PUTNAM MASTER INCOME TRUST, DEF 14A, 1999-07-22

PUTNAM MASTER INCOME TRUST
DEF 14A, 1999-07-22

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
----
Filed by the Registrant / X /
----
----
Filed by a party other than the Registrant / /
----
CHECK THE APPROPRIATE BOX:
----
/ / Preliminary Proxy Statement
- ----
----
/ / Confidential, for Use of the Commission Only (as
- ---- permitted by Rule 14a-6(e) (2))

----
/ X / Definitive Proxy Statement
- ----
----
/ / Definitive Additional Materials
- ----
----
/ / Soliciting Material Pursuant to Sec. 240.14a-11(c) or
- ---- Sec. 240.14a-12

PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM MASTER INCOME TRUST
PUTNAM TAX-FREE HEALTH CARE FUND
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement,
if other than Registrant)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):

----
/ X / No fee required
- ----
----
/ / Fee computed on table below per Exchange Act Rule 14a
- ---- 6(i)(1) and 0-11

(1) Title of each class of securities to which
transaction applies:

(2) Aggregate number of securities to which transaction
applies:

(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is
calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

----
/ / Fee paid previously with preliminary materials.
- ----

----
/ / Check box if any part of the fee is offset as provided
- ---- by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid
previously. Identify the previous filing by
registration statement number, or the Form or Schedule
and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM MASTER INCOME TRUST
PUTNAM TAX-FREE HEALTH CARE FUND

THE DOCUMENT YOU HOLD IN YOUR HANDS CONTAINS YOUR PROXY STATEMENT
AND PROXY CARD. A PROXY CARD IS, IN ESSENCE, A BALLOT. WHEN YOU
VOTE YOUR PROXY, IT TELLS US HOW TO VOTE ON YOUR BEHALF ON
IMPORTANT ISSUES RELATING TO YOUR FUND. IF YOU COMPLETE AND SIGN
THE PROXY, WE'LL VOTE IT EXACTLY AS YOU TELL US. IF YOU SIMPLY
SIGN THE PROXY, WE'LL VOTE IT IN ACCORDANCE WITH THE TRUSTEES'
RECOMMENDATIONS ON PAGE 4.

WE URGE YOU TO SPEND A COUPLE OF MINUTES WITH THE PROXY
STATEMENT, AND EITHER FILL OUT YOUR PROXY CARD, AND RETURN IT TO
US VIA THE MAIL, OR RECORD YOUR VOTING INSTRUCTIONS VIA THE
INTERNET. WHEN SHAREHOLDERS DON'T RETURN THEIR PROXIES IN
SUFFICIENT NUMBERS, WE HAVE TO INCUR THE EXPENSE OF FOLLOW-UP
SOLICITATIONS, WHICH CAN COST YOUR FUND MONEY.

WE WANT TO KNOW HOW YOU WOULD LIKE TO VOTE AND WELCOME YOUR
COMMENTS. PLEASE TAKE A FEW MOMENTS WITH THESE MATERIALS AND
RETURN YOUR PROXY TO US.

(PUTNAM LOGO APPEARS HERE)
BOSTON * LONDON * TOKYO

TABLE OF CONTENTS

A Message from the Chairman 1
Notice of Shareholder Meeting 2
Trustees' Recommendations 4

PROXY CARD ENCLOSED

If you have any questions, please contact us at the special toll-
free number we have set up for you (1-800-225-1581) or call your
financial adviser.
A MESSAGE FROM THE CHAIRMAN

(Photograph of George Putnam appears here)

Dear Shareholder:

I am writing to you to ask for your vote on important questions
that affect your investment in your fund. While you are, of
course, welcome to join us at your fund's meeting, most
shareholders cast their vote by either filling out and signing
the enclosed proxy card or by voting via the Internet. You can
also choose to vote your proxy via the Internet. We are asking
for your vote on the following matters: (1) fixing the number of
Trustees and electing your fund's Trustees; and (2) ratifying the
selection of your fund's independent auditors.

Although we would like very much to have each shareholder attend
his or her fund's meeting, we realize this is not possible.
Whether or not you plan to be present, we need your vote. We
urge you to record your voting instructions on the Internet or
complete, sign, and return the enclosed proxy card promptly. A
postage-paid envelope is enclosed for mailing and Internet
instructions are on the proxy card.

I'm sure that you, like most people, lead a busy life and are
tempted to put this proxy aside for another day. Please don't.
When shareholders do not return their proxies, their fund may
have to incur the expense of follow-up solicitations. All
shareholders benefit from the speedy return of proxies.

Your vote is important to us. We appreciate the time and
consideration that I am sure you will give this important matter.
If you have questions about the proposals, contact your financial
adviser or call a Putnam customer service representative at 1-800-
225-1581.

Sincerely yours,

(signature of George Putnam)
George Putnam, Chairman

PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM MASTER INCOME TRUST
PUTNAM TAX-FREE HEALTH CARE FUND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

THIS IS THE FORMAL AGENDA FOR YOUR FUND'S SHAREHOLDER MEETING. IT
TELLS YOU WHAT MATTERS WILL BE VOTED ON AND THE TIME AND PLACE OF
THE MEETING, IF YOU CAN ATTEND IN PERSON.

To the Shareholders of Putnam Convertible Opportunities and
Income Trust, Putnam Managed High Yield Trust, Putnam Master
Income Trust and Putnam Tax-Free Health Care Fund:

The Annual Meeting of Shareholders of your fund will be held on
October 7, 1999 at 2:00 p.m., Boston time, on the eighth floor of
One Post Office Square, Boston, Massachusetts, to consider the
following:

1. FIXING THE NUMBER OF TRUSTEES AND ELECTING TRUSTEES. SEE
PAGE 6.

2. RATIFYING THE SELECTION BY THE TRUSTEES OF THE INDEPENDENT
AUDITORS OF YOUR FUND FOR ITS CURRENT FISCAL YEAR. SEE
PAGE 32.

3. TRANSACTING OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.

By the Trustees

George Putnam, Chairman
John A. Hill, Vice Chairman
William F. Pounds, Vice Chairman

Jameson A. Baxter John H. Mullin, III
Hans H. Estin Robert E. Patterson
Ronald J. Jackson George Putnam, III
Paul L. Joskow A.J.C. Smith
Elizabeth T. Kennan W. Thomas Stephens
Lawrence J. Lasser W. Nicholas Thorndike

WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED OR FOLLOW THE INSTRUCTIONS IN
THESE MATERIALS RELATING TO INTERNET VOTING SO YOU WILL BE
REPRESENTED AT THE MEETING.
July 20, 1999
PROXY STATEMENT

THIS DOCUMENT WILL GIVE YOU THE INFORMATION YOU NEED TO VOTE ON
THE MATTERS LISTED ON THE PREVIOUS PAGE. MUCH OF THE INFORMATION
IN THE PROXY STATEMENT IS REQUIRED UNDER RULES OF THE SECURITIES
AND EXCHANGE COMMISSION; SOME OF IT IS TECHNICAL. IF THERE IS
ANYTHING YOU DON'T UNDERSTAND, PLEASE CONTACT US AT OUR SPECIAL
TOLL-FREE NUMBER, 1-800-225-1581, OR CALL YOUR FINANCIAL ADVISER.

WHO IS ASKING FOR MY VOTE?

THE ENCLOSED PROXY IS SOLICITED BY THE TRUSTEES OF PUTNAM
CONVERTIBLE OPPORTUNITIES AND INCOME TRUST, PUTNAM MANAGED HIGH
YIELD TRUST, PUTNAM MASTER INCOME TRUST AND PUTNAM TAX-FREE
HEALTH CARE FUND for use at the Annual Meeting of Shareholders of
each fund to be held on October 7, 1999, and, if your fund's
meeting is adjourned, at any later meetings, for the purposes
stated in the Notice of Annual Meeting (see page 2).

HOW DO YOUR FUND'S TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE ON
THESE PROPOSALS?

The Trustees recommend that you vote

1.a. (In the case of Putnam Managed High Yield Trust, Putnam
Master Income Trust and Putnam Tax-Free Health Care Fund)
FOR FIXING THE NUMBER OF TRUSTEES AS PROPOSED AND THE
ELECTION OF ALL NOMINEES;

1.b. (In the case of Putnam Convertible Opportunities and Income
Trust) FOR FIXING THE NUMBER OF TRUSTEES AS PROPOSED AND THE
ELECTION OF CLASS A NOMINEES; and

2.a. (In the case of Putnam Convertible Opportunities and Income
Trust, Putnam Managed High Yield Trust and Putnam Tax-Free
Health Care Fund) FOR RATIFYING THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT AUDITORS OF
YOUR FUND.

2.b. (In the case of Putnam Master Income Trust) FOR RATIFYING
THE SELECTION OF KPMG LLP AS THE INDEPENDENT AUDITORS OF
YOUR FUND.

WHO IS ELIGIBLE TO VOTE?

