, credit union, national securities
exchange, registered securities association, clearing agency,
savings association or trust company, provided such institution
is acceptable under and conforms with Putnam Fiduciary Trust
Company's signature guarantee procedures. A copy of such
procedures is available upon request. If you want your
redemption proceeds sent to an address other than your address as
it appears on Putnam's records, you must provide a signature
guarantee. 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.

SUSPENSION OF REDEMPTIONS

The Fund may not suspend shareholders' right of
redemption, or postpone payment for more than seven days, unless
the New York Stock Exchange is closed for other than customary
weekends or holidays, or if permitted by the rules of the
Securities and Exchange Commission during periods when trading on
the Exchange is restricted or during any emergency which makes it
impracticable for the Fund to dispose of its securities or to
determine fairly the value of its net assets, or during any other
period permitted by order of the Commission for protection of
investors.

SHAREHOLDER LIABILITY

Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of
the Fund. However, the Agreement and Declaration of Trust
disclaims shareholder liability for acts or obligations of the
Fund and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by
the Fund or the Trustees. The Agreement and Declaration of Trust
provides for indemnification out of Fund property for all loss
and expense of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund would be unable to
meet its obligations. The likelihood of such circumstances is
remote.

STANDARD PERFORMANCE MEASURES

Yield and total return data for the Fund may from time to
time be presented in Part I of this Statement and in
advertisements. In the case of funds with more than one class of
shares, all performance information is calculated separately for
each class. The data is calculated as follows.

Total return for one-, five- and ten-year periods (or for
such shorter periods as the Fund has been in operation or shares
of the relevant class have been outstanding) is determined by
calculating the actual dollar amount of investment return on a
$1,000 investment in the Fund made at the beginning of the
period, at the maximum public offering price for Class A shares
and net asset value for other classes of shares, and then
calculating the annual compounded rate of return which would
produce that amount. Total return for a period of one year is
equal to the actual return of the Fund during that period. Total
return calculations assume deduction of the Fund's maximum sales
charge or contingent deferred sales charge, if applicable, and
reinvestment of all Fund distributions at net asset value on
their respective reinvestment dates.

The Fund's yield is presented for a specified thirty-day
period (the "base period"). Yield is based on the amount
determined by (i) calculating the aggregate amount of dividends
and interest earned by the Fund during the base period less
expenses accrued for that period, and (ii) dividing that amount
by the product of (A) the average daily number of shares of the
Fund outstanding during the base period and entitled to receive
dividends and (B) the per share maximum public offering price for
Class A shares and net asset value for other classes of shares on
the last day of the base period. The result is annualized on a
compounding basis to determine the yield. For this calculation,
interest earned on debt obligations held by the Fund is generally
calculated using the yield to maturity (or first expected call
date) of such obligations based on their market values (or, in
the case of receivables-backed securities such as GNMA's, based
on cost). Dividends on equity securities are accrued daily at
their stated dividend rates.

If the Fund is a money market fund, yield is computed by
determining the percentage net change, excluding capital changes,
in the value of an investment in one share over the seven-day
period for which yield is presented (the "base period"), and
multiplying the net change by 365/7 (or approximately 52 weeks).
Effective yield represents a compounding of the yield by adding 1
to the number representing the percentage change in value of the
investment during the base period, raising that sum to a power
equal to 365/7, and subtracting 1 from the result.

If the Fund is a tax-exempt fund, the tax-equivalent yield
during the base period may be presented for shareholders in one
or more stated tax brackets. Tax-equivalent yield is calculated
by adjusting the tax-exempt yield by a factor designed to show
the approximate yield that a taxable investment would have to
earn to produce an after-tax yield equal, for that shareholder,
to the tax-exempt yield. The tax-equivalent yield will differ
for shareholders in other tax brackets.

At times, Putnam Management may reduce its compensation or
assume expenses of the Fund in order to reduce the Fund's
expenses. The per share amount of any such fee reduction or
assumption of expenses during the Fund's past ten fiscal years
(or for the life of the Fund, if shorter) is reflected in the
table in the section entitled "Financial history" in the
Prospectus. Any such fee reduction or assumption of expenses
would increase the Fund's yield and total return during the
period of the fee reduction or assumption of expenses.

All data are based on past performance and do not predict
future results.

COMPARISON OF PORTFOLIO PERFORMANCE

Independent statistical agencies measure the Fund's
investment performance and publish comparative information
showing how the Fund, and other investment companies, performed
in specified time periods. Three agencies whose reports are
commonly used for such comparisons are set forth below. From
time to time, the Fund may distribute these comparisons to its
shareholders or to potential investors. THE AGENCIES LISTED
BELOW MEASURE PERFORMANCE BASED ON THEIR OWN CRITERIA RATHER THAN
ON THE STANDARDIZED PERFORMANCE MEASURES DESCRIBED IN THE
PRECEDING SECTION.

