Putnam
New York
Tax Exempt
Money Market
Fund
SEMIANNUAL REPORT
May 31, 1996
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "The fund is positioned to take advantage of investment opportunities
within New York and will maintain a high-quality portfolio while
examining the state's uncertain economic environment."
-- Lindsey C. Strong, Manager
Putnam New York Tax Exempt Money Market Fund
* "[G]iven that 1996 is an election year, the popularity of tax
deductions and complexity of implementing any substantial changes to the
tax codes help make the outlook for the muni market optimistic."
-- The Value Line Mutual Fund Survey, March 19, 1996
CONTENTS
4 Report from Putnam Management
7 Fund performance summary
9 Portfolio holdings
11 Financial statements
From the Chairman
[PHOTO OF GEORGE PUTNAM OMITTED]
(copyright) Karsh, Ottawa
Dear Shareholder:
Putnam New York Tax Exempt Money Market Fund began its current fiscal
year, in the midst of one of the most vibrant fixed-income markets in
recent memory, only to take an abrupt turn downward in March. The
decline came in response to concern over the possibility of a pickup in
inflation at the hands of an economy many perceived was still advancing
too swiftly.
Fund Manager Lindsey C. Strong, foreseeing such volatility even before
the new fiscal year began, had shifted your fund's portfolio to shorter
maturities. This move gave the fund a considerable advantage over many
other funds. With the portfolio concentrated in high-quality corporate
issues and shorter-term government agency securities, Lindsey believes
share price and income stream should be preserved in a market
environment that may remain somewhat unsettled over the next few months.
She provides a full discussion of your fund's performance and outlook in
the report that follows.
Respectfully yours,
George Putnam
/S/George Putnam
Chairman of the Trustees
July 17, 1996
Report from the Fund Manager
Lindsey C. Strong
For the six months ended May 31, 1996, Putnam New York Tax Exempt Money
Market Fund continued to provide a competitive total return while
focusing on capital preservation, liquidity, and maintaining a stable
$1.00 share price. Throughout the period, we implemented the fund's
conservative investment strategy, which emphasizes short-term
instruments of the highest quality in its pursuit of current income.
* PORTFOLIO MATURITIES ADJUSTED IN A SHIFTING ECONOMY
During the semiannual period, the economic environment in which your
fund was managed shifted from one of slow economic growth and declining
interest rates to one of stronger growth and uncertainty about the
direction of interest rates. Since money market funds invest in short-
term, fixed-income securities, their yields rise and fall with the
short-term interest rates that are controlled by the Federal Reserve
Board.
The slow-growth, low-inflation environment that persisted throughout
1995 prompted the Fed to trim short-term interest rates by one quarter
of a percentage point in December 1995 and again in January 1996. In
this declining interest rate environment, our strategy emphasized
extending the fund's average maturity in order to lock in higher yields.
For most of 1996, however, stronger-than-expected economic growth has
raised concerns that inflation may accelerate. February's employment
gain figures were twice what analysts had forecast, fueling these
concerns. March's and April's employment statistics were also robust.
While the Fed took no action on interest rates from February through
May, economic news led many analysts to conclude that additional rate
declines were unlikely and that rate increases might well be on the
horizon.
Because of the uncertainty of this investment climate, we have adopted a
more neutral strategy. We began to reduce the fund's average maturity so
we would be in a position to take advantage of incrementally higher
yields, should interest rates begin to rise.
*CREDIT QUALITY AND DIVERSIFICATION REMAIN ESSENTIAL
The inability of Albany and New York City to balance their respective
budgets has been a concern for several months. With less money flowing
from Washington and state lawmakers wrestling with dwindling resources,
we believe that the likelihood of a balanced state budget is smaller
than ever.
Further fiscal tightening will necessitate budgetary cutbacks in
programs, which we believe will only make the economics of public
agencies more problematic. Because we take a conservative approach to
managing your fund -- one in which credit quality is paramount -- your
fund has virtually no exposure to the state's budgetary problems.
