Putnam
New York
Tax Exempt
Money Market
Fund
SEMIANNUAL REPORT
May 31, 1998
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "Amid ongoing improvement in New York's economic and fiscal situation,
the state's municipal money market environment has become more and
more positive. Nevertheless, we remain extremely cautious in our
securities selection process and continue to seek only those holdings that
meet the highest quality standards."
-- Brian S. Torpey, manager
Putnam New York Tax Exempt Money Market Fund
CONTENTS
4 Report from Putnam Management
7 Fund performance summary
9 Portfolio holdings
11 Financial statements
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
Demonstrating the perversity that frequently visits the securities markets,
Asia's financial woes worked to the benefit of U.S. fixed-income investments
throughout the six months ended May 31, 1998. During the period that comprised
the first half of Putnam New York Tax Exempt Money Market Fund's fiscal year,
assets from all over the world fled to the safety of U.S. bonds.
The inflow bolstered the entire spectrum of fixed-income securities, including
New York money market instruments. More significantly, perhaps, the rise in
bond prices that drove yields lower obviated the need for the inflation-wary
Federal Reserve Board to raise interest rates.
Throughout the period, your fund was able to continue providing competitive
returns while maintaining a steady $1.00 per share price. In the following
report, Fund Manager Brian Torpey reviews strategy and discusses prospects for
the second half.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
July 15, 1998
Report from the Fund Manager
Brian S. Torpey
New York tax-exempt bond investors were among the beneficiaries of the state's
continuing Wall Street boom, surging employment, and falling crime rate during
the six months ended May 31, 1998. Within this economic environment during the
first half of Putnam New York Tax Exempt Money Market Fund's fiscal year,
shares of the fund delivered a competitive total return while maintaining a
stable $1.00 share price.
* INVESTORS BENEFIT FROM STRONG NATIONAL, STATE ECONOMIES
Despite concerns about fallout from the Asian financial crisis, the U.S.
economy maintained a rather heady pace of expansion during the semiannual
period. Indeed, U.S. economic data did not experience significant negative
consequences as weaker demand in Asia pushed down worldwide commodities prices
and long-term interest rates.
While the economy continues to expand at a rate that in the past would have
been considered a harbinger of inflationary pressures, current data show
virtually no signs of higher inflation. The inflation rate for 1997 was just
1.4%, and so far the numbers for 1998 seem similarly low. Given such a benign
environment, the Federal Reserve Board has kept monetary policy on hold
throughout the period. In fact, the Fed has not raised the federal funds rate,
the benchmark rate on overnight loans between banks, since March 1997. At that
time, policymakers feared the then strong economic demand would result in
increased inflation.
The news keeps getting better for New York City. Earlier this spring, several
of the city's general obligation bonds were upgraded, a move the market had
anticipated for some time. Another tax cut provided additional good news for
New York residents. Fiscal conservatism and strong economic policies are
expected to provide a fiscal year budget surplus even greater than last year's
$1.4 billion.
* MONEY MARKET FUNDS CONTINUE TO ATTRACT CASH
Money market funds continued to receive record inflows over the past six
months. Investors are moving assets to more conservative, high-quality
investments because of the increased volatility in the stock market, a
potential intervention by the Fed, and the Asian crisis. Money market funds
are especially attractive now not only because of their liquid, high-quality
assets but because of the flat yield curve environment that has resulted in
tighter spreads relative to long-term funds.
During the period, derivative products continued to grow in availability as
many investors sought to increase their income in today's flat interest-rate
environment. However, your fund has always avoided derivatives, preferring to
focus exclusively on more conservative tax-exempt money market securities of
the highest quality. These may include variable rate demand notes (VRDNs),
tax-exempt notes, and municipal commercial paper from large top-quality
issuers. VRDNs are instruments that pay variable interest rates that reset
daily, weekly, or monthly.
Superior quality thus remains a hallmark of your fund. With the exception of
general obligation securities issued by the state of New York, all portfolio
holdings are backed by letters of credit or insurance or are U.S. Treasury
issues.
Diversification is another key element of your fund's conservative strategy.