LIPPER ANALYTICAL SERVICES, INC. distributes mutual fund
rankings monthly. The rankings are based on total return
performance calculated by Lipper, reflecting generally
changes in net asset value adjusted for reinvestment of
capital gains and income dividends. They do not reflect
deduction of any sales charges. Lipper rankings cover a
variety of performance periods, for example year-to-date,
1-year, 5-year, and 10-year performance. Lipper
classifies mutual funds by investment objective and asset
category.

MORNINGSTAR, INC. distributes mutual fund ratings twice a
month. The ratings are divided into five groups:
highest, above average, neutral, below average and lowest.
They represent a fund's historical risk/reward ratio
relative to other funds with similar objectives. The
performance factor is a weighted-average assessment of the
Fund's 3-year, 5-year, and 10-year total return
performance (if available) reflecting deduction of
expenses and sales charges. Performance is adjusted using
quantitative techniques to reflect the risk profile of the
fund. The ratings are derived from a purely quantitative
system that does not utilize the subjective criteria
customarily employed by rating agencies such as Standard &
Poor's Corporation and Moody's Investor Service, Inc.

CDA/WIESENBERGER'S MANAGEMENT RESULTS publishes mutual
fund rankings and is distributed monthly. The rankings
are based entirely on total return calculated by
Weisenberger for periods such as year-to-date, 1-year,
3-year, 5-year and 10-year. Mutual funds are ranked in
general categories (e.g., international bond,
international equity, municipal bond, and maximum capital
gain). Weisenberger rankings do not reflect deduction of
sales charges or fees.

Independent publications may also evaluate the Fund's
performance. Certain of those publications are listed below, at
the request of Putnam Mutual Funds, which bears full
responsibility for their use and the descriptions appearing
below. From time to time the Fund may distribute evaluations by
or excerpts from these publications to its shareholders or to
potential investors. The following illustrates the types of
information provided by these publications.

BUSINESS WEEK publishes mutual fund rankings in its
Investment Figures of the Week column. The rankings are
based on 4-week and 52-week total return reflecting
changes in net asset value and the reinvestment of all
distributions. They do not reflect deduction of any sales
charges. Funds are not categorized; they compete in a
large universe of over 2000 funds. The source for
rankings is data generated by Morningstar, Inc.

INVESTOR'S BUSINESS DAILY publishes mutual fund rankings
on a daily basis. The rankings are depicted as the top 25
funds in a given category. The categories are based
loosely on the type of fund, e.g., growth funds, balanced
funds, U.S. government funds, GNMA funds, growth and
income funds, corporate bond funds, etc. Performance
periods for sector equity funds can vary from 4 weeks to
39 weeks; performance periods for other fund groups vary
from 1 year to 3 years. Total return performance reflects
changes in net asset value and reinvestment of dividends
and capital gains. The rankings are based strictly on
total return. They do not reflect deduction of any sales
charges. Performance grades are conferred from A+ to E.
An A+ rating means that the fund has performed within the
top 5% of a general universe of over 2000 funds; an A
rating denotes the top 10%; an A- is given to the top 15%,
etc.

BARRON'S periodically publishes mutual fund rankings. The
rankings are based on total return performance provided by
Lipper Analytical Services. The Lipper total return data
reflects changes in net asset value and reinvestment of
distributions, but does not reflect deduction of any sales
charges. The performance periods vary from short-term
intervals (current quarter or year-to-date, for example)
to long-term periods (five-year or ten-year performance,
for example). Barron's classifies the funds using the
Lipper mutual fund categories, such as Capital
Appreciation Funds, Growth Funds, U.S. Government Funds,
Equity Income Funds, Global Funds, etc. Occasionally,
Barron's modifies the Lipper information by ranking the
funds in asset classes. "Large funds" may be those with
assets in excess of $25 million; "small funds" may be
those with less than $25 million in assets.

THE WALL STREET JOURNAL publishes its Mutual Fund
Scorecard on a daily basis. Each Scorecard is a ranking
of the top-15 funds in a given Lipper Analytical Services
category. Lipper provides the rankings based on its total
return data reflecting changes in net asset value and
reinvestment of distributions and not reflecting any sales
charges. The Scorecard portrays 4-week, year-to-date,
one-year and 5-year performance; however, the ranking is
based on the one-year results. The rankings for any given
category appear approximately once per month.

FORTUNE magazine periodically publishes mutual fund
rankings that have been compiled for the magazine by
Morningstar, Inc. Funds are placed in stock or bond fund
categories (for example, aggressive growth stock funds,
growth stock funds, small company stock funds, junk bond
funds, Treasury bond funds, etc.), with the top-10 stock
funds and the top-5 bond funds appearing in the rankings.
The rankings are based on 3-year annualized total return
reflecting changes in net asset value and reinvestment of
distributions and not reflecting sales charges.
Performance is adjusted using quantitative techniques to
reflect the risk profile of the fund.

