[Final]
[Translation]
Annual Securities Report
(the Fifth Term)
From: October 1, 1998
To: September 30, 1999
PUTNAM DIVERSIFIED INCOME TRUST
Annual Securities Report
(the Fifth Term)
From: October 1, 1998
To: September 30, 1999
To: Director of Kanto Local Finance Bureau
Filing Date of SRS: February 4, 2000
(As amended on February 15, 2000)
(As amended on April 3, 2000)
Name of the Registrant Trust: PUTNAM DIVERSIFIED INCOME TRUST
Name and Official Title Charles E. Porter
of Representative: Executive Vice President
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
- - ii -
Places where a copy of this Annual Securities Report
is available for Public Inspection
Not applicable.
(Total number of pages of this Annual Securities Report in Japanese is
including front and back pages.)
C O N T E N T S
Japanese This
Original English
Translation
I. DESCRIPTION OF THE FUND 1 1
l. GENERAL INFORMATION 1 1
2. INVESTMENT POLICY 6 7
3. MANAGEMENT STRUCTURE 11 14
4. INFORMATION CONCERNING THE EXERCISE
OF RIGHTS BY SHAREHOLDERS, ETC. 20 28
5. STATUS OF INVESTMENT FUND 23 32
II. OUTLINE OF THE TRUST 27 37
III. OUTLINE OF THE OTHER RELATED COMPANIES 59 74
IV. FINANCIAL CONDITION OF THE FUND 61 77
V. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY 181 83
VI. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT TRUST SECURITIES 200 84
VII. REFERENCE INFORMATION 200 84
Note 1: U.S.$amount is translated into Japanese Yen at the rate of U.S.
$l.00 = (YEN) 102.40 the mean of the exchange rate quotations by The
Bank of Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars
by telegraphic transfer against yen on 30th December, 1999.
Note 2: In this report, money amounts and percentages have been rounded.
Therefore, there are cases in which the amount for the "total"
column is not equal to the aggregate amount. Also, conversion into
other currencies is done simply by multiplying the corresponding
amount by the conversion rate specified and rounded up when
necessary. As a result, in this report, there are cases in which
figures for the same information differ from each other.
Note 3: In this report, "fiscal year" refers to a year from October 1 to
September 30 of the following year.
I. DESCRIPTION OF THE FUND
1. GENERAL INFORMATION
(A) Outline of Laws Regulating the Fund in the Jurisdiction Where
Established:
(1) Name of the Fund: Putnam Diversified Income Trust (the "Fund")
(2) Form of the Fund
Putnam Diversified Income Trust is a Massachusetts business trust
organized on August 11, 1988. A copy of the Agreement and Declaration
of Trust, which is governed by Massachusetts law, is on file with the
Secretary of State of The Commonwealth of Massachusetts.
The Fund is an open-end, diversified management investment company
with an unlimited number of authorized shares of beneficial interest.
The Trustees may, without shareholder approval, create two or more
series of shares representing separate investment portfolios. Any such
series of shares may be further divided without shareholder approval
into two or more classes of shares having such preferences and special
or relative rights and privileges as the Trustees determine. The Fund's
shares are not currently divided into any series. Only the Fund's
class M shares are currently offered in Japan. The Fund also offers in
the United States of America other classes of shares with different sales
charges and expenses. Because of these different sales charges and
expenses, the investment performance of the classes will vary.
Each share has one vote, with fractional shares voting proportionally.
Shares of all classes will vote together as a single class except when
otherwise required by law or as determined by the Trustees. Shares are
freely transferable, are entitled to dividends as declared by the
Trustees, and, if the Fund were liquidated, shareholders would receive
the net assets of the Fund. The Fund may suspend the sale of shares
at any time and may refuse any order to purchase shares. Although the
Fund is not required to hold annual meetings of its shareholders,
shareholders holding at least 10% of the outstanding shares entitled
to vote have the right to call a meeting to elect or remove Trustees,
or to take other actions as provided in the Agreement and Declaration
of Trust.
If a shareholder owns fewer shares than the minimum set by the
Trustees (presently 20 shares), the Fund may redeem the shareholders'
shares. Shareholders will receive at least 30 days' written notice
before the Fund redeems shareholders' shares, and shareholders may
purchase additional shares at any time to avoid a redemption. The
Fund may also redeem shares if shareholders own shares above a maximum
amount set by the Trustees. There is presently no maximum, but the
Trustees may at any time, establish one, which could apply to both
present and future shareholders.
Year 2000 issues. The Fund could be adversely affected if the
computer systems that we and the Fund's other service providers use
do not properly process and calculate the date-related information
relating to the year 2000. While year 2000-related computer problems
could have a negative effect on the Fund, both in its operations and
in its investments, Putnam Management is working to avoid such problems
and to obtain assurances from service providers that they are taking
similar steps. No assurances, though, can be provided that
the fund will not be adversely impacted by these matters.
(3) Governing Laws
The Fund was created under, and is subject to, the laws of the
Commonwealth of Massachusetts. The sale of the Fund's shares is subject
to, among other things, the Securities Act of 1933, as amended, and
certain state securities laws. The Fund also attempts to qualify each
year and elect to be taxed as a regulated investment company under
the U.S. Internal Revenue Code of 1986, as amended.
The following is a broad outline of certain of the principal
statutes regulating the operations of the Fund in the U.S.:
a. Massachusetts General Laws, Chapter 182 - Voluntary Associations and
Certain Trusts
Chapter 182 provides in part as follows:
A copy of the declaration of trust must be filed with the Secretary
of State of the Commonwealth of Massachusetts and with the Clerk of the
City of Boston. Any amendment of the declaration of trust must be filed
with the Secretary and the Clerk within thirty days after the adoption
of such amendment.
A trust must annually file with the Secretary of State on or before
June 1 a report providing the name of the trust, its address, number of
shares outstanding and the names and addresses of its trustees.
Penalties may be assessed against the trust for failure to comply
with certain of the provisions of Chapter 182.
b. Investment Company Act of 1940
The Investment Company Act of 1940, as amended (the "1940 Act"), in
general, requires investment companies to register as such with the U.S.
Securities and Exchange Commission (the "SEC"), and to comply with a
number of substantive regulations of their operations. The 1940 Act
requires an investment company, among other things, to provide periodic
reports to its shareholders.
c. Securities Act of 1933
The Securities Act of 1933, as amended (the "1933 Act"), regulates
many sales of securities. The Act, among other things, imposes various
registration requirements upon sellers of securities and provides for
various liabilities for failures to comply with its provisions or in
respect of other specified matters.
d. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended (the "1934 Act"),
regulates a variety of matters involving, among other things, the secondary
trading of securities, periodic reporting by the issuers of securities,
and certain of the activities of transfer agents
and brokers and dealers.
e. The Internal Revenue Code of 1986
The Fund intends to qualify as a "regulated investment company" for
federal income tax purposes and to meet all other requirements that are
necessary for it to be relieved of federal taxes on income and gains it
distributes to shareholders.
f. Other laws
The Fund is subject to the provisions of other laws, rules, and
regulations applicable to the Fund or its operations, such as, for example,
various state laws regarding the sale of the Fund's shares.
(B) Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction over the Fund
or certain of its operations are the SEC and state regulatory agencies
or authorities.
a. The SEC has broad authority to oversee the application and
enforcement of the federal securities laws, including the 1940 Act,
the 1933 Act, and the 1934 Act, among others, to the Fund. The 1940
Act provides the SEC broad authority to inspect the records of
investment companies, to exempt investment companies or certain
practices from the provisions of the Act, and otherwise to enforce the
provisions of the Act.
b. State authorities typically have broad authority to regulate
the activities of brokers, dealers, or other persons directly or
indirectly engaged in activities related to the offering and sale of
securities to their residents or within their jurisdictions.
(C) Objectives and Basic Nature of the Fund:
GOAL
The Fund seeks as high a level of current income as Putnam Management
believes is consistent with preservation of capital.
MAIN INVESTMENT STRATEGIES -- MULTI-SECTOR BONDS
We invest mostly in bonds that
* are obligations of corporations and governments worldwide,
* are a combination of investment grade and below investment grade
securities (junk bonds), and
* have intermediate to long-term maturities (three years or longer).
We invest a portion of the Fund in each of three sectors:
* U.S. and investment grade sector: U.S. government securities and
investment-grade bonds of U.S. corporations.
* High yield sector: lower-rated bonds of U.S. corporations.
* International sector: bonds of foreign governments and corporations,
including both investment grade and lower-rated securities.
MAIN RISKS
The main risks that could adversely affect the value of this Fund's
shares and the total return on your investment include:
* The risk that movements in financial markets will adversely affect the
value of the Fund's investments. This risk includes interest rate risk,
which means that the prices of the Fund's investments are likely to fall
if interest rates rise. Interest rate risk is generally highest for
investments with long maturities.
* The risk that the issuers of the Fund's investments will not make timely
payments of interest and principal. This credit risk is higher for debt
that is below investment grade in quality. Because the Fund invests
significantly in junk bonds, this risk is heightened for the Fund.
Investors should carefully consider the risks associated with an
investment in the Fund.
* The risk that, compared to other debt, mortgage-backed investments may
increase in value less when interest rates decline, and decline in value
more when interest rates rise.
* The risks of investing outside the United States, such as currency
fluctuations, economic or financial instability, lack of timely or
reliable financial information or unfavorable political or legal
developments. These risks are increased for investments in
emerging markets.
You can lose money by investing in the Fund. The Fund may not achieve
its goals, and is not intended as a complete investment program. An
investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
(D) History of the Fund:
August 11, 1988: Organization of the Fund as a Massachusetts business
trust. Adoption of the Agreement and Declaration
of Trust.
September 7, 1988: Adoption of the Amended and Restated Agreement and
Declaration of Trust.
(E) Affiliated Companies of the Fund:
Names and related business of the affiliated companies of the Fund
are as follows:
(1) Putnam Investment Management, Inc. ("Investment Management Company")
renders investment management services to the Fund.
(2) Putnam Fiduciary Trust Company (the "Custodian" and "Investor Servicing
Agent") acts as Custodian and Investor Servicing Agent.
(3) Putnam Mutual Funds Corp. ("Principal Underwriter") engages in
providing marketing services to the Fund.
(4) Sakura Friend Securities Co., Ltd. ("Distributor in Japan" and "Agent
Company") engages in forwarding the purchase or repurchase orders for
the Shares in Japan and also acts as the agent company. Sakura Friend
Securities Co., Ltd. is a new company name that has resulted from the
merger of Yamatane Securities Co., Ltd. with Shineiishino Securities
Co., Ltd. from April 1, 2000.
[GRAPHIC OMITTED: CHART OF RELATED COMPANIES OF THE FUND]
Related Companies of the Fund
Trust
Putnam Diversified Income Trust
Trustees
(Agreement and
Declaration of Trust)
Investor
Servicing
Distribution Agreement Custodian Agreement Agreement
Principal Custodian Investor
Underwriter Servicing Agent
Putnam Mutual Putnam Fiduciary
Funds Corp. Trust Company
(acts as distributor) (acts as custodian and
investor servicing
agent of the Fund)
Japan Dealer
Sales Agreement
Agent Company Mangement Contract
Agreement
Distributor in Japan Investment
Agent Company Management Company
Sakura Friend Securities Co., Ltd. Putnam Investment Management, Inc.
(forwarding of sales in Japan (acts as investment manager of the
and rendering of service as Fund and investment advisor
agent company) concerning the Fund's assets
2. INVESTMENT POLICY
(A) Basic Policy for Investment and Objectives of Investment:
The Fund's main investment strategies and related risks.
Any investment carries with it some level of risk that generally reflects
its potential for reward. We pursue the Fund's goal by investing mainly in
multi-sector bonds. We will consider, among other things, credit, interest
rate and prepayment risks as well as general market conditions when
deciding whether to buy or sell investments.
A description of the risks associated with the Fund's main investment
strategies follows.
Interest rate risk. The values of bonds and other debt usually rise and
fall in response to changes in interest rates. Declining interest rates
generally raise the value of existing debt instruments, and rising interest
rates generally lower the value of existing debt instruments. Changes in a
debt instrument's value usually will not affect the amount of interest
income paid to the Fund, but will affect the value of the Fund's shares.
Interest rate risk is generally greater for investments with longer
maturities.
Some investments give the issuer the option to call, or redeem, these
investments before their maturity date. If an issuer "calls" its security
during a time of declining interest rates, we might have to reinvest the
proceeds in an investment offering a lower yield, and therefore might not
benefit from any increase in value as a result of declining interest rates.
"Premium investments" offer interest rates higher than prevailing market
rates. However, they involve a greater risk of loss, because their values
tend to decline over time. You may find it useful to compare the Fund's
yield, which factors out the effect of premium investments, with its
current dividend rate, which does not factor out that effect.
Credit risk. Investors normally expect to be compensated in proportion to
the risk they are assuming. Thus, debt of issuers with poor credit
prospects usually offers higher yields than debt of issuers with more
secure credit. Higher-rated investments generally offer lower credit risk.
We may invest 70% of the fund's total assets in higher-yielding,
higher-risk debt investments that are rated below BBB or its equivalent at
the time of purchase by each nationally recognized securities rating agency
rating such investments, or are unrated investments that we believe are of
comparable quality. We may invest up to 5% of the fund's total assets in
debt investments rated below CCC or its equivalent, at the time of
purchase, by each rating agency rating such investments and unrated
investments that we believe are of comparable quality. We will not
necessarily sell an investment if its rating is reduced after we buy it.
Investments rated below BBB or its equivalent are known as "junk bonds."
This rating reflects a greater possibility that the issuers may be unable
to make timely payments of interest and principal and thus default. If
this happens, or is perceived as likely to happen, the values of those
investments will usually be more volatile and are likely to fall. A
default or expected default could also make it difficult for us to sell the
investments at prices approximating the values we had previously placed on
them. Lower-rated debt usually has a more limited market than higher-rated
debt, which may at times make it difficult for us to buy or sell certain
debt instruments or to establish their fair value. Credit risk is
generally greater for investments that are issued at less than their face
value and make payments of interest only at maturity rather than at
intervals during the life of the investment.
Credit ratings are based largely on the issuer's historical financial
condition and the rating agencies' investment analysis at the time of
rating. The rating assigned to any particular investment does not
necessarily reflect the issuer's current financial condition, and does not
reflect an assessment of an investment's volatility or liquidity. Although
we consider credit ratings in making investment decisions, we perform our
own investment analysis and do not rely only on ratings assigned by the
rating agencies. The Fund depends more on our ability in buying
lower-rated debt than it does in buying investment-grade debt. We may have
to participate in legal proceedings or to take possession of and manage
assets that secure the issuer's obligations. This could increase the
Fund's operating expenses and decrease its net asset value.
Although investment-grade investments generally have lower credit risk,
they may share some of the risks of lower-rated investments. U.S.
government investments generally have the least credit risk, but are not
completely free of credit risk. While some, such as U.S. Treasury
obligations and Ginnie Mae certificates, are backed by the full faith and
credit of the U.S. government, others are subject to varying degrees of
risk. These risk factors include the creditworthiness of the issuer and,
in the case of mortgage-backed securities, the ability of the underlying
borrowers to meet their obligations.
Prepayment risk. Traditional debt investments typically pay a fixed rate
of interest until maturity, when the entire principal amount is due. By
contrast, payments on mortgage-backed investments typically include both
interest and partial payment of principal. Principal may also be prepaid
voluntarily, or as a result of refinancing or foreclosure. We may have to
invest the proceeds from prepaid investments in other investments with less
attractive terms and yields. Compared to debt that cannot be prepaid,
mortgage-backed investments are less likely to increase in value during
periods of declining interest rates and have a higher risk of decline in
value during periods of rising interest rates. They may increase the
volatility of a fund. Some mortgage-backed investments receive only the
interest portion or the principal portion of payments on the underlying
mortgages. The yields and values of these investments are extremely
sensitive to changes in interest rates and in the rate of principal
payments on the underlying mortgages. The market for these investments may
be volatile and limited, which may make them difficult to buy or sell.
Non-U.S. investments. Non-U.S. investments involve certain special risks,
including
* Unfavorable changes in currency exchange rates: Non-U.S. investments
are typically issued and traded in non-U.S. currencies. As a result,
their values may be affected by changes in exchange rates between non-U.S.
currencies and the U.S. dollar.
* Political and economic developments: Non-U.S. investments may be
subject to the risks of seizure by a non-U.S. government, imposition
of restrictions on the exchange or export of non-U.S. currency, and
tax increases.
* Unreliable or untimely information: There may be less information
publicly available about a non-U.S. company than about most U.S.
companies, and non-U.S. companies are usually not subject to accounting,
auditing and financial reporting standards and practices as stringent
as those in the United States.
* Limited legal recourse: Legal remedies for investors may be more limited
than the remedies available in the United States.
* Limited markets: Certain non-U.S. investments may be less liquid
(harder to buy and sell) and more volatile than U.S. investments, which
means we may at times be unable to sell these non-U.S. investments at
desirable prices. For the same reason, we may at times find it
difficult to value the Fund's non-U.S. investments.
* Trading practices: Brokerage commissions and other fees are generally
higher for non-U.S. investments than for U.S. investments. The procedures
and rules governing non-U.S. transactions and custody may also involve
delays in payment, delivery or recovery of money or investments.
Sovereign issuers: The willingness and ability of sovereign issuers to pay
principal and interest on government securities depends on various economic
factors, including the issuer's balance of payments, overall debt level,
and cash flow from tax or other revenues.
Lower yield: Non-U.S. withholding taxes may reduce the proceeds from
dividends, interest or the sales of non-U.S. investments.
The risks of non-U.S. investments are typically increased in less developed
countries, which are sometimes referred to as emerging markets. For
example, political and economic structures in these countries may be
changing rapidly, which can cause instability. These countries are also
more likely to experience high levels of inflation, deflation or currency
devaluation, which could hurt their economies and securities markets. For
these and other reasons, investments in emerging markets are often
considered speculative.
Certain of these risks may also apply to some extent to U.S.-traded
investments that are denominated in non-U.S. currencies, investments in
U.S. companies that are traded in non-U.S. markets, or to investments in
U.S. companies that have significant non-U.S. operations. Special U.S. tax
considerations may apply to our non-U.S. investments.
Derivatives. We may engage in a variety of transactions involving
derivatives, such as futures, options, warrants and swap contracts.
Derivatives are financial instruments whose value depends upon, or is
derived from, the value of something else, such as one or more underlying
investments, pools of investments, indexes or currencies. We may use
derivatives both for hedging and non-hedging purposes. For example, we may
use derivatives to increase or decrease exposure to long-term or short-term
interest rates in the United States or abroad. However, we may also choose
not to engage in hedging transactions, based on our evaluation of market
conditions or the availability of suitable derivatives.
Derivatives involve special risks arid may result in losses. The Fund
depends on our ability to manage these sophisticated instruments. The
prices of derivatives may move in unexpected ways, especially in abnormal
market conditions. Some derivatives are "leveraged" and therefore may
magnify or otherwise increase investment losses. Our use of derivatives
may also increase the amount of taxes payable by shareholders.
Other risks arise from the potential inability to terminate or sell
derivatives positions. A liquid secondary market may not always exist for
the Fund's derivatives positions at any time. In fact, many
over-the-counter instruments (investments not traded on an exchange) will
not be liquid. Over-the-counter instruments also involve the risk that the
other party to the derivative transaction will not meet its obligations.
Frequent trading. We may buy or sell investments relatively often, which
involves higher brokerage commissions, and may increase the amount of taxes
payable by shareholders.
Other investments. In addition to the main investment strategies described
above, we may also make other types of investments, such as investments in
asset-backed and equity securities, which may be subject to other risks.
Alternative strategies. At times we may judge that market conditions make
pursuing the Fund's investment strategies inconsistent with the best
interests of its shareholders. We then may temporarily use alternative
strategies that are mainly designed to limit the Fund's losses. However,
we may choose not to use these strategies for a variety of reasons, even in
very volatile market conditions. These strategies may cause the Fund to
miss out on investment opportunities, and may prevent the Fund from
achieving its goal.
Changes in policies. The Fund's Trustees may change the Fund's goal,
investment strategies and other policies without shareholder approval,
except as otherwise indicated.
(B) Investment Restrictions:
As fundamental investment restrictions, which may not be changed
without a vote of a majority of the outstanding voting securities,
the Fund may not and will not:
(1) With respect to 75% of its total assets, invest in the securities of
any issuer if, immediately after such investment, more than 5% of the total
assets of the Fund (taken at current value) would be invested in the
securities of such issuer; provided that this limitation does not apply to
obligations issued or guaranteed as to interest or principal by the U.S.
government or its agencies or instrumentalities.
(2) With respect to 75% of its total assets, acquire more than 10% of the
outstanding voting securities of any issuer.
(3) Borrow money, except that the Fund may borrow amounts not exceeding 15%
of the value (taken at the lower of cost or current value) of its total
assets (not including the amount borrowed) at the time the borrowing is
made for temporary purposes (including repurchasing its shares while
effecting an orderly liquidation of portfolio securities) or for emergency
purposes.
(4) Issue any class of securities which is senior to the Fund's shares of
beneficial interest, except for permitted borrowings.
(5) Make loans, except by purchase of debt obligations in which the Fund
may invest consistent with its investment policies, by entering into
repurchase agreements, or by lending its portfolio securities.
(6) Purchase or sell real estate, although it may purchase securities of
issuers which deal in real estate, securities which are secured by
interests in real estate, and securities which represent interests in real
estate, and it may acquire and dispose of real estate or interests in real
estate acquired through the exercise of its rights as a holder of debt
obligations secured by real estate or interests therein.
(7) Purchase or sell commodities or commodity contracts, except that the
Fund may purchase and sell financial futures contracts and options and may
enter into foreign exchange contracts and other financial transactions not
involving physical commodities.
(8) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it
may be deemed to be an underwriter under the federal securities laws.
(9) Invest more than 25% of the value of its total assets in any one
industry. (Securities of the U.S. Government, its agencies, or
instrumentalities, or of any non-U.S. government, its agencies, or
instrumentalities, securities of supranational entities, and securities
backed by the credit of a governmental entity are not considered to
represent industries.)
It is contrary to the Fund's present policy, which may be changed without
shareholder approval, to:
(1) Invest in (a) securities which are not readily marketable, (b)
securities restricted as to resale (excluding securities determined by the
Trustees of the Fund (or the person designated by the Trustees of the Fund
to make such determinations) to be readily marketable), and (c) repurchase
agreements maturing in more than seven days, if, as a result, more than 15%
of the Fund's net assets (taken at current value) would be invested in
securities described in (a), (b) and (c) above.
(2) Invest less than 15% of its net assets in U.S. government securities.