Shareholders of record at the close of business on July 9, 1999
are entitled to be present and to vote at the meeting or any
adjourned meeting. The Notice of Annual Meeting, the proxy, and
the Proxy Statement are being mailed to shareholders of record on
or about July 26, 1999.

Each share is entitled to one vote. Shares represented by duly
executed proxies will be voted in accordance with shareholders'
instructions. If you sign the proxy, but don't fill in a vote,
your shares will be voted in accordance with the Trustees'
recommendations. If any other business is brought before your
fund's meeting, your shares will be voted at the Trustees'
discretion.

Shareholders of each fund vote separately with respect to each
proposal. Voting by one fund does not affect the other fund.

THE PROPOSALS

I. ELECTION OF TRUSTEES

WHO ARE THE NOMINEES FOR TRUSTEES?

The Board Policy Committee of the Trustees of each fund makes
recommendations concerning the Trustees of that fund. The Board
Policy Committee consists solely of Trustees who are not
"interested persons" (as defined in the Investment Company Act of
1940) of your fund or of Putnam Investment Management, Inc., your
fund's investment manager ("Putnam Management").

PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM MASTER INCOME TRUST
PUTNAM TAX-FREE HEALTH CARE FUND

The Board Policy Committee of the Trustees of your fund
recommends that the number of Trustees be fixed at fifteen and
that you vote for the election of the nominees described below.
Each nominee is currently a Trustee of your fund and of the other
Putnam funds.

PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST

The Trustees of Putnam Convertible Opportunities and Income Trust
are classified into three classes of Trustees, as is reflected
below. Only the Class A Trustees, whose current terms expire at
the time of the Annual Meeting, are nominated for election. The
nominees for Class A Trustees are Jameson Adkins Baxter, Hans H.
Estin, Paul L. Joskow, Lawrence J. Lasser and William F. Pounds,
and each is described below. Each Class A Trustee is also a
Trustee of the other Putnam funds.

The Board Policy Committee of the Trustees of your fund
recommends that the number of Trustees be fixed at fifteen and
that you vote for the election of each of the Class A nominees.

JAMESON ADKINS BAXTER
[INSERT PICTURE]

* NOMINEE FOR TRUSTEE OF PUTNAM MANAGED HIGH YIELD TRUST
* NOMINEE FOR TRUSTEE OF PUTNAM MASTER INCOME TRUST
* NOMINEE FOR TRUSTEE OF PUTNAM TAX-FREE HEALTH CARE FUND
* NOMINEE FOR CLASS A TRUSTEE OF PUTNAM CONVERTIBLE
OPPORTUNITIES AND INCOME TRUST

Ms. Baxter, age 55, is the President of Baxter Associates, Inc.,
a management consulting and private investment firm which she
founded in 1986. During that time, she was also a Vice President
and Principal of the Regency Group, Inc., and a Consultant to
First Boston Corporation, both of which are investment banking
firms. From 1965 to 1986, Ms. Baxter held various positions in
investment banking and corporate finance at First Boston.

Ms. Baxter currently also serves as a Director of Banta
Corporation, MB Financial, Inc., Ryerson Tull and ASHTA
Chemicals, Inc. She is also the Chairman Emeritus of the Board of
Trustees of Mount Holyoke College, having previously served as
Chairman for five years and as a Board member for thirteen years;
an Honorary Trustee and past President of the Board of Trustees
of the Emma Willard School; Chair of the Board of Governors of
Good Shepherd Hospital; and Vice Chair of the National Center for
Nonprofit Boards. Ms. Baxter is a graduate of Mount Holyoke
College.

HANS H. ESTIN
[INSERT PICTURE]

Mr. Estin, age 70, is a Chartered Financial Analyst and the Vice
Chairman of North American Management Corp., a registered
investment adviser serving individual clients and their families.
Mr. Estin currently also serves as a Corporation Member of The
Schepens Eye Research Institute; and a Trustee of New England
Aquarium. He previously served as the Chairman of the Board of
Trustees of Boston University and is currently active in various
other civic associations, including the Boys & Girls Clubs of
Boston, Inc. Mr. Estin is a graduate of Harvard College and
holds honorary doctorates from Merrimack College and Boston
University.

JOHN A. HILL
[INSERT PICTURE]

* NOMINEE FOR TRUSTEE OF PUTNAM MANAGED HIGH YIELD TRUST
* NOMINEE FOR TRUSTEE OF PUTNAM MASTER INCOME TRUST
* NOMINEE FOR TRUSTEE OF PUTNAM TAX-FREE HEALTH CARE FUND
* CLASS B TRUSTEE OF PUTNAM CONVERTIBLE OPPORTUNITIES AND
INCOME TRUST

Mr. Hill, age 57, is a Vice Chairman of the Trustees. He is the
Chairman and Managing Director of First Reserve Corporation, a
registered investment adviser investing in companies in the world-
wide energy industry on behalf of institutional investors.
Prior to acquiring First Reserve in 1983, Mr. Hill held executive
positions with several investment advisory firms and held various
positions with the Federal government, including Associate
Director of the Office of Management and Budget and Deputy
Administrator of the Federal Energy Administration.

Mr. Hill currently also serves as a Director of Snyder Oil
Corporation, an exploration and production company which he
founded, TransMontaingne Oil Company, a refined oil product
pipeline and distribution company and various private companies
controlled by First Reserve Corporation. He is also a Member of
the Board of Advisors of Fund Directions. He is currently active
in various business associations, including the Economic Club of
New York, and lectures on energy issues in the United States and
Europe. Mr. Hill is a graduate of Southern Methodist University.

RONALD J. JACKSON
[INSERT PICTURE]

Mr. Jackson, age 55, retired as Chairman of the Board, President
and Chief Executive Officer of Fisher-Price, Inc., a major toy
manufacturer, in 1993, a position which he held since 1990. He
previously served as President and Chief Executive Officer of
Stride-Rite, Inc., a manufacturer and distributor of footwear,
from 1989 to 1990, and as President and Chief Executive Officer
of Kenner Parker Toys, Inc., a major toy and game manufacturer,
from 1985 to 1987. Prior to that, he held various financial and
marketing positions at General Mills, Inc. from 1966 to 1985,
including Vice President, Controller and Vice President of
Marketing for Parker Brothers, a toy and game company, and
President of Talbots, a retailer and direct marketer of women's
apparel. Mr. Jackson is a graduate of Michigan State University
Business School.

PAUL L. JOSKOW*
[INSERT PICTURE]

Dr. Joskow, age 52, is Elizabeth and James Killian Professor of
Economics and director of the Center for Energy and Environmental
Policy Research at the Massachusetts Institute of Technology. He
has published three books and numerous articles on topics in
industrial organization, government regulation of industry, and
competition policy. Dr. Joskow currently serves as a Director of
the New England Electric System, a public utility holding
company, State Farm Indemnity Company, an automobile insurance
company, and the Whitehead Institute for Biomedical Research, a
non-profit research institution. He has been President of the
Yale University Council since 1993.

Dr. Joskow is active on industry restructuring, environmental,
energy, competition, and privatization policies and has served as
an advisor to governments and corporations around the world.

Dr. Joskow is a graduate of Cornell University and Yale
University. He is a Fellow of the Econometric Society and the
American Academy of Arts and Sciences.

ELIZABETH T. KENNAN
[INSERT PICTURE]

Dr. Kennan, age 61, is President Emeritus of Mount Holyoke
College. From 1978 through June 1995, she was President of Mount
Holyoke College. From 1966 to 1978, she was on the faculty of
Catholic University, where she taught history, published numerous
articles, and directed the postdoctoral programs in Patristic and
Medieval Studies.

Dr. Kennan currently also serves as a Director of Bell Atlantic,
Northeast Utilities, the Kentucky Home Life Insurance Companies,
and Talbots. She also serves as a Member of The Folger
Shakespeare Library Committee. She is currently active in
various educational and civic associations. Dr. Kennan is a
graduate of Mount Holyoke College, the University of Washington,
and St. Hilda's College, Oxford University, and holds several
honorary doctorates.

LAWRENCE J. LASSER*
[INSERT PICTURE]

Mr. Lasser, age 56, is a Vice President of your fund and each of
the other Putnam funds. He has been the President, Chief
Executive Officer and a Director of Putnam Investments, Inc. and
Putnam Management since 1985, having begun his career there in
1969.

Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and the United Way of Massachusetts Bay. He is a
Member of the Board of Trustees of the Museum of Fine Arts in
Boston, The Council on Foreign Relations, and a Member of the
Board of Governors and Executive Committee at the Investment
Company Institute. He is also a Trustee of the Beth
Israel\Deaconess Medical Center in Boston and the Vineyard Open
Land Foundation. Mr. Lasser is a graduate of Antioch College and
Harvard Business School.

