Putnam
New York
Tax Exempt
Money Market
Fund
ANNUAL REPORT
November 30, 1997
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "While New York's fiscal and economic situation currently reflects
a position of strength, we remain extremely cautious in securities
selection for the fund, since preserving credit quality and net asset
value remain two of the most important components of our investment
strategy."
-- Brian S. Torpey, manager
Putnam New York Tax Exempt Money Market Fund
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
14 Financial statements
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
In contrast to the somewhat unsettled interest-rate environment that prevailed
when Putnam New York Tax Exempt Money Market Fund's management reported to you
at the fiscal year's midpoint, stable rates kept fixed-income investors more
or less calm during the second half. The global flight to the relative safety
of money market funds in the aftermath of the Southeast Asian currency crisis
in late October provided a dramatic and positive finale.
I am pleased to introduce your fund's new manager, Brian S. Torpey. Brian
joined Putnam in 1996 as tax-exempt cash manager. He currently manages other
Putnam tax-exempt money market funds as well as the cash positions of our
tax-exempt bond funds. He has nine years of investment industry experience.
In the following report, Brian reviews the fund's fiscal year that ended on
November 30, 1997, and discusses prospects for the fiscal year just begun.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
January 21, 1998
Report from the Fund Manager
Brian S. Torpey
Putnam New York Tax Exempt Money Market Fund concluded its fiscal year much as
it began, in an environment marked by solid economic growth, low inflation,
and relatively low interest rates. In this climate, your fund's conservative
investment strategy continued to serve shareholders well. Once again, an
emphasis on superior quality, capital preservation, and current tax-free
income enabled the fund to provide a competitive total return while
maintaining a stable $1.00 share price.
* STEADY GROWTH, LOW INFLATION ENVIRONMENT CONTINUES
The U.S. economy has remained strong through the year. The Federal Reserve
System's November survey pegs growth at a healthy 3.6% for the calendar year
to date. The unemployment rate has dropped below 5%, indicating an expanding
economy. In addition, The Conference Board's index of leading indicators has
advanced for six consecutive months through October. Despite the economic
growth, inflation data have been subdued as the Producer Price Index has
inched up a modest 2.1% year over year through November. Also there is a
possibility that weakness in Asian markets could spill into the U.S. markets.
These factors have tempered the argument to raise short-term rates to keep
inflation in check.
* MONETARY POLICY STAYS ON HOLD FOR MOMENT
While volatility in the financial markets continues to reflect investor
sensitivity to inflationary pressures, the Federal Reserve Board has not
raised short-term interest rates since its March meeting. In April and May,
money market security yields rose in expectation of another Fed increase. When
the Fed failed to act, yields backed down to their current levels near the
federal funds target rate.
Although the "persistent strength in demand" cited by Fed officials as a key
reason for their March interest-rate tightening has continued, this demand has
not yet led to rising prices, and at subsequent meetings during the period,
the Fed found no compelling reason to raise rates again. In his October
congressional testimony, Fed Chairman Alan Greenspan did warn that the economy
had not slowed enough to eliminate the threat of renewed inflation, although
most analysts believed that the subsequent eruption of the Southeast Asian
currency crisis has made near-term Fed action on interest rates unlikely.
* NEW YORK'S FISCAL STRENGTH PROVIDES FAVORABLE CREDIT BACKDROP FOR TAX-EXEMPT
MONEY MARKET
In step with the rest of the country, New York's economic prospects improved
during the period. Job growth continued and unemployment declined. Business
improved in many sectors, most notably in the financial services industry,
where Wall Street had a banner year.
As the healthy U.S. economy has decreased the borrowing needs of the U.S.
Treasury, so has New York's economic strength lowered the state government's
borrowing needs. Higher employment levels have created higher tax revenues,
offsetting the needs of the state and cities to issue new short-term debt.
While this has decreased the supply of money market securities, it has
provided a favorable credit backdrop for the market.