We normally invest 15% - 65% of the fund's net assets in each sector
described in the prospectus. We consider the following companies to be
foreign companies:
* companies domiciled outside the United states, or
* companies whose principal operations are located outside the
United States.
In addition, the Fund will, so long as shares of the Fund are being offered
for sale by the Fund in Japan, comply with the following standards of
selection of the Japan Securities Dealers Association.
1. The Fund will not invest more than 15% of its net assets in securities
that are not traded on an official exchange or other regulated market
including without limitation, the National Association of Securities
Dealers Automated Quotation System (this restriction shall not be
applicable to bonds determined by Putnam Investment Management, Inc. to be
liquid and for which a market price (including a dealer quotation) is
generally obtainable or determinable);
2. The Fund will not borrow money in excess of 10% of the value of its
total assets;
3. The Fund will not make short sales of securities in excess of the Fund's
net asset value; and
4. The Fund will not together with other mutual funds managed by Putnam
Investment, Inc., acquire more than 50% of the outstanding voting
securities of any issuer.
If any violation of the foregoing standards occurs, the Fund will,
promptly after discovery of the violation, take such action as may be
necessary to cause the violation to cease, which shall be the only
obligation of the Fund and the only remedy in respect of the violation.
This undertaking will remain in effect as long as shares of the fund are
qualified for offer or sale in Japan and such undertaking is required by
the Japanese Securities Dealers Association as a condition of such
qualification.
All percentage limitations on investments (other than pursuant to
nonfundamental investment restriction above) will apply at the time of
the making of an investment and shall not be considered violated unless
an excess or deficiency occurs or exists immediately after and as a
result of such investment.
The Investment Company Act of 1940 provides that a "vote of a majority
of the outstanding voting securities" of the Fund means the affirmative
vote of the lesser of (1) more than 50% of the outstanding shares of the
Fund, or (2) 67% or more of the shares present at a meeting if more than
50% of the outstanding shares are represented at the meeting in person
or by proxy.
(C) Distribution Policy:
The Fund distributes any net investment income once a month and any net
realized capital gains at least once a year. The Fund normally pays
distributions on the 20th day of each month to Japanese investors who
hold shares as of 10th day of each month.
3. MANAGEMENT STRUCTURE
(A) Outline of Management of Assets, etc.:
A. Valuation of assets:
The Fund determines the net asset value per share of each class of
shares once each day the New York Stock Exchange (the "Exchange") is
open. Currently, the Exchange is closed Saturdays, Sundays and the
following U.S. holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, the Fourth of July, Labor
Day, Thanksgiving and Christmas. The Fund determines net asset value as
of the close of regular trading on the Exchange, currently 4:00 p.m.,
New York time. However, equity options held by the Fund are priced as
of the close of trading at 4:10 p.m., New York time, and futures
contracts on U.S. government and other fixed-income securities and index
options held by the Fund are priced as of their close of trading at 4:15
p.m., New York time.
Investments for which market quotations are readily available are stated
at prices which, in the opinion of Investment Management Company, most
nearly represent the market values of such securities. Currently, such
prices are determined using the last reported sale price or, if no sales
are reported (as in the case of some securities traded over-the-
counter), the last reported bid price, except that certain securities
are valued at the mean between the last reported bid and asked prices.
Short-term investments having remaining maturities of 60 days or less
are valued at amortized cost, which approximates market value. Other
investments are valued at their fair market value following procedures
approved by the Trustees. Liabilities are deducted from the total value
of assets, and the resulting amount is divided by the number of shares
of the class outstanding to determine net asset value per share.
Market quotations are not considered to be readily available for long-
term corporate bonds and notes, certain preferred stocks, tax-exempt
securities, and certain non-U.S. securities. These investments are
valued at fair market value on the basis of valuations furnished by a
pricing service, approved by the Trustee, or dealers, which determine
valuations for normal, institutional-size trading units of such
securities using methods based on market transactions for comparable
securities and various relationships between securities that are
generally recognized by institutional traders.
If any securities held by the Fund are restricted as to resale,
Investment Management Company determines their fair value following
procedures approved by the Trustees. The fair value of such securities
is generally determined as the amount which the Fund could reasonably
expect to realize from an orderly disposition of such securities over a
reasonable period of time. The valuation procedures applied in any
specific instance are likely to vary from case to case. However,
consideration is generally given to the financial position of the issuer
and other fundamental analytical data relating to the investment and to
the nature of the restrictions on disposition of the securities
(including any registration expenses that might be borne by the Fund in
connection with such disposition). In addition, specific factors are
also generally considered, such as the cost of the investment, the
market value of any unrestricted securities of the same class, the size
of the holding, the prices of any recent transactions or offers with
respect to such securities and any available analysts' reports regarding
the issuer.
Generally, trading in certain securities (such as non-U.S. securities)
is substantially completed each day at various times prior to the close
of the Exchange. The values of these securities used in determining the
net asset value of the Fund's shares are computed as of such times.
Also, because of the amount of time required to collect and process
trading information as to large numbers of securities issues, the values
of certain securities (such as convertible bonds, U.S. government
securities, and tax-exempt securities) are determined based on market
quotations collected earlier in the day at the latest practicable time
prior to the close of the Exchange. Occasionally, events affecting the
value of such securities may occur between such times and the close of
the Exchange which will not be reflected in the computation of the
Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value following procedures approved by the
Trustees.
B. Management Fee, etc.:
(1) Management Fee:
(a) Management Fees
Under a Management Contract dated January 20, 1997, the Fund pays a
quarterly fee to Investment Management Company based on the average net
assets of the Fund, as determined at the close of each business day
during the quarter, at an annual rate of 0.70% of the first $500 million
of average net assets, 0.60% of the next $500 million, 0.55% of the next
$500 million, 0.50% of the next $5 billion, 0.475% of the next $5
billion, 0.455 % of the next $5 billion, 0.440% of the next $5 billion
and 0.430% thereafter.
Pursuant to the Management Contract (and a management contract in effect
prior to January 20, 1997, under which the management fee payable to
Putnam Management was paid at the rate of 0.70% of the first $500
million of the fund's average net assets, 0.60% of the next $500
million, 0.55% of the next $500 million and 0.50% of any amount over
$1.5 billion), the Fund incurred $25,340,329, $28,525,765 and
$23,670,223 in management fees for the fiscal years ending on September
30, 1999, 1998 and 1997, respectively.
(b) Custodian Fee and Charges of the Investor Servicing Agent
Putnam Fiduciary Trust Company, the Fund's Custodian, shall be entitled
to receive, out of the assets of the Fund, reasonable compensation for
its services and expenses as Custodian, as agreed from time to time
between the Fund and the Custodian, not including fees paid by the
Custodian to any sub-custodian, payable monthly based on the average
daily total net assets of the Fund during the relevant month. Any
reasonable disbursements and out-of-pocket expenses (including without
limitation telephone, telex, cable and postage expenses) incurred by the
Custodian, and any custody charges of banks and financial institutions
to whom the custody of assets of the Fund is entrusted, will be borne by
the Fund.
The Fund will pay to Putnam Investor Services, a division of Putnam
Fiduciary Trust Company, the Fund's Investor Servicing Agent, such fee,
out of the assets of the Fund, as is mutually agreed upon in writing
from time to time, in the amount, at the time and in the manner of
payment mutually agreed.
For the fiscal year ending on September 30, 1999, the Fund paid
$5,824,823 as a custodian fee and investor servicing agent fee.
(c) Fee on Class M Distribution Plan
The Class M distribution plan provides for payments by the Fund to
Putnam Mutual Funds at the annual rate of up to 1.00% of average net
assets attributable to Class M shares. The Trustees currently limit
payments under the Class M plan to the annual rate of 0.50% of such
assets.
Payments under the plans are intended to compensate Putnam Mutual Funds
Corp. for services provided and expenses incurred by it as principal
underwriter of Fund's shares, including the payments to dealers
mentioned below. Payments to dealers are subject to the continuation of
the class M distribution plan and the terms of an agreement between
Sakura Friend and Putnam Mutual Funds Corp.
The payments to dealers are based on the average net asset value of
Class M shares attributable to shareholders for whom Sakura Friend and
other dealers are designated as the dealer of record. Putnam Mutual
Funds Corp. makes the payments quarterly at an annual rate of 0.25% of
such average net asset value of Class M shares.
Putnam Mutual Funds Corp. also pays to Sakura Friend and other dealers,
as additional compensation with respect to the sale of Class M shares,
0.15% of such average net asset value of Class M shares. For Class M
shares, the total annual payment to Sakura Friend and other dealers
equals 0.40% of such average net asset value. Putnam Mutual Funds Corp.
makes quarterly payments to qualifying dealers.
For the fiscal year ending on September 30, 1999, the Fund paid fees
under the distribution plan of $4,988,648 for the Class M shares.
(d) Other Expenses:
The Fund pays all expenses not assumed by Investment Management Company,
including Trustees' fees, auditing, legal, custodial, investor servicing
and shareholder reporting expenses, and payments under its distribution
plans (which are in turn allocated to the relevant class of shares).
The Fund also reimburses Investment Management Company for the
compensation and related expenses of certain Fund officers and their
staff who provide administrative services. The total reimbursement is
determined annually by the Trustees and was $33,213 for Fiscal 1999.
Each Trustee receives a fee for his or her services. Each Trustee also
receives fees for serving as Trustee of 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 Trustees meet monthly over a two-day period, except in August. The
Board Policy Committee, which consists solely of Trustees not affiliated
with the Investment Management Company and is responsible for
recommending Trustee compensation, 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 year each Trustee was first elected a Trustee
of the Putnam funds, the fees paid to each Trustee by the fund for
fiscal 1999 and the fees paid to each Trustee by all of the Putnam funds
during calendar 1999:
<TABLE>
<CAPTION>
COMPENSATION TABLE
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/Year fund (1) fund expenses upon retirement (2) funds (3)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jameson A. Baxter/
1994 (4) $3,685 $834 $95,000 $191,000
Hans H. Estin/
1972 3,666 1,862 95,000 190,000
John A. Hill/
1985 (4) 4,733 865 115,000 239,750
Ronald J. Jackson/
1996 (4) 3,735 785 95,000 193,500
Paul L. Joskow/
1997* 3,666 226 95,000 191,000
Elizabeth T. Kennan/
1992 3,666 1,115 95,000 190,000
Lawrence J. Lasser/
1992* 3,648 847 95,000 189,000
John H. Mullin III/
1997 3,780 341 95,000 196,000
Robert E. Patterson/
1984 3,672 604 95,000 190,250
William F. Pounds/
1971 (5) 4,585 2,079 115,000 231,000
George Putnam/
1957* 3,666 1,964 95,000 190,000
George Putnam, III/
1984* 3,666 407 95,000 190,000
A.J.C. Smith/
1986* 3,629 1,308 95,000 188,000
W. Thomas Stephens/
1997(4) 3,628 319 95,000 188,000
W. Nicholas Thorndike/
1992 3,666 1,572 95,000 190,000
(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 1999.
(3) As of December 31, 1999, there were 114 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation
Deferral Plan. The total amounts of deferred compensation payable by the
fund to Ms. Baxter, Mr. Hill, Mr. Jackson, Mr. Joskow, Mr. Mullin and Mr.
Stephens as of September 30, 1999 were $13,284, $27,955, $13,084, $6,599,
$5,928 and $8,188, respectively, including income earned on such amounts.
(5) Includes additional compensation for service as Vice Chairman of the
Putnam funds.
* Is or may be deemed to be an "interested person" as defined in the
Investment Company Act of 1940 of the Fund, the Investment Management
Company or Putnam Mutual Funds Corp.
</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, also available under the Plan,
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.
Investment Management Company places all orders for purchases and sales
of the Fund's portfolio securities. In selecting broker-dealers,
Investment Management Company may consider research and brokerage
services furnished to it and its affiliates. Subject to seeking the
most favorable price and execution available, Investment Management
Company may consider sales of Fund shares (and, if permitted by law, of
the other Putnam Funds) as a factor in the selection of broker-dealers.
During fiscal 1997, 1998 and 1999, the Fund paid $138,679, $343,432 and
$441,589 in brokerage commissions, respectively. During fiscal 1999 the
Fund paid $2,250 on transactions with an aggregate principal value of
$783,707 (0.01% of transactions) to brokers and dealers to recognize
research, statistical and quotation services provided to Investment
Management Company and its affiliates.
For the fiscal year ending on September 30, 1999, the Fund paid
$29,612,785 in total other expenses, including payments under its
distribution plans, but excluding management fees, investor servicing
agent expenses and custodian expenses.
C. Sales, Repurchases and Custody:
(1) Sales of Shares:
a. Sales in the United States
Investors residing in the U.S. can open a fund account with as little as
$500 and make additional investments at any time with as little as $50
($25 through systematic investing). The Fund sells its shares at the
offering price, which is the NAV plus any applicable sales charge.
Investors' financial advisor or Putnam Investor Services generally must
receive their completed buy order before the close of regular trading on
the New York Stock Exchange for investors' shares to be bought at that
day's offering price.
Investors residing in the U.S. can buy shares
* Through a financial advisor
Investors' advisors will be responsible for furnishing all necessary
documents to Putnam Investor Services, and may charge investors for
their services.
* Through systematic investing
Investors can make regular investments of $25 or more per month through
automatic deductions from investors' bank checking or savings account.
Application forms are available through investor's advisor or Putnam
Investor Services at 1-800-225-1581.
Investors may also complete an order form and write a check for the
amount they wish to invest, payable to the Fund. Return the check and
completed form to Putnam Mutual Funds.
The Fund may periodically close to new purchases of shares or refuse any
order to buy shares if the Fund determines that doing so would be in the
best interests of the Fund and its shareholders.
Class M shares
* Initial sales charge of up to 3.25%
* Lower sales charges for larger investments of $50,000 or more
* No deferred sales charge
* Lower annual expenses, and higher dividends, than class B shares (not
offered in Japan) because of lower 12b-1 fee
* Higher annual expenses, and lower dividends, than class A shares (not
offered in Japan) because of higher 12b-1 fee
* No conversion to class A shares (not offered in Japan), so future 12b-1
fee does not decrease
Initial sales charges for class M shares
Sales charge as a percentage of:
-------------------------------
Net
Amount of purchase amount Offering
at offering price ($) invested price *
- --------------------- -------- ------
Under 50,000 3.36% 3.25%
50,000 but under 100,000 2.30 2.25
100,000 but under 250,000 1.52 1.50
250,000 but under 500,000 1.01 1.00
500,000 but under 1,000,000 NONE NONE
1,000,000 and above NONE NONE
* Offering price includes sales charge.
Deferred sales charges will be based on the lower of the shares' cost
and current NAV. Shares not subject to any charge will be redeemed
first, followed by shares held longest. Investors may sell shares
acquired by
reinvestment of distributions without a charge at any time.
Distribution (12b-1) plans
The Fund has adopted distribution plans to pay for the marketing of Fund
shares and for services provided to shareholders. The plans provide for
payments at annual rates (based on average net assets) of up to 1.00% on
class M shares. The Trustees currently limit payments on class M shares
to 0.50% of average net assets. Because these fees are paid out of the
Fund's assets on an ongoing basis, they will increase the cost of
investors' investments.
An investor may be eligible to buy Class M Shares at reduced sales
charges. For fiscal 1999, Putnam Mutual Funds Corp. received
$24,170,048 in sales charges for Class M Shares, of which it retained
$1,856,305.
b. Sales in Japan
In Japan, Shares of the Fund are offered on any Business Day and any
business day of securities company in Japan during the Subscription
Period mentioned in "8. Period of Subscription, Part I Information
concerning Securities" of a securities registration statement pursuant
to the terms set forth in "Part I. Information concerning Securities" of
the relevant securities registration statement. Investors shall submit
an Account Agreement or Transaction Agreement (together with the Account
Agreement referred to herein as the "Agreements"); provided, however,
that on and after June 1, 1997, Distributor or Sales Handling Company
shall provide to the investors a Contract Concerning a Foreign
Securities Transactions Account and other prescribed contract (the
"Account Contract") and receive from such investors an application for
requesting the opening of a transactions account under the Account
Contract. The purchase shall be made in the minimum initial investment
amount of 300 shares and in integral multiples of 10 shares.
The issue price for Shares during the Subscription period shall be, in
principle, the Net Asset Value per Share next calculated on the day on
which the Fund has received such application. The Trade Day in Japan is
the day when the Distributor or Sales Handling Company confirms the
execution of the order (ordinarily the business day in Japan next
following the placement of orders), and the payment and delivery shall
be made on the fourth Business Day after and including the Trade Day.
The sales charge shall be 3.25% of the amount of subscriptions, of which
3.00% may be retained by the distributor in Japan and 0.25% may be
retained by the Principal Underwriter.
The Investors having entrusted Distributor or Sales Handling Company
with safekeeping of the certificates for Fund shares will receive a
certificate of safekeeping in exchange for the purchase price. In such
case payment shall be made in yen in principal and the applicable
exchange rate shall be based on the foreign exchange rate quoted in the
Tokyo Foreign Exchange Market on the Trade Day and which shall be
determined by such Distributor or Sales Handling Company. The payment
may be made in dollars to the extent that the Distributor or Sales
Handling Companies can agree.
In addition, Distributor or Sales Handling Companies in Japan who are
members of the Japan Securities Dealers' Association cannot continue
sales of the Shares in Japan when the net assets of the Fund are less
than (YEN) 100,000,000 or the Shares otherwise cease to comply with the
"Standards of Selection of Foreign Investment Fund Securities" in the
"Regulations Concerning the Transactions of Foreign Securities"
established by the Association.
(2) Repurchase of Shares:
a. Repurchase in the United States
Investors residing in the U.S. can sell their shares back to the Fund
any day the New York Stock Exchange is open, either through investors'
financial advisor or directly to the Fund. Payment for redemptions may
be delayed until the Fund collects the purchase price of shares which
may take up to 15 calendar days after the purchase date.
Selling shares through investors' financial advisor
Investors' advisor must receive investors' request in proper form before
the close of regular trading on the New York Stock Exchange for them to
receive that day's NAV, less any applicable deferred sales charge.
Investors' advisor will be responsible for furnishing all necessary
documents to Putnam Investor Services on a timely basis and may charge
them for his or her services.
Selling shares directly to the Fund
Putnam Investor Services must receive investors' request in proper form
before the close of regular trading on the New York Stock Exchange in
order to receive that day's NAV, less any applicable sales charge.
By mail
Send a letter of instruction signed by all registered owners or their
legal representatives to Putnam Investor Services. If investors have
certificates for the shares investors want to sell, investors must
include them along with completed stock power forms.
By telephone
Investors may use Putnam's telephone redemption privilege to redeem
shares valued at less than $100,000 unless investors have notified
Putnam Investor Services of an address change within the preceding 15
days, in which case other requirements may apply. Unless investors
indicate otherwise on the account application, Putnam Investor
Services will be authorized to accept redemption instructions received
by telephone.
The telephone redemption privilege is not available if there are
certificates for investor's shares. The telephone redemption privilege
may be modified or terminated without notice.
Additional requirements
In certain situations, for example, if investors sell shares with a
value of $100,000 or more, the signatures of all registered owners or
their legal representatives must be guaranteed by a bank, broker-dealer
or certain other financial institutions.
In addition, Putnam Investor Services usually requires additional
documents for the sale of shares by a corporation, partnership, agent or
fiduciary, or a surviving joint owner. For more information concerning
Putnam's signature guarantee and documentation requirements, contact
Putnam Investor Services.
When will the Fund pay investors?
The Fund generally sends investors payment for investor's shares the
business day after investor's request is received. Under unusual
circumstances, the Fund may suspend redemptions, or postpone payment for
more than seven days as permitted by federal securities laws.
Redemption by the Fund
If investor owns fewer shares than the minimum set by the Trustees
(presently 20 shares), the Fund may redeem investors shares without
investors' permission and send investors the proceeds. The Fund may
also redeem shares if an investor owns more shares than a maximum amount
set by the Trustees. There is presently no maximum, but the Trustees
could set a maximum that would apply to both present and future
shareholders.
b. Repurchase in Japan
Shareholders in Japan may at any time request repurchase of their Shares
without a contingent deferred sales charge. Repurchase requests in
Japan may be made to Investor Servicing Agent through the Distributor or
Sales Handling Company on a Fund Business Day that is business day of
securities companies in Japan. The repurchase shall be made in integral
multiples of 10 shares.
The price a shareholder in Japan will receive is the next net asset
value calculated after the Fund receives the repurchase request from
Sakura Friend. The payment of the price shall be made in yen through
the Distributor or Sales Handling Companies pursuant to the Agreements
(on and after June 1, 1997, the Contracts) or, if the Distributor or
Sales Handling Companies agree, in dollars. The payment for repurchase
proceeds shall be made on the fourth business day of securities
companies in Japan after and including the Trade Day.
(3) Suspension of Repurchase:
The Fund may suspend shareholders' right of redemption, or postpone
payment for more than seven days, if the New York Stock Exchange is
closed for other than customary weekends or holidays, or if permitted by
the rules of the Securities and Exchange Commission during periods when
trading on the Exchange is restricted or during any emergency which
makes it impracticable for the Fund to dispose of its securities or to
determine fairly the value of its net assets, or during any other period
permitted by order of the Commission for protection of investors.
(4) Custody of Shares:
Share certificates shall be held by Shareholders at their own risk.
The custody of the Share certificates (if issued) sold to Japanese
Shareholders shall, unless otherwise instructed by the Shareholder, be
held, in the name of the custodian, by the custodian of Sakura Friend.
Certificates of custody for the Shares shall be delivered by the
Distributor or Sales Handling Companies to the Japanese Shareholders.
D. Miscellaneous:
(1) Duration and Liquidation:
Unless terminated, the Fund shall continue without limitation of time.
The Fund may be terminated at any time by vote of Shareholders holding
at least 66 2/3% of the Shares entitled to vote or by the Trustees of
the Fund by written notice to the Shareholders.
(2) Accounting Year:
The accounts of the Fund will be closed each year on 30th September.
(3) Authorized Shares:
There is no prescribed authorized number of Shares, and Shares may be
issued from time to time.
(4) Agreement and Declaration of Trust:
Originals or copies of the Agreement and Declaration of Trust, as
amended, are maintained in the office of the Trust and are made
available for public inspection for the Shareholders. Originals or
copies of the Agreement and Declaration of Trust, as amended, are on
file in the United States with the Secretary of State of the
Commonwealth of Massachusetts and with the Clerk of the City of Boston.
The Agreement and Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when
authorized to do so by vote of Shareholders holding a majority of the
Shares entitled to vote, except that an amendment which shall affect the
holders of one or more series or classes of Shares but not the holders
of all outstanding series and classes shall be authorized by vote of the
Shareholders holding a majority of the Shares entitled to vote of each
series and class affected and no vote of Shareholders of a series or
class not affected shall be required. Amendments having the purpose of
changing the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein shall not require authorization
by Shareholder vote.