MONEY magazine periodically publishes mutual fund rankings
on a database of funds tracked for performance by Lipper
Analytical Services. The funds are placed in 23 stock or
bond fund categories and analyzed for five-year risk
adjusted return. Total return reflects changes in net
asset value and reinvestment of all dividends and capital
gains distributions and does not reflect deduction of any
sales charges. Grades are conferred (from A to E): the
top 20% in each category receive an A, the next 20% a B,
etc. To be ranked, a fund must be at least one year old,
accept a minimum investment of $25,000 or less and have
had assets of at least $25 million as of a given date.

FINANCIAL WORLD publishes its monthly Independent
Appraisals of Mutual Funds, a survey of approximately 1000
mutual funds. Funds are categorized as to type, e.g.,
balanced funds, corporate bond funds, global bond funds,
growth and income funds, U.S. government bond funds, etc.
To compete, funds must be over one year old, have over $1
million in assets, require a maximum of $10,000 initial
investment, and should be available in at least 10 states
in the United States. The funds receive a composite past
performance rating, which weighs the intermediate- and
long-term past performance of each fund versus its
category, as well as taking into account its risk, reward
to risk, and fees. An A+ rated fund is one of the best,
while a D-rated fund is one of the worst. The source for
Financial World rating is Schabacker investment management
in Rockville, MD.

FORBES magazine periodically publishes mutual fund ratings
based on performance over at least two bull and bear
market cycles. The funds are categorized by type,
including stock and balanced funds, taxable bond funds,
municipal bond funds, etc. Data sources include Lipper
Analytical Services and CDA Investment Technologies. The
ratings are based strictly on performance at net asset
value over the given cycles. Funds performing in the top
5% receive an A+ rating; the top 15% receive an A rating;
and so on until the bottom 5% receive an F rating. Each
fund exhibits two ratings, one for performance in "up"
markets and another for performance in "down" markets.

KIPLINGER'S PERSONAL FINANCE MAGAZINE (formerly Changing
Times), periodically publishes rankings of mutual funds
based on one-, three- and five-year total return
performance reflecting changes in net asset value and
reinvestment of dividends and capital gains and not
reflecting deduction of any sales charges. Funds are
ranked by tenths: a rank of 1 means that a fund was among
the highest 10% in total return for the period; a rank of
10 denotes the bottom 10%. Funds compete in categories of
similar funds--aggressive growth funds, growth and income
funds, sector funds, corporate bond funds, global
governmental bond funds, mortgage-backed securities funds,
etc. Kiplinger's also provides a risk-adjusted grade in
both rising and falling markets. Funds are graded against
others with the same objective. The average weekly total
return over two years is calculated. Performance is
adjusted using quantitative techniques to reflect the risk
profile of the fund.

U.S. NEWS AND WORLD REPORT periodically publishes mutual
fund rankings based on an overall performance index (OPI)
devised by Kanon Bloch Carre & Co., a Boston research
firm. Over 2000 funds are tracked and divided into 10
equity, taxable bond and tax-free bond categories. Funds
compete within the 10 groups and three broad categories.
The OPI is a number from 0-100 that measures the relative
performance of funds at least three years old over the
last 1, 3, 5 and 10 years and the last six bear markets.
Total return reflects changes in net asset value and the
reinvestment of any dividends and capital gains
distributions and does not reflect deduction of any sales
charges. Results for the longer periods receive the most
weight.

THE 100 BEST MUTUAL FUNDS YOU CAN BUY (1992), authored by
Gordon K. Williamson. The author's list of funds is
divided into 12 equity and bond fund categories, and the
100 funds are determined by applying four criteria.
First, equity funds whose current management teams have
been in place for less than five years are eliminated.
(The standard for bond funds is three years.) Second, the
author excludes any fund that ranks in the bottom 20
percent of its category's risk level. Risk is determined
by analyzing how many months over the past three years the
fund has underperformed a bank CD or a U.S. Treasury bill.
Third, a fund must have demonstrated strong results for
current three-year and five-year performance. Fourth, the
fund must either possess, in Mr. Williamson's judgment,
"excellent" risk-adjusted return or "superior" return with
low levels of risk. Each of the 100 funds is ranked in
five categories: total return, risk/volatility,
management, current income and expenses. The rankings
follow a five-point system: zero designates "poor"; one
point means "fair"; two points denote "good"; three points
qualify as a "very good"; four points rank as "superior";
and five points mean "excellent."

In addition, Putnam Mutual Funds may distribute to
shareholders or prospective investors illustrations of the
benefits of reinvesting tax-exempt or tax-deferred distributions
over specified time periods, which may include comparisons to
fully taxable distributions. These illustrations use
hypothetical rates of tax-advantaged and taxable returns and are
not intended to indicate the past or future performance of any
fund.

DEFINITIONS

"Putnam Management" -- Putnam Investment Management,
Inc., the Fund's investment
manager.

"Putnam Mutual Funds" -- Putnam Mutual Funds Corp., the
Fund's principal underwriter.

"Putnam Fiduciary Trust -- Putnam Fiduciary Trust Company,
Company" the Fund's custodian.

"Putnam Investor Services" -- Putnam Investor Services, a
division of Putnam Fiduciary
Trust Company, the Fund's
investor servicing agent.
<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 (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>