JOHN H. MULLIN, III
[INSERT PICTURE]

* NOMINEE FOR TRUSTEE OF PUTNAM MANAGED HIGH YIELD TRUST
* NOMINEE FOR TRUSTEE OF PUTNAM MASTER INCOME TRUST
* NOMINEE FOR TRUSTEE OF PUTNAM TAX-FREE HEALTH CARE FUND
* CLASS C TRUSTEE OF PUTNAM CONVERTIBLE OPPORTUNITIES AND
INCOME TRUST

Mr. Mullin, age 58, is Chairman and CEO of Ridgeway Farm, a
limited liability company engaged in timber activities and
farming. Prior to establishing Ridgeway Farm, Mr. Mullin was a
Managing Director of Dillon, Read & Co. Inc., an investment
banking firm.

Mr. Mullin currently serves as a Director of ACX Technologies,
Inc., a company engaged in the manufacture of industrial ceramics
and packaging products; Alex. Brown Realty, Inc., a real estate
investment company and The Liberty Corporation, a company engaged
in the life insurance and broadcasting industries. Mr. Mullin
previously served as a Director of Dillon, Read & Co. Inc.,
Adolph Coors Company, Crystal Brands, Inc., Fisher-Price, Inc.,
Mattel, Inc. and The Ryland Group, Inc. Mr. Mullin is a Trustee
Emeritus of Washington & Lee University where he served as
Chairman of the Investment Committee. Mr. Mullin is a graduate
of Washington & Lee University and The Wharton Graduate School at
the University of Pennsylvania.

ROBERT E. PATTERSON
[INSERT PICTURE]

Mr. Patterson, age 54, is the President and a Trustee of Cabot
Industrial Trust, a publicly traded real estate investment trust.
Prior to February, 1998 he was Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, a
registered investment adviser which managed real estate
investments for institutional investors. Prior to 1990, he was
the Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc., the predecessor company of Cabot Partners. Prior
to that, he was a Senior Vice President of the Beal Companies, a
real estate management, investment and development company. He
has also worked as an attorney and held various positions in
state government, including the founding Executive Director of
the Massachusetts Industrial Finance Agency.

Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center, a Trustee of SEA Education Association and a
Director of Brandywine Trust Company. Mr. Patterson is a
graduate of Harvard College and Harvard Law School.

WILLIAM F. POUNDS
[INSERT PICTURE]

Dr. Pounds, age 71, is a Vice Chairman of the Trustees. He was a
Professor of Management at the Massachusetts Institute of
Technology Alfred P. Sloan School of Management from 1961 through
1998, and is currently a Professor Emeritus.

Dr. Pounds currently also serves as a Director of IDEXX
Laboratories, Inc., North American Management Corp., Management
Sciences For Health, Inc. and Sun Company, Inc. He is also a
Vice President and Trustee of the Museum of Fine Arts, Boston;
and a Fellow of The American Academy of Arts and Sciences. He
previously served as Senior Advisor to the Rockefeller Family and
as President and Chief Executive Officer of Rockefeller Financial
Services, Inc. and as a Director of Fisher-Price, Inc., General
Mills, Inc., and an Overseer of WGBH Educational Foundation. Dr.
Pounds is a graduate of Carnegie-Mellon University.

GEORGE PUTNAM*
[INSERT PICTURE]

Mr. Putnam, age 72, is the Chairman of the Trustees and President
of your fund and each of the other Putnam funds. He is the
Chairman and a Director of Putnam Management and Putnam Mutual
Funds Corp. Mr. Putnam is the son of the founder of the Putnam
funds and Putnam Management and has been employed in various
capacities by Putnam Management since 1951, including Chief
Executive Officer from 1961 to 1973. He is a former Overseer and
Treasurer of Harvard University; a past Chairman of the Harvard
Management Company; and a Trustee Emeritus of Wellesley College
and Bradford College.

Mr. Putnam currently also serves as a Director of Freeport Copper
and Gold, Inc., a mining and natural resources company and
Houghton Mifflin Company, a major publishing company. He is also
a Trustee of Massachusetts General Hospital, McLean Hospital,
Vincent Memorial Hospital, WGBH Educational Foundation, and the
Museum of Fine Arts, Boston, the New England Aquarium and College
of the Atlantic; an Overseer of the Museum of Science in Boston,
and Northeastern University; and a Fellow of The American Academy
of Arts and Sciences. Mr. Putnam is a graduate of Harvard
College and Harvard Business School and holds honorary doctorates
from Bates College and Harvard University.

GEORGE PUTNAM, III*
[INSERT PICTURE]

Mr. Putnam, age 47, is the President of New Generation Research,
Inc., a publisher of financial advisory and other research
services relating to bankrupt and distressed companies, and New
Generation Advisers, Inc., a registered investment adviser which
provides advice to private funds specializing in investments in
such companies. Prior to founding New Generation in 1985, Mr.
Putnam was an attorney with the Philadelphia law firm Dechert
Price & Rhoads.

Mr. Putnam currently also serves as a Director of the
Massachusetts Audubon Society and The Boston Family Office,
L.L.C., a registered investment advisor that provides financial
advice to individuals and families. He is also a Trustee of the
SEA Education Association and St. Mark's School. Mr. Putnam is a
graduate of Harvard College, Harvard Business School and Harvard
Law School.

A.J.C. SMITH*
[INSERT PICTURE]

Mr. Smith, age 65, is the Chairman and Chief Executive Officer of
Marsh & McLennan Companies, Inc. He has been employed by Marsh &
McLennan and related companies in various capacities since 1961.
Mr. Smith is a Director of the Trident Corp.; a Trustee of the
Carnegie Hall Society, the Central Park Conservancy, the
Educational Broadcasting Corporation, the Economic Club of New
York, and the U.S. Chamber of Commerce; a Member of the Board of
Overseers of the Joan and Sanford I. Weill Graduate School of
Medical Sciences of Cornell University; and a Founder of the
Museum of Scotland Society. He was educated in Scotland and is a
Fellow of the Faculty of Actuaries in Edinburgh, a Fellow of the
Canadian Institute of Actuaries, a Fellow of the Conference of
Actuaries, an Associate of the Society of Actuaries, a Member of
the American Academy of Actuaries, the International Actuarial
Association and the International Association of Consulting
Actuaries.

W. THOMAS STEPHENS
[INSERT PICTURE]

Mr. Stephens, age 56, is the President and Chief Executive
Officer of MacMillan Bloedel Limited, a forest products and
building materials company.

In 1996, Mr. Stephens retired as Chairman of the Board of
Directors, President and Chief Executive Officer of Johns
Manville Corporation. He also served as Executive Vice President
and Chief Financial Officer of Manville. In total, Mr. Stephens
had 27 years of experience with Manville and its predecessor
companies.

Mr. Stephens serves as a Director for Qwest Communications, a
fiber optic and communication system supplier and New Century
Energies, a public utility company. Mr. Stephens is a graduate
of the University of Arkansas.

W. NICHOLAS THORNDIKE**
[INSERT PICTURE]

Mr. Thorndike, age 66, serves as a Director of various
corporations and charitable organizations, including Data General
Corporation, a computer and high technology company, Bradley Real
Estate, Inc., a real estate investment firm, Providence Journal
Co., a newspaper publisher, and Courier Corporation, a book
binding and printing company. He is also a Trustee of Cabot
Industrial Trust, Eastern Utilities Associates, Massachusetts
General Hospital, where he previously served as chairman and
president, and Northeastern University.

Prior to December 1988, he was the Chairman of the Board and
Managing Partner of Wellington Management Company/Thorndike,
Doran, Paine & Lewis, a registered investment adviser that
manages mutual funds and institutional assets. He also
previously served as a Trustee of the Wellington Group of Funds
(now The Vanguard Group) and was the Chairman and a Director of
Ivest Fund, Inc. Mr. Thorndike is a graduate of Harvard College.
- ----------------------------
* Nominees who are or may be deemed to be "interested persons"
(as defined in the Investment Company Act of 1940) of your
fund, Putnam Management, and Putnam Mutual Funds Corp.
("Putnam Mutual Funds"), the principal underwriter for all
the open-end Putnam funds and an affiliate of Putnam
Management. Messrs. Putnam, Lasser, and Smith are deemed
"interested persons" by virtue of their positions as
officers or shareholders of your fund, or directors of
Putnam Management, Putnam Mutual Funds, or Marsh & McLennan
Companies, Inc., the parent company of Putnam Management and
Putnam Mutual Funds.

Mr. George Putnam, III, Mr. Putnam's son, is also an
"interested person" of your fund, Putnam Management, and
Putnam Mutual Funds. Mr. Joskow is not currently an
"interested person" of your fund but could be deemed by the
Securities and Exchange Commission to be an "interested
person" on account of his prior consulting relationship with
National Economic Research Associates, Inc. a wholly-owned
subsidiary of Marsh & McLennan Companies, Inc., which was
terminated as of August 31, 1998. The balance of the
nominees are not "interested persons."