In Japan, material changes in the Agreement and Declaration of Trust
shall be published and notice thereof shall be sent to the Japanese
Shareholders.
(5) Issue of Warrants, Subscription Rights, etc.:
The Fund may not grant privileges to purchase shares of the Fund to
shareholders or investors by issuing warrants, subscription rights or
options, or other similar rights.
(6) How Performance Is Shown:
Fund advertisements may, from time to time, include performance
information. "Yield" is calculated by dividing the annualized net
investment income per share during a recent 30-day period by the maximum
public offering per share on the last day of that period.
For purposes of calculating yield, net investment income is calculated
in accordance with U.S. Securities and Exchange Commission regulations
and may differ from net investment income as determined for tax
purposes. U.S. Securities and Exchange Commission regulations require
that net investment income be calculated on a "yield-to-maturity" basis,
which has the effect of amortizing any premiums or discounts in the
current market value of fixed-income securities. The current dividend
rate is based on net investment income as determined for tax purposes,
which may not reflect amortization in the same manner. Yield is based
on the price of the shares, including the maximum initial sales charge.
"Total return" for the one-, five- and ten-year periods (or for the life
of the Fund, if shorter) through the most recent calendar quarter
represents the average annual compounded rate of return on an investment
of $1,000 in the Fund invested at the maximum public offering price.
Total return may also be presented for other periods or based on
investment at reduced sales charge levels. Any quotation of investment
performance not reflecting the maximum initial sales charge or
contingent deferred sales charge would be reduced if the sales charge
were used. For the one, five-year period ended September 30, 1999 and
the period since the inception of the Fund through September 30, 1999,
the average annual total return at public offering price (POP) for Class
M shares of the Fund was -3.17%, 5.20% and 7.41%, respectively. The 30-
day yield for Class M shares of the Fund for the period ended September
30, 1999 was 8.33%.
All data are based on past investment results and do not predict future
performance. Investment performance, which will vary, is based on many
factors, including market conditions, portfolio composition, Fund
operating expenses and the class of shares the investor purchases.
Investment performance also often reflects the risks associated with the
Fund's investment objective and policies. These factors should be
considered when comparing the Fund's investment results with those of
other mutual Funds and other investment vehicles.
Quotations of investment performance for any period when an expense
limitation was in effect will be greater than if the limitation had not
been in effect. Fund performance may be compared to that of various
indexes.
(B) Outline of Disclosure System:
(1) Disclosure in U.S.A.:
(i) Disclosure to shareholders
In accordance with the Investment Company Act of 1940, the Fund is
required to send to its shareholders annual and semi-annual reports
containing financial information.
(ii) Disclosure to the SEC
The Fund has filed a registration statement with the SEC on Form N-1A;
the Fund updates that registration statement periodically in accordance
with the Investment Company Act of 1940.
(2) Disclosure in Japan:
a. Disclosure to the Supervisory Authority:
(i) Disclosure Required under the Securities and Exchange Law:
When the Fund intends to offer the Shares amounting to more than 100
million yen in Japan, it shall submit to the Director of Kanto Local
Finance Bureau of the Ministry of Finance securities registration
statements together with the copies of the Agreement and Declaration of
Trust and the agreements with major related companies as attachments
thereto. The said documents are made available for public inspection
for the investors and any other persons who desire at Kanto Local
Finance Bureau of the Ministry of Finance.
The Distributor or Sales Handling Companies of the Shares shall deliver
to the investors prospectuses the contents of which are substantially
identical with Part I and Part II of the securities registration
statements. For the purpose of disclosure of the financial conditions,
etc., the Trustees shall submit to the Director of Kanto Local Finance
Bureau of the Ministry of Finance securities reports within 6 months of
the end of each fiscal year, semi-annual reports within 3 months of the
end of each semi-annual period and extraordinary reports from time to
time when changes occur as to material subjects of the Fund. These
documents are available for public inspection for the investors and any
other persons who desire at Kanto Local Finance Bureau of the Ministry
of Finance.
(ii) Notifications, etc. under the Law Concerning Securities Investment
Trusts and Securities Investment Companies
If the Management Company conducts business of offering for sale of
units of the Fund, etc., it must file in advance the prescribed matters
on the Fund with the Commissioner of Financial Supervisory Agent under
the Law Concerning Securities Investment Trusts and Securities
Investment Companies (the Law No.198, 1951) (hereinafter referred to the
"Investment Trusts Law"). In addition, if the Management Company amends
the Management Regulations of the Fund, it must file in advance such
amendment and the details thereof with the Commissioner of Financial
Supervisory Agent. Further, the Management Company must prepare the
Management Report on the prescribed matters concerning the assets of the
Fund under the Investment Trusts Law immediately after the end of each
calculation period of the Fund and must file such Report with the
Commissioner of Financial Supervisory Agent.
b. Disclosure to Japanese Shareholders:
If the Management Company makes any amendment to the Management
Regulations of the Fund, the substance of which is important, it must
give in advance public notice concerning its intention to make such
amendment and the substance of such amendment at least 30 days prior to
such amendment, and must deliver the written documents containing the
above matters to the unitholders known in Japan. Provided, however,
that if the said written documents are delivered to all the unitholders
in Japan, the relevant public notice is not required to be given.
The Japanese Shareholders will be notified of the material facts which
would change their position and of notices from the Trustees, through
the Distributor or Sales Handling Companies.
The above-described Management Report on the Fund will be sent to the
unitholders known in Japan.
(C) Restrictions on Transactions with Interested Parties:
Portfolio securities of the Fund may not be purchased from or sold or
loaned to any Trustee of the Fund, Putnam Investment Management, Inc.,
acting as investment adviser of the Fund, or any affiliate thereof or
any of their directors, officers, or employees, or any major shareholder
thereof (meaning a shareholder who holds to the actual knowledge of
Investment Management Company, on his own account whether in his own or
other name (as well as a nominee's name), 10% or more of the total
issued outstanding shares of such a company) acting as principal or for
their own account unless the transaction is made within the investment
restrictions set forth in the Fund's prospectus and statement of
additional information and either (i) at a price determined by current
publicly available quotations (including a dealer quotation) or (ii) at
competitive prices or interest rates prevailing from time to time on
internationally recognized securities markets or internationally
recognized money markets (including a dealer quotation).
4. INFORMATION CONCERNING THE EXERCISE OF RIGHTS BY SHAREHOLDERS, ETC.
(A) Rights of Shareholders and Procedures for Their Exercise:
The Shareholders shall be registered in order to exercise directly the
rights of their Shares. Therefore, the Shareholders in Japan who
entrust the custody of their Shares to the Distributor or Sales Handling
Company cannot exercise directly their rights, because they are not
registered. Shareholders in Japan may have the Distributor or Sales
Handling Companies exercise their rights on their behalf in accordance
with the Account Agreement with the Distributor or Sales Handling
Companies.
Shareholders in Japan who do not entrust the custody of their Shares to
the Distributor or Sales Handling Companies may exercise their rights in
accordance with their own arrangement under their own responsibility.
The major rights enjoyed by the investors are as follows:
(i) Voting rights
Each share has one vote, with fractional shares voting proportionally.
Shares of each class will vote together as a single class except when
otherwise required by law or as determined by the Trustees. Although
the Fund is not required to hold annual meetings of its shareholders,
shareholders holding at least 10% of the outstanding shares entitled to
vote have the right to call a meeting to elect or remove Trustees, or to
take other actions as provided in the Agreement and Declaration of
Trust.
(ii) Repurchase rights
Shareholders are entitled to request repurchase of Shares at their Net
Asset Value at any time.
(iii) Rights to receive dividends
Shareholders generally receive distributions from any net investment
income once a month and any net realized capital gains at least once a
year.
Shareholders may choose from three distribution options, though
investors in Japan may only choose the last alternative.
* Reinvest all distributions in additional shares without a sales
charge;
* Receive distributions from net investment income and net short-term
capital gains in cash while reinvesting net-long term capital gains
distributions in additional shares without a sales charge; or
* Receive all distributions in cash.
(iv) Right to receive distributions upon dissolution
Shareholders of a fund are entitled to receive distributions upon
dissolution in proportion to the number of shares then held by them,
except as otherwise required.
(v) Right to inspect accounting books and the like
Shareholders are entitled to inspect the Agreement and Declaration of
Trust, the accounting books at the discretion of the Court and the
minutes of the shareholders' meeting.
(vi) Right to transfer shares
Shares are transferable without restriction except as limited by
applicable law.
(vii) Rights with respect to the U.S. registration statement
If, under the 1933 Act, there is any false statement concerning any
important matter in the U.S. Registration Statement, or any omission of
any statement of important matters to be stated therein or not to cause
any misunderstanding, shareholders are entitled to institute a lawsuit,
against the person who had signed the relevant Registration Statement,
the trustee of the issuer (or any person placed in the same position) at
the time of filing such Statement, any person involved in preparing such
Statement or any subscriber of the relevant shares.
(B) Tax Treatment of Shareholders in Japan:
The tax treatment of Shareholders in Japan shall be as follows:
(1) The distributions to be made by the Fund will be treated as
distributions made by a domestic investment trust.
a. The distributions to be made by the Fund to Japanese individual
shareholders will be subject to separate taxation from other income
(i.e. withholding of income tax at the rate of 15% and withholding of
local taxes at the rate of 5% in Japan). In this case, no report
concerning distributions will be filed with the Japanese tax
authorities.
b. The distributions to be made by the Fund to Japanese corporate
shareholders will be subject to withholding of income tax at the rate of
15% and to withholding of local taxes at the rate of 5% in Japan. In
certain cases, the Paying Handling Companies will prepare a report
concerning distributions and file such report with the Japanese tax
authorities.
c. Net investment returns such as dividends, etc. and distributions of
short-term net realized capital gain, among distributions on Shares of the
Fund, will be, in principle, subject to withholding of U. S. federal income
tax at the rate of 15% and the amount obtained after such deduction will be
paid in Japan.
Distributions of long-term net realized capital gain will not be subject
to withholding of U.S. federal income tax and the full amount thereof will
be paid in Japan. The amount subject to withholding of U. S. federal
income tax may be deducted from the tax levied on a foreign entity in Japan.
The Japanese withholding tax imposed on distributions as referred to in
a. and b. above will be collected by way of so-called "difference collecting
method". In this method only the difference between the amount equivalent
to 20% of the distributions before U.S. withholding tax and the amount of U.S.
withholding tax withheld in the U.S. will be collected in Japan.
(2) The provisions of Japanese tax laws giving the privilege of a certain
deduction from taxable income to corporations, which may apply to dividends
paid by a domestic corporation, shall not apply.
(3) Capital gains and losses arising from purchase and repurchase of the
Shares shall be treated in the same way as those arising from purchase and
sale of a domestic investment trust. The distribution of the net
liquidation assets shall be also treated in the same way as those arising
from liquidation of a domestic investment trust.
(C) Foreign Exchange Control in U.S.A.:
In U.S.A., there are no foreign exchange control restrictions on remittance
of dividends, repurchase money, etc. of the Shares to Japanese Shareholders.
(D) Agent in Japan:
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
The foregoing law firm is the true and lawful agent of the Fund to
represent and act for the Fund in Japan for the purpose of;
(1) the receipt of any and all communications, claims, actions, proceedings
and processes as to matters involving problems under the laws and the rules
and regulations of the JSDA and
(2) representation in and out of court in connection with any and all
disputes, controversies or differences regarding the transactions relating
to the public offering, sale and repurchase in Japan of the Shares of the
Fund.
The agent for the registration with the Director of Kanto Local Finance
Bureau of Japanese Ministry of Finance of the initial public offering
concerned as well as for the continuous disclosure is each of the
following persons:
Harume Nakano
Ken Miura
Attorneys-at-law
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki, 3-chome
Chiyoda-ku, Tokyo
(E) Jurisdiction:
Limited only to litigation brought by Japanese investors regarding
transactions relating to (D)(2) above, the Fund has agreed that the
following court has jurisdiction over such litigation and the
Japanese law is applicable thereto:
Tokyo District Court
1-4, Kasumigaseki 1-chome
Chiyoda-ku, Tokyo
5. STATUS OF THE INVESTMENT FUND
<TABLE>
<CAPTION>
(A) Diversification of Investment Fund: (As of the end of December, 1999)
- -------------------------------------------------------------------------------------------
Types of Assets Name of Country Total U.S. Dollars Investment Ratio (%)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Corporate Bonds United States 1,710,124,014 41.01
Canada 58,946,630 1.41
Mexico 43,304,161 1.04
United Kingdom 41,857,224 1.00
Netherlands 35,804,213 0.86
Luxembourg 23,786,167 0.57
Indonesia 20,778,699 0.50
China 19,921,500 0.48
Bermuda 17,880,850 0.43
Brazil 11,807,875 0.28
Columbia 9,357,600 0.22
Cayman Islands 7,385,100 0.18
Argentina 3,499,600 0.08
Ireland 2,917,400 0.07
Denmark 2,632,149 0.06
Israel 2,501,550 0.06
India 2,436,813 0.06
Philippines 2,272,838 0.05
Portland 1,913,000 0.05
Greece 1,633,000 0.04
Germany 387,699 0.01
Australia 131,868 0.00
Sub-total 2,021,279,950 48.47
- -------------------------------------------------------------------------------------------
U.S. Government
Obligations United States 579,983,138 13.91
- -------------------------------------------------------------------------------------------
Foreign
Government Bonds United Kingdom 119,268,492 2.86
Germany 89,220,274 2.14
Sweden 85,628,534 2.05
Australia 78,610,692 1.89
Canada 62,704,596 1.50
Argentina 45,260,000 1.09
Brazil 42,375,920 1.02
Russia 36,711,128 0.88
Mexico 17,409,250 0.42
Columbia 10,862,531 0.26
Venezuela 7,099,341 0.17
Turkey 6,148,800 0.15
Philippines 3,574,750 0.09
Sub-total 604,874,308 14.50
- -------------------------------------------------------------------------------------------
Collateralized
Mortgage Obligations United States 404,993,418 9.71
- -------------------------------------------------------------------------------------------
Brady Bonds Mexico 91,683,986 2.20
Brazil 69,833,398 1.67
Bulgaria 37,513,013 0.90
Venezuela 25,594,667 0.61
Peru 3,022,763 0.07
Argentina 1,672,175 0.04
Sub-total 229,320,002 5.50
- -------------------------------------------------------------------------------------------
Preferred Stock United States 126,836,748 3.04
Canada 17,825,000 0.43
Germany 9,155,750 0.22
Sub-total 153,817,498 3.69
- -------------------------------------------------------------------------------------------
Asset-Backed
Securities United States 27,936,369 0.67
- -------------------------------------------------------------------------------------------
Short-term United States 145,446,503 3.49
- -------------------------------------------------------------------------------------------
Unit United States 4,278,248 0.10
Australia 296 0.00
Sub-total 4,278,544 0.10
- -------------------------------------------------------------------------------------------
Convertible Bonds United States 14,822,393 0.36
- -------------------------------------------------------------------------------------------
Common Stock United States 35,902,239 0.86
Columbia 2,717,046 0.07
Brazil 9 0.00
Sub-total 38,619,294 0.93
- -------------------------------------------------------------------------------------------
Warrants United States 9,032,942 0.22
Netherlands 2,204,000 0.05
Columbia 669,600 0.02
Ireland 224,000 0.01
Mexico 181,500 0.00
Equador 5,150 0.00
Sub-total 12,317,192 0.30
- -------------------------------------------------------------------------------------------
Convertible
Preferred Stocks United States 14,663,277 0.35
- -------------------------------------------------------------------------------------------
Purchased Options United States 35,841 0.00
- -------------------------------------------------------------------------------------------
Cash, Deposit and Other Assets
(After deduction of liabilities) -82,266,413 -1.97
- -------------------------------------------------------------------------------------------
Total 4,170,121,314 100
(Net Asset Value) (YEN 427,020 million)
- -------------------------------------------------------------------------------------------
</TABLE>
(B) Results of Past Operations
(1) Record of Changes in Net Assets (Class M Shares)
Record of changes in net assets at the end of the following fiscal years
and at the end of each month within one year prior to the end of December,
1999 is as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Total Net Asset Value Net Asset Value per Share
- --------------------------------------------------------------------------------------------------
Dollar (thousands) Yen (millions) Dollar Yen
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Fiscal Year 14,751 1,511 11.97 1,226
(September 30, 1995)
- --------------------------------------------------------------------------------------------------
2nd Fiscal Year 46,327 4,744 12.27 (12.34) 1,256 (1,264)
(September 30, 1996)
- --------------------------------------------------------------------------------------------------
3rd Fiscal Year 513,351 52,567 12.67 (12.74) 1,297 (1,305)
(September 30, 1997)
- --------------------------------------------------------------------------------------------------
4th Fiscal Year 1,019,477 104,394 11.62 (11.69) 1,190 (1,197)
(September 30, 1998)
- --------------------------------------------------------------------------------------------------
5th Fiscal Year 1,066,821 109,242 10.73 (10.81) 1,099 (1,107)
(September 30, 1999)
- --------------------------------------------------------------------------------------------------
1999 end of January 1,039,980 106,494 11.47 (11.54) 1,175 (1,182)
- --------------------------------------------------------------------------------------------------
February 958,538 98,154 11.24 (11.31) 1,151 (1,158)
- --------------------------------------------------------------------------------------------------
March 950,399 97,321 11.33 (11.41) 1,160 (1,168)
- --------------------------------------------------------------------------------------------------
April 976,710 100,015 11.47 (11.55) 1,175 (1,183)
- --------------------------------------------------------------------------------------------------
May 951,842 97,469 11.15 (11.23) 1,142 (1,150)
- --------------------------------------------------------------------------------------------------
June 958,507 98,151 11.05 (11.13) 1,132 (1,140)
- --------------------------------------------------------------------------------------------------
July 977,005 100,045 10.93 (11.01) 1,119 (1,127)
- --------------------------------------------------------------------------------------------------
August 1,025,879 105,050 10.78 (10.86) 1,104 (1,112)
- --------------------------------------------------------------------------------------------------
September 1,066,821 109,242 10.73 (10.81) 1,099 (1,107)
- --------------------------------------------------------------------------------------------------
October 1,064,162 108,970 10.65 (10.73) 1,091 (1,099)
- --------------------------------------------------------------------------------------------------
November 1,063,437 108,896 10.68 (10.76) 1,094 (1,102)
- --------------------------------------------------------------------------------------------------
December 1,078,139 110,401 10.73 (10.81) 1,099 (1,107)
- --------------------------------------------------------------------------------------------------
(Note 1) Operations of Class M Shares were commenced on December 1, 1994.
(Note 2) Ex-dividend date is the 10th of each month. The amount of NAV per
share with dividend is set forth in the parentheses.
</TABLE>
(2) Record of Distributions Paid
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Amount of Amount of Amount paid
Dividend paid Profit Distributed from Return of
Period per Share per Share Capital per Share
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Fiscal Year (12/1/94 - 9/30/95) $0.65 (\66.56) -- (\0.00) $0.13 (\13.31)
- -------------------------------------------------------------------------------------------------------
2nd Fiscal Year (10/1/95-9/30/96) $0.87 (\89.09) $0.00 (\0.00) -- \0.00
- -------------------------------------------------------------------------------------------------------
3rd Fiscal Year (10/1/96-9/30/97) $0.85 (\87.04) $0.00 (\0.00) -- \0.00
- -------------------------------------------------------------------------------------------------------
4th Fiscal Year (10/1/97-9/30/98) $0.67 (\68.61) $0.16 (\16.38) -- \0.00
- -------------------------------------------------------------------------------------------------------
5th Fiscal Year (10/1/98-9/30/99) $0.89 (\91.14) -- (\0.00) $0.01 (\1.02)
- -------------------------------------------------------------------------------------------------------
</TABLE>
(Note) Record of distribution paid and NAV on the ex-dividend date from
January 1998 to January 2000 are as follows:
- ------------------------------------------------------------------------
Dividend NAV on the ex-dividend date
- ------------------------------------------------------------------------
Month/Year Dollar Yen Dollar
- ------------------------------------------------------------------------
[S] [C] [C] [C]
1998 end of January 0.069 7.07 12.54
- ------------------------------------------------------------------------
February 0.069 7.07 12.60
- ------------------------------------------------------------------------
March 0.069 7.07 12.54
- ------------------------------------------------------------------------
April 0.069 7.07 12.65
- ------------------------------------------------------------------------
May 0.070 7.17 12.56
- ------------------------------------------------------------------------
June 0.069 7.07 12.52
- ------------------------------------------------------------------------
July 0.069 7.07 12.45
- ------------------------------------------------------------------------
August 0.070 7.17 12.24
- ------------------------------------------------------------------------
September 0.069 7.07 11.45
- ------------------------------------------------------------------------
October 0.070 7.17 11.22
- ------------------------------------------------------------------------
November 0.070 7.17 11.31
- ------------------------------------------------------------------------
December 0.070 7.17 11.52
- ------------------------------------------------------------------------
1999 end of January 0.070 7.17 11.38
- ------------------------------------------------------------------------
February 0.072 7.37 11.36
- ------------------------------------------------------------------------
March 0.076 7.78 11.19
- ------------------------------------------------------------------------
April 0.079 8.09 11.45
- ------------------------------------------------------------------------
May 0.079 8.09 11.35
- ------------------------------------------------------------------------
June 0.079 8.09 11.00
- ------------------------------------------------------------------------
July 0.079 8.09 10.98
- ------------------------------------------------------------------------
August 0.079 8.09 10.68
- ------------------------------------------------------------------------
September 0.079 8.09 10.72
- ------------------------------------------------------------------------
October 0.079 8.09 10.65
- ------------------------------------------------------------------------
November 0.079 8.09 10.68
- ------------------------------------------------------------------------
December 0.079 8.09 10.73
- ------------------------------------------------------------------------
2000 end of January 0.079 8.09 10.61
- ------------------------------------------------------------------------
(C) Record of Sales and Repurchases
Record of sales and repurchases during the following fiscal years and
number of outstanding Class M shares of the Fund as of the end of such
Fiscal Years are as follows:
- ------------------------------------------------------------------------
Number of Number of
Number of Shares Outstanding
Shares Sold Repurchased Shares
- ------------------------------------------------------------------------
[S] [C] [C] [C]
1st Fiscal Year 1,363,277 131,265 1,232,012
(12/1/94-9/30/95) (0) (0) (0)
- ------------------------------------------------------------------------
2nd Fiscal Year 3,470,806 925,979 3,776,839
(10/1/95-9/30/96) (0) (0) (0)
- ------------------------------------------------------------------------
3rd Fiscal Year 38,906,817 2,156,006 40,527,650
(10/1/96-9/30/97) (34,927,970) (344,600) (34,583,370)
- ------------------------------------------------------------------------
4th Fiscal Year 82,811,002 35,639,555 87,699,097
(10/1/97-9/30/98) (79,711,290) (33,361,320) (80,933,340)
- ------------------------------------------------------------------------
5th Fiscal Year 65,746,653 53,993,131 99,452,619
(10/1/98-9/30/99) (63,773,260) (51,272,070) (93,434,530)
- ------------------------------------------------------------------------
Note: The number of Shares sold, repurchased and outstanding in the
parentheses represents those sold, repurchased and outstanding
in Japan. The Shares are sold in Japan from May 28, 1997.