New York City provides a shining example of the positive effects of this
situation. While the rating agencies did not raise the city's credit ratings,
investors recognized the situation as a promising opportunity and the city's
general obligation bonds rose in price to become among the top-performing
credits within the national tax-exempt market. New York City is also a major
issuer of tax-exempt money market securities, and the same positive factors
that supported its longer-term municipal bonds have helped to support money
market issues as well.
* STAYING NEUTRAL AND KEEPING QUALITY HIGH
Given our expectation of potentially higher interest rates by early 1998, we
have continued to position the fund flexibly. During the period, this meant
keeping portfolio duration relatively neutral -- rather than short or long --
in order to be ready to take advantage of incrementally higher yields, should
interest rates begin to rise. Throughout the period, we continued to seek out
securities offering strong value and solid yield.
Although the healthy New York economy and its sound budgetary position
continue to create more confidence in the overall quality of state debt, we
still put extra effort into identifying only the highest quality investments
for your fund. Our standards for credit quality remain extremely strict, and
our approach continues to focus on traditional tax-exempt money market
securities including variable rate demand notes (VRDNs) and municipal
commercial paper from large top-quality issuers.
As an extra measure of caution, we continue to seek credit enhancement
features such as insurance or bank letters of credit on the fund's
investments. 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. Currently almost 90% of your fund's investments feature
these enhancements.
* OUTLOOK: HIGHER RATES CONSIDERED LIKELY
While some investors seem to be extending their expectations of stable
short-term interest rates almost indefinitely, we believe that as time goes on
there will be moderate upward pressure on interest rates driven by the strong
economy. Actual inflation remains quite low, but pressures are certainly
building, and the market remains vulnerable to any news of an uptick.
Once U.S. investors shift their concentration away from the Pacific Rim and
its repercussions and back toward matters at home, tight labor markets and the
economy's strength should come into sharper focus as potential
inflation-raising situations. With its neutral portfolio duration and
conservative, quality-focused investment strategy, your fund remains well
positioned for what lies ahead. Should interest rates begin to rise, we will
be able to take advantage of higher yields to capture additional income for
the fund. In the meantime, we will continue to concentrate on preserving net
asset value and maintaining a superior quality portfolio.
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 11/30/97, 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 COMPARISONS (11/30/97)
Current After-tax After-tax
return* return1 return2
- ------------------------------------------------------------------------------
Passbook savings account 2.02% 1.09% 1.14%
- ------------------------------------------------------------------------------
Taxable money market fund (7-day yield) 5.22 2.81 2.94
- ------------------------------------------------------------------------------
3-month certificate of deposit 4.11 2.22 2.31
- ------------------------------------------------------------------------------
Putnam New York Tax Exempt
Money Market Fund (7-day yield) 3.07 3.07 3.07
- ------------------------------------------------------------------------------
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: Bank of Boston (passbook savings), Bank Rate Monitor (3-month CDs),
IBC/Donaghue's Money Fund Report (taxable money market fund compound 7-day
yield).
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 11/30/97
Lipper
New York
Tax Exempt Consumer
Money Market Price
NAV Fund Average Index
- ------------------------------------------------------------------------------
1 year 2.91% 3.07% 1.83%
- ------------------------------------------------------------------------------
5 years 13.28 13.94 13.73
Annual average 2.53 2.64 2.61
- ------------------------------------------------------------------------------
10 years 40.03 40.70 39.95
Annual average 3.42 3.47 3.42
- ------------------------------------------------------------------------------
Life of fund (10/26/87) 40.61 41.17 40.07
Annual average 3.43 3.48 3.40
- ------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 12/31/97
(most recent calendar quarter)
NAV
- ------------------------------------------------------------------------------
1 year 2.73%
- ------------------------------------------------------------------------------
5 years 13.17
Annual average 2.51
- ------------------------------------------------------------------------------
10 years 39.59
Annual average 3.39
- ------------------------------------------------------------------------------
Life of fund (10/26/87) 40.71
Annual average 3.41
- ------------------------------------------------------------------------------
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
12 months ended 11/30/97
- ------------------------------------------------------------------------------
Distributions (number) 12
- ------------------------------------------------------------------------------
Income $0.028670
- ------------------------------------------------------------------------------
Current return (end of period)
- ------------------------------------------------------------------------------
Current 7-day yield1 3.07%
- ------------------------------------------------------------------------------
Taxable equivalent (a)2 5.46
- ------------------------------------------------------------------------------
Taxable equivalent (b)2 5.69
- ------------------------------------------------------------------------------
Current 30-day yield1 2.99
- ------------------------------------------------------------------------------
Taxable equivalent (a)2 5.31
- ------------------------------------------------------------------------------
Taxable equivalent (b)2 5.55
- ------------------------------------------------------------------------------
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.
