Putnam
New York
Tax Exempt
Money Market
Fund
SEMIANNUAL REPORT
May 31, 1997
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "[D]espite the obvious love affair individual investors have had
with mutual funds over the past few years, they've also been steadily
allocating cash to money market funds, one of the most conservative and
most "liquid" -- or easy to enter and exit -- investments available.
By next month, these assets could top $1 trillion, up from $300 billion
only four years ago."
-- The Wall Street Journal, April 3, l997
CONTENTS
4 Report from Putnam Management
7 Fund performance summary
10 Portfolio holdings
12 Financial statements
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
Prolonged anticipation of a Federal Reserve Board increase in short-term
interest rates provided most of the challenges for Fund Manager Lindsey Strong
throughout the first half of Putnam New York Tax Exempt Money Market Fund's
fiscal year. Thus, when the Fed finally did raise rates by a quarter point in
late March, she had already positioned the portfolio appropriately.
Lindsey also maintained the fund's conservative strategy of investing in
high-quality short-term investments. As a result, she was able to deliver
another period of competitive performance while maintaining a stable net asset
value. In the following report, Lindsey discusses in detail the driving forces
behind your fund's performance during the first half of fiscal 1997 and her
outlook for the fiscal year's second half.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
July 16, 1997
Report from the Fund Manager
Lindsey C. Strong
During the six months ended May 31, l997, Putnam New York Tax Exempt Money
Market Fund continued to produce competitive returns. At a time when both the
stock and bond markets fluctuated broadly, the fund remained true to its goal
of providing stability of capital as well as a steady stream of double
tax-free income. During the semiannual period, we maintained your fund's
conservative investment approach of selecting only the highest quality
short-term investments for the portfolio.
* ROBUST ECONOMY RAISES CONCERNS ABOUT INFLATION AND INTEREST RATES
When your fund began its fiscal year last December, most markets were enjoying
a favorable environment. Economic growth was moderate and both interest rates
and inflation were at relatively low levels. During the first five months of
1997, however, various leading economic indicators suggested more robust
economic growth. By virtually any measure -- job growth, personal income, new
home sales, personal spending -- the economy was clearly running in high gear,
and concerns about increased inflation and higher interest rates began to
dominate the financial markets.
After leaving interest rates alone for more than two years, the Federal
Reserve Board raised short-term interest rates by a quarter of a percentage
point on March 25, l997, explaining the move as a preemptive strike against
inflation. This move gave rise to speculation that more increases were to
come. However, when the Fed met again in May and July to evaluate the
economy's strength, it took no action on rates, noting that although the
economy remained strong, there seemed to be no conclusive evidence of
accelerating inflation.
* NEW YORK ECONOMY CONTINUES TO IMPROVE
New York's economic and fiscal situations remained positive during the period.
Just as the country as a whole has benefited from a stronger economy, so, too,
has New York. As new jobs are created and unemployment declines, more people
are contributing to the state's tax revenues. This increase has had the effect
of easing some of New York's long-standing budget deficit problems.
While many factors contributed to the fund's performance, our active
investment strategy remains the key ingredient. We combine ongoing analysis of
current holdings with continuous monitoring of the marketplace in search of
appropriate new investments. We believe this is a prudent strategy geared for
long-term success.
Even though the supply of new securities was relatively weak during the
period, we were able to find investments that met our high quality standards.
Currently a majority of the fund's investments are insured or backed by bank
letters of credit. The insurance and letters of credit from a third party
ensure that the short-term debt (money market instruments) in which your fund
invests will be paid within a certain period. These features add a significant
measure of quality assurance even to those issues rated in the highest
categories by nationally recognized rating services, making many of the fund's
holdings among the highest quality securities available. We intend to maintain
or even expand the portfolio's high level of insured and bank-backed
securities, should appropriate investment opportunities arise.
* MAINTAINING A NEUTRAL AND FLEXIBLE STANCE
Because of uncertainty over inflation, interest rates, and the course of the
Fed's monetary policy, we maintained our strategy of keeping the portfolio's
duration relatively neutral. The flexibility afforded by this strategy allows
the fund to take advantage of incrementally higher yields, should interest
rates rise.