II. OUTLINE OF THE TRUST
1. Trust
(A) Law of Place of Incorporation
The Trust is a Massachusetts business trust organized in Massachusetts,
U.S.A. on August 11, 1988.
Chapter 182 of the Massachusetts General Laws prescribes the fundamental
matters in regard to the operations of certain business trusts
constituting voluntary associations under that chapter.
The Trust is an open-end, diversified management company under the
Investment Company Act of 1940.
(B) Outline of the Supervisory Authority
Refer to I - l (B) Outline of the Supervisory Authority.
(C) Purpose of the Trust
The purpose of the Trust is to provide investors a managed investment
primarily in securities, debt instruments and other instruments and
rights of a financial character.
(D) History of the Trust
August 11, 1988: Organization of the Fund as a Massachusetts
business trust. Adoption of the Agreement and Declaration of Trust.
September 7, 1988: Adoption of the Amended and Restated Agreement
and Declaration of Trust.
(E) Amount of Capital Stock
Not applicable.
(F) Structure of the management of the Trust
The Trustees are responsible for generally overseeing the conduct of the
Fund's business. The Agreement and Declaration of Trust provides that
they shall have all powers necessary or convenient to carry out that
responsibility. The number of Trustees is fixed by the Trustees and may
not be less than three. A Trustee may be elected either by the Trustees
or by the shareholders. At any meeting called for the purpose, a
Trustee may be removed by vote of two-thirds of the outstanding shares
of the Trust. Each Trustee elected by the Trustees or the shareholders
shall serve until he or she retires, resigns, is removed, or dies or
until the next meeting of shareholders called for the purpose of
electing Trustees and until the election and qualification of his or her
successor.
The Trustees of the Trust are authorized by the Agreement and
Declaration of Trust to issue shares of the Trust in one or more series,
each series being preferred over all other series in respect of the
assets allocated to that series. The Trustees may, without shareholder
approval, create two or more series of shares representing separate
investment portfolios. Any such series of shares may be further divided
without shareholders approval into two or more classes, with such
preferences and special or relative rights and privileges as the
Trustees may determine. The Trust's shares are not currently divided
into series.
Under the Agreement and Declaration of Trust the shareholders shall have
power, as and to the extent provided therein, to vote only (i) for the
election of Trustees, to the extent provided therein (ii) for the
removal of Trustees, to the extent provided therein (iii) with respect
to any investment adviser, to the extent provided therein (iv) with
respect to any termination of the Trust, to the extent provided therein
(v) with respect to certain amendments of the Agreement and Declaration
of Trust, (vi) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding, or
claim should or should not be brought or maintained derivatively or as a
class action on behalf of the Trust or the shareholders, and (vii) with
respect to such additional matters relating to the Trust as may be
required by the Agreement and Declaration of Trust, the Bylaws of the
Trust, or any registration of the Trust with the U.S. Securities and
Exchange Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Certain of the foregoing
actions may, in addition, be taken by the Trustees without vote of the
shareholders of the Trust.
On any matter submitted to a vote of shareholders, all shares of the
Trust then entitled to vote are voted in the aggregate as a single class
without regard to series or classes of shares, except (1) when required
by the Investment Company Act of 1940, as amended, or when the Trustees
hall have determined that the matter affects one or more series or
classes of shares materially differently, shares are voted by individual
series or class; and (2) when the Trustees have determined that the
matter affects on the interests of one or more series or classes, then
only shareholders of such series or classes are entitled to vote
thereon. There is no cumulative voting.
Meetings of shareholders may be called by the Clerk whenever ordered by
the Trustees, the Chairman of the Trustees, or requested in writing by
the holder or holders of at least one-tenth of the outstanding shares
entitled to vote at the meeting. Written notice of any meeting of
shareholders must be given by mailing the notice at least seven days
before the meeting. Thirty percent of shares entitled to vote on a
particular matter is a quorum for the transaction of business on that
matter at a shareholders' meeting, except that, where any provision of
law or of the Agreement and Declaration of Trust permits or requires
that holders of any series or class vote as an individual series or
class, then thirty percent of the aggregate number of shares of that
series or class entitled to vote are necessary to constitute a quorum
for the transaction of business by that series or class. For the
purpose of determining the shareholders of any class or series of shares
who are entitled to vote or act at any meeting, or who are entitled to
receive payment of any dividend or other distribution, the Trustees are
authorized to fix record dates, which may not be more then 90 days
before the date of any meeting of shareholders or more than 60 days
before the date of payment of any dividend or other distribution.
The Trustees are authorized by the Agreement and Declaration of Trust to
adopt Bylaws not inconsistent with the Agreement and Declaration of
Trust providing for the conduct of the business of the Trust. The
Bylaws contemplate that the Trustees shall elect a Chairman of the
Trustees, the President, the Treasurer, and the Clerk of the Trust, and
that other officers, if any, may be elected or appointed by the Trustees
at any time. The Bylaws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
Regular meetings of the Trustees may be held without call or notice at
such places and at such times as the Trustees may from time to time
determine. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram
at least twenty-four hours before the meeting or to give notice to him
or her in person or by telephone at least twenty-four hours before the
meeting.
At any meeting of Trustees, a majority of the Trustees then in office
shall constitute a quorum. Except as otherwise provided in the
Agreement and Declaration of Trust or Bylaws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a
meeting (a quorum being present), or by written consents of a majority
of the Trustees then in office.
Subject to a favorable majority shareholder vote (as defined in the
Agreement and Declaration of Trust), the Trustees may contract for
exclusive or nonexclusive advisory and/or management services with any
corporation, trust, association, or other organization.
The Agreement and Declaration of Trust contains provisions for the
indemnification of Trustees, officers, and shareholders of the Trust
under the circumstances and on the terms specified therein.
The Trust may be terminated at any time by vote of shareholders holding
at least two-thirds of the shares entitled to vote or by the trustees by
written notice to the shareholders. Any series of shares may be
terminated at any time by vote of shareholders holding at least two-
thirds of the shares of such series entitled to vote or by the Trustees
by written notice to the shareholders of such series.
The foregoing is a general summary of certain provisions of the
Agreement and Declaration of Trust and Bylaws of the Trust, and is
qualified in its entirety by reference to each of those documents.
(G) Information Concerning Major Shareholders
Not applicable.
(H) Information Concerning Directors, Officers and Employees
<TABLE>
<CAPTION>
(1) Trustees and Officers of the Trust (as of December, 1999)
- --------------------------------------------------------------------------------------
Shares
Name Office and Title Resume Owned
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
George Putnam Chairman and present: Chairman and 6,399.799
President Director,
Putnam Management
and Putnam
Mutual Funds
Corp.
Director, Marsh &
McLennan Companies,
Inc., Freeport Copper
and Gold, Inc. and
Houghton Mifflin
Company
- --------------------------------------------------------------------------------------
John A. Hill Vice Chairman present: Chairman and 1,206.768
Managing Director,
First Reserve Corp.
Director, Snyder Oil
Corp., TransMontaigne
Oil Company and various
private companies owned
by First Reserve Corp.
- --------------------------------------------------------------------------------------
William F. Pounds Vice Chairman present: Professor Emeritus 0
of Management,
Alfred P. Sloan
School of
Management,
Massachusetts
Institute of
Technology,
Director, IDEXX
Laboratories, Inc.,
Management Sciences
for Health, Inc. and
Sun Company, Inc.
- --------------------------------------------------------------------------------------
Jameson Adkins Baxter Trustee present: President, Baxter 444.065
Associates, Inc.,
Director, MB
Financial, Inc.,
ASHTA Chemicals,
Inc., Banta
Corporation and
Ryerson Tull Inc.
- --------------------------------------------------------------------------------------
Hans H. Estin Trustee present: Vice Chairman, 261.803
North American
Management Corp.
- --------------------------------------------------------------------------------------
Ronald J. Jackson Trustee present: Former Chairman, 538.492
President and
Chief Executive
Officer,
Fisher-Price, Inc.
- --------------------------------------------------------------------------------------
Paul. L. Joskow Trustee present: Professor of 276.934
Economics and
Management and
former Chairman of
Dept. of Economics,
Massachusetts Institute
of Technology
Director, New England
Electric System, State
Farm Indemnity
Company and Whitehead
Institute for
Biomedical Research
- --------------------------------------------------------------------------------------
Elizabeth T. Kennan Trustee present: President Emeritus 339.813
and Professor,
Mount Holyoke
College, Director,
Bell Atlantic,
Kentucky Home
Life Insurance
Companies, Northeast
Utilities and Talbots
- --------------------------------------------------------------------------------------
Lawrence J. Lasser Trustee and present: President, Chief 159.467
Vice President Executive Officer
and Director,
Putnam Investments,
Inc. and Putnam
Management
Director, Marsh &
McLennan Companies,
Inc. and United Way
of Massachusetts Bay
- --------------------------------------------------------------------------------------
John H. Mullin, III Trustee present: Chairman and Chief 469.028
Executive Officer,
Ridgeway Farm
Director, ACX
Technologies, Inc.,
Alex. Brown Realty,
Inc., The Liberty
Corporation and
Carolina Power & Light
- --------------------------------------------------------------------------------------
Robert E. Patterson Trustee present: President and 469.028
Trustee, Cabot
Industrial Trust
Director,
Broadywine Trust
Company
- --------------------------------------------------------------------------------------
George Putnam, III Trustee present: President, New 1,699.983
Generation Research,
Inc. and New Generation
Advisers Inc.
Director, The Boston
Family Office L.L.C.
- --------------------------------------------------------------------------------------
A.J.C. Smith Trustee present: Chairman and Chief 256.406
Executive Officer,
Marsh & McLennan
Companies, Inc.
Director, Trident
Partnership
- --------------------------------------------------------------------------------------
W. Thomas Stephens Trustee present: President and 122.436
Chief Executive
Officer, MacMillan
Bloedel, Ltd.
Director, Qwest
Communications and
New Century Energies
- --------------------------------------------------------------------------------------
W. Nicholas Thorndike Trustee present: Director, various 171.134
corporations and
charitable organizations
including Courier Corp.,
Data General Corp.,
Bradley Real Estate,
Inc. and Providence
Journal Co.
- --------------------------------------------------------------------------------------
Charles E. Porter Executive Vice present: Managing Director 0
President of Putnam Investments,
Inc. and Putnam
Management
- --------------------------------------------------------------------------------------
Patricia C. Flaherty Senior Vice present: Senior Vice 0
President President of
Putnam Investments,
Inc. and Putnam
Management,
- --------------------------------------------------------------------------------------
Richard A. Monaghan Vice President present: Managing Director 0
of Putnam Investments,
Inc. and Chief of
Mutual Fund Business
of Putnam Mutual
Funds Corp.
- --------------------------------------------------------------------------------------
Gordon H. Silver Vice President present: Director and Senior 0
Managing Director of
Putnam Investments, Inc.
and Putnam Management
- --------------------------------------------------------------------------------------
John D. Hughes Vice President present: Senior Vice President 0
of Putnam Management
- --------------------------------------------------------------------------------------
Ian C. Ferguson Vice President present: Senior Managing 0
Director of Putnam
Management
- --------------------------------------------------------------------------------------
Brett C. Browchuk Vice President present: Managing Director 0
of Putnam Management
- --------------------------------------------------------------------------------------
John R. Verani Vice President present: Senior Vice 0
President of Putnam
Investments, Inc.
and Putnam Management
- --------------------------------------------------------------------------------------
John R. Verani Vice President present: Senior Vice President of 0
Putnam Investments, Inc.
and Putnam Management
- --------------------------------------------------------------------------------------
Stephen Oristaglio Vice President present: Managing Director of 0
Putnam Management
- --------------------------------------------------------------------------------------
Edward H. D'Aleilo Vice President present: Managing Director of 0
Putnam Management
- --------------------------------------------------------------------------------------
David L. Waldman Vice President present: Managing Director of 0
Putnam Management
- --------------------------------------------------------------------------------------
D. William Kohli Vice President present: Managing Director of 0
Putnam Management
- --------------------------------------------------------------------------------------
Jennifer E. Leichter Vice President present Managing Director of 0
Putnam Management
- --------------------------------------------------------------------------------------
Jeffrey A. Kaufman Vice President present: Senior Vice President 0
of Putnam Management
- --------------------------------------------------------------------------------------
Paul G. Bucuvalas Assistant present: N/A 0
Treasurer
- --------------------------------------------------------------------------------------
Mary A. Eaton Associate present: N/A 0
Treasurer and
Assistant Clerk
- --------------------------------------------------------------------------------------
Judith Cohen Associate Clerk present: N/A 0
- --------------------------------------------------------------------------------------
Katharine Howard Senior Associate present: N/A 0
Treasurer
- --------------------------------------------------------------------------------------
Wanda M. McManus Assistant Clerk present: N/A 0
- --------------------------------------------------------------------------------------
Joanne M. Neary Assistant Clerk present: N/A 0
- --------------------------------------------------------------------------------------
</TABLE>
(2) Employees of the Trust
The Trust does not have any employees.
(I) Description of Business and Outline of Operation
The Trust may carry out any administrative and managerial act, including
the purchase, sale, subscription and exchange of any securities, and the
exercise of all rights directly or indirectly pertaining to the Fund's
assets. The Trust has retained Putnam Investment Management, Inc., the
investment adviser, to render investment advisory services and Putnam
Fiduciary Trust Company, to hold the assets of the Fund in custody and
act as Investor Servicing Agent.
(J) Miscellaneous
(1) Changes of Trustees and Officers
Trustees may be removed or replaced by, among other things, a resolution
adopted by a vote of two-thirds of the outstanding shares at a meeting
called for the purpose. In the event of vacancy, the remaining Trustees
may fill such vacancy by appointing for the remaining term of the
predecessor Trustee such other person as they in their discretion shall
see fit. The Trustees may add to their number as they consider
appropriate. The Trustees may elect and remove officers as they
consider appropriate.
(2) Amendment to the Agreement and Declaration of Trust
Generally, approval of shareholders is required to amend the Agreement
and Declaration of Trust, except for certain matters such as change of
name, curing any ambiguity or curing any defective or inconsistent
provision.
(3) Litigation and Other Significant Events
Nothing which has or which would have a material adverse effect on the
Trust has occurred which has not been disclosed. The fiscal year end of
the Trust is September 30. The Trust is established for an indefinite
period and may be dissolved at any time by vote of the shareholders
holding at least two-thirds of the shares entitled to vote or by the
Trustees by written notice to shareholders.
2. Putnam Investment Management, Inc. (Investment Management Company)
(A) Law of Place of Incorporation
Putnam is incorporated under the General Corporation Law of The
Commonwealth of Massachusetts, U.S.A. Its investment advisory business is
regulated under the Investment Advisers Act of 1940.
Under the Investment Advisers Act of 1940, an investment adviser means,
with certain exceptions, any person who, for compensation, engages in the
business of advising others, either directly or through publications or
writings, as to the value of securities or as to the advisability of
investing in, purchasing or selling securities, or who, for compensation
and as part of a regular business, issues analyses or reports concerning
securities. Investment advisers under the Act may not conduct their
business unless they are registered with the SEC.
(B) Outline of the Supervisory Authority
Investment Management Company is registered as an investment adviser under
the Investment Advisers Act of 1940.
(C) Purpose of the Company
Investment Management Company's sole business is investment management,
which includes the buying, selling, exchanging and trading of securities of
all descriptions on behalf of mutual funds in any part of the world.
(D) History of the Company
Investment Management Company is one of America's oldest and largest money
management firms. Investment Management Company's staff of experienced
portfolio managers and research analysts selects securities and constantly
supervises the fund's portfolio. By pooling an investor's money with that
of other investors, a greater variety of securities can be purchased than
would be the case individually: the resulting diversification helps reduce
investment risk. Investment Management Company has been managing mutual
funds since 1937. Today, the firm serves as the Investment Management
Company for the funds in the Putnam Family, with over $391 billion in
assets in nearly 12 million shareholder accounts at the end of December,
1999. An affiliate, The Putnam Advisory Company, Inc., manages domestic
and foreign institutional accounts and mutual funds, including the accounts
of many Fortune 500 companies. Another affiliate, Putnam Fiduciary Trust
Company, provides investment advice to institutional clients under its
banking and fiduciary powers as well as shareholder and custody services to
the Putnam Funds.
Putnam Investment Management Inc., Putnam Mutual Funds and Putnam Fiduciary
Trust Company are subsidiaries of Putnam Investments, Inc., which is wholly
owned by Marsh & McLennan Companies, Inc., a publicly-owned holding company
whose principal businesses are international insurance and reinsurance
brokerage, employee benefit consulting and investment management.
(E) Amount of Capital Stock (as of the end of December, 1999)
1. Amount of Capital (issued capital stock at par value):
Common Stock 1,000 shares at $1 par value
2. Number of authorized shares of capital stock:
Common Stock 1,000 shares
3. Number of outstanding shares of capital stock:
Common Stock 1,000 shares
4. Amount of capital (for the purposes of this Item, "Amount of Capital"
means total stockholders' equity for the past five years:
Amount of Capital
Year (Total Stockholders' Equity)
- ----------- ----------------------------
End of 1995 $45,521,351
End of 1996 $45,817,658
End of 1997 $48,617,160
End of 1998 $425,782,008
End of 1999 $879,198,215
(F) Structure of the Management of the Company
Investment Management Company is ultimately managed by its Board of
Directors, which is elected by its shareholders.
Each fund managed by Investment Management Company is managed by one or
more portfolio managers. These managers, in coordination with analysts who
research specific securities and other members of the relevant investment
group (in the case of the Fund, Investment Management Company's Fixed
Income Investments Group), provide a continuous investment program for the
fund and place all orders for the purchase and sale of portfolio
securities.
The investment performance and portfolio of each fund is overseen by its
Board of Trustees, a majority of whom are not affiliated with Investment
Management Company. The Trustees meet 11 times a year and review the
performance of each fund with its manager at least quarterly.
In selecting portfolio securities for the Fund, Investment Management
Company looks for securities that represent attractive values based on
careful issue-by-issue credit analysis and hundreds of onsite visits and
other contacts with issuers every year. Investment Management Company is
one of the largest managers of high yield and other debt securities in the
United States.
The following officers of Investment Management Company have had primary
responsibility for the day-to-day management of the Fund's portfolio since
the years shown below. Their experience as portfolio managers or
investment analysts over at least the last five years is also shown.
- ------------------------------------------------------------------------
Names Year Experience
- ------------------------------------------------------------------------
[S] [C] [C]
D. William Kohli 1994 1994 - Investment Management
Managing Director Present Company
- ------------------------------------------------------------------------
Jennifer E. Leichter 1998 1987 - Investment Management
Managing Director Present Company
- ------------------------------------------------------------------------
David L. Waldman 1998 1997 - Investment Management
Managing Director Present Company
1995 - Lazard Freres
June 1997
Prior to Goldman Sachs
Apr. 1995
- ------------------------------------------------------------------------
Jeffrey A. Kaufman 1998 1998 - Investment Management
Senior Vice President Present Company
Prior to MFS Investment Management
Aug. 1998
- ------------------------------------------------------------------------
(G) Information Concerning Major Stockholders
As of the end of December, 1999, all the outstanding shares of capital
stock of Investment Management Company were owned by Putnam Investments,
Inc. See subsection D above.
(H) Information Concerning Officers and Employees
The following table lists the names of various officers and directors of
Investment Management Company and their respective positions with
Investment Management Company. For each named individual, the table lists:
(i) any other organizations (excluding other Investment Management
Company's funds) with which the officer and/or director has recently had
or has substantial involvement; and (ii) positions held with such
organization:
<TABLE>
<CAPTION>
List of Officers and Directors of Putnam Investment Management, Inc.
(as of the end of December, 1999)
- ---------------------------------------------------------------------------------------
Position with
Putnam Investment Other Business
Name Management, Inc. Affiliation
- ---------------------------------------------------------------------------------------
<S> <C> <C>
1 Putnam, George Chairman Director of Putnam Mutual
Funds Corp.