We have structured a portfolio in which approximately 80% of your fund's
investments are insured or backed by bank letters of credit. The
insurance and letters of credit guarantee that the short-term debt
(money market instruments) in which your fund invests will be paid
within a certain period of time. These features add a significant
measure of quality assurance, making many of the fund's holdings among
the highest quality securities available. We intend to maintain the
portfolio's high percentage of insured and bank-backed securities going
forward and may even expand it, should appropriate investment
opportunities arise.
The supply of municipal securities fluctuates broadly throughout the
year. Nevertheless, we were able to find securities that measured up to
our strict standards for high quality and liquidity. We primarily
invested in variable rate demand notes (VRDNs) and municipal commercial
paper issued by the state of New York. Variable rate demand notes are
instruments that can be redeemed on short notice. They pay a variable
interest rate that resets at daily, weekly, or monthly intervals and can
be particularly useful in enabling us to manage the fund's average
maturity and liquidity. Commercial paper is a short-term security issued
by a municipality to finance capital or operating needs.
PERFORMANCE COMPARISONS (5/31/96)
Current After-tax After-tax
return return1 return2
- -----------------------------------------------------------------------
Passbook savings account 2.00% 1.07% 1.12%
- -----------------------------------------------------------------------
Taxable money market fund
7-day yield 4.74 2.55 2.66
- -----------------------------------------------------------------------
3-month certificate of
deposit (as of 5/29/96) 3.99 2.14 2.24
- -----------------------------------------------------------------------
Putnam New York
Tax Exempt Money
Market Fund (7-day yield) 3.14 3.14 3.14
- -----------------------------------------------------------------------
Sources: Bank of Boston (passbook savings), IBC/Donaghue's Money Fund
Report (taxable money market fund 7-day yield), Bank Rate Monitor (3-
month Cds).
The principal value and interest of money market mutual funds are
uninsured and designed to be fixed, while distributions vary daily. The
principal value on passbook savings and bank CDs is generally insured up
to certain limits by state and federal agencies. CDs, unlike stocks
(which incur more risk), offer a fixed rate of return. Unlike money
market funds, early withdrawals from bank CDs may be subject to
substantial penalties. Investment returns will fluctuate. 1After-tax
return assumes a combined 46.27% federal income tax, New York state and
New York City tax rate. 2After-tax return assumes a combined 43.90%
federal income tax and New York state personal income tax rate.
An investment in this fund is neither insured nor guaranteed by the U.S.
government. The fund is managed to maintain a steady price of $1.00 per
share, although there is no assurance this price will be maintained in
the future.
* OUR OUTLOOK
We are cautiously optimistic in our outlook for the economy and interest
rates. Rising long-term interest rates, a fluctuating bond market, and
strong employment data suggest that more robust economic growth and
possibly higher inflation may be in the offing. We believe that short-
term interest rates could remain at current levels or edge upward. Given
this environment, we plan to maintain the fund's average maturity at a
level that should keep the fund sufficiently flexible to take advantage
of buying opportunities that may arise, while protecting its income
stream.
The views expressed here are exclusively those of Putnam Management.
They are not meant as investment advice. Although the described holdings
were viewed favorably as of 5/31/96, there is no guarantee the fund will
continue to hold these securities in the future. An investment in the
fund is neither insured nor guaranteed by the U.S. government. There can
be no assurance that the fund will be able to maintain a stable net
asset value of $1.00 per share.
Performance summary
Performance should always be considered in light of a fund's investment
strategy. Putnam New York Tax Exempt Money Market Fund is designed for
investors seeking current income free from federal income tax and New
York State and New York City personal income taxes, consistent with
preservation of capital and maintenance of liquidity and stability of
principal.
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares
changed over time, assuming you held the shares through the entire
period and reinvested all distributions in the fund.
