Putnam
New York
Tax Exempt
Money Market Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
11-30-98
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
The past several months have continued to bring unsettling news for
most investors. Fortunately, the unprecedented international events
that rattled global stock and bond markets had a relatively salutary
effect on domestic money markets. Indeed, as foreign investors
panicked about plummeting stock markets, they began a flight to
quality - selling hedge funds and emerging-markets funds in favor
of the relative safety of U.S. Treasury bonds and money market funds.
At the same time, however, short-term interest rates continued to
fall, limiting the yields available on money market securities.
Putnam New York Tax Exempt Money Market Fund's recent performance
reflects this mixed environment. For the twelve months ended
November 30, 1998, the fund returned 2.91% at net asset value.
You can find additional performance information on pages 5, 6 and 7.
* ECONOMIC CONCERNS PROMPT INTEREST-RATE CUTS
The U.S. economy continued to expand throughout the period, although
there were hints of a slowdown, as the effects of Asian, Russian, and
Latin American financial crises began to emerge. Incoming data for the
fourth quarter suggested slackening ahead, with robust October retail
sales and higher housing starts balanced against falling corporate
profits, declining exports, declining capital spending, and increasing
layoffs.
Given this backdrop, many analysts and money market participants began
to expect the Federal Reserve Board to reduce short-term interest rates.
In fact, interest rates on money market securities had already been
trending downward for some time. Your fund's manager, Brian Torpey,
attributes this to global stock market volatility, concerns about
credit quality among lower-rated bonds, and the ongoing flight to
quality that drove securities prices up. However, it is unlikely that
most market watchers anticipated the strength of the Fed's response to
these conditions.
At the end of September, the Fed lowered the federal funds rate for the
first time in nearly three years, by one quarter of a percentage point.
A scant two weeks later, the Fed again took action, this time lowering
the federal funds rate by the same amount. Fed officials explained the
surprising move as necessary to protect the economy from a freeze among
nervous lenders. Economic growth relies a great deal on borrowing, as
businesses constantly need to raise money to finance operations and
expansion. In the wake of recent global and domestic financial crises,
businesses were finding it more expensive and more difficult to raise
necessary capital. In fact, concerns surrounding these issues prompted
the Fed to lower interest rates a third time on November 17, again by
one quarter of a percentage point.
* LONGER DURATION AIDS PURSUIT OF INCOME WHILE PROTECTING CAPITAL
In addition to falling interest rates, the annual period has also been
characterized by a dwindling supply of tax-exempt money market securities
as economic strength raised tax revenues and decreased municipalities'
borrowing needs. Amid these challenging conditions, Brian has redoubled
efforts to maintain current income while preserving capital and staying
focused on investments of superior quality. Extending portfolio duration
has been one of the most important elements of his strategy. While
portfolio duration was relatively neutral - neither short nor long - at
the fund's fiscal midpoint, he has since lengthened it to match or even
slightly exceed the average maintained by the fund's peer group. This
slightly longer duration has helped the fund lock in the highest
available money market yields while reducing the frequency with which
the fund must reinvest assets in the current falling interest-rate
environment.
* CREDIT QUALITY AND CAPITAL PRESERVATION ARE KEY CONCERNS FOR MORE
INVESTORS
Global events and the economy's mixed signals have brought concerns about
credit quality and capital preservation to the forefront for more and
more investors. Putnam New York Tax Exempt Money Market Fund has always
made capital preservation and credit quality top priorities, investing
in a wide spectrum of superior quality money market securities. Over
the past six months, your fund manager has bolstered quality even
further by eliminating all securities backed by letters of credit
from Japanese banks, even though the portfolio's holdings were only
backed by banks of the highest quality. As always, fund management
continues to seek portfolio investments that are rated by two or more
nationally recognized rating services and that have at least two
ratings in the top two categories. If a security has been rated by
only one service, its rating must be within the service's top two
categories.
In the coming months, your fund's manager will continue to pursue the
conservative strategies that have served shareholders well thus far.
He will remain focused on superior quality and preservation of capital
while continuing to seek out appropriate opportunities to generate
current income in today's low interest-rate environment.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
January 20, 1999
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 11/30/98, there is no guarantee the fund
will continue to hold these securities in the future. An investment in
the fund is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. Although the fund seeks to
preserve your investment at $1.00 per share, it is possible to lose
money by investing in the fund.