- ---------------------------------------------------------------------------------------
2 Lasser, Lawrence J. President and
Director, CEO
- ---------------------------------------------------------------------------------------
3 Silver, Gordon H. Director and Senior Director of Putnam Fiduciary
Managing Director Trust Company and Senior
Managing Director of Putnam
Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
4 Burke, Robert W. Senior Managing Director Senior Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
5 Collman, Kathleen M. Senior Managing Director Senior Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
6 Ferguson, Ian C. Senior Managing Director
- ---------------------------------------------------------------------------------------
7 Oristaglio, Stephen M. Senior Managing Director
- ---------------------------------------------------------------------------------------
8 Regan, Anthony W. Senior Managing Director
- ---------------------------------------------------------------------------------------
9 Spiegel, Steven Senior Managing Director Senior Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
10 Anderson, Blake E. Managing Director
- ---------------------------------------------------------------------------------------
11 Beck, Robert R. Managing Director
- ---------------------------------------------------------------------------------------
12 John F. Boneparth Managing Director Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
13 Bresnahan, Leslee R. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
14 Browchuk, Brett C. Managing Director
- ---------------------------------------------------------------------------------------
15 Cassaro, Joseph A. Managing Director
- ---------------------------------------------------------------------------------------
16 Cotner, C. Beth Managing Director
- ---------------------------------------------------------------------------------------
17 Cronin, Kevin M. Managing Director Managing Director of Putnam
Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
18 D'Alelio, Edward H. Managing Director
- ---------------------------------------------------------------------------------------
19 Daly, Kenneth L. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
20 DeTore, John A. Managing Director Managing Director of Putnam
Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
21 Durgarian, Karnig H. Managing Director Director and Managing Director
of Putnam Fiduciary Trust
Company
- ---------------------------------------------------------------------------------------
22 Esteves, Irene M. Managing Director and Treasurer of Putnam Fiduciary
Chief Financial Officer Trust Company
- ---------------------------------------------------------------------------------------
23 Gillis, Roland Managing Director
- ---------------------------------------------------------------------------------------
24 Haslett, Thomas R. Managing Director
- ---------------------------------------------------------------------------------------
25 Holding, Pamela Managing Director
- ---------------------------------------------------------------------------------------
26 Hurley, William J. Managing Director Managing Director and CFO
of Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
27 Jacobs, Jerome J. Managing Director
- ---------------------------------------------------------------------------------------
28 Joseph, Joseph P. Managing Director
- ---------------------------------------------------------------------------------------
29 Kamshad, Omid Managing Director
- ---------------------------------------------------------------------------------------
30 King, David L. Managing Director
- ---------------------------------------------------------------------------------------
31 Kohli, D. William Managing Director
- ---------------------------------------------------------------------------------------
32 Kreisel, Anthony I. Managing Director
- ---------------------------------------------------------------------------------------
33 Kuenstner, Deborah F. Managing Director
- ---------------------------------------------------------------------------------------
34 Landes, William J. Managing Director
- ---------------------------------------------------------------------------------------
35 Leibovitch, Richard G. Managing Director
- ---------------------------------------------------------------------------------------
36 Leichter, Jennifer E. Managing Director
- ---------------------------------------------------------------------------------------
37 Lohr, Mark G. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
38 Maloney, Kevin J. Managing Director
- ---------------------------------------------------------------------------------------
39 Martino, Michael Managing Director Managing Director of Putnam
Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
40 Maxwell, Scott M. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
41 McMullen, Carol C. Managing Director
- ---------------------------------------------------------------------------------------
42 Memani, Krisha K. Managing Director
- ---------------------------------------------------------------------------------------
43 Miller, Daniel L. Managing Director
- ---------------------------------------------------------------------------------------
44 Miller, Jeffrey M. Managing Director Managing Director of Putnam
Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
45 Morgan Jr., John J. Managing Director Managing Director of Putnam
Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
46 Morgan, Kelly A. Managing Director
- ---------------------------------------------------------------------------------------
47 Murphy, Jennifer P. Managing Director
- ---------------------------------------------------------------------------------------
48 Nagashima, Toshio Managing Director Managing Director of Putnam
Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
49 Peacher, Stephen C. Managing Director
- ---------------------------------------------------------------------------------------
50 Peters, Jeffrey F. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
51 Pollard, Mark D. Managing Director
- ---------------------------------------------------------------------------------------
52 Porter, Charles E. Managing Director
- ---------------------------------------------------------------------------------------
53 Price, Quintin I. Managing Director
- ---------------------------------------------------------------------------------------
54 Reilly, Thomas V. Managing Director
- ---------------------------------------------------------------------------------------
55 Schultz, Mitchell D. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
56 Scott, Justin M. Managing Director Managing Director of Putnam
Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
57 Shadek Jr., Edward T. Managing Director
- ---------------------------------------------------------------------------------------
58 Starr, Loren Managing Director Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
59 Swift, Robert Managing Director
- ---------------------------------------------------------------------------------------
60 Talanian, John C. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
61 Tibbetts, Richard B. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
62 Waldman, David L. Managing Director
- ---------------------------------------------------------------------------------------
63 Warren, Paul C. Managing Director
- ---------------------------------------------------------------------------------------
64 Wetlaufer, Eric Managing Director
- ---------------------------------------------------------------------------------------
65 Woolverton, William H. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
66 Arends, Michael K. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
67 Asher, Steven E. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
68 Atkin, Michael J. Senior Vice President
- ---------------------------------------------------------------------------------------
69 Augustine, Jeffrey B. Senior Vice President
- ---------------------------------------------------------------------------------------
70 Bakshi, Manjit S. Senior Vice President
- ---------------------------------------------------------------------------------------
71 Bamford, Dolores Snyder Senior Vice President
- ---------------------------------------------------------------------------------------
72 John J. Bent Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
73 Baumbach, Robert K. Senior Vice President
- ---------------------------------------------------------------------------------------
74 Berka, Sharon A. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
75 Block, Richard L. Senior Vice President
- ---------------------------------------------------------------------------------------
76 Bloemker, Rob A. Senior Vice President
- ---------------------------------------------------------------------------------------
77 Boselli, John A. Senior Vice President
- ---------------------------------------------------------------------------------------
78 Bousa, Edward P. Senior Vice President
- ---------------------------------------------------------------------------------------
79 Bradford Jr., Linwood E. Senior Vice President Senior Vice President of
Putnam Mutual Funds
- ---------------------------------------------------------------------------------------
80 Burke, Andrea Senior Vice President
- ---------------------------------------------------------------------------------------
81 Burns, Cheryl A. Senior Vice President
- ---------------------------------------------------------------------------------------
82 Byrne, Joshua L. Senior Vice President
- ---------------------------------------------------------------------------------------
83 Callahan, Ellen S. Senior Vice President
- ---------------------------------------------------------------------------------------
84 Carlson, David G. Senior Vice President
- ---------------------------------------------------------------------------------------
85 Chase, Mary Claire Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
86 Chrostowski, Louis F. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
87 Crane, George H. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
88 Curran, Peter J. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
89 Dalferro, John R. Senior Vice President
- ---------------------------------------------------------------------------------------
90 Derbyshire, Ralph C. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
91 Dexter, Stephen P. Senior Vice President
- ---------------------------------------------------------------------------------------
92 Divney, Kevin M. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
93 Eigerman, Nathan W. Senior Vice President
- ---------------------------------------------------------------------------------------
94 Elavia, Tony H. Senior Vice President
- ---------------------------------------------------------------------------------------
95 England, Richard B. Senior Vice President
- ---------------------------------------------------------------------------------------
96 Epke Laura L. Senior Vice President
- ---------------------------------------------------------------------------------------
97 Farrell, Deborah S. Senior Vice President
- ---------------------------------------------------------------------------------------
98 Flaherty, Patricia C. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
99 Fleisher, Peter M. Senior Vice President
- ---------------------------------------------------------------------------------------
100 Fontana, Forrest N. Senior Vice President
- ---------------------------------------------------------------------------------------
101 Francis, Jonathan H. Senior Vice President
- ---------------------------------------------------------------------------------------
102 Frost, Karen T. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
103 Frucci, Richard M. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
104 Gorman, Stephen A. Senior Vice President
- ---------------------------------------------------------------------------------------
105 Graham, Andrew Senior Vice President
- ---------------------------------------------------------------------------------------
106 Grant, Peter J. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
107 Graviere, Patrice Senior Vice President
- ---------------------------------------------------------------------------------------
108 Grim, Daniel J. Senior Vice President
- ---------------------------------------------------------------------------------------
109 Haagensen, Paul E. Senior Vice President
- ---------------------------------------------------------------------------------------
110 Hadas, Edward Senior Vice President
- ---------------------------------------------------------------------------------------
111 Hadden, Peter J. Senior Vice President
- ---------------------------------------------------------------------------------------
112 Halperin, Matthew C. Senior Vice President
- ---------------------------------------------------------------------------------------
113 Hamlin, David E. Senior Vice President
- ---------------------------------------------------------------------------------------
114 Harring, Linda Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
115 Hart, Nigel P. Senior Vice President
- ---------------------------------------------------------------------------------------
116 Healey, Deborah R. Senior Vice President
- ---------------------------------------------------------------------------------------
117 Horwitz, Jonathan S. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
118 Hotchkiss, Michael F. Senior Vice President
- ---------------------------------------------------------------------------------------
119 Kaufman, Jeffrey Senior Vice President
- ---------------------------------------------------------------------------------------
120 Kay, Karen R. Senior Vice President Clerk, Director and Senior
Vice President of Putnam
Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
121 Kirson, Steven L. Senior Vice President
- ---------------------------------------------------------------------------------------
122 Knight, Jeffrey L. Senior Vice President
- ---------------------------------------------------------------------------------------
123 Koontz, Jill A. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
124 Korn, Karen R. Senior Vice President
- ---------------------------------------------------------------------------------------
125 Kurey, Thomas J. Senior Vice President
- ---------------------------------------------------------------------------------------
126 Lannum III, Coleman N. Senior Vice President
- ---------------------------------------------------------------------------------------
127 Lindsey, Jeffrey R. Senior Vice President
- ---------------------------------------------------------------------------------------
128 Lode, Geirulv Senior Vice President
- ---------------------------------------------------------------------------------------
129 Lomba, Rufino R. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
130 MacElwee, Jones, Senior Vice President
Elizabeth M.
- ---------------------------------------------------------------------------------------
131 Madore, Robert A. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
132 Malloy, Julie M. Senior Vice President
- ---------------------------------------------------------------------------------------
133 Manuel Jr., Richard D. Senior Vice President
- ---------------------------------------------------------------------------------------
134 Marrkand, Paul E. Senior Vice President
- ---------------------------------------------------------------------------------------
135 Marshall, William L. Senior Vice President
- ---------------------------------------------------------------------------------------
136 Matteis, Andrew S. Senior Vice President
- ---------------------------------------------------------------------------------------
137 McDonald, Richard E. Senior Vice President
- ---------------------------------------------------------------------------------------
138 Meehan, Thalia Senior Vice President
- ---------------------------------------------------------------------------------------
139 Mehta, Sandeep Senior Vice President
- ---------------------------------------------------------------------------------------
140 Miller, William H. Senior Vice President
- ---------------------------------------------------------------------------------------
141 Mockard, Jeanne L. Senior Vice President
- ---------------------------------------------------------------------------------------
142 Mufson, Michael J. Senior Vice President
- ---------------------------------------------------------------------------------------
143 Mullen, Donald E. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
144 Mullin, Hugh H. Senior Vice President
- ---------------------------------------------------------------------------------------
145 Murphy, Kevin F. Senior Vice President
- ---------------------------------------------------------------------------------------
146 Netols, Jeffrey W. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
147 Oler, Stephen S. Senior Vice President
- ---------------------------------------------------------------------------------------
148 Paine, Robert M. Senior Vice President
- ---------------------------------------------------------------------------------------
149 Parker, Margery C. Senior Vice President
- ---------------------------------------------------------------------------------------
150 Parr, Cynthia O. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
151 Perry, William Senior Vice President
- ---------------------------------------------------------------------------------------
152 Peters, Carmel Senior Vice President
- ---------------------------------------------------------------------------------------
153 Petralia, Randolph S. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
154 Plapinger, Keith Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
155 Pohl, Charles G. Senior Vice President
- ---------------------------------------------------------------------------------------
156 Prusko, James M. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
157 Puddle, David G. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
158 Quistberg, Paul T. Senior Vice President
- ---------------------------------------------------------------------------------------
159 Rogers, Kevin J. Senior Vice President
- ---------------------------------------------------------------------------------------
160 Ruys de Perez, Senior Vice President Senior Vice President of
Charles A. Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
161 Sai, Yumiko Senior Vice President
- ---------------------------------------------------------------------------------------
162 Santos, David J. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
163 Santosus, Anthony C. Senior Vice President
- ---------------------------------------------------------------------------------------
164 Schwister, Jay E. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
165 Selden, Denise D. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
166 Scordato, Christine A. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
167 Sievert, Jean I. Senior Vice President
- ---------------------------------------------------------------------------------------
168 Simon, Sheldon N. Senior Vice President
- ---------------------------------------------------------------------------------------
169 Simozar, Saied Senior Vice President
- ---------------------------------------------------------------------------------------
170 Smith Jr., Leo J. Senior Vice President
- ---------------------------------------------------------------------------------------
171 Smith, Margaret D. Senior Vice President
- ---------------------------------------------------------------------------------------
172 Spatz, Erin J. Senior Vice President
- ---------------------------------------------------------------------------------------
173 Spiers, John Graham Senior Vice President
- ---------------------------------------------------------------------------------------
174 Stack, Michael P. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
175 Stairs, George W. Senior Vice President
- ---------------------------------------------------------------------------------------
176 Strumpf, Casey Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
177 Sugimoto, Toshifumi Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
178 Sullivan, Roger R. Senior Vice President
- ---------------------------------------------------------------------------------------
179 Sullivan, William J. Senior Vice President
- ---------------------------------------------------------------------------------------
180 Suzuki, Toshimi Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
181 Svensson, Lisa H. Senior Vice President
- ---------------------------------------------------------------------------------------
182 Swanberg, Charles H. Senior Vice President
- ---------------------------------------------------------------------------------------
183 Thomsen, Rosemary H. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust Company
- ---------------------------------------------------------------------------------------
184 Troped Blacker, Senior Vice President Senior Vice President of
Bonnie L. Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
185 Verani, John R. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
186 Walsh, Francis P. Senior Vice President
- ---------------------------------------------------------------------------------------
187 Weinstein, Michael R. Senior Vice President
- ---------------------------------------------------------------------------------------
188 Weiss, Manuel Senior Vice President
- ---------------------------------------------------------------------------------------
189 Whalen, Edward F. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- ---------------------------------------------------------------------------------------
190 Wheeler, Diane D.F. Senior Vice President
- ---------------------------------------------------------------------------------------
191 Wyke, Richard P. Senior Vice President
- ---------------------------------------------------------------------------------------
192 Yogg, Michael R. Senior Vice President
- ---------------------------------------------------------------------------------------
193 Zukowski, Gerald S. Senior Vice President
- ---------------------------------------------------------------------------------------
(I) Summary of Business Lines and Business Operation
Investment Management Company is engaged in the business of providing
investment management and investment advisory services to mutual funds. As
of the end of December, 1999, Investment Management Company managed,
advised, and/or administered the following 114 funds and fund portfolios
(having an aggregate net asset value of approximately $391 billion):
</TABLE>
<TABLE>
<CAPTION>
Total Net Asset Net Asset
Year/Month/Day Principal Value Value