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.
Report of independent accountants
For the fiscal year ended November 30, 1997
To the Trustees and Shareholders of
Putnam New York Tax Exempt Money Market Fund
We have audited the accompanying statement of assets and liabilities of Putnam
New York Tax Exempt Money Market Fund, including the portfolio of investments
owned, as of November 30, 1997, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of
the periods indicated therein. These financial statements, financial
highlights are the responsibility of the fund's management. Our responsibility
is to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of November 30, 1997, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Putnam New York Tax Exempt Money Market Fund as of November 30, 1997, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 9, 1998
Portfolio of investments owned
November 30, 1997
<TABLE>
<CAPTION>
Key to Abbreviations
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
MUNICIPAL BONDS AND NOTES (91.4%) *
PRINCIPAL AMOUNT RATINGS** VALUE
New York (83.9%)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$495,000 Babylon, Indl. Dev. Agcy. Resource Recvy. Rev.
Bonds (Ogden Martin Syst. Babylon Inc.),
Ser. B, 8 1/2s, 01/01/19 Aaa $ 522,446
585,000 Chemung Cnty., G.O. Bonds, MBIA, 4 3/4s,
08/01/98 Aaa 588,443
845,000 Chemung Ctny., Indl. Dev. Agcy. Civic Fac. VRDN
(Arnot Ogden Med. Ctr.), Ser. A, 3.8s, 03/01/19
(Chase Manhattan Bank (LOC)) VMIG1 845,000
1,000,000 Erie Cnty, RAN, Ser.B. 4.5s, 10/29/98 (Union Bank
of Switzerland (LOC)) MIG1 1,006,010
750,000 Glens Falls Indl. Dev. Agcy. VRDN (Broad St. Ctr.),
3.85s, 08/01/05 (Fleet Trust Company (LOC)) A-1 750,000
1,750,000 Monroe Cnty., Indl. Dev. Agcy. VRDN (Columbia
Sussex Corp.), 5s, 11/01/14 (Cumberland
Fed. S&L (LOC)) A-1+ 1,750,000
2,700,000 Monroe Cnty., Indl. Dev. Agcy. VRDN (Canal Ponds),
Ser. D, 3.9s, 06/15/16 (Fleet Bank (LOC)) VMIG1 2,700,000
2,000,000 N Y City G.O. RAN, Ser. A. 4 1/2s, 06/30/98 MIG1 2,007,664
2,200,000 NY City, Hlth. & Hosp. Corp. VRDN (Hlth. Syst.),
Ser. A, 3.85s, 02/15/26 (Morgan Guaranty
Trust (LOC)) VMIG1 2,200,000
1,700,000 NY City, Hsg. Dev. Corp. Mtge. VRDN
(Multi-Fam. James Twr.), Ser. A, 3.85s, 07/01/05
(Citibank N.A. (LOC)) A-1+ 1,700,000
1,500,000 NY City, Indl. Dev. Agcy. VRDN (Stroheim &
Romann, Inc.), 3.9s, 12/01/15 (Westdeutsche
Landesbank Girozentrale (LOC) Germany) A-1+ 1,500,000
5,100,000 NY City, Muni. Wtr. & Swr. Fin. Auth. VRDN, Ser. A,
FGIC, 4s, 06/15/25 VMIG1 5,100,000
1,500,000 NY State G.O. VRDN, Ser. C, 4 1/2s, 10/01/23