** In February 1994 Mr. Thorndike accepted appointment as a
successor trustee of certain private trusts in which he has
no beneficial interest. At that time he also became
Chairman of the Board of two privately owned corporations
controlled by such trusts, serving in that capacity until
October 1994. These corporations filed voluntary petitions
for relief under Chapter 11 of the U.S. Bankruptcy Code in
August 1994.

Except as indicated above, the principal occupations and business
experience of the nominees for the last five years have been with
the employers indicated, although in some cases they have held
different positions with those employers.

All the nominees of Putnam Master Income Trust were elected by
the shareholders in October 1998 and all the nominees of Putnam
Managed High Yield Trust and Putnam Tax-Free Health Care Fund
were elected by the shareholders in December 1998. The 15
nominees for election as Trustees of each of Putnam Managed High
Yield Trust, Putnam Master Income Trust and Putnam Tax-Free
Health Care Fund who receive the greatest number of votes will be
elected Trustees of your fund. The Trustees serve until their
successors are elected and qualified. Each of the nominees has
agreed to serve as a Trustee if elected. If any of the nominees
is unavailable for election at the time of the meeting, which is
not anticipated, the Trustees may vote for other nominees at
their discretion, or the Trustees may fix the number of Trustees
at less than 15 for your fund.

As described above, only the Class A Trustees of Putnam
Convertible Opportunities and Income Trust, whose current terms
expire at the time of the shareholder meeting, are nominated for
election; the other Trustees of the fund will continue to serve
under their current terms. The terms for the Class B Trustees
will expire at the fund's 2000 annual meeting of shareholders and
the terms of the Class C Trustees will expire at the fund's 2001
annual meeting. Each of the fund's Class A Trustees was elected
by the shareholders in December 1996, except for Mr. Joskow who
was elected by the Trustees in November 1997. Each of the Class
B Trustees was elected by the shareholders in December 1997.
Each of the fund's Class C Trustees was elected by the
shareholders in December 1998.

The five nominees of Putnam Convertible Opportunities and Income
Trust who receive the greatest number of votes will be elected
Class A Trustees of the fund. Each Class A Trustee will be
elected to a three year term expiring at the fund's 2002 annual
meeting of shareholders. Each Trustee of Putnam Convertible
Opportunities and Income Trust serves until the expiration of his
or her term and until his or her successor is elected and
qualified.

WHAT ARE THE TRUSTEES' RESPONSIBILITIES?

Your fund's Trustees are responsible for the general oversight of
your fund's business and for assuring that your fund is managed
in the best interests of its shareholders. The Trustees
periodically review your fund's investment performance as well as
the quality of other services provided to your fund and its
shareholders by Putnam Management and its affiliates, including
administration, custody and investor servicing. At least
annually, the Trustees review the fees paid to Putnam Management
and its affiliates for these services and the overall level of
your fund's operating expenses. In carrying out these
responsibilities, the Trustees are assisted by an independent
administrative staff and by your fund's auditors and legal
counsel, which are selected by the Trustees and are independent
of Putnam Management and its affiliates.

DO THE TRUSTEES HAVE A STAKE IN YOUR FUND?

The Trustees believe it is important that each Trustee have a
significant investment in the Putnam funds. The Trustees
allocate their investments among the more than 113 Putnam funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $82 million. The
table below lists each Trustee's current investments in the fund
and in the Putnam funds as a group based on beneficial ownership.
Except as otherwise noted, each Trustee has sole voting power and
sole investment power with respect to his or her shares.
SHARE OWNERSHIP BY TRUSTEES
<TABLE><CAPTION>

NUMBER OF SHARES OWNED AS OF MAY 14, 1999 OF:
<S> <C> <C> <C> <C> <C> <C>
TRUSTEES Year All Putnam Putnam Putnam Putnam
first Putnam Convertible Managed High Master Tax-Free
elected funds Opportunities Yield Trust Income Health
as (1) and Income Trust Care
Trustee Trust
of the
Putnam
funds
Jameson A. Baxter 1994 320 418 135 383
126,599
Hans H. Estin 1972 260 158 842 138
34,862
John A. Hill 1985 1,600 100 1,500 100
201,398
Ronald J. Jackson 1996 200(2) 200(2) 200(2) 200(2)
149,059
Paul L. Joskow 1997 100 100 100 100
23,145
Elizabeth T. 1992 141(3) 175(3) 150(3) 149(3)
Kennan 27,481
Lawrence J. Lasser 1992 100 100 100 100
443,281
John H. Mullin, 1997 100 100 100 100
III 43,458
Robert E Patterson 1984 200 200 300 100
77,294
William F. Pounds 1971 200 500 500 335
338,409
George Putnam 1957 1,985,24 20,419(4) 1,242 2,965 1,021
2
George Putnam, III 1984 20,500(5) 500 500 500
523,992
A.J.C. Smith 1986 100(6) 200(6) 200(6) 200(6)
61,487
W. Thomas Stephens 1997 100 100 100 100
110,476
W. Nicholas 1992 141 172 195 147
Thorndike 81,349
</TABLE>
(1) These holdings do not include shares of Putnam money market funds.
(2) Mr. Jackson has shared investment power and shared voting
power with respect to such shares.
(3) Dr. Kennan is the custodian of a trust which owns all of
these shares and in which she has no economic interest.
(4) Mr. Putnam has shared investment power and shared voting
power with respect to 20,000 of these shares.
(5) Mr. Putnam, III has shared investment power and shared
voting power with respect to 20,000 of these shares.
(6) Mr. Smith has shared investment power and shared voting
power with respect to such shares.

As of May 14, 1999, the Trustees and officers of Putnam
Convertible Opportunities and Income Trust, Putnam Managed
High Yield Trust, Putnam Master Income Trust and Putnam Tax-
Free Health Care Fund owned a total of 24,481, 4,266, 7,887,
and 3,673 shares, respectively of each fund comprising less
than 1% of the outstanding shares of such fund on that date.

WHAT ARE SOME OF THE WAYS IN WHICH THE TRUSTEES REPRESENT SHAREHOLDER INTERESTS?

The Trustees believe that, as substantial investors in the Putnam
funds, their interests are closely aligned with those of
individual shareholders. Among other ways, the Trustees seek to
represent shareholder interests:

C by carefully reviewing your fund's investment performance on
an individual basis with your fund's managers;

C by also carefully reviewing the quality of the various other
services provided to the funds and their shareholders by Putnam
Management and its affiliates;

C by discussing with senior management of Putnam Management
steps being taken to address any performance deficiencies;

C by reviewing the fees paid to Putnam Management to ensure
that such fees remain reasonable and competitive with those of
other mutual funds, while at the same time providing Putnam
Management sufficient resources to continue to provide high
quality services in the future;

C by monitoring potential conflicts between the funds and
Putnam Management and its affiliates to ensure that the funds
continue to be managed in the best interests of their
shareholders; and

C by also monitoring potential conflicts among funds to ensure
that shareholders continue to realize the benefits of
participation in a large and diverse family of funds.

HOW OFTEN DO THE TRUSTEES MEET?

The Trustees meet each month (except August) over a two-day
period to review the operations of your fund and of the other
Putnam funds. A portion of these meetings is devoted to meetings
of various Committees of the board which focus on particular
matters. These currently include: the Contract Committee, which
reviews all contractual arrangements with Putnam Management and
its affiliates; the Communication, Service and Marketing
Committee, which reviews the quality of services provided by your
fund's investor servicing agent and custodian; the Brokerage and
Custody Committee, which reviews matters relating to custody of
securities, best execution, brokerage costs and allocations and
new investment techniques; the Audit and Pricing Committee, which
reviews procedures for the valuation of securities, the funds'
accounting policies and the adequacy of internal controls and
supervises the engagement of the funds' auditors; the Board
Policy Committee, which reviews the compensation of the Trustees
and their administrative staff and supervises the engagement of
the funds' independent counsel and which is responsible for
selecting nominees for election as Trustees, and the Closed-end
Funds and Variable Trust Committee, which is responsible for
reviewing special issues applicable to closed-end funds such as
your fund and funds sold through variable annuity products.

Each Trustee generally attends at least two formal committee
meetings during each regular meeting of the Trustees. During
1998, the average Trustee participated in approximately 40
committee and board meetings. In addition, the Trustees meet in
small groups with Chief Investment Officers and Portfolio
Managers to review recent performance and the current investment
climate for selected funds. These meetings ensure that each
fund's performance is reviewed in detail at least twice a year.
The Contract Committee typically meets on several additional
occasions during the year to carry out its responsibilities.
Other Committees, including an Executive Committee, may also meet
on special occasions as the need arises.

WHAT ARE THE TRUSTEES PAID FOR THEIR SERVICES?