We continued to invest in traditional tax-exempt money market securities of
the highest quality. These included variable rate demand notes (VRDNs),
municipal commercial paper, and high-quality municipal notes from large,
well-established issuers. VRDNs are instruments that can be redeemed on short
notice. They pay variable interest rates that reset at daily, weekly, or
monthly intervals. They are helpful in enabling us to adjust the fund's
average maturity and liquidity. Municipal commercial paper and notes are
securities issued by municipalities to finance capital or operating needs.
* OUR OUTLOOK IS POSITIVE, BUT CAUTIOUS
As always, we will be closely monitoring the New York and national economies
in the coming months. We are optimistic that New York will maintain its
relatively healthy economic and fiscal condition. We expect the market to
remain in its current trading range through the summer unless economic data
begin to heat up again. The Fed seems to be on hold in the absence of evidence
that inflation is heating up. Given our outlook for slightly higher interest
rates, we believe the fund's neutral duration should serve it well. In our
view, the fund is well positioned to take advantage of incrementally higher
yields, should interest rates rise. In addition, the fund's emphasis on
high-quality securities should continue to serve shareholders well by
providing a steady stream of tax-exempt income and by maintaining its stable
share price.
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 5/31/97, there is no guarantee the fund will continue to hold
these securities in the future.
PERFORMANCE COMPARISONS (5/31/97)
Current After-tax After-tax
return* return1 return2
- ------------------------------------------------------------------------------
Passbook savings account 2.02% 1.09% 1.14%
- ------------------------------------------------------------------------------
Taxable money market fund 7-day yield 5.11 2.76 2.87
- ------------------------------------------------------------------------------
3-month certificate of deposit 4.07 2.19 2.29
- ------------------------------------------------------------------------------
Putnam New York Tax Exempt
Money Market Fund (7-day yield) 3.00 3.00 3.00
- ------------------------------------------------------------------------------
The net asset value of money market mutual funds is uninsured and designed to
be fixed, while distributions vary daily. Investment returns will fluctuate.
The principal value on passbook savings and on bank CDs is generally insured
up to certain limits by state and federal agencies. Unlike stocks, which incur
more risk, CDs offer a fixed rate of return. Unlike money market funds, bank
CDs may be subject to substantial penalties for early withdrawals.
1 After-tax return assumes a combined 46.08% maximum combined federal, state,
and New York City tax rate.
2 After-tax return assumes a 43.74% maximum combined federal and state income
tax rate.
* Sources: BankBoston (passbook savings), Bank Rate Monitor (3-month CDs),
IBC/Donaghue's Money Fund Report (taxable money market fund compound 7-day
yield).
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 exempt from federal, state, and New York
City personal income taxes, consistent with capital preservation, stable
principal, and liquidity.
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 5/31/97
Lipper
New York
Tax Exempt Consumer
Fund shares Money Market Price
at NAV Fund Average Index
- --------------------------------------------------------------------------
6 months 1.40% 1.49% 0.95%
- --------------------------------------------------------------------------
1 year 2.78 2.91 2.23
- --------------------------------------------------------------------------
5 years 12.81 13.46 14.60
Annual average 2.44 2.56 2.76
- --------------------------------------------------------------------------
Life of fund (10/26/87) 38.55 39.02 38.86
Annual average 3.45 3.50 3.48
- --------------------------------------------------------------------------
Fund performance data do not take into account any adjustment for taxes
payable on reinvested distributions. Performance data represent past
results and are not indicative of future returns. Investment returns will
fluctuate. 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. The fund's
holdings do not match those in the Lipper Average.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 5/31/97
- ------------------------------------------------------------------------------
Distributions (number) 6
- ------------------------------------------------------------------------------
Income $0.013904
- ------------------------------------------------------------------------------
Total $0.013904
- ------------------------------------------------------------------------------
Current return (end of period)
- ------------------------------------------------------------------------------
Current 7-day yield1 3.00%
- ------------------------------------------------------------------------------
Taxable equivalent2(a) 5.56
- ------------------------------------------------------------------------------
Taxable equivalent2(b) 5.33
- ------------------------------------------------------------------------------
Current 30-day yield1 2.96
- ------------------------------------------------------------------------------
Taxable equivalent2(a) 5.49
- ------------------------------------------------------------------------------
Taxable equivalent2(b) 5.26
- ------------------------------------------------------------------------------
1 The 7-day and 30-day yields are the two most common gauges for
measuring money market mutual fund performance.