Name Established Characteristics ($ million) per share ($)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 The George Putnam Fund of Boston; A 11/5/37 Open/Equity 3,615.37 16.28
2 The George Putnam Fund of Boston; B 4/24/92 Open/Equity 1,501.55 16.13
3 The George Putnam Fund of Boston; M 12/1/94 Open/Equity 274.63 16.13
4 The George Putnam Fund of Boston; Y 1/1/94 Open/Equity 785.71 16.31
5 Putnam American Government Income Fund; A 3/1/85 Open/Bond 1,500.12 8.23
6 Putnam American Government Income Fund; B 5/20/94 Open/Bond 149.13 8.20
7 Putnam American Government Income Fund; M 2/14/95 Open/Bond 7.34 8.25
8 Putnam Asia Pacific Growth Fund; A 2/20/91 Open/Equity 391.08 19.00
9 Putnam Asia Pacific Growth Fund; B 6/1/93 Open/Equity 325.60 18.63
10 Putnam Asia Pacific Growth Fund; M 2/1/95 Open/Equity 27.44 18.82
11 Putnam Asia Pacific Fund II 3/23/98 Open/Equity 4.16 14.38
12 Putnam Asset Allocation: Balanced Portfolio; A 2/7/94 Open/Balanced 997.69 12.96
13 Putnam Asset Allocation: Balanced Portfolio; B 2/11/94 Open/Balanced 621.04 12.89
14 Putnam Asset Allocation: Balanced Portfolio; C 9/1/94 Open/Balanced 137.12 12.81
15 Putnam Asset Allocation: Balanced Portfolio; M 2/6/95 Open/Balanced 73.55 12.93
16 Putnam Asset Allocation: Balanced Portfolio; Y 7/14/94 Open/Balanced 512.55 12.97
17 Putnam Asset Allocation : Conservative Portfolio; A 2/7/94 Open/Balanced 402.18 10.54
18 Putnam Asset Allocation : Conservative Portfolio; B 2/18/94 Open/Balanced 195.30 10.51
19 Putnam Asset Allocation : Conservative Portfolio; C 9/1/94 Open/Balanced 52.89 10.48
20 Putnam Asset Allocation : Conservative Portfolio; M 2/7/95 Open/Balanced 28.81 10.51
21 Putnam Asset Allocation : Conservative Portfolio; Y 7/14/94 Open/Balanced 114.38 10.56
22 Putnam Asset Allocation: Growth Portfolio; A 2/8/94 Open/Balanced 795.23 15.20
23 Putnam Asset Allocation: Growth Portfolio; B 2/16/94 Open/Balanced 543.00 15.01
24 Putnam Asset Allocation: Growth Portfolio; C 9/1/94 Open/Balanced 126.84 14.87
25 Putnam Asset Allocation: Growth Portfolio; M 2/1/95 Open/Balanced 70.05 15.03
26 Putnam Asset Allocation: Growth Portfolio; Y 7/14/94 Open/Balanced 446.05 15.29
27 Putnam Arizona Tax Exempt Income Fund; A 1/30/91 Open/Bond 97.12 8.61
28 Putnam Arizona Tax Exempt Income Fund; B 7/15/93 Open/Bond 30.61 8.60
29 Putnam Arizona Tax Exempt Income Fund; M 7/3/95 Open/Bond 0.85 8.62
30 Putnam Balanced Fund 10/2/95 Open/Balanced 5.00 13.50
31 Putnam Balanced Retirement Fund; A 4/19/85 Open/Balanced 614.44 9.85
32 Putnam Balanced Retirement Fund; B 2/1/94 Open/Balanced 185.76 9.75
33 Putnam Balanced Retirement Fund; M 3/17/95 Open/Balanced 14.71 9.79
34 Putnam Balanced Retirement Fund; Y 1/4/99 Open/Balanced 3.66 9.85
35 Putnam California Investment Grade Municipal Trust 11/27/92 Closed/Bond 65.03 14.12
36 Putnam California Tax Exempt Income Fund; A 4/29/83 Open/Bond 2,573.91 8.02
37 Putnam California Tax Exempt Income Fund; B 1/4/93 Open/Bond 572.53 8.01
38 Putnam California Tax Exempt Income Fund; M 2/14/95 Open/Bond 14.04 8.01
39 Putnam California Tax Exempt Money Market Fund 10/26/87 Open/Bond 42.80 1.00
40 Putnam Capital Opportunities Fund; A 8/5/93 Open/Equity 80.92 10.29
41 Putnam Capital Opportunities Fund; B 11/2/94 Open/Equity 89.65 10.19
42 Putnam Capital Opportunities Fund; M 1/22/96 Open/Equity 7.66 10.22
43 Putnam Capital Appreciation Fund; A 8/5/93 Open/Equity 1,207.96 26.14
44 Putnam Capital Appreciation Fund; B 11/2/94 Open/Equity 1,287.36 25.82
45 Putnam Capital Appreciation Fund; M 1/22/96 Open/Equity 83.52 25.89
46 Putnam Convertible Opportunity and Income Trust 6/29/95 Closed/Bond 88.48 23.83
47 Putnam Convertible Income-Growth Trust; A 6/29/72 Open/Balanced 1,044.18 19.89
48 Putnam Convertible Income-Growth Trust; B 7/15/93 Open/Balanced 296.17 19.64
49 Putnam Convertible Income-Growth Trust; M 3/13/95 Open/Balanced 17.64 19.76
50 Putnam Convertible Income-Growth Trust; Y 12/30/98 Open/Balanced 66.16 19.89
51 Putnam Dividend Income Fund 9/28/89 Closed/Bond 118.61 10.96
52 Putnam Diversified Income Trust; A 10/3/88 Open/Bond 1,436.08 10.77
53 Putnam Diversified Income Trust; B 3/1/93 Open/Bond 1,634.05 10.72
54 Putnam Diversified Income Trust; C 2/1/99 Open/Bond 7.76 10.75
55 Putnam Diversified Income Trust; M 12/1/94 Open/Bond 1,078.14 10.73
56 Putnam Diversified Income Trust ; Y 7/11/96 Open/Bond 14.10 10.78
57 Putnam Emerging Markets Fund; A 10/2/95 Open/Equity 84.37 12.51
58 Putnam Emerging Markets Fund; B 10/2/95 Open/Equity 60.09 12.41
59 Putnam Emerging Markets Fund; M 10/2/95 Open/Equity 5.11 12.45
60 Putnam Equity Fund 98 12/30/97 Open/Equity 21.27 25.82
61 Putnam Equity Income Fund; A 6/15/77 Open/Balanced 1,115.65 13.94
62 Putnam Equity Income Fund; B 9/13/93 Open/Balanced 600.17 13.84
63 Putnam Equity Income Fund; C 2/1/99 Open/Balanced 13.22 13.91
64 Putnam Equity Income Fund; M 12/2/94 Open/Balanced 58.29 13.86
65 Putnam Europe Growth Fund; A 9/7/90 Open/Equity 1,011.69 26.55
66 Putnam Europe Growth Fund; B 2/1/94 Open/Equity 911.61 25.92
67 Putnam Europe Growth Fund; M 12/1/94 Open/Equity 95.37 26.39
68 Putnam Florida Tax Exempt Income Fund; A 8/24/90 Open/Bond 220.98 8.69
69 Putnam Florida Tax Exempt Income Fund; B 1/4/93 Open/Bond 76.20 8.69
70 Putnam Florida Tax Exempt Income Fund; M 5/1/95 Open/Bond 0.70 8.68
71 Putnam Global Natural Resources Fund; A 7/24/80 Open/Equity 185.72 19.30
72 Putnam Global Natural Resources Fund; B 2/1/94 Open/Equity 135.82 19.03
73 Putnam Global Natural Resources Fund; M 7/3/95 Open/Equity 6.28 19.22
74 Putnam Global Equity Trust; A 7/1/94 Open/Equity 559.42 18.41
75 Putnam Global Equity Trust; B 7/2/94 Open/Equity 650.46 18.05
76 Putnam Global Equity Trust; C 2/1/99 Open/Equity 17.67 18.32
77 Putnam Global Equity Trust; M 7/3/95 Open/Equity 54.10 18.18
78 Putnam Global Growth and Income Fund; A 1/3/95 Open/Equity 40.60 13.60
79 Putnam Global Growth and Income Fund; B 1/3/95 Open/Equity 31.99 13.47
80 Putnam Global Growth and Income Fund; M 1/3/95 Open/Equity 3.20 13.54
81 Putnam Global Governmental Income Trust; A 6/1/87 Open/Bond 120.95 11.62
82 Putnam Global Governmental Income Trust; B 2/1/94 Open/Bond 28.14 11.59
83 Putnam Global Governmental Income Trust; M 3/17/95 Open/Bond 189.31 11.57
84 Putnam Global Growth Fund; A 9/1/67 Open/Equity 5,976.11 18.59
85 Putnam Global Growth Fund; B 4/27/92 Open/Equity 2,667.57 17.69
86 Putnam Global Growth Fund; C 2/1/99 Open/Equity 32.62 18.44
87 Putnam Global Growth Fund; M 3/1/95 Open/Equity 104.90 18.34
88 Putnam Global Growth Fund; Y 6/15/94 Open/Equity 292.38 18.94
89 Putnam Growth and Income Fund II; A 1/5/95 Open/Balanced 1,197.63 12.38
90 Putnam Growth and Income Fund II; B 1/5/95 Open/Balanced 1,337.61 12.28
91 Putnam Growth and Income Fund II; C 2/1/99 Open/Balanced 32.96 12.36
92 Putnam Growth and Income Fund II; M 1/5/95 Open/Balanced 155.81 12.32
93 The Putnam Fund for Growth and Income; A 11/6/57 Open/Balanced 21,089.59 18.75
94 The Putnam Fund for Growth and Income; B 4/27/92 Open/Balanced 13,386.48 18.49
95 The Putnam Fund for Growth and Income; M 5/1/95 Open/Balanced 447.29 18.63
96 The Putnam Fund for Growth and Income; Y 6/15/94 Open/Balanced 1,586.22 18.77
97 Putnam Growth Fund 5/1/98 Open/Equity 3.85 14.44
98 Putnam Growth Opportunities; A 10/2/95 Open/Equity 2,297.95 29.85
99 Putnam Growth Opportunities; B 8/1/97 Open/Equity 2,689.05 29.34
100 Putnam Growth Opportunities; C 2/1/99 Open/Equity 167.35 29.71
101 Putnam Growth Opportunities; M 8/1/97 Open/Equity 144.80 29.51
102 Putnam High Income Convertible and Bond Fund 7/9/87 Closed/Bond 114.13 8.34
103 Putnam High Yield Advantage Fund; A 3/25/86 Open/Bond 929.69 7.79
104 Putnam High Yield Advantage Fund; B 5/16/94 Open/Bond 773.30 7.75
105 Putnam High Yield Advantage Fund; M 12/1/94 Open/Bond 818.83 7.78
106 Putnam High Yield Advantage Fund; Y 12/30/98 Open/Bond 9.21 7.79
107 Putnam High Yield Fund II; A 12/31/97 Open/Bond 583.56 7.37
108 Putnam High Yield Fund II; B 12/31/97 Open/Bond 835.82 7.38
109 Putnam High Yield Fund II; M 12/31/97 Open/Bond 38.77 7.38
110 Putnam High Yield Trust; A 2/14/78 Open/Bond 2,406.74 10.35
111 Putnam High Yield Trust; B 3/1/93 Open/Bond 550.00 10.31
112 Putnam High Yield Trust; M 7/3/95 Open/Bond 13.42 10.35
113 Putnam High Yield Trust; Y 12/30/98 Open/Bond 20.24 10.35
114 Putnam Health Sciences Trust; A 5/28/82 Open/Equity 2,864.24 61.20
115 Putnam Health Sciences Trust; B 3/1/93 Open/Equity 2,079.32 58.43
116 Putnam Health Sciences Trust; M 7/3/95 Open/Equity 87.42 60.02
117 Putnam High Yield Municipal Trust 5/25/89 Closed/Bond 184.56 8.33
118 Putnam Income Fund; A 11/1/54 Open/Bond 1,092.17 6.36
119 Putnam Income Fund; B 3/1/93 Open/Bond 442.86 6.33
120 Putnam Income Fund; M 12/14/94 Open/Bond 1,569.30 6.32
121 Putnam Income Fund; Y 2/12/94 Open/Bond 255.66 6.38
122 Putnam Intermediate U.S. Government Income Fund; A 2/16/93 Open/Bond 241.00 4.76
123 Putnam Intermediate U.S. Government Income Fund; B 2/16/93 Open/Bond 132.63 4.76
124 Putnam Intermediate U.S. Government Income Fund; M 4/3/95 Open/Bond 14.27 4.77
125 Putnam Intermediate U.S. Government Income Fund; Y 10/1/97 Open/Bond 114.25 4.75
126 Putnam International Fund 12/28/95 Open/Equity 6.61 13.83
127 Putnam International Growth and Income Fund; A 8/1/96 Open/Equity 527.79 12.17
128 Putnam International Growth and Income Fund; B 8/1/96 Open/Equity 484.17 12.05
129 Putnam International Growth and Income Fund; C 2/1/99 Open/Equity 17.12 12.14
130 Putnam International Growth and Income Fund; M 8/1/96 Open/Equity 40.23 12.14
131 Putnam International Growth Fund; A 2/28/91 Open/Equity 5,014.81 29.68
132 Putnam International Growth Fund; B 6/1/94 Open/Equity 2,981.43 29.10
133 Putnam International Growth Fund; M 12/1/94 Open/Equity 327.77 29.45
134 Putnam International Growth Fund; Y 7/12/96 Open/Equity 677.92 29.79
135 Putnam International New Opportunities Fund; A 1/3/95 Open/Equity 1,544.48 24.83
136 Putnam International New Opportunities Fund; B 7/21/95 Open/Equity 1,695.10 24.08
137 Putnam International New Opportunities Fund; C 2/1/99 Open/Equity 22.49 24.67
138 Putnam International New Opportunities Fund; M 7/21/95 Open/Equity 136.31 24.37
139 Putnam International Voyager Fund; A 12/28/95 Open/Equity 520.82 25.70
140 Putnam International Voyager Fund; B 10/30/96 Open/Equity 394.95 25.39
141 Putnam International Voyager Fund; M 10/30/96 Open/Equity 43.00 25.52
142 Putnam Investment Grade Municipal Trust I 10/26/89 Closed/Bond 220.80 10.50
143 Putnam Investment Grade Municipal Trust II 11/27/92 Closed/Bond 166.70 12.48
144 Putnam Investment Grade Municipal Trust III 11/29/93 Closed/Bond 48.31 12.06
145 Putnam Investors Fund 98 2/17/98 Open/Equity 13.47 26.29
146 Putnam Investors Fund; A 12/1/25 Open/Equity 7,903.08 19.15
147 Putnam Investors Fund; B 3/1/93 Open/Equity 4,195.93 18.22
148 Putnam Investors Fund; M 12/2/94 Open/Equity 264.26 18.73
149 Putnam Investors Fund; Y 1/7/97 Open/Equity 1,212.69 19.25
150 Putnam Latin America Fund 3/23/98 Open/Equity 2.50 8.63
151 Putnam Massachusetts Tax Exempt Income Fund; A 10/23/89 Open/Bond 266.92 8.80
152 Putnam Massachusetts Tax Exempt Income Fund; B 7/15/93 Open/Bond 115.09 8.79
153 Putnam Massachusetts Tax Exempt Income Fund; M 5/12/95 Open/Bond 5.03 8.80
154 Putnam Master Income Trust 4/29/88 Closed/Bond 413.09 7.78
155 Putnam Managed High Yield Trust 6/25/93 Closed/Bond 88.32 11.77
156 Putnam Michigan Tax Exempt Income Fund; A 10/23/89 Open/Bond 129.01 8.47
157 Putnam Michigan Tax Exempt Income Fund; B 7/15/93 Open/Bond 41.51 8.46
158 Putnam Michigan Tax Exempt Income Fund; M 4/17/95 Open/Bond 2.35 8.47
159 Putnam Mid-Cap Value Fund 11/1/99 Open/Balanced 3.25 8.98
160 Putnam Minnesota Tax Exempt Income Fund; A 10/23/89 Open/Bond 90.81 8.41
161 Putnam Minnesota Tax Exempt Income Fund; B 7/15/93 Open/Bond 47.50 8.39
162 Putnam Minnesota Tax Exempt Income Fund; M 4/3/95 Open/Bond 2.21 8.41
163 Putnam Managed Municipal Income Trust 2/24/89 Closed/Bond 400.15 8.58
164 Putnam Money Market Fund; A 10/1/76 Open/Bond 3,738.64 1.00
165 Putnam Money Market Fund; B 4/27/92 Open/Bond 968.19 1.00
166 Putnam Money Market Fund; C 2/1/99 Open/Bond 13.59 1.00
167 Putnam Money Market Fund; M 12/8/94 Open/Bond 123.55 1.00
168 Putnam Master Intermediate Income Trust 4/29/88 Closed/Bond 757.30 7.56
169 Putnam Municipal Income Fund; A 5/22/89 Open/Bond 734.03 8.51
170 Putnam Municipal Income Fund; B 1/4/93 Open/Bond 444.18 8.50
171 Putnam Municipal Income Fund; C 2/1/99 Open/Bond 8.36 8.50
172 Putnam Municipal Income Fund; M 12/1/94 Open/Bond 14.02 8.50
173 Putnam Municipal Opportunities Trust 5/28/93 Closed/Bond 202.09 12.51
174 Putnam New Opportunities Fund; A 8/31/90 Open/Equity 17,962.52 90.95
175 Putnam New Opportunities Fund; B 3/1/93 Open/Equity 11,892.98 85.99
176 Putnam New Opportunities Fund; M 12/1/94 Open/Equity 713.40 88.37
177 Putnam New Opportunities Fund; Y 7/19/94 Open/Equity 1,744.40 92.40
178 Putnam New Value Fund; A 1/3/96 Open/Equity 350.04 11.86
179 Putnam New Value Fund; B 2/26/96 Open/Equity 350.03 11.78
180 Putnam New Value Fund; M 2/26/96 Open/Equity 32.36 11.83
181 Putnam New Jersey Tax Exempt Income Fund; A 2/20/90 Open/Bond 187.99 8.56
182 Putnam New Jersey Tax Exempt Income Fund; B 1/4/93 Open/Bond 90.61 8.56
183 Putnam New Jersey Tax Exempt Income Fund; M 5/1/95 Open/Bond 0.93 8.56
184 Putnam New York Investment Grade Municipal Trust 11/27/92 Closed/Bond 36.54 12.83
185 Putnam New York Tax Exempt Income Fund; A 9/2/83 Open/Bond 1,337.89 8.21
186 Putnam New York Tax Exempt Income Fund; B 1/4/93 Open/Bond 188.74 8.20
187 Putnam New York Tax Exempt Income Fund; M 4/10/95 Open/Bond 1.80 8.21
188 Putnam New York Tax Exempt Money Market Fund 10/26/87 Open/Bond 40.33 1.00
189 Putnam New York Tax Exempt Opportunities Fund; A 11/7/90 Open/Bond 137.24 8.36
190 Putnam New York Tax Exempt Opportunities Fund; B 2/1/94 Open/Bond 62.76 8.36
191 Putnam New York Tax Exempt Opportunities Fund; M 2/10/95 Open/Bond 2.23 8.35
192 Putnam Ohio Tax Exempt Income Fund; A 10/23/89 Open/Bond 164.26 8.37
193 Putnam Ohio Tax Exempt Income Fund; B 7/15/93 Open/Bond 51.89 8.36
194 Putnam Ohio Tax Exempt Income Fund; M 4/3/95 Open/Bond 1.72 8.37
195 Putnam OTC & Emerging Growth Fund; A 11/1/82 Open/Equity 5,936.99 37.01
196 Putnam OTC & Emerging Growth Fund; B 7/15/93 Open/Equity 2,716.06 34.88
197 Putnam OTC & Emerging Growth Fund; M 12/2/94 Open/Equity 654.50 35.89
198 Putnam OTC & Emerging Growth Fund; Y 7/12/96 Open/Equity 468.43 37.42
199 Putnam Pennsylvania Tax Exempt Income Fund; A 7/21/89 Open/Bond 153.68 8.44
200 Putnam Pennsylvania Tax Exempt Income Fund; B 7/15/93 Open/Bond 84.40 8.43
201 Putnam Pennsylvania Tax Exempt Income Fund; M 7/3/95 Open/Bond 2.57 8.44
202 Putnam Preferred Income Fund; A 1/4/84 Open/Bond 102.92 8.33
203 Putnam Preferred Income Fund; M 4/20/95 Open/Bond 10.28 8.31
204 Putnam Premier Income Trust 1995/2/29 Closed/Bond 1,053.48 7.47
205 Putnam Research Fund; A 10/2/95 Open/Equity 680.81 18.25
206 Putnam Research Fund; B 6/15/98 Open/Equity 720.61 18.02
207 Putnam Research Fund; C 2/1/99 Open/Equity 61.70 18.13
208 Putnam Research Fund; M 6/15/98 Open/Equity 55.24 18.10
209 Putnam Small Cap Value Fund; A 4/12/99 Open/Equity 66.89 9.70
210 Putnam Small Cap Value Fund; B 5/3/99 Open/Equity 46.00 9.66
211 Putnam Strategic Income Fund; A 2/19/95 Open/Bond 81.81 7.26
212 Putnam Strategic Income Fund; B 2/19/96 Open/Bond 126.31 7.27
213 Putnam Strategic Income Fund; C 2/1/99 Open/Bond 6.25 7.29
214 Putnam Strategic Income Fund; M 2/19/96 Open/Bond 8.43 7.26
215 Putnam Tax Smart Equity Fund; A 7/1/99 Open/Equity 83.50 10.36
216 Putnam Tax Smart Equity Fund; B 10/1/99 Open/Equity 89.47 10.34
217 Putnam Tax Smart Equity Fund; C 10/1/99 Open/Equity 21.62 10.34
218 Putnam Tax Exempt Income Fund; A 12/31/76 Open/Bond 1,641.00 8.38
219 Putnam Tax Exempt Income Fund; B 1/4/93 Open/Bond 209.40 8.38
220 Putnam Tax Exempt Income Fund; M 2/16/95 Open/Bond 9.39 8.40
221 Putnam Tax Exempt Money Market Fund 10/26/87 Open/Bond 95.22 1.00
222 Putnam Tax - Free Health Care Fund 6/29/92 Closed/Bond 185.85 13.46
223 Putnam Tax - Free Income Trust Tax - Free High Yield Fund; A 9/20/93 Open/Bond 1,145.73 13.41
224 Putnam Tax - Free Income Trust Tax - Free High Yield Fund B 9/9/85 Open/Bond 551.61 13.43
225 Putnam Tax - Free Income Trust Tax - Free High Yield Fund C 2/1/99 Open/Bond 3.14 13.40
226 Putnam Tax - Free Income Trust Tax - Free High Yield Fund M 12/29/94 Open/Bond 20.29 13.41
227 Putnam Tax - Free Income Trust Tax - Free Insured Fund; A 9/30/93 Open/Bond 239.50 14.07
228 Putnam Tax - Free Income Trust Tax - Free Insured Fund; B 9/9/85 Open/Bond 286.52 14.08
229 Putnam Tax - Free Income Trust Tax - Free Insured Fund; M 6/1/95 Open/Bond 1.84 14.10
230 Putnam U.S. Core Fund 5/1/98 Open/Equity 4.53 11.86
231 Putnam U.S. Government Income Trust; A 2/8/84 Open/Bond 1,935.18 12.34
232 Putnam U.S. Government Income Trust; B 4/27/92 Open/Bond 929.45 12.28
233 Putnam U.S. Government Income Trust; M 2/6/95 Open/Bond 118.72 12.32
234 Putnam U.S. Government Income Trust; Y 4/11/94 Open/Bond 27.90 12.33
235 Putnam Utilities Growth and Income Fund; A 11/19/90 Open/Balanced 980.80 12.56
236 Putnam Utilities Growth and Income Fund; B 4/27/92 Open/Balanced 476.13 12.49
237 Putnam Utilities Growth and Income Fund; M 3/1/95 Open/Balanced 12.88 12.54
238 Putnam Value Fund 5/1/98 Open/Balanced 2.19 8.40
239 Putnam Vista Fund; A 6/3/68 Open/Equity 5,240.35 17.46
240 Putnam Vista Fund; B 3/1/93 Open/Equity 2,420.95 16.29
241 Putnam Vista Fund; M 12/1/94 Open/Equity 207.73 16.88
242 Putnam Vista Fund; Y 3/28/95 Open/Equity 817.34 17.78
243 Putnam Voyager Fund II; A 4/14/93 Open/Equity 1,660.07 38.45
244 Putnam Voyager Fund II; B 10/2/95 Open/Equity 1,504.05 37.13
245 Putnam Voyager Fund II; C 2/1/99 Open/Equity 75.66 38.21
246 Putnam Voyager Fund II; M 10/2/95 Open/Equity 171.15 37.61
247 Putnam Voyager Fund; A 4/1/96 Open/Equity 24,363.39 30.96
248 Putnam Voyager Fund; B 4/27/92 Open/Equity 11,745.52 28.48
249 Putnam Voyager Fund; M 12/1/94 Open/Equity 558.06 30.01
250 Putnam Voyager Fund; Y 4/1/94 Open/Equity 3,894.20 31.60
251 Putnam VT Asia Pacific Growth Fund; IA 5/1/95 Open/Equity 249.79 17.29
252 Putnam VT Asia Pacific Growth Fund; IB 4/30/98 Open/Equity 5.84 17.25
253 Putnam VT Diversified Income Fund; IA 9/15/93 Open/Bond 624.13 9.92
254 Putnam VT Diversified Income Fund; IB 4/6/98 Open/Bond 23.08 9.90
255 Putnam VT Global Asset Allocation Fund; IA 2/1/88 Open/Balanced 1,001.68 19.60
256 Putnam VT Global Asset Allocation Fund; IB 4/30/98 Open/Balanced 6.61 19.60
257 Putnam VT George Putnam Fund; IA 4/30/98 Open/Equity 276.49 9.98
258 Putnam VT George Putnam Fund; IB 4/30/98 Open/Equity 38.46 9.98
259 Putnam VT Global Growth Fund; IA 5/1/90 Open/Equity 3,090.97 30.49
260 Putnam VT Global Growth Fund; IB 4/30/98 Open/Equity 28.90 30.41
261 Putnam VT Growth and Income Fund; IA 2/1/88 Open/Balanced 9,572.04 26.80
262 Putnam VT Growth and Income Fund; IB 4/6/98 Open/Balanced 161.53 26.75
263 Putnam VT High Yield Fund; IA 2/1/88 Open/Bond 964.83 11.09
264 Putnam VT High Yield Fund; IB 4/30/98 Open/Bond 17.58 11.08
265 Putnam VT Health and Sciences Fund; IA 4/30/98 Open/Equity 218.73 10.50
266 Putnam VT Health and Sciences Fund; IB 4/30/98 Open/Equity 20.06 10.49
267 Putnam VT Income Fund; IA 2/1/88 Open/Bond 937.78 12.52
268 Putnam VT Income Fund; IB 4/30/98 Open/Bond 18.06 12.51
269 Putnam VT International Growth and Income; IA 1/1/97 Open/Balanced 387.24 15.25
270 Putnam VT International Growth and Income; IB 4/6/98 Open/Balanced 10.65 15.22
271 Putnam VT International New Opportunities Fund; IA 1/1/97 Open/Equity 329.68 23.31
272 Putnam VT International New Opportunities Fund; IB 4/30/98 Open/Equity 32.75 23.28
273 Putnam VT International Growth Fund; IA 1/1/97 Open/Equity 624.44 21.66
274 Putnam VT International Growth Fund; IB 4/30/98 Open/Equity 39.82 21.63
275 Putnam VT Investors Fund; IA 4/30/98 Open/Equity 865.72 15.16
276 Putnam VT Investors Fund; IB 4/30/98 Open/Equity 101.68 15.13
277 Putnam VT Money Market Fund; IA 2/1/88 Open/Bond 816.03 1.00
278 Putnam VT Money Market Fund; IB 4/30/98 Open/Bond 42.95 1.00
279 Putnam VT New Opportunities Fund; IA 5/2/94 Open/Equity 6,430.19 43.54
280 Putnam VT New Opportunities Fund; IB 4/30/98 Open/Equity 62.72 43.44
281 Putnam VT New Value Fund; IA 1/2/97 Open/Equity 249.16 11.86
282 Putnam VT New Value Fund; IB 4/30/98 Open/Equity 9.47 11.85
283 Putnam VT OTC & Emerging Growth Fund; IA 4/30/98 Open/Equity 205.79 22.79
284 Putnam VT OTC & Emerging Growth Fund; IB 4/30/98 Open/Equity 24.08 22.76
285 Putnam VT Research; IA 10/1/98 Open/Equity 133.59 14.69
286 Putnam VT Research; IB 10/1/98 Open/Equity 26.14 14.67
287 Putnam VT Small Cap Value Fund; IA 4/30/99 Open/Equity 12.19 10.31
288 Putnam VT Small Cap Value Fund; IB 4/30/99 Open/Equity 6.35 10.30
289 Putnam VT Utilities Growth and Income Fund; IA 5/1/92 Open/Balanced 946.28 16.97
290 Putnam VT Utilities Growth and Income Fund; IB 4/30/98 Open/Balanced 11.34 16.95
291 Putnam VT Vista Fund; IA 1/2/97 Open/Equity 543.64 20.68
292 Putnam VT Vista Fund; IB 4/30/98 Open/Equity 37.12 20.65
293 Putnam VT Voyager Fund; IA 2/1/88 Open/Equity 9,136.97 66.25
294 Putnam VT Voyager Fund; IB 4/30/98 Open/Equity 155.29 66.11
295 Putnam Worldwide Equity Fund 5/6/98 Open/Equity 18.27 32.74
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
J) Miscellaneous
1. Election and Removal of Directors
Directors of Investment Management Company are elected to office or
removed from office by vote of either stockholders or directors, in
accordance with Articles of Organization and By-Laws of Investment
Management Company.
2. Results of operations
Officers are elected by the Board of Directors. The Board of Directors
may remove any officer without cause.
3. Supervision by SEC of Changes in Directors and Certain Officers
Putnam files certain reports with the SEC in accordance with Sections 203
and 204 of the Investment Advisers Act of 1940, which reports list and
provide certain information relating to directors and officers of
Investment Management Company.
4. Amendment to the Articles of Organization, Transfer of Business and
Other Important Matters.
a. Articles of Organization of Investment Management Company may be
amended, under the General Corporation Law of The Commonwealth of
Massachusetts, by appropriate shareholders' vote.
b. Under the General Corporation Law of The Commonwealth of Massachusetts,
transfer of business requires a vote of 2/3 of the stockholders entitled to
vote thereon.
c. Investment Management Company has no direct subsidiaries.
5. Litigation, etc.
There are no known facts, such as legal proceedings, which are expected
to materially affect the Fund and/or Investment Management Company within
the six-month period preceding the filing of this Registration Statement.
III. OUTLINE OF THE OTHER RELATED COMPANIES
(A) Putnam Fiduciary Trust Company (the Transfer Agent, Shareholder Service
Agent and Custodian)
(1) Amount of Capital
U.S.$44,658,297 (approximately (YEN) 4.6 billion) as of the end of December,
1999
(2) Description of Business
Putnam Fiduciary Trust Company is a Massachusetts trust company and is a
wholly-owned subsidiary of Putnam Investments, Inc., parent of Putnam.
Putnam Fiduciary Trust Company has been providing paying agent and
shareholder service agent services to mutual funds, including the Fund,
since its inception, and custody services since 1990.
(3) Outline of Business Relationship with the Fund
Putnam Fiduciary Trust Company provides transfer agent services,
shareholder services and custody services to the Fund.