Each Trustee receives a fee for his or her services. Each
Trustee also receives fees for serving as Trustee of the other
Putnam funds. The Trustees periodically review their fees to
assure that such fees continue to be appropriate in light of
their responsibilities as well as in relation to fees paid to
trustees of other mutual fund complexes. The Compensation
Committee, which consists solely of Trustees not affiliated with
Putnam Management, estimates that Committee and Trustee meeting
time together with the appropriate preparation requires the
equivalent of at least three business days per Trustee meeting.
The following table shows the fees paid to each Trustee by each
fund for its most recent fiscal year and the fees paid to each
Trustee by all of the Putnam funds during calendar year 1998:
<TABLE><CAPTION>
PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
COMPENSATION TABLE
<S> <C> <C> <C> <C>

Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees fund(1) fund expenses upon retirement(2) funds(3)
Jameson A. Baxter $717 $158 $ 95,000 $207,000(4)
Hans H. Estin 634 307 95,000 182,500
John A. Hill (5) 652 121 115,000 200,500(4)
Ronald J. Jackson 704 98 95,000 200,500(4)
Paul L. Joskow 634 19 95,000 180,500(4)
Elizabeth T. Kennan 695 171 95,000 200,500
Lawrence J. Lasser 624 128 95,000 178,500
John H. Mullin, III 644 28 95,000 180,500(4)
Robert E. Patterson 631 94 95,000 181,500
William F. Pounds (5) 649 344 115,000 215,000
George Putnam 624 345 95,000 179,500
George Putnam, III 631 62 95,000 181,500
A.J.C. Smith 615 209 95,000 176,500
W. Thomas Stephens 631 26 95,000 181,500(4)
W. Nicholas Thorndike 651 244 95,000 182,500

(1) Includes an annual retainer and an attendance fee for each meeting attended.
(2) Assumes that each Trustee retires at the normal retirement date. Estimated
benefits for each Trustee are based on Trustee fee rates in effect during
calendar 1998.
(3) As of December 31, 1998, there were 113 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral Plan.
(5) Includes additional compensation for service as Vice Chairman of the Putnam
funds.
</TABLE>
<TABLE><CAPTION>
PUTNAM MANAGED HIGH YIELD TRUST
COMPENSATION TABLE
<S> <C> <C> <C> <C>
Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees fund(1) fund expenses upon retirement(2) funds(3)
Jameson A. Baxter $678 $151 $ 95,000 $207,000(4)
Hans H. Estin 635 310 95,000 182,500
John A. Hill (5) 673 132 115,000 200,500(4)
Ronald J. Jackson 677 113 95,000 200,500(4)
Paul L. Joskow 635 27 95,000 180,500(4)
Elizabeth T. Kennan 666 178 95,000 200,500
Lawrence J. Lasser 629 135 95,000 178,500
John H. Mullin, III 654 41 95,000 180,500(4)
Robert E. Patterson 630 97 95,000 181,500
William F. Pounds (5) 651 348 115,000 215,000
George Putnam 629 339 95,000 179,500
George Putnam, III 632 65 95,000 181,500
A.J.C. Smith 547 214 95,000 176,500
W. Thomas Stephens 632 38 95,000 181,500(4)
W. Nicholas Thorndike 635 254 95,000 182,500

(1) Includes an annual retainer and an attendance fee for each meeting attended.
(2) Assumes that each Trustee retires at the normal retirement date. Estimated
benefits for each Trustee are based on Trustee fee rates in effect during
calendar 1998.
(3) As of December 31, 1998, there were 113 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral Plan.
(5) Includes additional compensation for service as Vice Chairman of the Putnam
funds.
</TABLE>
<TABLE><CAPTION>
PUTNAM MASTER INCOME TRUST
COMPENSATION TABLE
<S> <C> <C> <C> <C>
Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees fund(1) fund expenses upon retirement(2) funds(3)
Jameson A. Baxter $956 $173 $ 95,000 $207,000(4)
Hans H. Estin 846 395 95,000 182,500
John A. Hill (5) 836 188 115,000 200,500(4)
Ronald J. Jackson 927 172 95,000 200,500(4)
Paul L. Joskow 836 52 95,000 180,500(4)
Elizabeth T. Kennan 927 239 95,000 200,500
Lawrence J. Lasser 827 182 95,000 178,500
John H. Mullin, III 836 78 95,000 180,500(4)
Robert E. Patterson 841 129 95,000 181,500
William F. Pounds (5) 911 441 115,000 215,000
George Putnam 832 413 95,000 179,500
George Putnam, III 841 87 95,000 181,500
A.J.C. Smith 814 279 95,000 176,500
W. Thomas Stephens 839 72 95,000 181,500(4)
W. Nicholas Thorndike 846 337 95,000 182,500

(1) Includes an annual retainer and an attendance fee for each meeting attended.
(2) Assumes that each Trustee retires at the normal retirement date. Estimated
benefits for each Trustee are based on Trustee fee rates in effect during
calendar 1998.
(3) As of December 31, 1998, there were 113 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral Plan.
(5) Includes additional compensation for service as Vice Chairman of the Putnam
funds.
</TABLE>
<TABLE><CAPTION>
PUTNAM TAX-FREE HEALTH CARE FUND
COMPENSATION TABLE
<S> <C> <C> <C> <C>
Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees fund(1) fund expenses upon retirement(2) funds(3)
Jameson A. Baxter $574 $129 $ 95,000 $207,000(4)
Hans H. Estin 538 267 95,000 182,500
John A. Hill (5) 582 114 115,000 200,500(4)
Ronald J. Jackson 573 97 95,000 200,500(4)
Paul L. Joskow 538 23 95,000 180,500(4)
Elizabeth T. Kennan 564 153 95,000 200,500
Lawrence J. Lasser 532 116 95,000 178,500
John H. Mullin, III 553 35 95,000 180,500(4)
Robert E. Patterson 534 84 95,000 181,500
William F. Pounds (5) 571 299 115,000 215,000
George Putnam 532 292 95,000 179,500
George Putnam, III 535 56 95,000 181,500
A.J.C. Smith 524 184 95,000 176,500
W. Thomas Stephens 535 33 95,000 181,500(4)
W. Nicholas Thorndike 538 218 95,000 182,500

(1) Includes an annual retainer and an attendance fee for each meeting attended.
(2) Assumes that each Trustee retires at the normal retirement date. Estimated
benefits for each Trustee are based on Trustee fee rates in effect during
calendar 1998.
(3) As of December 31, 1998, there were 113 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral Plan.
(5) Includes additional compensation for service as Vice Chairman of the Putnam
funds.
</TABLE>
Under a Retirement Plan for Trustees of the Putnam funds (the
"Plan"), each Trustee who retires with at least five years of
service as a Trustee of the funds is entitled to receive an
annual retirement benefit equal to one-half of the average annual
compensation paid to such Trustee for the last three years of
service prior to retirement. This retirement benefit is payable
during a Trustee's lifetime, beginning the year following
retirement, for a number of years equal to such Trustee's years
of service. A death benefit is also available under the Plan
which assures that the Trustee and his or her beneficiaries will
receive benefit payments for the lesser of an aggregate period of
(i) ten years or (ii) such Trustee's total years of service.

The Plan Administrator (a committee comprised of Trustees that
are not "interested persons" of the fund, as defined in the
Investment Company Act of 1940) may terminate or amend the Plan
at any time, but no termination or amendment will result in a
reduction in the amount of benefits (i) currently being paid to a
Trustee at the time of such termination or amendment, or (ii) to
which a current Trustee would have been entitled to receive had
he or she retired immediately prior to such termination or
amendment.

For additional information about your fund, including further
information about its Trustees and officers, please see "Fund
Information," on page 38.

PUTNAM INVESTMENTS

Putnam Investment Management, Inc. and its affiliate, Putnam
Fiduciary Trust Company, your fund's investor servicing agent and
custodian, are wholly owned by Putnam Investments, Inc., One Post
Office Square, Boston, Massachusetts 02109, a holding company
that is, except for a minority stake owned by employees, in turn
owned by Marsh & McLennan Companies, Inc., which has executive
offices at 1166 Avenue of the Americas, New York, New York 10036.
Marsh & McLennan Companies, Inc. is a leading professional
services firm with risk and insurance services, investment
management and consulting businesses.

2A. RATIFICATION OF INDEPENDENT AUDITORS

(PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST, PUTNAM
MANAGED HIGH YIELD TRUST AND PUTNAM TAX-FREE HEALTH CARE FUND)

PRICEWATERHOUSECOOPERS LLP, 160 Federal Street, Boston,
Massachusetts 02110, independent accountants, has been selected
by the Trustees as the independent auditors of your fund for the
current fiscal year. Among the country's preeminent accounting
firms, this firm also serves as the auditor for the other funds
in the Putnam family. It was selected primarily on the basis of
its expertise as auditors of investment companies, the quality of
its audit services, and the competitiveness of its fees.

A majority of the votes on the matter is necessary to ratify the
selection of auditors. Voting by one fund does not affect any
other fund. A representative of the independent auditors is
expected to be present at the meeting to make statements and to
respond to appropriate questions.