(Morgan Guaranty Trust (LOC)) VMIG1 1,500,000
3,000,000 NY State Energy Res. & Dev. Auth. Poll. Ctrl. VRDN
(LILCO), Ser. A, 3.6s, 03/01/16 (Deutsche Bank
A.G., NY (LOC)) VMIG1 3,000,000
NY State Hsg. Fin. Agcy. VRDN
2,590,000 (Special Surgery Hosp. Staff), Ser. A, 3.9s, 11/01/10
(Chase Manhattan Bank (LOC)) VMIG1 2,590,000
2,000,000 (Normadie Court I), 3.85s, 05/15/15
(Landesbank Hessien (LOC)) VMIG1 2,000,000
1,900,000 NY State Local Govt. Assistance Corp. VRDN,
Ser. E, 3.8s, 04/01/25 (Canadian Imperial
Bank (LOC)) VMIG1 1,900,000
NY State Med. Care Fac. Fin. Agcy. VRDN
2,600,000 (Children's Hosp. - Buffalo), Ser. A., 3.95s, 11/01/05
(Barclays Bank PLC (LOC)) VMIG1 2,600,000
2,000,000 (Lenox Hill Hosp.), Ser. A, 3.8s, 11/01/08
(Chase Manhattan Bank (LOC)) VMIG1 2,000,000
500,000 Suffolk Cnty., G.O. Bonds (Southwest Swr. Dist.),
MBIA, 4s, 02/01/98 Aaa 500,275
250,000 Triborough Bridge & Tunnel Auth. Ben. Interest
Certif. Rev. Bonds, MBIA, 4.3s, 01/01/98 Aaa 250,066
--------------
37,009,904
Puerto Rico (7.5%)
- ---------------------------------------------------------------------------------------------------------
PR, Indl, Med. & Env. Poll. Ctrl. Fac. Fin. Auth. VRDN
1,300,000 (Higher Ed.) 4.05s, 12/01/15 (Bank of Tokyo
Mitsubishi (LOC)) A-1 1,300,000
2,000,000 (Reynolds Metals Co.), 3 3/4s, 09/01/13
(ABN AMRO Bank (LOC)) P-1 2,000,892
--------------
3,300,892
--------------
Total Municipal Bonds and Notes (cost $40,310,796) $ 40,310,796
MUNICIPAL COMMERCIAL PAPER (8.4%) *
PRINCIPAL AMOUNT RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------
$1,900,000 NY G.O. MCP 3 3/4s, 04/07/98 A-1 $ 1,900,000
1,800,000 NY Dorm Auth. MCP (Memorial Sloan-Kettering
Cancer Center) 3.7s, 12/05/97 A-1 1,800,000
--------------
Total Municipal Commercial Paper (cost $3,700,000) $ 3,700,000
- ---------------------------------------------------------------------------------------------------------
Total Investments (cost $44,010,796) *** $ 44,010,796
- ---------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $44,100,844.
** The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings available
at November 30, 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 November 30, 1997. Securities rated by Putnam are indicated by "/P" and are not publicly
rated. Ratings are not covered by the Report of independent accountants.
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
*** The aggregate identified cost on a tax basis is the same.
The rates shown on VRDN's are the current interest rates at November 30, 1997.