The Securities and Exchange Commission recently updated its Rule 2a-7
requirements for tax-exempt money market funds, which took effect July 1,
1998. Because Putnam Management has always believed in the prudence of
diversification, your fund is already in compliance with these new
requirements.
* NEUTRAL DURATION STRUCTURE KEEPS FUND FLEXIBLE FOR WHAT LIES AHEAD
In seeking to position the fund appropriately for the current interest-rate
environment and for any changes that may lie ahead, we have continued our
strategy of maintaining flexibility. At the end of the period, this meant
keeping the fund's average days to maturity neutral relative to the market.
This positioning readies the fund to capitalize on the higher tax-exempt
security yields that typically become available during the second quarter
because of tax-exempt money market fund cash outflows for income tax
payments. We also expect to take advantage of new VRDN supply that should
become available this summer, when many states conclude their fiscal years
and come to market with new municipal issues.
PERFORMANCE COMPARISONS (5/31/98)
Current After-tax After-tax
return* return1 return2
- ----------------------------------------------------------------------------
Passbook savings account 2.00% 1.08% 1.13%
- ----------------------------------------------------------------------------
Taxable money market fund (7-day yield) 5.02 2.71 2.82
- ----------------------------------------------------------------------------
3-month certificate of deposit 3.99 2.15 2.24
- ----------------------------------------------------------------------------
Putnam New York Tax Exempt
Money Market Fund (7-day yield) 3.12 3.12 3.12
- ----------------------------------------------------------------------------
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.
1After-tax return assumes a combined 46.08% federal, New York state, and New
York City tax rate.
2After-tax return assumes a combined 43.74% federal and New York state 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).
For the time being, it appears that economic strength and low inflation
can indeed go hand in hand. With the Fed waiting to see how and if the
Asian financial crisis will affect the U.S. economy, short-term interest
rates appear to be on hold for now. Should the economy begin to overheat,
however, the Fed may be forced to raise rates. Your fund's duration
structure and conservative, quality-focused strategy position it well for
this environment by providing the flexibility to capture any higher yields
that become available.
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 5/31/98, there is no guarantee the fund will continue to hold
these securities in the future. An investment in this fund is neither insured
nor guaranteed by the U.S. government, and there is no assurance that a $1.00
share price will be maintained.
Performance summary
This section provides information about your fund's performance, which
should always be considered in light of its investment strategy. Putnam
New York Tax Exempt Money Market Fund is designed for investors seeking
current income exempt from federal, New York state, and New York City
income tax, consistent with capital preservation, stable principal, and
liquidity.
TOTAL RETURN FOR PERIODS ENDED 5/31/98
Lipper New York
Tax Exempt
Money Market Fund Consumer
NAV Average Price Index
- ------------------------------------------------------------------------------
6 months 1.51% 1.49% 0.80%
- ------------------------------------------------------------------------------
1 year 3.00 3.06 1.69
- ------------------------------------------------------------------------------
5 years 13.80 14.59 12.90
Annual average 2.62 2.76 2.46
- ------------------------------------------------------------------------------
10 years 38.80 40.05 38.55
Annual average 3.33 3.43 3.32
- ------------------------------------------------------------------------------
Life of fund (10/26/87) 42.45 43.25 41.20
Annual average 3.39 3.45 3.31
- ------------------------------------------------------------------------------
Past performance is no guarantee of future results. Fund performance data
do not take into account any adjustment for taxes payable on reinvested
distributions. 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 5/31/98
- ------------------------------------------------------------------------------
Distributions (number) 6
- ------------------------------------------------------------------------------
Income $0.014949
- ------------------------------------------------------------------------------
Current return (end of period)
- ------------------------------------------------------------------------------
Current 7-day yield1 3.25%
- ------------------------------------------------------------------------------
Taxable equivalent (a)2 5.78
- ------------------------------------------------------------------------------
Taxable equivalent (b)2 6.03
- ------------------------------------------------------------------------------
Current 30-day yield1 3.03
- ------------------------------------------------------------------------------
Taxable equivalent (a)2 5.39
- ------------------------------------------------------------------------------
Taxable equivalent (b)2 5.62
- ------------------------------------------------------------------------------
1The 7-day and 30-day yields are the two most common gauges for measuring
money market mutual fund performance.