2 Assumes (a) maximum 46.08% combined federal, state, and New York City
tax rate. or (b) maximum 43.74% combined federal and state 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
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.
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, used for performance
comparison purposes, is an arithmetic average of the total return of all
New York 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. It is not possible to invest
directly in an index.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
WELCOME TO
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New features will be added to the site on an ongoing basis. So, visit us
at http://www.putnaminv.com -- often!
Portfolio of investments owned
May 31, 1997 (Unaudited)
Key to Abbreviations
FHA Insd. -- Federal Housing Administration Insured
G.O. Bonds -- General Obligation Bonds
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
RAN -- Revenue Anticipation Notes
VRDN -- Variable Rate Demand Notes
MCP -- Municipal Commercial Paper
FSA -- Financial Security Assurance
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (73.3%) *
PRINCIPAL AMOUNT RATINGS** VALUE
<S> <C> <C> <C>
New York (63.1%)
- ------------------------------------------------------------------------------------------------------------
$ 1,300,000 Buffalo, RAN, Ser. A, 4 1/4s, 7/15/97
(Landesbank Hessen (LOC)) MIG1 $ 1,300,585
1,895,000 Monroe Cnty., Indl. Dev. Agcy. VRDN
(Columbia Sussex Corp.), 5s, 11/01/14
(Cumberland Fed. S&L (LOC)) VMIG1 1,895,000
1,800,000 Nasau Cnty., Indl. Dev. Agcy. VRDN
(Cold Spring Harbor Lab), 4s, 7/1/19
(Morgan Trust (LOC)) VMIG1 1,800,000
2,100,000 NY City G.O. Bonds VRDN, 4.2s, 8/15/22
(Union Bank of (LOC)) VMIG1 2,100,000
250,000 NY City, G.O. Bonds, Ser. A, 8 3/4s, 11/01/97 Aaa 258,690
500,000 NY City, Hsg. Dev. Corp. Mtg. VRDN
(Multi-Fam. James Twr.), Ser. A, 3.15s, 07/01/05
(Citibank N.A. (LOC)) A-1 500,000
3,000,000 NY City, Hsg. Dev. Corp. Special Obligation VRDN
(East 96th St. Project), Ser. A, 3.8s, 08/01/15
(Bank of Tokyo Mitsubishi (LOC)) VMIG1 3,000,000
2,100,000 NY State Dorm. Auth. VRDN (Oxford U. Press Inc.),
4.05s, 07/01/23 (Landesbank Hessen (LOC)) VMIG1 2,100,000
3,000,000 NY State Energy Res. & Dev. Auth. Poll. Ctrl.
VRDN (LILCO), Ser. A, 3.6s, 3/01/16
(Deutsche Bank A.G., NY (LOC)) VMIG1 2,999,100
NY State Hsg. Fin. Agcy. VRDN
1,900,000 (Special Surgery Hosp. Staff), Ser. A, 3.85s, 11/01/10
(Chase Manhattan Bank (LOC)) VMIG1 1,900,000
1,700,000 (Normadie Court I), 3.9s, 05/15/15
(Landesbank (LOC)) VMIG1 1,700,000
2,655,000 NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
(Insd. Mtge. Hosp.), Ser. A, Insd. FHA, 8s, 2/15/25 Aaa 2,729,625
500,000 Suffolk Cnty. G.O. Bonds (Southwest Swr. Dist.),
MBIA, 4s, 2/01/98 Aaa 500,330
2,000,000 Suffolk Cnty., Indl. Dev. Agcy. VRDN
(Cold Spring Harbor Lab), 4s, 7/01/23
(Morgan Guaranty Trust (LOC)) VMIG1 2,000,000
250,000 Triborough Bridge & Tunnel Auth. Rev. Bonds,
MBIA, 4.3s, 01/01/98 Aaa 250,597
------------
25,033,927
Puerto Rico (10.2%)
- ------------------------------------------------------------------------------------------------------------
2,000,000 Cmnwlth. of PR G.O. Bonds, MBIA, 7 1/8s, 7/01/02 Aaa 2,045,000
2,000,000 PR, Indl. Med. & Env. Poll. Ctrl. Fac. Fin. Auth. VRDN
(Reynolds Metal Co.), 3 3/4s, 9/01/13
(ABN AMRO Bank (LOC)) VMIG1 1,999,920
------------
4,044,920
------------
Total Municipal Bonds and Notes
(cost $29,078,847) $29,078,847
MUNICIPAL COMMERCIAL PAPER (26.7%) *
PRINCIPAL AMOUNT RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------
$ 3,000,000 NY City G.O.1996j3 MCP, 3 1/2s, 7/16/97 A-1 $ 3,000,000
1,800,000 NY Dorm Auth MCP (Memorial Sloan-Kettering
Cancer Center), 3.45s, 7/16/97 A-1 1,800,000
3,000,000 NY G.O. 1997a MCP, 3.45s, 7/16/97 A-1 3,000,000
1,000,000 NY City G.O. FSA MCP, 3 1/2s, 7/16/97 A-1 1,000,000
1,800,000 NY City Muni Water Finance MCP, 3 3/4s, 7/31/97 A-1 1,800,000
--------------
Total Municipal Commercial Paper
(cost $10,600,000) 10,600,000
- ------------------------------------------------------------------------------------------------------------
Total Investments (cost $39,678,847) *** $39,678,847
- ------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $41,141,070.