2B. RATIFICATION OF INDEPENDENT AUDITORS
(PUTNAM MASTER INCOME TRUST ONLY)

KPMG LLP, 99 High Street, Boston, Massachusetts 02110,
independent accountants, has been selected by the Trustees as the
independent auditors of your fund for the current fiscal year.
The Audit and Pricing Committee of the Board of Trustees
unanimously approved the selection of KPMG in June of 1999, and
the Trustees unanimously approved such selection in July 1999.
Among the country's preeminent accounting firms, this firm also
serves as the auditors for several of the other funds in the
Putnam family. It was selected primarily on the basis of its
expertise as auditors of investment companies, the quality of its
audit services, and the competitiveness of its fees.

PricewaterhouseCoopers LLP, independent accountants, has
previously served as the independent auditors for your fund.
PricewaterhouseCoopers LLP resigned as independent auditors in
July, 1999. Neither of its reports on the financial statements
for the past two fiscal years contained an adverse opinion or a
disclaimer of opinion, nor was either report qualified as to
uncertainty, audit scope or accounting principles. There have
been no disagreements between PricewaterhouseCoopers LLP and your
fund on any matter of accounting principles and practices,
financial statement disclosure, or auditing scope or procedure.

The change in audit firms reflects the Trustees' decision to
continue their policy of having two audit firms serve the Putnam
funds. In the past, the two firms were Price Waterhouse LLP and
Coopers & Lybrand L.L.P. These firms merged in July, 1998.

FURTHER INFORMATION ABOUT VOTING AND THE MEETING

QUORUM AND METHODS OF TABULATION. The shareholders of each fund
vote separately with respect to each proposal. In the case of
Putnam Convertible Opportunities and Income Trust, Putnam Managed
High Yield Trust and Putnam Tax-Free Health Care Fund, a majority
of the shares entitled to vote -- present in person or
represented by proxy -- constitutes a quorum for the transaction
of business with respect to any proposal at the meeting (unless
otherwise noted in the proxy statement). In the case of Putnam
Master Income Trust, thirty percent of the shares entitled to
vote-present or represented by proxy-constitutes a quorum for the
transaction of business with respect to any proposal at the
meeting (unless otherwise noted in the proxy statement). Shares
represented by proxies that reflect abstentions and "broker non-
votes" (i.e., shares held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or
the persons entitled to vote and (ii) the broker or nominee does
not have the discretionary voting power on a particular matter)
will be counted as shares that are present and entitled to vote
on the matter for purposes of determining the presence of a
quorum. Votes cast by proxy or in person at the meeting will be
counted by persons appointed by your fund as tellers for the
meeting.

The tellers will count the total number of votes cast "for"
approval of the proposals for purposes of determining whether
sufficient affirmative votes have been cast. With respect to the
election of Trustees and selection of auditors, neither
abstentions nor broker non-votes have any effect on the outcome
of the proposal.

OTHER BUSINESS. The Trustees know of no other business to be
brought before the meeting. However, if any other matters
properly come before the meeting, it is their intention that
proxies that do not contain specific restrictions to the contrary
will be voted on such matters in accordance with the judgment of
the persons named as proxies in the enclosed form of proxy.

SIMULTANEOUS MEETINGS. The meeting of shareholders of your fund
is called to be held at the same time as the meetings of
shareholders of certain of the other Putnam funds. It is
anticipated that all meetings will be held simultaneously. If
any shareholder at the meeting objects to the holding of a
simultaneous meeting and moves for an adjournment of the meeting
to a time promptly after the simultaneous meetings, the persons
named as proxies will vote in favor of such adjournment.

SOLICITATION OF PROXIES. In addition to soliciting proxies by
mail, Trustees of your fund and employees of Putnam Management,
Putnam Fiduciary Trust Company, and Putnam Mutual Funds may
solicit proxies in person or by telephone. Your fund may also
arrange to have voting instructions recorded by telephone. The
telephone procedure is designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of
their shares in accordance with their instructions and to confirm
that their instructions have been properly recorded. Your fund
has been advised by counsel that these procedures are consistent
with the requirements of applicable law. If these procedures
were subject to a successful legal challenge, such votes would
not be counted at the meeting. Your fund is unaware of any such
challenge at this time. Shareholders would be called at the
phone number Putnam Investments has in its records for their
accounts, and would be asked for their Social Security number or
other identifying information. The shareholders would then be
given an opportunity to authorize proxies to vote their shares at
the meeting in accordance with their instructions. To ensure
that the shareholders' instructions have been recorded correctly,
they will also receive a confirmation of their instructions in
the mail. A special toll-free number will be available in case
the information contained in the confirmation is incorrect.

Shareholders may have the opportunity to submit their voting
instructions via the Internet by utilizing a program provided
through the vendor. The giving of such a proxy will not affect
your right to vote in person should you decide to attend the
meeting. To vote via the Internet, you will need the 14-digit
"control" number that appears on your proxy card. To use the
Internet, please access the Internet address found on your proxy
card on the World Wide Web. The Internet voting procedures are
designed to authenticate shareholder identities, to allow
shareholders to give their voting instructions, and to confirm
that shareholders' instructions have been recorded properly.
Shareholders voting via the Internet should understand that there
may be costs associated with electronic access, such as usage
charges from Internet access providers and telephone companies,
that must be borne by the shareholders.

Your fund's Trustees have adopted a general policy of maintaining
confidentiality in the voting of proxies. Consistent with this
policy, your fund may solicit proxies from shareholders who have
not voted their shares or who have abstained from voting.

Persons holding shares as nominees will upon request be
reimbursed for their reasonable expenses in soliciting
instructions from their principals. Each fund has retained at
its expense D.F. King & Co., Inc., 77 Water Street, New York, New
York 10005, to aid in the solicitation of instructions for
registered and nominee accounts, for a fee not to exceed $2,000
for each fund plus reasonable out-of-pocket expenses for mailing
and phone costs.

REVOCATION OF PROXIES. Proxies, including proxies given by
telephone, may be revoked at any time before they are voted by a
written revocation received by the Clerk of your fund, by
properly executing a later-dated proxy, by recording later-dated
voting instructions via the Internet or by attending the meeting
and voting in person.

DATE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS FOR THE NEXT ANNUAL
MEETING. It is currently anticipated that each fund's next
annual meeting of shareholders will be held in October 2000.
Shareholder proposals to be included in the proxy statement for
that meeting must be received by your fund before March 29, 2000.
Shareholders who wish to make a proposal at the 2000 annual
meeting-other than one that will be included in your fund's proxy
materials-should notify the fund no later than June 12, 2000. If
a shareholder who wishes to present a proposal fails to notify
his fund by this date, the proxies solicited for the meeting will
have discretionary authority to vote on the shareholder's
proposal if it is properly brought before the meeting. If a
shareholder makes a timely notification, the proxies may still
exercise discretionary voting authority under circumstances
consistent with the SEC's proxy rules.

ADJOURNMENT. If sufficient votes in favor of any of the
proposals set forth in the Notice of the Meeting are not received
by the time scheduled for the meeting, the persons named as
proxies may propose adjournments of the meeting for a period or
periods of not more than 60 days in the aggregate to permit
further solicitation of proxies with respect to those proposals.
Any adjournment will require the affirmative vote of a majority
of the votes cast on the question in person or by proxy at the
session of the meeting to be adjourned. The persons named as
proxies will vote in favor of adjournment those proxies that they
are entitled to vote in favor of such proposals. They will vote
against adjournment those proxies required to be voted against
such proposals. Your fund pays the costs of any additional
solicitation and of any adjourned session. Any proposals for
which sufficient favorable votes have been received by the time
of the meeting may be acted upon and considered final regardless
of whether the meeting is adjourned to permit additional
solicitation with respect to any other proposal.

FINANCIAL INFORMATION. YOUR FUND WILL FURNISH TO YOU UPON
REQUEST, WITHOUT CHARGE, A COPY OF THE FUND'S ANNUAL REPORT FOR
ITS MOST RECENT FISCAL YEAR, AND A COPY OF ITS SEMIANNUAL REPORT
FOR ANY SUBSEQUENT SEMIANNUAL PERIOD. SUCH REQUESTS MAY BE
DIRECTED TO PUTNAM INVESTOR SERVICES, P.O. BOX 41203, PROVIDENCE,
RI 02940-1203 OR 1-800-225-1581.

FUND INFORMATION

LIMITATION OF TRUSTEE LIABILITY. The Agreement and Declaration
of Trust of each fund provides that the fund will indemnify its
Trustees and officers against liabilities and expenses incurred
in connection with litigation in which they may be involved
because of their offices with the fund, except if it is
determined in the manner specified in the Agreement and
Declaration of Trust that they have not acted in good faith in
the reasonable belief that their actions were in the best
interests of the fund or that such indemnification would relieve
any officer or Trustee of any liability to the fund or its
shareholders arising by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties.
Your fund, at its expense, provides liability insurance for the
benefit of its Trustees and officers.