PERFORMANCE COMPARISONS (11/30/98)
Current After-tax After-tax
return* return1 return2
- ------------------------------------------------------------------------
Passbook savings account 1.50% 0.81% 0.84%
- ------------------------------------------------------------------------
Taxable money market fund (7-day yield) 5.00 2.70 2.81
- ------------------------------------------------------------------------
3-month certificate of deposit 3.77 2.03 2.12
- ------------------------------------------------------------------------
Putnam New York Tax Exempt
Money Market Fund (7-day yield) 2.54 2.54 2.54
- ------------------------------------------------------------------------
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% federal, New York state,
and New York City tax rate.
2 After-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).
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 income tax and New York personal income
tax, consistent with capital preservation, stable principal, and
liquidity.
TOTAL RETURN FOR PERIODS ENDED 11/30/98
Lipper
New York
Tax Exempt Consumer
Fund shares Money Market Price
at NAV Fund Average Index
- ----------------------------------------------------------------------
1 year 2.91% 2.91% 1.55%
- ----------------------------------------------------------------------
5 years 14.64 15.10 12.48
Annual average 2.77 2.85 2.38
- ----------------------------------------------------------------------
10 years 37.94 38.63 36.33
Annual average 3.27 3.32 3.15
- ----------------------------------------------------------------------
Life of fund (10/26/87) 44.69 45.23 42.24
Annual average 3.38 3.42 3.23
- ----------------------------------------------------------------------
Fund shares at
NAV
- ----------------------------------------------------------------------
Current return (end of period)
- ----------------------------------------------------------------------
Current 7-day yield1 2.54%
- ----------------------------------------------------------------------
Taxable equivalent (a)2 4.51
- ----------------------------------------------------------------------
Taxable equivalent (b)2 4.71
- ----------------------------------------------------------------------
Current 30-day yield1 2.45
- ----------------------------------------------------------------------
Taxable equivalent (a)2 4.35
- ----------------------------------------------------------------------
Taxable equivalent (b)2 4.54
- ----------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. 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 not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. Although the fund seeks to preserve your
investment at $1.00 per share, it is possible to lose money by investing
in the fund. The fund's holdings do not match those in the Lipper average.
Yield data more closely reflect the current earnings of the fund.
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 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.
DISTRIBUTION INFORMATION
12 months ended 11/30/98
- ------------------------------------------------------------------------------
Distributions (number) 12
- ------------------------------------------------------------------------------
Income $0.028751
- ------------------------------------------------------------------------------
Total $0.028751
- ------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 12/31/98
(most recent calendar quarter)
Fund shares at
NAV
- ------------------------------------------------------------------------------
1 year 2.90%
- ------------------------------------------------------------------------------
5 years 14.81
Annual average 2.80
- ------------------------------------------------------------------------------
Life of fund (10/26/87) 45.07
Annual average 3.38
- ------------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. 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.
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.
Report of independent accountants
For the fiscal year ended November 30, 1998
To the Trustees and Shareholders of
Putnam New York Tax Exempt Money Market Fund
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments owned (except for bond ratings),
and the related statements of operations and of changes in net assets and
the financial highlights present fairly, in all material respects, the
financial position of Putnam New York Tax Exempt Money Market Fund (the
"fund") at November 30, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to
as "financial statements") are the responsibility of the fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe
that our audits, which included confirmation of investments owned at
November 30, 1998 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 11, 1999
<TABLE>
<CAPTION>
Portfolio of investments owned
November 30, 1998
Key to Abbreviations
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Financial Guaranty Insurance Company
FRB -- Floating Rate Bonds
FSA -- Financial Security Assurance
G.O. Bonds -- General Obligation Bonds
LOC -- Letter of Credit
MCP -- Municipal Commercial Paper
VRDN -- Variable Rate Demand Notes
MUNICIPAL BONDS AND NOTES (75.1%) (a)
PRINCIPAL AMOUNT RATINGS (RAT) VALUE
<S> <C> <C> <C> <C>
New York (70.0%)
- --------------------------------------------------------------------------------------------------------------------------
$ 1,800,000 Dutchess Cnty., Indl. Dev. Agency Civic Fac.