** The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings available at
May 31 1997 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, 1997.
Securities rated by Putnam are indicated by "/P" and are not publicly rated.
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 Service, Inc.
MIGI/VMIGI = Best quality; strong protection of cash flows, superior liquidity and broad access to refinancing
MIG2/VMIG2 = High quality; ample protection of cash flows, liquidity support and ability to refinance
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
P-1 = Superior capacity for repayment
P-2 = Strong capacity for repayment
Standard & Poor's Corp.
SP-1 = Overwhelming safety characteristics
SP-2 = Strong capacity to pay interest and repay principal.
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 shown on VRDN are the current interest rates at May 31,1997.
The fund had the following industry group concentrations greater than 10% at May 31, 1997 (as a percentage of net
assets):
Housing 18.0%
Healthcare 15.2
Industrial 13.8
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
May 31, 1997 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost (Note 1) $ 39,678,847
- ---------------------------------------------------------------------------------------------------
Cash 857,536
- ---------------------------------------------------------------------------------------------------
Interest and other receivables 443,448
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 411,376
- ---------------------------------------------------------------------------------------------------
Total assets 41,391,207
Liabilities
- ---------------------------------------------------------------------------------------------------
Distributions payable to shareholders 77,957
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 83,030
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 49,021
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 8,060
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 3,668
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 670
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 27,731
- ---------------------------------------------------------------------------------------------------
Total liabilities 250,137
- ---------------------------------------------------------------------------------------------------
Net assets $ 41,141,070
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Note 4) $ 41,141,070
- ---------------------------------------------------------------------------------------------------
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share
($41,141,070 divided by 41,141,070 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, 1997 (Unaudited)
<S> <C>
Tax exempt interest income $ 733,780
- --------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 95,085
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 51,124
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 2,368
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 1,986
- --------------------------------------------------------------------------------------------------
Reports to shareholders 7,667
- --------------------------------------------------------------------------------------------------
Registration fees 4,441
- --------------------------------------------------------------------------------------------------
Auditing 8,061
- --------------------------------------------------------------------------------------------------
Legal 8,685
- --------------------------------------------------------------------------------------------------
Postage 1,688
- --------------------------------------------------------------------------------------------------
Other 7,724
- --------------------------------------------------------------------------------------------------
Total expenses 188,829
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (40,734)
- --------------------------------------------------------------------------------------------------
Net expenses 148,095
- --------------------------------------------------------------------------------------------------
Net investment income 585,685
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 585,685
- --------------------------------------------------------------------------------------------------
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
1997* 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $ 585,685 $ 1,177,005
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 585,685 1,177,005
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income (585,685) (1,177,005)
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 1,685,331 582,464
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 1,685,331 582,464
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 39,455,739 38,873,275
- ----------------------------------------------------------------------------------------------------------------------
End of period $41,141,070 $39,455,739
- ----------------------------------------------------------------------------------------------------------------------
* 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
Per-share May 31
operating performance (Unaudited) Year ended November 30
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
<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 .0139 .0289 .0318 .0188 .0165 .0259 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments -- -- -- -- .0001 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0139 .0289 .0318 .0188 .0166 .0259
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.0139) (.0289) (.0318) (.0188) (.0165) (.0259)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.0001)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.0139) (.0289) (.0318) (.0188) (.0166) (.0259)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(b) 1.40 * 2.93 3.23 1.90 1.67 2.62
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(in thousands) $41,141 $39,456 $38,873 $44,815 $50,473 $57,705
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .45 * .88 .91 .77 .91 .78 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 1.38 * 2.75 3.18 1.86 1.69 2.59 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
* Not annualized.