TOTAL RETURN FOR PERIODS ENDED 5/31/96
Lipper New York
Tax Exempt Consumer
Fund shares Money Market Fund Price
at NAV Average Index
- ----------------------------------------------------------------------
6 months 1.54% 1.48% 1.95%
- ----------------------------------------------------------------------
1 year 3.13 3.11 2.89
- ----------------------------------------------------------------------
5 years 13.52 13.93 15.49
Annual average 2.57 2.64 2.92
- ----------------------------------------------------------------------
Life of fund (10/26/87) 34.80 35.10 35.82
Annual average 3.53 3.57 3.62
- ----------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 6/30/96
(most recent calendar quarter)
Fund shares
at NAV
- ----------------------------------------------------------------------
6 months 1.33%
- ----------------------------------------------------------------------
1 year 2.92
- ----------------------------------------------------------------------
5 years 13.22
Annual average 2.52
- ----------------------------------------------------------------------
Life of fund (10/26/87) 34.87
Annual average 3.51
- ----------------------------------------------------------------------
Performance data represent past results and should not be taken as an
assurance of future performance. Investment returns will fluctuate.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 5/31/96
- ----------------------------------------------------------------------
Distributions (number) 6
- ----------------------------------------------------------------------
Income $0.01535
- ----------------------------------------------------------------------
Current return (end of period)
- ----------------------------------------------------------------------
7-day yield1 3.14%
- ----------------------------------------------------------------------
Taxable equivalent2 (a) 5.60
- ----------------------------------------------------------------------
Taxable equivalent2 (b) 5.84
- ----------------------------------------------------------------------
30-day yield1 3.23
- ----------------------------------------------------------------------
Taxable equivalent2 (a) 5.76
- ----------------------------------------------------------------------
Taxable equivalent2 (b) 6.01
- ----------------------------------------------------------------------
1The 7- and 30-day yields are the two most common gauges for measuring
money market mutual fund performance.
2Assumes (a) maximum 43.90% combined federal income tax and New York
state personal income tax rate or (b) maximum 46.27% combined federal
income tax, New York state and New York City personal income tax rate.
Results for investors subject to lower tax rates would not be as
advantageous.
For some investors, investment income may also be subject to the federal
alternative minimum tax. Investment income may be subject to state and
local taxes.
TERMS AND DEFINITIONS
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares.
COMPARATIVE BENCHMARKS
Lipper New York Tax Exempt Money Market Fund Average is an arithmetic
average of the total return of all tax exempt money market mutual funds
tracked by Lipper Analytical Services. Lipper is an independent rating
organization for the mutual fund industry. Lipper rankings vary for
other periods. The fund's holdings do not match those in the Lipper
Average.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
<TABLE>
<CAPTION>
Portfolio of investments owned
May 31,1996 (Unaudited)
Key to Abbreviations
FGIC- Federal Guaranty Insurance Corporation
LOC- Letter of Credit
MCP- Municipal Commercial Paper
RAN- Revenue Anticipation Notes
TAN- Tax Anticipation Notes
VRDN- Variable Rate Demand Notes
MUNICIPAL BONDS AND NOTES (84.9%) *
PRINCIPAL AMOUNT RATINGS ** VALUE
New York (84.9%)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
$2,000,000 Erie Cnty., RAN (Union Bank of Switzerland LOC),
4 1/2s, 9/20/96 VMIG1 $2,003,830
2,000,000 Metropolitan Trans. Auth. Transit Fac. Rev. Bonds,
Ser. F, 8 3/8s, 7/1/16 AAA 2,047,642
2,035,000 Monroe Cnty., Indl. Dev. Agcy. VRDN (Columbia
Sussex) (Cumberland Federal Savings and
Loan LOC), 5s , 11/1/14 A-1+ 2,035,000
N Y City, Hsg. Dev. Corp. VRDN
3,300,000 (East 96th St. Project)(Bank of Tokyo-
Mitsubishi LOC), Ser. A, 3.4s, 8/1/15 VMIG1 3,300,000
510,000 (Parkgate Tower Project)(Citibank LOC), 3.4s,
12/1/07 VMIG1 510,000
1,000,000 N Y City, Indl. Dev. Agcy. VRDN (Cab. Assoc. & RCB
Const. Project)(Bank of New York LOC), 4.05s,
12/1/01 AA 1,000,000
3,500,000 N Y State Dorm. Auth. Rev. Bonds (City Univ.