AUDIT AND PRICING AND BOARD POLICY COMMITTEES. The voting
members of the Audit and Pricing Committee of your fund include
only Trustees who are not "interested persons" of the fund by
reason of any affiliation with Putnam Investments and its
affiliates. The Audit and Pricing Committee currently consists
of Messrs. Estin, Joskow, Putnam, III (Chairman and without
vote), Smith (without vote), Stephens and Dr. Kennan. The Board
Policy Committee consists only of Trustees who are not
"interested persons" of your fund or Putnam Management. The
Board Policy Committee currently consists of Dr. Kennan
(Chairperson), Messrs. Hill, Patterson, Pounds and Thorndike.

OFFICERS AND OTHER INFORMATION. In addition to George Putnam and
Lawrence J. Lasser, the officers of each fund are as follows:

PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
Year first
elected to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (60) Executive Vice President 1995
Patricia C. Flaherty (52) Senior Vice President 1995
John D. Hughes (64) Senior Vice President
& Treasurer 1995
Gordon H. Silver (52) Vice President 1995
Ian C. Ferguson (42) Vice President 1997
Brett C. Browchuk (36) Vice President 1995
Thomas V. Reilly (52) Vice President 1995
Edward T. Shadek, Jr.(38) Vice President 1997
Stephen Oristaglio (43) Vice President 1998
Edward H. D'Alelio (47) Vice President 1998
Charles G. Pohl* (38) Vice President 1998
Kevin Rogers* (54) Vice President 1999
Richard A. Monaghan** (44) Vice President 1999
John R. Verani (60) Vice President 1995
- -----------------------------------------------------------------
* One of the fund's portfolio managers
** President of Putnam Mutual Funds

PUTNAM MANAGED HIGH YIELD TRUST
Year first
elected to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (60) Executive Vice President 1993
Patricia C. Flaherty (52) Senior Vice President 1993
John D. Hughes (64) Senior Vice President
& Treasurer 1993
Gordon H. Silver (52) Vice President 1993
Ian C. Ferguson (42) Vice President 1998
Brett C. Browchuk (36) Vice President 1998
Stephen Oristaglio (43) Vice President 1998
Edward H. D'Alelio (47) Vice President 1993
Jennifer E. Leichter* (38) Vice President 1993
Rosemary Thomsen* (38) Vice President 1999
Richard A. Monaghan** (44) Vice President 1999
John R. Verani (60) Vice President 1993
- -----------------------------------------------------------------
* One of the fund's portfolio managers
** President of Putnam Mutual Funds

PUTNAM MASTER INCOME TRUST
Year first
elected to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (60) Executive Vice President 1989
Patricia C. Flaherty (52) Senior Vice President 1993
John D. Hughes (64) Senior Vice President
& Treasurer 1987
Gordon H. Silver (52) Vice President 1990
Ian C. Ferguson (42) Vice President 1997
Brett C. Browchuk (36) Vice President 1998
Stephen Oristaglio (43) Vice President 1998
Edward H. D'Alelio (47) Vice President 1998
David L. Waldman* (33) Vice President 1997
Robert M. Paine* (35) Vice President 1999
D. William Kohli* (38) Vice President 1994
Richard A. Monaghan** (44) Vice President 1999
John R. Verani (60) Vice President 1987
- -----------------------------------------------------------------
* One of the fund's portfolio managers
** President of Putnam Mutual Funds

PUTNAM TAX-FREE HEALTH CARE FUND
Year first
elected to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (60) Executive Vice President 1992
Patricia C. Flaherty (52) Senior Vice President 1993
John D. Hughes (64) Senior Vice President
& Treasurer 1992
Gordon H. Silver (52) Vice President 1992
Ian C. Ferguson (42) Vice President 1998
Brett C. Browchuk (36) Vice President 1998
Stephen Oristaglio (43) Vice President 1998
Jerome Jacobs (40) Vice President 1997
Blake Anderson* (42) Vice President 1994
Richard A. Monaghan** (44) Vice President 1999
John R. Verani (60) Vice President 1992
- -----------------------------------------------------------------
* One of the fund's portfolio managers
** President of Putnam Mutual Funds

All of the officers of your fund are employees of Putnam
Management or its affiliates. Because of their positions with
Putnam Management or its affiliates or their ownership of stock
of Marsh & McLennan Companies, Inc., Messrs. Putnam, Putnam, III,
Lasser and Smith (nominees for Trustees of your fund), as well as
the officers of your fund, will benefit from the management fees,
custodian fees, and investor servicing fees paid or allowed by
the fund.

ASSETS AND SHARES OUTSTANDING OF YOUR FUND
AS OF JULY 2, 1999

NET ASSETS:

Putnam Convertible Opportunities and Income Trust $88,794,711
Putnam Managed High Yield Trust $92,333,868
Putnam Master Income Trust $426,280,801
Putnam Tax-Free Health Care Fund $197,484,624

SHARES OUTSTANDING AND AUTHORIZED TO VOTE:

Putnam Convertible Opportunities and
Income Trust 3,712,567 shares
Putnam Managed High Yield Trust 7,507,107 shares
Putnam Master Income Trust 53,095,749 shares
Putnam Tax-Free Health Care Fund 13,807,168 shares

5% BENEFICIAL OWNERSHIP:

Putnam Convertible Opportunities
and Income Trust None
Putnam Managed High Yield Trust None
Putnam Master Income Trust None
Putnam Tax-Free Health Care Fund None

This Page Intentionally Left Blank

PUTNAM INVESTMENTS

The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
53966 7/99

PUTNAM INVESTMENTS LOGO

FOR YOUR CONVENIENCE YOU MAY RECORD YOUR VOTING INSTRUCTIONS VIA
THE INTERNET OR BY RETURNING THIS PROXY CARD BY MAIL

Your vote is very important. If you choose to record your voting
instructions via the Internet, visit the website at
www.proxyweb.com. Please refer to the instructions below. Your
voting instructions will be immediately confirmed and posted.

TO RECORD YOUR VOTING INSTRUCTIONS ON THE INTERNET

1. Read the proxy statement.
2. Go to www.proxyweb.com
3. Enter the 14-digit control number printed on your proxy card.
4. Follow the instructions on the site.

IF YOU VOTE ON THE INTERNET, THERE IS NO NEED TO RETURN YOUR
PROXY CARD.

THIS IS YOUR PROXY CARD.

PLEASE RECORD YOUR VOTING INSTRUCTIONS ON THIS PROXY CARD, SIGN
IT BELOW, AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.
YOUR VOTE IS IMPORTANT.

Proxy for a meeting of shareholders to be held on October 7, 1999
for PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST.

THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE FUND.

The undersigned shareholder hereby appoints George Putnam, Hans
H. Estin, and Robert E. Patterson, and each of them separately,
Proxies, with power of substitution, and hereby authorizes them
to represent and to vote, as designated below, at the meeting of
shareholders of Putnam Convertible Opportunities and Income Trust
on October 7, 1999, at 2:00 p.m., Boston time, and at any
adjournments thereof, all of the shares of the fund that the
undersigned shareholder would be entitled to vote if personally
present.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY.

Please sign your name exactly as it appears on this card. If you
are a joint owner, each owner should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If
you are signing for a corporation, please sign the full corporate
name and indicate the signer's office. If you are a partner,
sign in the partnership name.

- -----------------------------------------------------------------
Shareholder sign here Date

- -----------------------------------------------------------------
Co-owner sign here Date

HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or
telephone number or to provide us with your comments. Detach
this form from the proxy card and return it with your signed
proxy in the enclosed envelope.

_________________________________________________________________
Name

_________________________________________________________________
Street

_________________________________________________________________
City State Zip

_________________________________________________________________
Telephone

DO YOU HAVE ANY COMMENTS?

- -----------------------------------------------------------------

DEAR SHAREHOLDER:

Your vote is important. Please help us to eliminate the expense
of follow-up mailings by signing and returning this proxy card or
by recording your voting instructions via the Internet as soon as
possible. A postage-paid envelope is enclosed for your
convenience.

IF YOU COMPLETE AND SIGN THE PROXY, WE'LL VOTE IT EXACTLY AS YOU
TELL US. IF YOU SIMPLY SIGN THE PROXY, IT WILL BE VOTED FOR
FIXING THE NUMBER OF TRUSTEES AND ELECTING TRUSTEES AS SET FORTH
IN PROPOSAL 1 AND FOR PROPOSAL 2. IN THEIR DISCRETION, THE
PROXIES WILL ALSO BE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS
THAT MAY PROPERLY COME BEFORE THE MEETING.

THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR CLASS A TRUSTEES AND FOR THE
OTHER PROPOSAL LISTED BELOW:

PLEASE VOTE BY FILLING IN THE APPROPRIATE BOXES BELOW.

1. Proposal to elect Class A Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin,
P.L. Joskow, L.J. Lasser and W.F. Pounds.