2Assumes (a) maximum 43.74% combined federal income tax and New York state
personal income tax rate or (b) maximum 46.08% 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.
TOTAL RETURN FOR PERIODS ENDED 6/30/98
(most recent calendar quarter)
NAV
- ------------------------------------------------------------------------------
6 months 1.49%
- ------------------------------------------------------------------------------
1 year 3.00
- ------------------------------------------------------------------------------
5 years 13.93
Annual average 2.64
- ------------------------------------------------------------------------------
10 years 38.68
Annual average 3.32
- ------------------------------------------------------------------------------
Life of fund (10/26/87) 42.82
Annual average 3.39
- ------------------------------------------------------------------------------
Performance data represent past results, do not reflect future
performance, and will differ for each share class. Investment returns and
principal value will fluctuate so that an investor's shares, when sold,
may be worth more or less than their original cost. See first page of
performance section for performance calculation method.
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
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.
Portfolio of investments owned
May 31, 1998 (Unaudited)
Key to Abbreviations
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Financial Guaranty Insurance Company
G.O. Bonds -- General Obligation Bonds
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MCP -- Municipal Commercial Paper
RAN -- Revenue Anticipation Notes
VRDN -- Variable Rate Demand Notes
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (85.2%) (a)
PRINCIPAL AMOUNT RATINGS (RAT) VALUE
New York (76.1%)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Babylon, Indl. Dev. Agcy. Resource Recvy. Rev. Bonds
(Ogden Martin Syst. Babylon Inc.)
$ 495,000 Ser. B, 8 1/2s, 1/1/19 Aaa $ 511,666
1,000,000 Ser. C, 8 1/2s, 1/1/19 Aaa 1,033,784
585,000 Chemung Cnty., G.O. Bonds, MBIA, 4 3/4s, 8/1/98 Aaa 585,868
1,000,000 Erie Cnty., G.O. Bonds, Ser. B, 4 1/2s, 10/29/98
(Union Bank of Switzerland (LOC)) MIG1 1,002,709
4,000,000 Long Island, Pwr. Auth. NY Elec. Syst. VRDN,
Ser. 1, 4s, 5/1/33 (Bayerische Landesbank (LOC)) VMIGI 4,000,000
1,010,000 Metropolitan Trans. Auth. Rev. Bonds (Commuter
Fac.), Ser. L, AMBAC, 7 1/2s, 7/1/17 Aaa 1,033,211
1,750,000 Monroe Cnty., Indl. Dev. Agcy. VRDN (Columbia
Sussex Corp.), 5s, 11/1/14 (Cumberland Fed.
S&L (LOC)) A-1+ 1,750,000
2,000,000 NY City, RAN, Ser. A, 4 1/2s, 6/30/98 (Morgan
Guaranty Trust (LOC)) MIG1 2,001,074
1,700,000 NY City, Hlth. & Hosp. Corp. VRDN (Hlth. Syst.),
Ser. A, 3.9s, 2/15/26 (Morgan Guaranty Trust
(LOC)) VMIGI 1,700,000
NY City, Indl. Dev. Agcy. VRDN
1,700,000 (Columbia Grammar School), 3.85s, 6/30/14
(Chase Manhattan Bank (LOC)) A-1 1,700,000
1,500,000 (Stroheim & Romann, Inc.), 3.8s, 12/1/15
(Westdeutsche Landesbank Girozentrale (LOC)
Germany) A-1+ 1,500,000
1,800,000 (Heavenly Rest Day Church), 3.85s, 7/1/21
(Barclays Bank PLC (LOC)) VMIGI 1,800,000
1,000,000 NY State Sr. Lien Rev. Bonds, 5s, 7/1/98 Aaa 1,000,772
500,000 NY State Dorm. Auth. Rev. Bonds (Columbia U.),
4.6s, 7/1/98 AAA 500,214
500,000 NY State Hsg. Fin. Agcy. Rev. Bonds (State U.