System) Ser. A, 7 5/8s, 7/1/13 AAA 3,583,145
N Y State Energy Research & Dev. Auth. Poll.
Control VRDN
3,000,000 (Lilco Project)(Deutsche Bank LOC), Ser. A,
3 1/4s, 3/1/16 VMIG1 3,000,000
1,200,000 (NY State Elec.& Gas Corp.)(Union Bank of
Switzerland LOC), Ser. D, 3.8s, 10/1/29 A-1+ 1,200,000
1,100,000 (NY State Elec. & Gas Corp.)(Morgan Gnty.
Tr. Co. LOC), Ser. C, 3.6s, 6/1/29 A-1+ 1,100,000
4,000,000 (Niagara Mohawk Pwr. Project) (Toronto
Dominion Bank LOC), Ser. 85 A, 3.8s, 7/1/15 A-1+ 4,000,000
1,000,000 (Rochester Gas & Electric)(Bank of New York
LOC), Ser. A, 3.45s, 10/1/14 P-1 1,000,000
2,000,000 NY State Hsg. Fin. Agcy. VRDN (Normandie Court
Project)( Societe Generale LOC), 3.5s, 5/15/15 VMIG1 2,000,000
4,000,000 NY State Local Govt. Assistance Corp. VRDN (Swiss
Bank Corporation , Credit Suisse LOC), Ser. B,
3.4s, 4/1/23 VMIG1 4,000,000
2,000,000 NY State Med. Care Fac. Fin. Agcy. VRDN (Lenox Hill Hosp.)
(Chemical Bank LOC), Ser. A, 3 1/2s, 11/1/08 VMIG1 2,000,000
2,100,000 North Hempstead, Solid Waste Mgmt. Auth. VRDN
(National Westminster Bank PLC LOC), Ser. A, 3.4s, 2/1/12 VMIG1 2,100,000
2,300,000 Triborough Brdg. & Tunnel Auth. Special Obligation
VRDN, FGIC, 3.4s, 1/1/24 VMIG1 2,300,000
2,500,000 Westchester Cnty., TAN, 3 3/4s, 12/11/96 MIG1 2,508,428
-----------
Total Municipal Bonds and Notes (cost $39,688,045) $39,688,045
MUNICIPAL COMMERCIAL PAPER (13.1%) *
PRINCIPAL AMOUNT RATINGS ** VALUE
- -----------------------------------------------------------------------------------------------------------------------------
$2,300,000 NY City, Water Finance MCP (Canadian Imperial
Bank of Commerce LOC), 3.7s, 8/8/96 MIG1 $2,300,000
1,900,000 NY State Dorm Auth. MCP (Memorial Sloan-
Kettering Cancer Center)(Chase Manhattan Bank LOC), 3.65s, 8/6/96 MIG1 1,900,000
1,900,000 NY State Environmental Facilities Corp. MCP
(General Electric Project), 3.5s, 6/14/96 P-1 1,900,000
-----------
Total Municipal Commercial Paper (cost $6,100,000) $ 6,100,000
- -----------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $45,788,045)*** $45,788,045
- -----------------------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $46,723,681.
** The Moody's or Standard & Poor's ratings indicated are believed to be the most
recent ratings available at May 31, 1996 for the securities listed. Ratings are generally
ascribed to securities at the time of issuance. While the agencies may from time to
time revise such ratings, they undertake no obligation to do so, and the ratings
do not necessarily represent what the agencies would ascribe to these securities at May 31, 1996.