VRDN (Marist College), Ser. A, FRB,
3.05s, 7/1/28 A-1+ $ 1,800,000
425,000 Metropolitan Trans. Auth. Rev. Bonds, Ser. A,
FSA, 4.3s, 7/1/99 Aaa 427,665
Monroe Cnty., Indl. Dev. Agcy. VRDN
1,590,000 (Columbia Sussex Corp.), 5s, 11/1/14
(Cumberland Fed. S&L (LOC)) A-1+ 1,590,000
1,900,000 (Canal Ponds), Ser. D, 3.3s, 6/15/16
(Fleet Bank (LOC)) VMIG1 1,900,000
1,860,000 Niagara Cnty., Indl. Dev. Agcy. Solid Waste
Disp., VRDN, (American Fuel Co.), 3.35s,
11/15/24 A-1+ 1,860,000
1,450,000 North Hempstead, G. O. Bonds (Pub. Impt.),
Ser. B, AMBAC, 6.9s, 9/1/02 Aaa 1,514,091
1,800,000 NY City, Hsg. Dev. Corp. Mtge. VRDN
(Multi-Fam. James Twr. Dev.), Ser. A, 3.3s, 7/1/05
(Citibank N. A. (LOC)) A-1+ 1,800,000
NY City, Indl. Dev. Agcy. VRDN
1,500,000 (Stroheim & Romann, Inc.), 3.05s, 12/1/15
(Westdeutsche Landesbank Girozentrale
(LOC)) A-1+ 1,500,000
1,800,000 (Heavenly Rest Day Church), 3s, 7/1/21
(Barclays Bank PLC (LOC)) VMIG1 1,800,000
1,800,000 (Columbia Grammar School), 3.25s, 6/30/14
(Chase Manhattan Bank (LOC)) A-1 1,800,000
950,000 NY State G. O. Bonds, Ser. B., 5.1s, 8/15/99 A2 959,989
590,000 NY State Dorm Auth. Rev. Bonds (NY U.),
FGIC, 6s, 7/1/99 Aaa 597,245
1,900,000 NY State Dorm. Auth. VRDN
(Oxford U. Press Inc.), 3.3s, 7/1/23 VMIG1 1,900,000
1,800,000 NY State Energy Res. & Dev. Auth. Poll. Control
VRDN (Niagara Mohawk Pwr.), Ser. A, 3.75s,
7/1/15 (Toronto Dominion Bank (LOC)) A-1+ 1,800,000
NY State Fin. Agcy., Rev. Bonds
300,000 (State Univ.), 7.4s, 11/1/99 Aaa 311,348
415,000 Ser. A, FSA, 4.2, 11/1/99 Aaa 417,588
1,500,000 NY State Hsg. Fin. Agcy., VRDN
(Special Surgery Hosp. Staff), Ser. A, 3.2s,
11/1/10 (Chase Manhattan Bank (LOC)) VMIG1 1,500,000
1,700,000 NY State Med. Care Fac. Fin. Agcy. VRDN
(Lenox Hill Hosp.), Ser. A,3.3s, 11/1/08
(Chase Manhattan Bank (LOC)) VMIG1 1,700,000
300,000 NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds,
Ser. A, FGIC, 6 3/4s, 6/15/14 Aaa 309,726
1,800,000 Suffolk Cnty., Indl. Dev. Agcy. VRDN
(Cold Spring Harbor Lab), 3.3s, 7/1/23
(Morgan Guaranty Trust (LOC)) A-1+ 1,800,000
-------------
27,287,652
Puerto Rico (5.1%)
- --------------------------------------------------------------------------------------------------------------------------
2,000,000 PR, Indl. Med. & Env. Poll. Ctrl. Fac. Fin. Auth.
VRDN (Reynolds Metal Co.), 3.0s, 9/1/13
(ABN AMRO Bank (LOC)) A-1+ 2,000,000
-------------
Total Municipal Bonds and Notes
(cost $29,287,652) $29,287,652
MUNICIPAL COMMERCIAL PAPER (23.9%) (a)
PRINCIPAL AMOUNT RATINGS (RAT) VALUE
- --------------------------------------------------------------------------------------------------------------------------
$ 3,800,000 Long Island Power Auth. MCP 3.2s, 2/8/99 VMIGI $ 3,800,000
1,900,000 New York City G.O. MCP 3.2s, 2/8/99 VMIGI 1,900,000
3,600,000 NYC Water & Sewer MCP 3.05s, 2/26/99 A-1+ 3,600,000
-------------
Total Municipal Commercial Paper
(cost $9,300,000) $ 9,300,000
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $38,587,652) (b) $ 38,587,652
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $38,986,151.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings available at
November 30, 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 November 30, 1998. 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
(b) The aggregate identified cost on a tax basis is the same.