Constr.), Ser. A, 8s, 11/1/06 Aaa 518,466
1,700,000 NY State Hsg. Fin. Agcy. VRDN (Normadie Court I),
3.9s, 5/15/15 (Landesbank Hessien (LOC)) VMIGI 1,700,000
1,700,000 NY State Local Govt. Assistance Corp. VRDN,
Ser. E, 3.9s, 4/1/25 (Canadian Imperial Bank
(LOC)) VMIGI 1,700,000
1,800,000 NY State Med. Care Fac. Fin. Agcy. VRDN (Lenox
Hill Hosp.), Ser. A, 3.95s, 11/1/08 (Chase
Manhattan Bank) (LOC)) VMIGI 1,800,000
1,700,000 Triborough Bridge & Tunnel Auth. Special Obligation
VRDN, FGIC, 3.9s, 1/1/24 VMIGI 1,700,000
--------------
27,537,764
Puerto Rico (9.1%)
- -------------------------------------------------------------------------------------------------------------
PR, Indl. Med. & Env. Poll. Ctrl. Fac. Fin. Auth. VRDN
1,300,000 (Higher Ed.), 4.4s, 12/1/15 (Bank of Tokyo
Mitsubishi (LOC)) VMIGI 1,300,000
2,000,000 (Reynolds Metal Co.), 3 3/4s, 9/1/13 (ABN
AMRO Bank (LOC)) A-1+ 2,000,892
--------------
3,300,892
--------------
Total Municipal Bonds and Notes (cost $30,838,656) $ 30,838,656
MUNICIPAL COMMERCIAL PAPER (14.7%) (a)
PRINCIPAL AMOUNT RATINGS (RAT) VALUE
- -------------------------------------------------------------------------------------------------------------
$ 1,800,000 New York G.O. MCP 3.8s, 7/23/98 MIGI $ 1,800,000
3,500,000 NYC Water and Sewer MCP 3.9s, 7/10/98 VMIGI 3,500,000
--------------
Total Municipal Commercial Paper (cost $5,300,000) $ 5,300,000
- -------------------------------------------------------------------------------------------------------------
Total Investments (cost $36,138,656) (b) $ 36,138,656
- -------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $36,189,248.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings available
at May 31, 1998 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, 1998, 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+ = Very strong capacity to pay principal and interest
SP-1 = Strong capacity to pay principal and interest
SP-2 = Satisfactory capacity to pay principal and interest
A-1+ = Extremely strong degree of safety
A-1 = Strong degree of safety
A-2 = Satisfactory capacity for timely repayment
(b) The aggregate identified cost on a tax basis is the same.
The rates shown on VRDN's are the current interest rates at May 31, 1998.
The fund had the following industry group concentrations greater than 10% at May 31, 1998
(as a percentage of net assets):
Industrial 21.1%
Utilities 20.8
Education 12.5
Health care 10.9
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
May 31, 1998 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost (Note 1) $36,138,656
- ---------------------------------------------------------------------------------------------------
Cash 87,845
- ---------------------------------------------------------------------------------------------------
Interest and other receivables 330,359
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 235,236
- ---------------------------------------------------------------------------------------------------
Total assets 36,792,096
Liabilities
- ---------------------------------------------------------------------------------------------------
Distributions payable to shareholders 60,284
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 473,601
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 43,132
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 3,958
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 4,030
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 885
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 16,958
- ---------------------------------------------------------------------------------------------------
Total liabilities 602,848
- ---------------------------------------------------------------------------------------------------
Net assets $36,189,248
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Note 4) $36,189,248
- ---------------------------------------------------------------------------------------------------
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share
($36,189,248 divided by 36,189,248 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, 1998 (Unaudited)
<S> <C>
Tax exempt interest income $707,666
- --------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 89,362
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 42,582
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 1,924
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 2,044
- --------------------------------------------------------------------------------------------------
Registration fees 367
- --------------------------------------------------------------------------------------------------
Auditing 8,340
- --------------------------------------------------------------------------------------------------
Legal 6,727
- --------------------------------------------------------------------------------------------------
Other 891
- --------------------------------------------------------------------------------------------------
Total expenses 152,237
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (37,314)
- --------------------------------------------------------------------------------------------------
Net expenses 114,923
- --------------------------------------------------------------------------------------------------
Net investment income 592,743
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $592,743
- --------------------------------------------------------------------------------------------------
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
1998* 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $ 592,743 $ 1,238,315
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 592,743 1,238,315
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income (592,743) (1,238,315)