/ / FOR fixing the number of Trustees at fifteen and electing
all the nominees (EXCEPT AS MARKED TO THE CONTRARY BELOW)

TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE
NOMINEES, WRITE THE NAMES OF THE NOMINEE(S) BELOW:

------------------------------------------------------------

/ / WITHHOLD authority to vote for all nominees

FOR AGAINST ABSTAIN

2. PROPOSAL TO RATIFY / / / / / /
THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP
AS THE INDEPENDENT AUDITORS
OF YOUR FUND.

NOTE: If you have questions on any of the proposals, please
call 1-800-225-1581.

PUTNAMINVESTMENTS LOGO

FOR YOUR CONVENIENCE YOU MAY RECORD YOUR VOTING INSTRUCTIONS VIA
THE INTERNET OR BY RETURNING THIS PROXY CARD BY MAIL

TO RECORD YOUR VOTING INSTRUCTIONS ON THE INTERNET

1. Read the proxy statement.
2. Go to www.proxyweb.com
3. Enter the 14-digit control number printed on your proxy card.
4. Follow the instructions on the site.

IF YOU VOTE ON THE INTERNET, THERE IS NO NEED TO RETURN YOUR
PROXY CARD.

THIS IS YOUR PROXY CARD.

PLEASE RECORD YOUR VOTING INSTRUCTIONS ON THIS PROXY CARD, SIGN
IT BELOW, AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.
YOUR VOTE IS IMPORTANT.

Proxy for a meeting of shareholders to be held on October 7, 1999
for PUTNAM MANAGED HIGH YIELD TRUST.

THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE FUND.

The undersigned shareholder hereby appoints George Putnam, Hans
H. Estin, and Robert E. Patterson, and each of them separately,
Proxies, with power of substitution, and hereby authorizes them
to represent and to vote, as designated below, at the meeting of
shareholders of Putnam Managed High Yield Trust on October 7,
1999, at 2:00 p.m., Boston time, and at any adjournments thereof,
all of the shares of the fund that the undersigned shareholder
would be entitled to vote if personally present.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY.

- -----------------------------------------------------------------
Shareholder sign here Date

- -----------------------------------------------------------------
Co-owner sign here Date

_________________________________________________________________
Name

_________________________________________________________________
Street

_________________________________________________________________
City State Zip

_________________________________________________________________
Telephone

DO YOU HAVE ANY COMMENTS?

- -----------------------------------------------------------------

DEAR SHAREHOLDER:

THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER
PROPOSAL LISTED BELOW:

PLEASE VOTE BY FILLING IN THE APPROPRIATE BOXES BELOW.

1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, R.J. Jackson, P.L. Joskow, E.T. Kennan, L.J. Lasser,
J.H. Mullin, III, R.E. Patterson, W.F. Pounds, G. Putnam, G.
Putnam, III, A.J.C. Smith, W.T. Stephens and W.N. Thorndike.

/ / FOR fixing the number of Trustees and electing all the
nominees (EXCEPT AS MARKED TO THE CONTRARY BELOW)

TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE
NOMINEES, WRITE THE NAMES OF THE NOMINEE(S) BELOW:

------------------------------------------------------------

/ / WITHHOLD authority to vote for all nominees

FOR AGAINST ABSTAIN

2. PROPOSAL TO RATIFY / / / / / /
THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP
AS THE INDEPENDENT AUDITORS
OF YOUR FUND.

NOTE: If you have questions on any of the proposals, please
call 1-800-225-1581.
PUTNAMINVESTMENTS LOGO

FOR YOUR CONVENIENCE YOU MAY RECORD YOUR VOTING INSTRUCTIONS VIA
THE INTERNET OR BY RETURNING THIS PROXY CARD BY MAIL

TO RECORD YOUR VOTING INSTRUCTIONS ON THE INTERNET

1. Read the proxy statement.
2. Go to www.proxyweb.com
3. Enter the 14-digit control number on your proxy card.
4. Follow the instructions on the site.

IF YOU VOTE ON THE INTERNET, THERE IS NO NEED TO RETURN YOUR
PROXY CARD.

THIS IS YOUR PROXY CARD.

PLEASE RECORD YOUR VOTING INSTRUCTIONS ON THIS PROXY CARD, SIGN
IT BELOW, AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.
YOUR VOTE IS IMPORTANT.

Proxy for a meeting of shareholders to be held on October 7, 1999
for PUTNAM MASTER INCOME TRUST.

THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE FUND.

The undersigned shareholder hereby appoints George Putnam, Hans
H. Estin, and Robert E. Patterson, and each of them separately,
Proxies, with power of substitution, and hereby authorizes them
to represent and to vote, as designated below, at the meeting of
shareholders of Putnam Master Income Trust on October 7, 1999, at
2:00 p.m., Boston time, and at any adjournments thereof, all of
the shares of the fund that the undersigned shareholder would be
entitled to vote if personally present.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY.

_________________________________________________________________
Shareholder sign here Date

_________________________________________________________________
Co-owner sign here Date

_____________________________________________________________
Name
_________________________________________________________________
Street

_________________________________________________________________
City State Zip

_________________________________________________________________
Telephone

DO YOU HAVE ANY COMMENTS?

- -----------------------------------------------------------------

DEAR SHAREHOLDER:

THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER
PROPOSAL LISTED BELOW:

PLEASE VOTE BY FILLING IN THE APPROPRIATE BOXES BELOW.

1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, R.J. Jackson, P.L. Joskow, E.T. Kennan, L.J. Lasser,
J.H. Mullin, III, RE Patterson, W.F. Pounds, G. Putnam, G.
Putnam, III, A.J.C. Smith, W.T. Stephens and W.N. Thorndike.

/ / FOR fixing the number of Trustees and electing all the
nominees (EXCEPT AS MARKED TO THE CONTRARY BELOW)

TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE
NOMINEES, WRITE THE NAMES OF THE NOMINEE(S) BELOW:

------------------------------------------------------------

/ / WITHHOLD authority to vote for all nominees

FOR AGAINST ABSTAIN

2. PROPOSAL TO RATIFY / / / / / /
THE SELECTION OF
KPMG LLP
AS THE INDEPENDENT AUDITORS
OF YOUR FUND.

NOTE: If you have questions on any of the proposals, please
call 1-800-225-1581.
PUTNAMINVESTMENTS LOGO

FOR YOUR CONVENIENCE YOU MAY RECORD YOUR VOTING INSTRUCTIONS VIA
THE INTERNET OR BY RETURNING THIS PROXY CARD BY MAIL

Your vote is very important. If you choose to record your voting
instructions via the Internet, visit the website at
http://Putnam.proxyvoting.com Please refer to the instructions
below. Your voting instructions will be immediately confirmed
and posted.

TO RECORD YOUR VOTING INSTRUCTIONS ON THE INTERNET

1. Read the proxy statement.
2. Go to http://Putnam.proxyvoting.com
3. Enter the 14-digit control number printed to the right.
4. Follow the instructions on the site.

IF YOU VOTE ON THE INTERNET, THERE IS NO NEED TO RETURN YOUR
PROXY CARD.

THIS IS YOUR PROXY CARD.

PLEASE RECORD YOUR VOTING INSTRUCTIONS ON THIS PROXY CARD, SIGN
IT BELOW, AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.
YOUR VOTE IS IMPORTANT.

Proxy for a meeting of shareholders to be held on October 7, 1999
for PUTNAM TAX-FREE HEALTH CARE FUND.

THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE FUND.

The undersigned shareholder hereby appoints George Putnam, Hans
H. Estin, and Robert E. Patterson, and each of them separately,
Proxies, with power of substitution, and hereby authorizes them
to represent and to vote, as designated below, at the meeting of
shareholders of Putnam Tax-Free Health Care Fund on October 7,
1999, at 2:00 p.m., Boston time, and at any adjournments thereof,
all of the shares of the fund that the undersigned shareholder
would be entitled to vote if personally present.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY.

- -----------------------------------------------------------------
Shareholder sign here Date

- -----------------------------------------------------------------
Co-owner sign here Date

_________________________________________________________________
Name
_________________________________________________________________
Street
_________________________________________________________________
City State Zip
_________________________________________________________________
Telephone

DO YOU HAVE ANY COMMENTS?

- -----------------------------------------------------------------

DEAR SHAREHOLDER:

THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER
PROPOSAL LISTED BELOW:

PLEASE VOTE BY FILLING IN THE APPROPRIATE BOXES BELOW.

/ / FOR fixing the number of Trustees and electing all the
nominees (EXCEPT AS MARKED TO THE CONTRARY BELOW)

TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE
NOMINEES, WRITE THE NAMES OF THE NOMINEE(S) BELOW:

------------------------------------------------------------

/ / WITHHOLD authority to vote for all nominees

FOR AGAINST ABSTAIN

2. PROPOSAL TO RATIFY / / / / / /
THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP
AS THE INDEPENDENT AUDITORS
OF YOUR FUND.

NOTE: If you have questions on any of the proposals, please
call 1-800-225-1581.