Moody's Investor Service, Inc. and Standard & Poor's Corp. are the leading independent
rating agencies for debt securities. Moody's uses the designation "Moody's Investment Grade"
or "MIG" for most short-term municipal obligations, adding a "V" ("VMIG") for bonds
with a demand or variable feature; the designation "P" is used for tax-exempt
commercial paper. Standard & Poor's, uses "SP" for notes maturing in three years or less,
"A" for bonds with a demand or variable feature.
Moody's Investor Services, Inc.
MIG1/VMIG1 = Best quality; strong protection of cash flows, superior liquidity and broad access to refinancing
MIG2/VMIG2 = High quality; ample protection of cash flows, superior liquidity support and ability to refinance
P-1 = Superior capacity for repayment
P-2 = Strong capacity for repayment
AAA = Extremely strong capacity to pay interest and repay principal
AA = Strong capacity to pay interest and repay principal and differs from the higher rated issues only in a small degree
Standard & Poor's Corp.
SP-1 = Overwhelming safety characteristics
SP-2 = Strong capacity to pay principal and interest
A-1+ = Overwhelming degree of credit and protection
A-1 = Strong degree of safety
A-2 = Considered strong but lacks solid strength for timely repayment
*** The aggregate identified cost on a tax basis is the same.
The rates on VRDNs are the current rates at May 31, 1996, which are subject to change
based on the terms of the security.
The fund had the following industry group concentrations greater than 10% on May 31,
1996 (as a percentage of net assets):
Housing 26.1%
Energy 22.0
Transportation 11.4
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
May 31, 1996 (Unaudited)
<S> <C>
Assets
- ------------------------------------------------------------------------------------------
Investments in securities, at amortized cost (Note 1) $45,788,045
- ------------------------------------------------------------------------------------------
Cash 616,210
- ------------------------------------------------------------------------------------------
Interest and other receivables 437,559
- ------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 129,943
- ------------------------------------------------------------------------------------------
Total assets 46,971,757
Liabilities
- ------------------------------------------------------------------------------------------
Distributions payable to shareholders 74,448
- ------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 116,854
- ------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 34,707
- ------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 82
- ------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 737
- ------------------------------------------------------------------------------------------
Other accrued expenses 21,248
- ------------------------------------------------------------------------------------------
Total liabilities 248,076
- ------------------------------------------------------------------------------------------
Net assets $46,723,681
Represented by
- ------------------------------------------------------------------------------------------
Paid-in-capital (Note 4) $46,723,681
- ------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share
($46,723,681 divided by 46,723,681 shares) $1.00
- ------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended May 31, 1996 (Unaudited)
<S> <C>
Tax Exempt Interest Income: $743,537
- ------------------------------------------------------------------------------------
Expenses:
- ------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 97,207
- ------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 33,986
- ------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 2,912
- ------------------------------------------------------------------------------------
Administrative services (Note 2) 2,171
- ------------------------------------------------------------------------------------
Reports to shareholders 5,489
- ------------------------------------------------------------------------------------
Registration fees 9,618
- ------------------------------------------------------------------------------------
Auditing 8,255
- ------------------------------------------------------------------------------------
Other 794
- ------------------------------------------------------------------------------------
Total expenses 160,432
- ------------------------------------------------------------------------------------
Expense reduction (Note 2) (51,487)
- ------------------------------------------------------------------------------------
Net expenses 108,945
- ------------------------------------------------------------------------------------
Net investment income 634,592
- ------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $634,592
- ------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
May 31 November 30
1996* 1995
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- -------------------------------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------------------------------
Net investment income $634,592 $1,415,126
- -------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 634,592 1,415,126
- -------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- -------------------------------------------------------------------------------------------------------
From net investment income (634,592) (1,415,126)
- -------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) 7,850,406 (5,941,726)
- -------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 7,850,406 (5,941,726)
- -------------------------------------------------------------------------------------------------------