- ----------------------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) (7,911,596) 4,645,105
- ----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (7,911,596) 4,645,105
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 44,100,844 39,455,739
- ----------------------------------------------------------------------------------------------------------------------
End of period $36,189,248 $44,100,844
- ----------------------------------------------------------------------------------------------------------------------
* 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
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .0150 .0287 .0289 .0318 .0188 .0165
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments -- -- -- -- -- .0001
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0150 .0287 .0289 .0318 .0188 .0166
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.0150) (.0287) (.0289) (.0318) (.0188) (.0165)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- -- (.0001)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.0150) (.0287) (.0289) (.0318) (.0188) (.0166)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 1.51 2.91 2.93 3.23 1.90 1.67
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(in thousands) $36,189 $44,101 $39,456 $38,873 $44,815 $50,473
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .38 .83 .88 .91 .77 .91
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 1.49 2.92 2.75 3.18 1.86 1.69
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Total investment return assumes dividend reinvestments.
(b) 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. (Note 2).
</TABLE>
Notes to financial statements
May 31, 1998 (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 and related investment income 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, 1997, 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.
E) Amortization of bond premium Premiums from purchases of short-term
investments are amortized using the straight-line method.
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% thereafter.
The fund reimburses Putnam Management an allocated amount 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 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, 1998, fund expenses were reduced by $37,314
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.
Each Trustee of the fund receives an annual Trustee fee, of which $150 has
been allocated to the fund, 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 "Deferral 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
Deferral 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.
Putnam Mutual Funds Corp., acting as underwriter receives proceeds from
contingent deferred sales charges that apply to certain shares that have been
exchanged from other Putnam funds. Putnam Mutual Funds received no monies in
contingent deferred sales charges from such redemptions.
Note 3
Purchase and sales of securities
During the six months ended May 31, 1998, purchases and sales (including
maturities) of investment securities (all short-term obligations) aggregated
$235,600,837 and $243,405,000, 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, 1998, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital at a constant net asset value of
$1.00 per share were as follows:
Six months ended
May 31, 1998
- ------------------------------------------------------------
Shares sold 15,792,366
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 570,407
- ------------------------------------------------------------
16,362,773
Shares
repurchased (24,274,369)
- ------------------------------------------------------------
Net decrease (7,911,596)
- ------------------------------------------------------------
Year ended
November 30, 1997
- ------------------------------------------------------------
Shares sold 189,482,229
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,134,378
- ------------------------------------------------------------
190,616,607
Shares
repurchased (185,971,502)
- ------------------------------------------------------------
Net increase 4,645,105
- ------------------------------------------------------------
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund [DBL. DAGGER]
Capital Opportunities Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Opportunities Fund [DBL. DAGGER]
OTC & Emerging Growth Fund
Research Fund
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
Global Growth and Income Fund
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
Strategic Income Fund *
High Quality Bond Fund +
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Total Return Fund
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Money Market 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 Exempt Money Market 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
State tax-free money market funds [SECTION MARK]
California, New York
LIFESTAGE SM 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
*Formerly Putnam Diversified Income Trust II
+Formerly Putnam Federal Income Trust
[DBL. DAGGER] Closed to new investors. Some exceptions may apply.
Contact Putnam for details.
[SECTION MARK] Not available in all states.
**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.
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
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
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
Ian C. Ferguson
Vice President
William J. Curtin
Vice President
Jerome J. Jacobs
Vice President
Brian S. Torpey
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
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 the 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
- --------------------
SA056-43775 063 7/98