(B) Putnam Mutual Funds Corp. (the Principal Underwriter)
(1) Amount of Capital
U.S.$98,565,791 (approximately (YEN) (10.1) billion) as of the end of December,
1999
(2) Description of Business
Putnam Mutual Funds Corp. is the Principal Underwriter of the shares of
Putnam Funds including the Fund.
(3) Outline of Business Relationship with the Fund
Putnam Mutual Funds Corp. provides marketing services to the Fund.
(C) Sakura Friend Securities Co., Ltd. (Distributor in Japan and Agent
Company)
(1) Amount of Capital
(YEN) 26.139 billion as of April 1, 2000
(2) Description of Business
Yamatane Securities Co., Ltd., a diversified securities company in Japan
from its establishment in 1933, and Shineiishino Securities Co., Ltd. have
merged from April 1, 2000 and changed its company name to "Sakura Friend
Securities Co., Ltd.". Sakura Friend Securities Co., Ltd. engages the fund
units for the investment trust funds of Dai-Ichi Kangyo Asset Management
Co., Ltd., Sakura Investment Trust Management Co., Ltd., Nissei Investment
Trust Management Co., Ltd., NCG Investment Trust Management Co., Ltd.,
Nomura Asset Management Co., Ltd., Goldman Sachs Investment Trust
Management Co., Ltd., and Daiwa Asset Management Co., Ltd. etc.. It acts
as the Agent Company and engages in handling the sales and repurchase for
Putnam Europe Growth Fund, Priton Fund (Japan) and Euro Currency Open and
also engages in handling the sales and repurchase for Nomura Global Select
Trust.
(3) Outline of Business Relationship with the Fund
The Company acts as a Distributor in Japan and Agent Company for the Fund
in connection with the offering of shares in Japan.
(D) Capital Relationships
100% of the shares of Putnam Investment Management, Inc. are held by
Putnam Investments, Inc.
(E) Interlocking Directors and Auditors
<TABLE>
<CAPTION>
Names and functions of officers of the Fund who also are officers of the
related companies are as follows:
(as of the filing date)
- --------------------------------------------------------------------------------------
Name of Investment Transfer Agent and
Officer or Management Shareholder Service
Trustee Fund Company Agent
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
George Putnam Chairman and Chairman and None
Trustee Director
- --------------------------------------------------------------------------------------
Charles E. Porter Executive Vice Managing Director None
President
- --------------------------------------------------------------------------------------
Patricia C. Flaherty Senior Vice Senior Vice None
President President
- --------------------------------------------------------------------------------------
Lawrence J. Lasser Trustee and President and None
Vice President CEO
- --------------------------------------------------------------------------------------
Gordon H. Silver Vice President Senior Managing Director
Director
- --------------------------------------------------------------------------------------
Ian C. Ferguson Vice President Senior Managing None
Director
- --------------------------------------------------------------------------------------
Brett C. Browchuk Vice President Managing Director None
- --------------------------------------------------------------------------------------
Edward H. D'Alelio Vice President Managing Director None
- --------------------------------------------------------------------------------------
John R. Verani Vice President Senior Vice None
President
- --------------------------------------------------------------------------------------
Steven Oristaglio Vice President Managing Director None
- --------------------------------------------------------------------------------------
Jennifer Leichter Vice President Managing Director None
- --------------------------------------------------------------------------------------
D. William Kohli Vice President Managing Director None
- --------------------------------------------------------------------------------------
David L. Waldman Vice President Managing Director None
- --------------------------------------------------------------------------------------
Jeffrey A. Kaufman Vice President Senior Vice None
President
- --------------------------------------------------------------------------------------
</TABLE>
IV. FINANCIAL CONDITION OF THE FUND
1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Financial highlights
The financial highlights table is intended to help investors understand
the Fund's recent financial performance. Certain information reflects
financial results for a single Fund share. The total returns represent
the rate that an investor would have earned or lost on an investment in
the Fund, assuming reinvestment of all dividends and distributions.
This information has been derived from the Fund's financial statements,
which have been audited by PricewaterhouseCoopers LLP. Financial statements
included in the Fund's annual report to shareholders for the 1999 fiscal
year are presented in their entirety in this SRS. The Fund's annual report
is available without charge upon request.
Financial highlights (for a share outstanding throughout the period)
Class M
For the period
Dec. 1, 1994+
Year ended September 30 to Sept. 30
-----------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $11.62 $12.67 $12.27 $11.97 $11.34
- -----------------------------------------------------------------------------------------------
Investment operations
Net investment income .87 (c) .96 (c) .82 (c) .86 .78
- -----------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.86) (1.18) .43 .31 .63
- -----------------------------------------------------------------------------------------------
Total from
investment operations .01 (.22) 1.25 1.17 1.41
- -----------------------------------------------------------------------------------------------
Less distributions:
From net investment income (.87) (.67) (.85) (.87) (.65)
- -----------------------------------------------------------------------------------------------
In excess of net
investment income (.02) -- -- -- --
- -----------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.16) -- -- --
- -----------------------------------------------------------------------------------------------
From return of capital (.01) -- -- -- (.13)
- -----------------------------------------------------------------------------------------------
Total distributions (.90) (.83) (.85) (.87) (.78)
- -----------------------------------------------------------------------------------------------
Net asset value,
end of period $10.73 $11.62 $12.67 $12.27 $11.97
- -----------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) .09 (1.97) 10.59 10.12 12.90 *
- -----------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,066,821 $1,019,477 $513,351 $46,327 $14,751
- -----------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.19 1.22 1.24 1.28 1.07 *
- -----------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 7.81 7.69 6.88 7.09 6.30 *
- -----------------------------------------------------------------------------------------------
Portfolio turnover (%) 142.29 188.75 250.93 304.39 235.88
- -----------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(b) The ratio of expenses to average net assets includes amounts paid
through expense offset arrangements.
(c) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
</TABLE>
[The following financial documents are omitted here.]
[In Japanese version, the following financial documents and Japanese
translations thereof are incorporated here.]
Statement of assets and liabilities, September 30, 1999
Statement of operations, Year ended September 30, 1999
Statement of changes in net assets, Year ended September 30, 1999
Financial highlights (For a share outstanding throughout the period)
Notes to financial statements, September 30, 1999
The fund's Portfolio, September 30, 1999
Statement of assets and liabilities, September 30, 1998
Statement of operations, Year ended September 30, 1998
Statement of changes in net assets, Year ended September 30, 1998
Financial highlights (For a share outstanding throughout the period)
Notes to financial statements, September 30, 1998
2. CONDITION OF THE FUND
<TABLE>
<CAPTION>
(a) Statement of Net Assets
(As of the end of December 1999)
- -----------------------------------------------------------------------------------
$ YEN
- -----------------------------------------------------------------------------------
(in thousands)
- -----------------------------------------------------------------------------------
<S> <C> <C>
a. Total Assets 5,219,190,369 534,445,094
- -----------------------------------------------------------------------------------
b. Total Liabilities 1,049,069,055 107,424,671
- -----------------------------------------------------------------------------------
c. Total Net Assets 4,170,121,314 427,020,423
- -----------------------------------------------------------------------------------
(a-b)
- -----------------------------------------------------------------------------------
d. Total Number of Shares
- -----------------------------------------------------------------------------------
Outstanding
- -----------------------------------------------------------------------------------
Class A. 133,379,560 Shares
- -----------------------------------------------------------------------------------
Class B. 152,395,161 Shares
- -----------------------------------------------------------------------------------
Class C. 721,705 Shares
- -----------------------------------------------------------------------------------
Class M. 100,522,048 Shares
- -----------------------------------------------------------------------------------
Class Y. 1,307,697 Shares
- -----------------------------------------------------------------------------------
e. Net Asset Value
- -----------------------------------------------------------------------------------
per Share (c/d)
- -----------------------------------------------------------------------------------
Class A. $10.77 (YEN)1,103
- -----------------------------------------------------------------------------------
Class B. $10.72 (YEN)1,098
- -----------------------------------------------------------------------------------
Class C. $10.75 (YEN)1,101
- -----------------------------------------------------------------------------------
Class M. $10.73 (YEN)1,099
- -----------------------------------------------------------------------------------
Class Y. $10.78 (YEN)1,104
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
(b) Names of Major Portfolio Holdings other than Equity Shares (Top 30 Holdings)
Par Value U.S. Dollar
-------------------------------------------
Kind of Interest Acquisition Current Investment
Name of Securities Issue Maturity Rate (%) (1,000) currency Cost Value Ratio (%)
- ----------------------------------------------------------------------------------------------------------------------
<S><C> <C> <C> <C> <C> <C> <C> <C> <C>
1. U.S. Treasury Note U.S. Government 2004 5 1/4 166,390 USD 162,346,288 159,396,628 3.8
2. U.S. Treasury Note U.S. Government 2009 6 188,200 USD 115,756,009 114,506,250 2.7
3. U.S. Treasury Note U.S. Government 2004 6 93,675 USD 93,404,388 92,210,860 2.2
4. Australia
(Government of) Foreign Bonds 2008 8 3/4 107,585 AUD 126,208,355 78,610,692 1.9
5. Germany (Federal
Republic of) Foreign Bonds 2004 4 1/8 76,200 EUR 75,220,341 74,587,456 1.8
6. United Kingdom
Treasury Foreign Bonds 2000 8 45,395 GBP 47,898,816 74,467,715
7. Sweden (Government of) Foreign Bonds 2014 6 3/4 582,800 SEK 669,133,116 73,830,698 1.8
8. Brazil (Federal
Republic of) Brady Bond 2014 8 92,950 USD 65,150,952 69,833,398 1.7
9. Canada (Government of) Foreign Bonds 2029 5 3/4 86,570 CAD 87,987,165 56,190,049 1.3
10. GNMA U.S. Government 2022-2026 7 1/2 56,578 USD 57,760,521 56,135,807 1.3
11. U.S. Treasury Bonds U.S. Government 2029 6 1/8 58,510 USD 56,346,903 55,776,413 1.3
12. FHLMC U.S. Government 2000 5.73 50,000 USD 49,747,917 49,770,833 1.2
13. United Mexican Sates Brady Bond 2009 10 3/8 44,077 USD 43,479,754 46,787,736 1.1
14. Argentina (Republic
of) Foreign Bonds 2009 11 3/4 45,260 USD 46,334,925 45,260,000 1.1
15. Criimi Mae Commercial
Mortgage Trust
Ser. 98-C1, Class A2 CMO 2011 7 52,200 USD 50,674,781 43,611,469 1.0
16. United Mexican
States Brady Bond 2019 6 1/4 47,500 USD 40,731,250 37,406,250 0.9
17. UBS Finance Corp. Short Term 2000 3 1/2 36,000 USD 65,985,000 35,985,00 0.9
18. GNMA U.S. Government 2024-2027 8 32,074 USD 33,284,608 32,394,916 0.8
19. Brazil (Federal
Republic of) Foreign Bonds 2009 14 1/2 27,638 USD 24,290,382 30,645,014 0.7
20. Federal National
Mortgage Short Term 2000 5.57 30,000 USD 29,531,192 29,910,703 0.7
21. Federal Home Loan
Banks Short Term 2000 5.74 30,000 USD 29,779,967 29,779,967 0.7
22. Bulgaria (Government
of) Brady Bond 2012 2 1/4 41,115 USD 27,074,925 29,500,013 0.7
23. United Kingdom
Treasury Foreign Bonds 2003 10 13,975 GBP 15,735,850 25,227,803 0.6
24. Financing Corp. CMO 2023 6 1/2 28,229 USD 26,399,200 23,429,924 0.6
25. United Kingdom
Treasury Foreign Bonds 2002 9 3/4 11,245 GBP 12,359,379 19,572,974 0.5
26. FHLMC U.S. Government 2017-2028 7 1/2 18,863 USD 19,439,263 18,668,388 0.4
27. Venezuela (Republic) Brady Bond 2020 6 3/4 26,425 USD 22,263,063 17,969,000 0.4
28. Midland Funding II
Corp. Corporate Bonds 2005 11 3/4 16,170 USD 16,476,680 17,461,175 0.4
29. United Mexico states Foreign Bonds 2005 9 3/4 16,780 USD 16,773,959 17,409,250 0.4
30. Millicom International
Cellular S.A.
(Luxembourg) Corporate Bonds 2006 13 1/2 20,070 USD 11,457,135 16,557,750 0.4
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
V. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY
[Omitted, in Japanese version, financial statements of the Investment
Management Company and Japanese translations thereof are incorporated
here.]
[Financial Highlights will appear in this section and, in the Japanese
prospectus, at the beginning of such prospectus as summary of the
prospectus.]
VI. SUMMARY OF INFORMATION CONCERNING FOREIGN INVESTMENT TRUST SECURITIES
1. Transfer of the Shares
The transfer agent for the registered share certificates is Putnam
Fiduciary Trust Company, P.O.Box 41203, Providence, RI 02940-1203,
U. S. A.
The Japanese investors who entrust the custody of their shares to
Distributor or Sales Handling Company shall have their shares transferred
under the responsibility of such company, and the other investors shall make
their own arrangements.
No fee is chargeable for the transfer of shares.
2. The Closing Period of the Shareholders' Book
No provision is made.
3. There are no annual shareholders' meetings. Special shareholders'
meeting may be held from time to time as required by the Agreement and
Declaration of Trust and the Investment Company Act of 1940.
4. No special privilege is granted to Shareholders.
The acquisition of Shares by any person may be restricted.
VII. REFERENCE INFORMATION
The following documents in connection with the Fund were filed with
Director of Kanto Local Finance Bureau of MOF.
June 29, 1999: Semi-annual Report (during the Fifth term)
Amendment to Securities Registration Statement
July 9, 1999: Amendment to Securities Registration Statement
[Final]
[Translation]
SECURITIES REGISTRATION STATEMENT
for NAV Sale
Annual Securities Report
(the Fifth Term)
From: October 1, 1998
To: September 30, 1999
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
PUTNAM DIVERSIFIED INCOME TRUST
[Final]
[Translation]
SECURITIES REGISTRATION STATEMENT
for NAV Sale
PUTNAM DIVERSIFIED INCOME TRUST
SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date of SRS: February 4, 2000
(As amended on February 15, 2000)
(As amended on April 3, 2000)
Name of the Registrant Trust: PUTNAM DIVERSIFIED INCOME TRUST
Name and Official Title Charles E. Porter
of Representative: Executive Vice President
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
- - ii -
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM DIVERSIFIED INCOME TRUST
Offering or Sale of Foreign
Investment Fund Securities:
Type and Aggregate Amount of Up to 1 billion Class M Shares
Foreign Investment Fund Securities Up to the total amount obtained by
to be Publicly Offered or Sold: aggregating the respective net asset
value per Class M Share in respect
of 1 billion Class M Shares
(The Maximum amount expected to be
sold is 10.73 billion U.S. dollars
(approximately (YEN)1,098.8 billion)).
Note 1: U.S.$amount is translated into Japanese Yen at the rate of U.S.
$l.00=(YEN)102.40 the mean of the exchange rate quotations by The Bank
of Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by
telegraphic transfer against yen on 30th December, 1999.
Note 2: The maximum amount expected to be sold is an amount calculated by
multiplying the net asset value per Class M Share as of the end of
December, 1999 (U.S.$10.73) by 1 billion Class M Shares for
convenience.
Places where a copy of this Securities Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Securities Registration Statement in
Japanese is 8 including front and back pages.)
C O N T E N T S
Japanese This
Original English
Translation
PART I. INFORMATION CONCERNING SECURITIES 1 1
PART II. INFORMATION CONCERNING ISSUER 5 7
I. DESCRIPTION OF THE FUND 5 7
II. OUTLINE OF THE TRUST 5 7
III. OUTLINE OF THE OTHER RELATED COMPANIES 5 7
IV. FINANCIAL CONDITION OF THE FUND 5 7
V. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT FUND SECURITIES 5 7
VI. MISCELLANEOUS 5 7
PART III. SPECIAL INFORMATION 7 9
I. OUTLINE OF THE SYSTEM OF INVESTMENT
TRUSTS IN MASSACHUSETTS 7 9
II. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY 13 17
III. FORM OF FOREIGN INVESTMENT
FUND SECURITIES 13 17
PART I. INFORMATION CONCERNING SECURITIES
1. NAME OF FUND: PUTNAM DIVERSIFIED INCOME TRUST
(hereinafter referred to as the "Fund")
2. NATURE OF FOREIGN Five classes of shares (Class A shares,
INVESTMENT FUND Class B shares, Class C shares,
SECURITIES CERTIFICATES: Class M shares and Class Y shares)
Registered share certificate without
par value In Japan, Class M shares
(hereinafter referred to as the "Shares")
are for public offering. No rating
has been acquired.
3. NUMBER OF SHARES TO Up to 1 billion Shares
BE OFFERED FOR SALE
(IN JAPAN)
4. TOTAL AMOUNT OF Up to the total amount obtained by
OFFERING PRICE: aggregating the respective net asset
value per Share in respect of
1 billion Shares
(The maximum amount expected to be
sold is 10.73 billion U.S. dollars
(approximately (YEN)1,098.8 billion)).
Note 1: The maximum amount expected to be sold is the amount calculated,
for convenience, by multiplying the net asset value per Share as
of the end of December, 1999 ($10.73) by the number of Shares
to be offered (1 billion).
Note 2: Dollar amount is translated for convenience at the rate of
$1.00=(YEN)102.40 (the mean of the exchange rate quotations by The Bank
of Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by
telegraphic transfer against yen on 30th December, 1999). The
same applies hereinafter.
Note 3: In this document, money amounts and percentages have been rounded.
Therefore, there are cases in which the amount of the "total column"
is not equal to the aggregate amount. Also, translation into yen
is made simply by multiplying the corresponding amount by the
conversion rate specified and rounded up when necessary. As a
result, in this document, there are cases in which Japanese yen
figures for the same information differ from each other.
5. ISSUE PRICE: The Net Asset Value per Share next
calculated on a Fund Business Day
after the application for purchase
is received by the Fund.
Note: A "Fund Business Day" means a day on which the New York Stock
Exchange is open for business.
6. SALES CHARGE: Subscription charge applicable in
Japan shall be 3.25% of the Net Asset
Value. (0.25% of the Net Asset Value
divided by (1-0.0325) and rounded to
the nearest in the three decimal places
shall be retained by Putnam Mutual Funds
Corp. as the Fund's Principal
Underwriter.) A lower subscription
charge will be applied to purchases
of $50,000 or more.
7. MINIMUM AMOUNT OR The minimum amount for purchase of
NUMBER OF SHARES Shares is 300 shares and in integral
FOR SUBSCRIPTION: multiples of 10 shares.
8. PERIOD OF SUBSCRIPTION: From: 22nd February, 2000 (Tuesday)
To: 21st February, 2001 (Wednesday)
Provided that the subscription is
handled only on a Fund Business Day
and a business day when securities
companies are open for business
in Japan.
9. DEPOSIT FOR SUBSCRIPTION: None.
10. PLACE OF SUBSCRIPTION: Sakura Friend Securities Co., Ltd.
(hereinafter referred to as "Sakura
Friend" or "Distributor")
7-12, Nihonbashi-Kabuto-cho,
Chuo-ku, Tokyo
The Sakura Bank, Limited
3-1, Kudanminami 1-chome,
Chiyoda-ku, Tokyo
Note: The subscription is handled at the head office and the branch
offices in Japan of each of the above-mentioned companies.
11. DATE AND PLACE Investors shall pay the Issue Price
OF PAYMENT: and Sales Charge to Sakura Friend
within 4 business days in Japan from
the day when Sakura Friend confirms
the execution of the order (the "Trade
Day") (see page 16 of the Annual
Securities Report set forth below).
The total issue price for each
Application Day will be transferred
by Sakura Friend to the account of
the Fund at Putnam Fiduciary Trust
Company, the transfer agent, within 4
Fund Business Days (hereinafter
referred to as "Payment Date") from
(and including) the Application Day.
12. OUTLINE OF UNDERWRITING, ETC.:
(A) Sakura Friend undertakes to make a public offering of Shares in
accordance with an agreement dated 19th May, 1997 with Putnam Mutual Funds
Corp. in connection with the sale of the Shares in Japan.
(B) During the public offering period, Sakura Friend will execute or
forward the purchase orders and repurchase requests of the Shares received
directly or indirectly through other Sales Handling Companies (the "Sales
Handling Companies") to the Fund.
Note: Sales Handling Company means a securities agent company and/or
registration agent financial institution which shall conclude
the agreement with a distributor concerning agency business of
units of the Fund, act as agent for a distributor for subscription
or redemption of units of the Fund from investors and handle the
business, etc. concerning receipt of subscription money from
investors or payment of redemption proceeds to investors, etc.
(C) The Fund has appointed Sakura Friend as the Agent Company in Japan.
Note: "The Agent Company" shall mean a financial institution which, under
a contract made with a foreign issuer or a local underwriter of
investment securities, makes public the net asset value per Share
and submits or forwards the financial reports or other documents
to the Japan Securities Dealers Association ("JSDA") and the
Distributor or Sales Handling Companies rendering such other services.
13. MISCELLANEOUS:
(A) Method of Subscription:
Distributor or Sales Handling Company shall provide to the investors a
Contract Concerning a Foreign Securities Transactions Account and other
prescribed contracts ("Account Contract") and the investors submit to
the Distributor or Sales Handling Company an application for requesting
the opening of a transactions account under the Contract. The
subscription amount shall be paid in yen in principal and the yen
exchange rate shall be the exchange rate which shall be based on the
foreign exchange rate quoted in the Tokyo Foreign Exchange Market on the
Trade Day of each subscription and which shall be determined by such
Distributor or Sales Handling Company.
The subscription amount shall be paid in dollars to the account of the
Fund with Putnam Fiduciary Trust Company as transfer agent for the Fund
by Sakura Friend on the Payment Date.
(B) PERFORMANCE INFORMATION
The following information provides some indication of the Fund's risks.
The chart shows year-to-year changes in the performance of the Fund's
class M shares. The table following the chart compares the Fund's
performance to that of three broad measures of market performance. Of
course, a fund's past performance is not an indication of future
performance.
[GRAPHIC OMITTED: vertical bar chart CALENDAR YEAR TOTAL RETURNS FOR
CLASS M SHARES]
Calendar Year Total Returns for class M shares
1990 4.68
1991 23.31
1992 11.96
1993 15.52
1994 -5.82
1995 18.50
1996 8.53
1997 7.87
1998 -2.12
1999 1.85
Performance figures in the bar chart do not reflect the impact of sales
charges. If they did, performance would be less than that shown.
During the periods shown in the bar chart, the highest return for a
quarter was 6.91% (quarter ending 03/ 31 / 91 ) and the lowest return
for a quarter was -5.35% (quarter ending 09 / 30 / 98 ).