The rates shown on FRB and VRDN are the current interest rates shown at November 30, 1998, which are subject
to change based on the terms of the security.
The fund had the following industry group concentrations greater than 10% at November 30, 1998 (as a
percentage of net assets):
Industrial 27.4%
Education 16.6
Utilities 14.5
Water 10.1
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
November 30, 1998
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at amortized cost (Note 1) $38,587,652
- -----------------------------------------------------------------------------------------------
Cash 119,719
- -----------------------------------------------------------------------------------------------
Interest and other receivables 214,016
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 375,828
- -----------------------------------------------------------------------------------------------
Total assets 39,297,215
Liabilities
- -----------------------------------------------------------------------------------------------
Distributions payable to shareholders 54,495
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 166,494
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 43,108
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 8,204
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 4,372
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 585
- -----------------------------------------------------------------------------------------------
Other accrued expenses 33,806
- -----------------------------------------------------------------------------------------------
Total liabilities 311,064
- -----------------------------------------------------------------------------------------------
Net assets $38,986,151
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Note 4) $38,986,151
- -----------------------------------------------------------------------------------------------
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share
($38,986,151 divided by 38,986,151 shares) $1.00
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended November 30, 1998
<S> <C>
Tax exempt interest income $1,374,278
- -----------------------------------------------------------------------------------------------
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 175,908
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 74,396
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 3,640
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,505
- -----------------------------------------------------------------------------------------------
Reports to shareholders 12,282
- -----------------------------------------------------------------------------------------------
Registration fees 1,935
- -----------------------------------------------------------------------------------------------
Auditing 20,595
- -----------------------------------------------------------------------------------------------
Legal 8,341
- -----------------------------------------------------------------------------------------------
Other 7,375
- -----------------------------------------------------------------------------------------------
Total expenses 307,977
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (59,150)
- -----------------------------------------------------------------------------------------------
Net expenses 248,827
- -----------------------------------------------------------------------------------------------
Net investment income 1,125,451
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 1,125,451
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended November 30
-------------------------------
1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 1,125,451 $ 1,238,315
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,125,451 1,238,315
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income (1,125,451) (1,238,315)
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) (5,114,693) 4,645,105
- ---------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (5,114,693) 4,645,105
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of year 44,100,844 39,455,739
- ---------------------------------------------------------------------------------------------------------------
End of year $38,986,151 $44,100,844
- ---------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<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 .0288 .0287 .0289 .0318 .0188
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0288 .0287 .0289 .0318 .0188
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.0288) (.0287) (.0289) (.0318) (.0188)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
gain on investments -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.0288) (.0287) (.0289) (.0318) (.0188)
- ------------------------------------------------------------------------------------------------------------------------------------
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 2.91 2.93 3.23 1.90
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(in thousands) $38,986 $44,101 $39,456 $38,873 $44,815
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .79 .83 .88 .91 .77
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.88 2.92 2.75 3.18 1.86
- ------------------------------------------------------------------------------------------------------------------------------------
(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, 1998
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, 1998, the fund had a capital loss carryover of
approximately $6,700 available to offset future net capital gains, if any.
The amount of the carryover and the expiration dates are:
Loss Carryover Expiration
----------------- -----------------
$6,600 November 30, 2002
100 November 30, 2005
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 year ended November 30, 1998, fund expenses were reduced by
$59,150 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.
For the year ended November 30, 1998, 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 year ended November 30, 1998, purchases and sales (including
maturities) of investment securities (all short-term obligations)
aggregated $407,152,764 and $412,460,050 respectively. There were no
purchases and sales of U.S. government obligations. 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, 1998, 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,
- -----------------------------------------------------------------------------
1998 1997
- -----------------------------------------------------------------------------
Shares sold 34,362,303 189,482,229
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,082,222 1,134,378
- -----------------------------------------------------------------------------
35,444,525 190,616,607
Shares
repurchased (40,559,218) (185,971,502)
- -----------------------------------------------------------------------------
Net increase
(decrease) (5,114,693) 4,645,105
- -----------------------------------------------------------------------------
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.
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
PricewaterhouseCoopers LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
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
Steven M. Oristaglio
Vice President
Jerome J. Jacobs
Vice President
Blake E. Anderson
Vice President
Brian S. Torpey
Vice President and Fund Manager
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' web site:
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
www.putnaminv.com
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BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
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AN056 48654 1/99