Net assets
- -------------------------------------------------------------------------------------------------------
Beginning of period 38,873,275 44,815,001
- -------------------------------------------------------------------------------------------------------
End of period $46,723,681 $38,873,275
- -------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
Six
months ended
May 31 Year ended November 30
-----------------------------------------------------------------
1996 * 1995 1994 1993 1992 1991
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------------
Investment operations
- -------------------------------------------------------------------------------------------------------------------------
Net investment income .0154 .0318 .0188 .0165 .0259 (a) .0399 (a)
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (P/E) on investments - - - .0001 - -
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations $.0154 $.0318 $.0188 $.0166 $.0259 $.0399
- -------------------------------------------------------------------------------------------------------------------------
Less distributions:
- -------------------------------------------------------------------------------------------------------------------------
From net investment income (.0154) (.0318) (.0188) (.0165) (.0259) (.0399)
- -------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments - - - (.0001) - -
- -------------------------------------------------------------------------------------------------------------------------
Total distributions (.0154) (.0318) (.0188) (.0166) (.0259) (.0399)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(b) 1.54 (d) 3.23 1.90 1.67 2.62 4.07
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $46,724 $38,873 $44,815 $50,473 $57,705 $64,286
- -------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(c) .37 (d) .91 .77 .91 .78 (a) .80 (a)
- -------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) 1.47 (d) 3.18 1.86 1.69 2.59 (a) 3.96 (a)
* Unaudited
(a) Reflects an expense limitation. As a result of such limitations, expenses
of the fund for the years ended November 30, 1992 and 1991
reflect reductions of $0.0024 and $0.0034 per share, respectively.
(b) Total investment return assumes dividend reinvestments.
(c) The ratio of expenses to average net assets for the period ended November 30,
1995 and thereafter, includes amounts paid through expense offset arrangements.
Prior period ratios exclude these amounts. (See Note 2).
(d) Not annualized
</TABLE>
Notes to financial statements
May 31, 1996 (Unaudited)
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940, as
amended, as a nondiversified, open-end management investment company.
The fund seeks as high a level of current income exempt from Federal
income tax, New York State and New York City personal income taxes as
Putnam Investment Management, Inc. ("Putnam Managment"), the fund's
manager, a wholly-owned subsidiary of Putnam Investments, Inc., believes
is consistent with maintenance of liquidity and stability of principal.
The fund invests primarily in a nondiversified portfolio of short-term
New York tax exempt securities.
The following is a summary of significant accounting policies
consistently followed by the fund in the preparation of its financial
statements. The preparation of financial statements is in conformity
with generally accepted accounting principles and requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities. Actual results could differ from those
estimates.
A) Security valuation The valuation of the fund's portfolio instruments
is determined by means of the amortized cost method as set forth in Rule
2a-7 under the Investment Company Act of 1940. The amortized cost of an
instrument is determined by valuing it at cost originally and thereafter
amortizing any discount or premium from its face value at a constant
rate until maturity.
B) Security transactions Security transactions are accounted for on the
trade date (date the order to buy or sell is executed).
C) Federal taxes It is the policy of the fund to distribute all of its
income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies. It is also the intention of the fund to distribute
an amount sufficient to avoid imposition of any excise tax under Section
4982 of the Internal Revenue Code of 1986. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held and for excise tax on income and capital
gains.
At November 30, 1995, the fund had a capital loss carryover of
approximately $6,605 available to offset future net capital gain, if
any, which will expire on November 30, 2002.
D) Interest income and distributions to shareholders Interest is
recorded on the accrual basis. Income dividends (and distributions of
realized gains, if any) are recorded daily by the fund and are
distributed monthly to the shareholders. The amount and character of
income and gains to be distributed are determined in accordance with
income tax regulations which may differ from generally accepted
accounting principles.
Note 2
Management fee, administrative services, and other transactions
Compensation of Putnam Management, for management and investment
advisory services is paid quarterly based on the average net assets of
the fund. Such fee is based on the following annual rates: 0.45% of the
first $500 million of average net assets, 0.35% of the next $500
million, 0.30% of the next $500 million, and 0.25% of any amount over
$1.5 billion, subject, under current law, to reduction in any year by
the amount of certain brokerage commissions and fees (less expenses)
received by affiliates of Putnam Management on the fund's portfolio
transactions.