The fund had the following industry group concentrations greater than 10% at November 30, 1997 (as a
percentage of net assets):
Hospitals/Healthcare 21.3%
Industrial 18.3
Housing 12.5
Water & Sewer 11.6
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
November 30, 1997
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost (Note 1) $44,010,796
- ---------------------------------------------------------------------------------------------------
Cash 9,127
- ---------------------------------------------------------------------------------------------------
Interest and other receivables 263,712
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 16,145
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 60,000
- ---------------------------------------------------------------------------------------------------
Total assets 44,359,780
Liabilities
- ---------------------------------------------------------------------------------------------------
Distributions payable to shareholders 88,231
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 85,659
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 48,121
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 7,788
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 3,603
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 626
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 24,908
- ---------------------------------------------------------------------------------------------------
Total liabilities 258,936
- ---------------------------------------------------------------------------------------------------
Net assets $44,100,844
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Note 4) $44,100,844
- ---------------------------------------------------------------------------------------------------
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share
($44,100,844 divided by 44,100,844 shares) $1.00
- ---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended November 30,1997
<S> <C>
Tax exempt interest income $1,508,983
- --------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 190,795
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 88,616
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 3,993
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,837
- --------------------------------------------------------------------------------------------------
Reports to shareholders 16,292
- --------------------------------------------------------------------------------------------------
Registration fees 4,731
- --------------------------------------------------------------------------------------------------
Auditing 16,728
- --------------------------------------------------------------------------------------------------
Legal 14,279
- --------------------------------------------------------------------------------------------------
Postage 5,323
- --------------------------------------------------------------------------------------------------
Other 7,419
- --------------------------------------------------------------------------------------------------
Total expenses 352,013
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (81,345)
- --------------------------------------------------------------------------------------------------
Net expenses 270,668
- --------------------------------------------------------------------------------------------------
Net investment income 1,238,315
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $1,238,315
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended November 30
--------------------------------
1997 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------
Net investment income $ 1,238,315 $ 1,177,005
- ----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,238,315 1,177,005
- ----------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------
From net investment income (1,238,315) (1,177,005)
- ----------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 4,645,105 582,464
- ----------------------------------------------------------------------------------------------------------------
Total increase in net assets 4,645,105 582,464
Net assets
- ----------------------------------------------------------------------------------------------------------------
Beginning of year 39,455,739 38,873,275
- ----------------------------------------------------------------------------------------------------------------
End of year $44,100,844 $39,455,739
- ----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
- --------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended November 30
- --------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------
Net investment income .0287 .0289 .0318 .0188 .0165
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments -- -- -- -- .0001
- --------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0287 .0289 .0318 .0188 .0166
- --------------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------------
From net
investment income (.0287) (.0289) (.0318) (.0188) (.0165)
- --------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Total distributions (.0287) (.0289) (.0318) (.0188) (.0166)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of year $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 2.91 2.93 3.23 1.90 1.67
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(in thousands) $44,101 $39,456 $38,873 $44,815 $50,473
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .83 .88 .91 .77 .91
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 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
November 30, 1997
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 and accretion of bond discount 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.
Prior to January 20, 1997, any amount over $1.5 billion was based on 0.25%
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 year ended November 30, 1997, fund expenses were reduced by $81,345
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.
Trustees of the funds receive an annual Trustees fee of which $163 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
Purchases and sales of securities
During the year ended November 30, 1997, purchases and sales (including
maturities) of investment securities (all short-term obligations) aggregated
$561,862,239 and $555,420,106, 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 November 30, 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:
Year ended
November 30
- ------------------------------------------------------------
1997 1996
- ------------------------------------------------------------
Shares sold 189,482,229 304,712,398
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,134,378 1,174,100
- ------------------------------------------------------------
190,616,607 305,886,498
Shares
repurchased (185,971,502) (305,304,034)
- ------------------------------------------------------------
Net increase 4,645,105 582,464
- ------------------------------------------------------------
Federal tax information
The fund has designated 100% of dividends paid from net investment income
during the fiscal year as tax exempt for Federal income tax purposes.
WELCOME TO
www.putnaminv.com
Now you can get up-to-date information about your funds, learn more
about investing and retirement planning, and access market news and an
economic outlook from Putnam experts -- with just a few clicks of the
mouse!
VISIT PUTNAM'S NEW SITE ON THE WORLD WIDE WEB TO FIND OUT:
* the benefits of investing with Putnam
* Putnam's money management philosophy
* daily fund pricing and long-term fund performance
* how to tell if your retirement savings plan is on track
* how quickly money can accumulate in a tax-deferred investment
You can also read Dr. Robert Goodman's economic commentary and Putnam's
Capital Markets Forum outlook, search for a particular Putnam fund by
name or objective ... and much more.
The site can be accessed through any of the major online services
(America Online, CompuServe, Prodigy) that offer web access. Of course,
you can also access it via Netscape and an independent Internet service
provider.
New features will be added to the site on an ongoing basis. So, visit us
at http://www.putnaminv.com -- often!
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
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
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
Gary N. Coburn
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
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 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
- --------------------
AN037 -- 36876 1/98