(a) Reflects an expense limitation. As a result of such limitation, expenses of the fund for the year
ended November 30, 1992 reflects a reduction of $0.0024 per share.
(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).
</TABLE>
Notes to financial statements
May 31, 1997 (Unaudited)
Note 1
Significant accounting policies
Putnam New York Tax Exempt Money Market Fund (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, New York State and New York City personal income
taxes as Putnam Investment Management, Inc. ("Putnam Management"), 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, as amended. Therefore, no provision has been made for federal taxes
on income, capital gains or unrealized appreciation on securities held nor for
excise tax on income and capital gains.
At November 30, 1996, the fund had a capital loss carryover of approximately
$6,600 available to offset future capital gains, 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.
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, 0.25% of the next $5 billion, 0.225% of the next $5 billion, 0.205%
of the next $5 billion, 0.19% of the next $5 billion and 0.18% of any excess
thereafter. Prior to January 20, 1997, any amount over $1.5 billion was based
on 0.25%.
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.
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, 1997, fund expenses were reduced by $40,734
under expense offset arrangements with PFTC and brokerage service
arrangements. 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.
Trustees of the fund receive an annual Trustees fee of $170 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 has 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 in the fund and are invested
in certain Putnam funds until distribution in accordance with the Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan
(the "Pension Plan") covering all Trustees of the fund who have served as
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
Note 3
Purchase and sales of securities
During the six months ended May 31, 1997, purchases and sales of investment
securities (all short-term obligations) aggregated $282,551,066 and
$280,298,793, 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, 1997, 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 ended Year ended
May 31 November 30
1997 1996
- ------------------------------------------------------------
Shares sold 118,208,326 304,712,398
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 553,621 1,174,100
- ------------------------------------------------------------
118,761,947 305,886,498
Shares
repurchased (117,076,616) (305,304,034)
- ------------------------------------------------------------
Net increase 1,685,331 582,464
- ------------------------------------------------------------
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Global Natural Resources Fund *
Health Sciences Trust
International Growth Fund +
International New Opportunities Fund
Investors Fund
New Opportunities Fund
OTC & Emerging Growth Fund [DBL. DAGGER]
Vista Fund
Voyager Fund
Voyager Fund II
PUTNAM GROWTH
AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Diversified Income Trust II
Federal Income Trust
Global Governmental Income Trust
High Yield Advantage Fund
High Yield Trust
Income Fund
Intermediate U.S. Government Income Fund
Preferred Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New
Jersey, New York, Ohio and Pennsylvania
LIFESTAGESM FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market
investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
MOST CONSERVATIVE
INVESTMENTS **
Putnam money market funds: ++
California Tax Exempt Money Market Fund
Money Market Fund
New York Tax Exempt Money Market Fund
Tax Exempt Money Market Fund
CDs and savings accounts [2 DBL. DAGGERS]
* Formerly Natural Resources Fund
+ Formerly Overseas Growth Fund
[DBL. DAGGER] Formerly OTC Emerging Growth Fund
[SECTION MARK] Not available in all states.
** Relative to above.
++ An investment in a money market fund is neither insured nor
guaranteed by the U.S. government. These funds are managed to maintain a
price of $1.00 per share, although there is no assurance that this price
will be maintained in the future.
[2 DBL. DAGGERS] Not offered by Putnam Investments. Certificates of
deposit offer a fixed rate of return and may be insured
up to certain limits by federal/state agencies. Savings
accounts may also be insured up to certain limits. Please
call your financial advisor or Putnam at 1-800-225-1581 to
obtain a prospectus for any Putnam fund. It contains more
complete information, including charges and expenses. Please
read it carefully before you invest or send money.
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
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
William J. Curtin
Vice President
William F. McGue
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. You
can also learn more at Putnam Investments' website: http://www.putnaminv.com.
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.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- --------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- --------------------
34417-063 7/97