The fund 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 aggregate amount of all such reimbursements is determined annually
by the Trustees.
Trustees of the fund receive an annual Trustees fee of $390 and an
additional fee for each Trustee's 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 adopted a Trustee Fee Deferral Plan (the "Plan") which allows
the Trustees to defer the receipt of all or a portion of Trustees Fees
payable on or after July 1, 1995. The deferred fees remain invested in
certain Putnam funds until distribution in accordance with the Plan.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam
Investments, Inc. Investor servicing agent functions are provided by
Putnam Investor Services, a division of PFTC.
For the six months ended May 31, 1996, fund expenses were reduced by
$51,487 under expense offset arrangements with PFTC. Investor servicing
and custodian fees reported in the Statement of operations exclude these
credits. The fund could have invested a portion of the assets utilized
in connection with the expense offset arrangements in an income
producing asset if it had not entered into such arrangements.
The fund has adopted a distribution plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The purpose of the Plan
is to compensate Putnam Mutual Funds Corp., a wholly-owned subsidary of
Putnam Investments, Inc., for services provided and expenses incurred by
it in distributing shares of the fund. The Plan provides for payment by
the fund to Putnam Mutual Funds Corp. at an annual rate of up to 0.35%
of the fund's average net assets. No payments under the Plan are
currently authorized.
Note 3
Purchases and sales of securities
During the six months ended May 31, 1996, purchases and sales (including
maturities) of investment securities (all short-term investments)
aggregated $176,520,525 and $170,052,000, respectively. In determining
the net gain or loss on securities sold, the cost of securities has been
determined on the identified cost basis.
Note 4
Capital shares
At May 31, 1996, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares at a constant net
asset value of $1.00 per share were as follows:
Six months Year ended
ended May 31 November 30
1996 1995
- ---------------------------------------------------
Shares sold 165,731,226 186,252,463
Shares issued in
connection with
reinvestment of
distributions 621,887 1,305,570
- ---------------------------------------------------
166,353,113 187,558,033
Shares
repurchased (158,502,707) (193,499,759)
- ---------------------------------------------------
Net increase
(decrease) 7,850,406 (5,941,726)
- ---------------------------------------------------
Our commitment to quality service
* CHOOSE AWARD-WINNING SERVICE
Putnam Investor Services has won the DALBAR Quality Tested Service Seal
for the past six years. In 1995, over 146,000 tests of 56 shareholder
service components demonstrated that Putnam outperformed the industry
standard in every category.
* HELP YOUR INVESTMENT GROW
Set up a systematic program for investing with as little as $25 a month
from a Putnam money market fund or from your checking or savings
account.*
* SWITCH FUNDS EASILY
You can move money from one account to another with the same class of
shares without a service charge. (This privilege is subject to change or
termination.)
* ACCESS YOUR MONEY QUICKLY
You can get checks sent regularly or redeem shares any business day at
the then-current net asset value, which may be more or less than the
original cost of the shares.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a
helpful Putnam representative.
To make an additional investment in this or any other Putnam fund,
contact your financial advisor or call our toll-free number: 1-800-225-
1581.
*Regular investing of course, does not guarantee a profit or protect
against a loss in a declining market.
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
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Gary N. Coburn
Vice President
James E. Erickson
Vice President
William F. McGue
Vice President
Blake E. Anderson
Vice President
Lindsey C. Strong
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New York
Tax Exempt Money Market Fund. It may also be used as sales literature
when preceded or accompanied by the current prospectus, which gives
details of sales charges, investment objectives, and operating policies
of the fund, and the most recent copy of Putnam's Quarterly Performance
Summary. For more information, or to request a prospectus, call toll
free: 1-800-225-1581.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution, are not insured by the
Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board
or any other agency, and involve risk, including the possible loss of
principal amount invested.
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
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Bulk Rate
U.S. Postage
PAID
Putnam
Investments
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25866-063 7/96