Performance of class M shares shown in the bar chart and in the table
following the chart, for periods prior to their inception on 12/1/94, is
derived from the historical performance of the Fund's class A shares
(not offered in Japan), adjusted to reflect the higher operating
expenses of class M shares and, in the table only, the appropriate sales
charge.
Average Annual Total Returns (for periods ending 12/31/99)
- --------------------------------------------------------------------------
Past 1 year Past 5 years Past 10 years
- --------------------------------------------------------------------------
Class M -1.42% 5.99% 7.72%
- --------------------------------------------------------------------------
Lehman Brothers Aggregate
Bond Index -0.82% 7.73% 7.70%
- --------------------------------------------------------------------------
Salomon Brothers
Non-U.S. World Government
Bond Index -5.07% 5.90% 8.60%
- --------------------------------------------------------------------------
First Boston High Yield
Bond Index 3.28% 9.08% 11.06%
- --------------------------------------------------------------------------
Unlike the bar chart, this performance information reflects the impact of
the current maximum initial sales charge. The Fund's performance through
12/31/91 benefited from Putnam Management's agreement to limit the Fund's
expenses. The Fund's performance is compared to the Lehman Brothers
Aggregate Bond Index, an unmanaged index that is frequently used as a broad
market measure for fixed-income securities, the Salomon Brothers Non-U.S.
World Government Bond Index, an unmanaged index of bonds issued by 10
countries, excluding the United States, and the First Boston High Yield
Bond Index an unmanaged index of lower-rated, higher-yielding U.S.
corporate bonds.
(C) FEES AND EXPENSES
This table summarizes the fees and expenses investors may pay if they
invest in the Fund. Expenses are based on the Fund's last fiscal year.
Shareholder Fees
- -------------------------------------------------------------------------------
Class M Shares
- -------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of the offering price) 3.25%
- -------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) (as a percentage of
the original purchase price or redemption proceeds,
whichever is lower) NONE
- -------------------------------------------------------------------------------
Annual Operating Expenses (expenses that are deducted from fund assets)
- -------------------------------------------------------------------------------
Management Distribution Other Total Annual Fund
- -------------------------------------------------------------------------------
Class M 0.54% 0.50% 0.15% 1.19%
- -------------------------------------------------------------------------------
(D) EXAMPLE
This example translates the expenses shown in the preceding table into
dollar amounts. By doing this, investors can more easily compare the
cost of investing in the Fund to the cost of investing in other mutual
funds. The example makes certain assumptions. It assumes that investors
invest $10,000 in the Fund for the time periods shown and then redeem all
shares at the end of those periods. It also assumes a 5% return on
investor's investment each year and that the Fund's operating expenses
remain the same. The example is hypothetical; actual costs and returns
may be higher or lower.
- -------------------------------------------------------------------------------
1 year 3 years 5 years 10 years
- -------------------------------------------------------------------------------
Class M $442 $691 $958 $1,721
- -------------------------------------------------------------------------------
(E) Offerings other than in Japan:
Shares are simultaneously offered in the United States of America.
PART II. INFORMATION CONCERNING ISSUER
I. DESCRIPTION OF THE FUND
The description in this item is same as the description in I. DESCRIPTION
OF THE FUND of the Securities Report set forth below (the Securities Report
mentioned below, from page 1 to page 26)
II. OUTLINE OF THE TRUST
The description in this item is same as the description in II. OUTLINE OF
THE TRUST of the Securities Report set forth below (Ditto, from page 27 to
page 58)
III. OUTLINE OF THE OTHER RELATED COMPANIES
The description in this item is same as the description in III. OUTLINE OF
THE OTHER RELATED COMPANIES of the Securities Report set forth below
(Ditto, from page 59 to page 60)
IV. FINANCIAL CONDITION OF THE FUND
The description in this item is same as the description in IV. FINANCIAL
CONDITION OF THE FUND of the Securities Report set forth below (Ditto, from
page 61 to page 180)
V. SUMMARY OF INFORMATION CONCERNING FOREIGN INVESTMENT FUND SECURITIES
The description in this item is same as the description in V. SUMMARY OF
INFORMATION CONCERNING FOREIGN INVESTMENT FUND SECURITIES of the Securities
Report set forth below (Ditto, page 200)
VI. MISCELLANEOUS
(1) The following documents in connection with the Fund were filed with
Director of Kanto Local Finance Bureau of MOF.
June 29, 1999: Semi-annual Report (during the Fifth term)
Amendment to Securities Registration Statement
July 9, 1999: Amendment to Securities Registration Statement
(2) The ornamental design is used in cover page of the Japanese Prospectus.
(3) The following must be set forth in the Prospectus.
Outline of the Prospectus will be included at the beginning of the
Prospectus, summarizing the content of Part I., Information on the
securities, "I. Descriptions of the Fund", "III. Outline of Other Related
Companies" and "IV. Finanacial Condition of the Fund" in Part II,
Information on the Issuer, of the SRS.
(4) Summarized Preliminary Prospectus will be used.
Attached document (Summarized Preliminary Prospectus) will be used pursuant
to the below, to the extent permitted by applicable law, as the document
(Summarized Preliminary Prospectus) as set forth at Item 1.(1)(b), of
Article 12 of the Ordinance Concerning the Disclosure of the Content, etc.
of the Specified Securities.
(a) The content of the summarized Preliminary Prospectus may be publicized
by leaflets, pamphlets, direct mails (post cards and mails in envelopes) or
at newspapers, magazines, internet and other books.
(b) The layout, quality of papers, printing colour, design etc. of the
Summarized Preliminary Prospectus may vary depending on manner of usage.
Graphs and photos, illustrations and words (catch copies) set forth in the
attached may be used.
(c) For information of the Fund's achievements, the changes of the total
net asset value, the changes of the net asset value per share and the
fluctuation rates since the establishment of the Fund or for the latest 3
months, 6 months, one year, two years, three years or five years and the
likes, the achievements of past distributions, the continuous changes of
sum of the net asset value and the achievements of past distributions, may
be set out in the figures or graphs. Such information regarding the Fund's
achievement may be converted into and presented in yen and the latest
information available at anytime after the filing of the Securities
Registration Statement and the same information represented in the form of
tables or graphs may be set forth. Further, Account Contract and the
associated bylaws in relation to the subscription and payment, etc., of the
Distributor or Sales Handling companies may be presented.
(d) An example of dividend receivable corresponding to a certain amount of
purchase may be mentioned on the basis of historical performance of the
Fund. Such amount of dividend and purchase may be converted to Japanese
yen and may be described as well.
(e) An example of delivery amount corresponding to a certain number of
shares applied may be mentioned on the basis of the historical Net Asset
Value. Such amount of delivery may be converted to Japanese yen and may be
described as well.
PART III. SPECIAL INFORMATION
I. OUTLINE OF THE SYSTEM OF INVESTMENT TRUSTS IN MASSACHUSETTS
Below is an outline of certain general information about open-end U.S.
investment companies. This outline is not intended to provide
comprehensive information about such investment companies or the various
laws, rules or regulations applicable to them, but provides only a brief
summary of certain information which may be of interest to investors. The
discussion below is qualified in its entity by the complete registration
statement of the Fund and the full text of any referenced statutes and
regulations.
I. Massachusetts Business Trusts
A. General Information
Many investment companies are organized as Massachusetts business trusts.
A Massachusetts business trust is organized pursuant to a declaration
of trust, setting out the general rights and obligations of the
shareholders, trustees, and other related parties. Generally, the
trustees of the trust oversee its business, and its officers and agents
manage its day-to-day affairs.
Chapter 182 of the Massachusetts General Laws applies to certain
"voluntary associations", including many Massachusetts business trusts.
Chapter 182 provides for, among other things, the filing of the
declaration of trust with the Secretary of State of the Commonwealth
of Massachusetts and the filing by the trust of an annual statement
regarding, among other things, the number of its shares outstanding
and the names and addresses of its trustees.
B. Shareholder Liability
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of a trust. Typically, a
declaration of trust disclaims shareholder liability for acts or obligations
of the trust and provides for indemnification out of trust property for
all loss and expense of any shareholder held personally liable for the
obligations of a trust. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which a particular trust would be unable to meet
its obligations.
II. United States Investment Company Laws and Enforcement
A. General
In the United States, pooled investment management arrangements which
offer shares to the public are governed by a variety of federal statutes
and regulations. Most mutual funds are subject to these laws.
Among the more significant of these statutes are:
1. Investment Company Act of 1940
The Investment Company Act of 1940, as amended (the "1940 Act"), in
general, requires investment companies to register as such with the U.S.
Securities and Exchange Commission (the "SEC"), and to comply with a
number of substantive regulations of their operations. The 1940 Act
requires an investment company, among other things, to provide periodic
reports to its shareholders.
2. Securities Act of 1933
The Securities Act of 1933, as amended (the "1933 Act"), regulates many
sales of securities. The Act, among other things, imposes various
registration requirements upon sellers of securities and provides for
various liabilities for failures to comply with its provisions or in
respect of other specified matters.
3. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended (the "1934 Act"),
regulates a variety of matters involving, among other things, the
secondary trading of securities, periodic reporting by the issuers
of securities, and certain of the activities of transfer agents and
brokers and dealers.
4. The Internal Revenue Code
An investment company is an entity subject to federal income taxation
under the Internal Revenue Code. However, under the Code, an
investment company may be relieved of federal taxes on income and
gains it distributes to shareholders if it qualifies as a "regulated
investment company" under the Code for federal income tax purposes
and meets all other necessary requirements.
5. Other laws
The Fund is subject to the provisions of other laws, rules, and
regulations applicable to the Fund or its operations, such as,
for example, various state laws regarding the sale of the
Fund's shares.
B. Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction over the
Fund or certain of its operations are the SEC and state
regulatory agencies or authorities.
1. The SEC has broad authority to oversee the application and enforcement
of the federal securities laws, including the 1940 Act, the 1933 Act, and
the 1934 Act, among others, to the Fund. The 1940 Act provides the SEC
broad authority to inspect the records of investment companies, to exempt
investment companies or certain practices from the provisions of the Act,
and otherwise to enforce the provisions of the Act.
2. State authorities typically have broad authority to regulate the
activities of brokers, dealers, or other persons directly or indirectly
engaged in activities related to the offering and sale of securities to
their residents or within their jurisdictions.
C. Offering Shares to the Public
An investment company ("investment company" or "fund") offering its shares
to the public must meet a number of requirements, including, among other
things, registration as an investment company under the 1940 Act; registration
of the sale of its shares under the 1933 Act; registration of the fund, the
sale of its shares, or both, with state securities regulators; delivery
of a current prospectus to current or prospective investors; and so forth.
Many of these requirements must be met not only at the time of the original
offering of the fund's shares, but compliance must be maintained or updated
from time to time throughout the life of the fund.
D. Ongoing Requirements
Under U.S. law, a fund that continuously offers its shares is subject to
numerous ongoing requirements, including, but not limited
to;
1. Updating its prospectus if it becomes materially inaccurate or
misleading;
2. Annual update of its registration statement;
3. Filing semi-annual and annual financial reports with the SEC and
distributing them to shareholders;
4. Annual trustee approval of investment advisory arrangements,
distribution plans, underwriting arrangements, errors and
omissions/director and officer liability insurance, foreign custody
arrangements, and auditors;
5. Maintenance of a code of ethics; and
6. Periodic board review of certain fund transactions, dividend payments,
and payments under a fund's distribution plan.
III. Management of a Fund
The board of directors or trustees of a fund are responsible for generally
overseeing the conduct of a fund's business. The officers and agents of a
fund are generally responsible for the day-to-day operations of a fund.
The trustees and officers of a fund may or may not receive a fee for their
services.
The investment adviser to a fund is typically responsible for implementing
the fund's investment program. The adviser typically receives a fee for
its services based on a percentage of the net assets of a fund. Certain
rules govern the activities of investment advisers and the fees they may
charge. In the United States, investment advisers to investment companies
must be registered under the Investment Advisers Act of 1940, as amended.
IV. Share Information
A. Valuation
Shares of a fund are generally sold at the net asset value next determined
after an order is received by a fund, plus any applicable sales charges.
A fund normally calculates its net asset value per share by dividing the
total value of its assets, less liabilities, by the number of its shares
outstanding. Shares are typically valued as of the close of regular trading
on the New York Stock Exchange (4:00 p.m., New York time) each day the
Exchange is open.
B. Redemption
Shareholders may generally sell shares of a fund to that fund any day the
New York Stock Exchange is open for business at the net asset value next
computed after receipt of the shareholders' order. Under unusual
circumstances, a fund may suspend redemptions, or postpone payment for more
than seven says, if permitted by U.S. securities laws. A fund may charge
redemption fees as described in its prospectus.
C. Transfer agency
The transfer agent for a fund typically processes the transfer of shares,
redemption of shares, and payment and/or reinvestment of distributions.
V. Shareholder Information, Rights and Procedures for the Exercise of Such
Rights
A. Voting Rights
Voting rights vary from fund to fund. In the case of many funds organized
as Massachusetts business trusts, shareholders are entitled to vote on the
election of trustees, approval of investment advisory agreements, underwriting
agreements, and distribution plans (or amendments thereto), certain mergers or
other business combinations, and certain amendments to the declaration of
trust. Shareholder approval is also required to modify or eliminate a
fundamental investment policy.
B. Dividends
Shareholders are typically entitled to receive dividends when and if
declared by a fund's trustees. In declaring dividends, the trustees
will normally set a record date, and all shareholders of record on that
date will be entitled to receive the dividend paid.
C. Dissolution
Shareholders would normally be entitled to receive the net assets of a fund
which were liquidated in accordance with the proportion of the fund's
outstanding shares he owns.
D. Transferability
Shares of a fund are typically transferable without restriction.
E. Right to Inspection
Shareholders of a Massachusetts business trust have the right to inspect
the records of the trust as provided in the declaration of trust or as
otherwise provided by applicable law.
VI. U.S. Tax Matters
The Fund intends to qualify each year as a regulated investment company
under Subchapter M of the United States Internal Revenue Code of 1986, as
amended (the "Code").
As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, the Fund will not be subject to U.S. federal
income tax on any of its net investment income or net realized capital
gains that are distributed to its shareholders. In addition, as a
Massachusetts business trust, the Fund under present Massachusetts law is
not subject to any excise or income taxes in Massachusetts.
In order to qualify as a "regulated investment company" and to receive the
favorable tax treatment accorded regulated investment companies and their
shareholders, the Fund must, among other things, (a) derive at least 90% of
its gross income from dividends, interest, payments with respect to certain
securities loans, and gains from the sale of stock, securities and foreign
currencies, or other income (including but not limited to gains from
options, futures, or forward contracts) derived with respect to its
business of investing in such stock, securities, or currencies; (b)
distribute with respect to each taxable year at least 90% of the sum of its
taxable net investment income, its net tax-exempt income, and the excess,
if any, of its net short-term capital gains over net long-term capital
losses for such year; (c) diversify its holdings so that, at the close of
each quarter of its taxable year, (i) at least 50% of the value of its
total assets consists of cash, cash items, U.S. Government Securities,
securities of other regulated investment companies and other securities
limited generally with respect to any one issuer to not more than 5% of the
total assets of the Fund and not more than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25 % of the value of its
assets is invested in the securities (other than those of the U.S.
Government or other regulated investment companies) of any one issuer or of
two or more issuers which the Fund controls and which are engaged in the
same, similar or related trades or businesses.
If the Fund qualifies as a regulated investment company that is accorded
special tax treatment, the Fund will not be subject to federal income tax
on income paid to its shareholders in the form of dividends (including
capital gain dividends).
If the Fund failed to qualify as a regulated investment company accorded
special tax treatment in any taxable year, the Fund would be subject to tax
on its taxable income at corporate rates, and all distributions from
earnings and profits, including any distributions of net tax-exempt income
and net long-term capital gains, would be taxable to shareholders as
ordinary income. In addition, the Fund could be required to recognize
unrealized gains, pay substantial taxes and interest and make substantial
distributions before requalifying as a regulated investment company that is
accorded special tax treatment.
If the Fund fails to distribute in a calendar year substantially all of its
ordinary income for such year and substantially all of its capital gain net
income for the one-year period ending October 31 (or later if the Fund is
permitted so to elect and so elects), plus any retained amount from the
prior year, the Fund will be subject to a 4% excise tax on the
undistributed amounts. A dividend paid to shareholders by the Fund in
January of a year generally is deemed to have been paid by the Fund on
December 31 of the preceding year, if the dividend was declared and payable
to shareholders of record on a date in October, November or December of
that preceding year. The Fund intends generally to make distributions
sufficient to avoid imposition of the 4% excise tax.
Fund distributions will be taxable to shareholders as ordinary income,
except that any distributions designated by the Fund as deriving from net
gains on securities held for more than one year will be taxable as such,
regardless of how long a shareholder has held shares in the Fund.
Distributions will be taxable as described above whether received in cash
or in shares through the reinvestment of distributions. Shareholders who
are not subject to U.S. federal income tax on their income generally will
not have to pay such tax on amounts distributed to them.
Distributions from capital gains are made after applying any available
capital loss carryovers.
The Fund's transactions in non-U.S. currencies, non-U.S. currency-
denominated debt securities and certain non-U.S. currency options,
futures contracts and forward contracts (and similar instruments) may give
rise to ordinary income or loss to the extent such income or loss results
from fluctuations in the value of the non-U.S. currency concerned.
Investment by the Fund in "passive non-U.S. investment companies" could
subject the Fund to a U.S. federal income tax or other charge on the
proceeds from the sale of its investment in such a company; however, this
tax can be avoided by making an election to mark such investments to market
annually or to treat the passive non-U.S. investment company as a
"qualified electing fund".
A "passive non-U.S. investment company" is any non-U.S. corporation: (i) 75
percent or more of the income of which for the taxable year is passive
income, or (ii) the average percentage of the assets of which (generally by
value, but by adjusted tax basis in certain cases) that produce or are held
for the production of passive income is at least 50 percent. Generally,
passive income for this purpose means dividends, interest (including income
equivalent to interest), royalties, rents, annuities, the excess of gains
over losses from certain property transactions and commodities
transactions, and non-U.S. currency gains. Passive income for this purpose
does not include rents and royalties received by the non-U.S. corporation
from active business and certain income received from related persons.
The Fund's investment in securities issued at a discount and certain other
obligations will (and investments in securities purchased at a discount
may) require the Fund to accrue and distribute income not yet received. In
order to generate sufficient cash to make the requisite distributions, the
Fund may be required to sell securities in its portfolio that it otherwise
would have continued to hold.
The sale, exchange or redemption of Fund shares may give rise to a gain or
loss. In general, any gain or loss realized upon a taxable disposition of
shares will be treated as long-term capital gain or loss if the shares have
been held for more than 12 months, and otherwise as short-term capital gain
or loss. However, any loss realized upon a taxable disposition of shares
held for six months or less will be treated as long-term, rather than
short-term, to the extent of any long-term capital gain distributions
received by the shareholder with respect to the shares. All or a portion
of any loss realized upon a taxable disposition of Fund shares will be
disallowed if other shares of the Fund are purchased within 30 days before
or after the disposition. In such a case, the basis of the newly purchased
shares will be adjusted to reflect the disallowed loss. Shareholders who
are not subject to U.S. federal income tax generally will not have to pay
such tax on gains recognized by them from the sale, exchange or redemption
of Fund shares.
The Fund generally is required to withhold and remit to the U.S. Treasury
31% of the taxable dividends and other distributions paid to any individual
shareholder who fails to furnish the Fund with a correct taxpayer
identification number (TIN), who has under-reported dividends or interest
income, or who fails to certify to the fund that he or she is not subject
to such withholding. Shareholders who fail to furnish their correct TIN
are subject to a penalty of $50 for each such failure unless the failure is
due to reasonable cause and not wilful neglect. An individual's taxpayer
identification number is his or her social security number.
Non-U.S. investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the fund, including the possibility
that distributions may be subject to a 30% United States withholding tax
(or a reduced rate of withholding provided by treaty), the possibility that
a non-U.S. investor may be subject to U.S. tax on capital gain
distributions and gains realized upon the sale of fund shares if the
investor is present in the United States for at least 31 days during the
taxable year (and certain other conditions apply), or the possibility that
a non-U.S. investor may be subject to U.S. tax on income from the fund that
is "effectively connected" with a U.S. trade or business carried on by such
an investor. Shareholders residing in Japan should consult "Tax Treatment
of Shareholders in Japan "on page 38 of the Annual Report.
The Internal Revenue Service recently revised its regulations affecting the
application to foreign investors of the back-up withholding and withholding
tax rules described above. The new regulations generally will be effective
for payment made after December 31, 2000. In some circumstances, the new
rules will increase the certification and filing requirements imposed on
foreign investors in order to qualify for exemption from the 31% back-up
withholding tax rates under income tax treaties. Foreign investors in a
fund should consult their tax advisors with respect to the potential
application of these new regulations.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and related regulations currently in effect. For
the complete provisions, reference should be made to the pertinent Code
sections and regulations. The Code and regulations are subject to change
by legislative or administrative actions. Dividends and distributions also
may be subject to foreign; state or local taxes. Shareholders are urged to
consult their tax advisers regarding specific questions as to U.S. federal,
state or local taxes. The foregoing discussion relates solely to U.S.
federal income tax law.
VII. Important Participants in Offering of Mutual Fund Shares
A. Investment Company
Certain pooled investment vehicles qualify as investment companies under
the 1940 Act. There are open-end investment companies (those which offer
redeemable securities) and closed-end investment companies (any others).
B. Investment Adviser/Administrator
The investment adviser is typically responsible for the implementation
of an investment company's investment program. It, or another affiliated
or unaffiliated entity, may also perform certain record keeping and
administrative functions.
C. Underwriter
An investment company may appoint one or more principal underwriters for
its shares. The activities of such a principal underwriter are generally
governed by a number of legal regimes, including, for example, the 1940
Act, the 1933 Act, the 1934 Act, and state laws.
D. Transfer Agent
A transfer agent performs certain bookkeeping, data processing, and
administrative services pertaining to the maintenance of shareholder
accounts. A transfer agent may also handle the payment of any dividends
declared by the trustees of a fund.
E. Custodian
A custodian's responsibilities may include, among other things,
safeguarding and controlling a fund's cash and securities, handling
the receipt and delivery of securities, and collecting interest and
dividends on a fund's investments.
II. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY
The description in this item is same as the description in II. FINANCIAL
CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of the Securities Report
set forth below (Ditto, from page 181 to page 199)
III. FORM OF FOREIGN INVESTMENT FUND SECURITIES
Main items to be set forth on the share certificate of the Fund (if issued)
are as follows:
(1) Front
a. Name of the Fund
b. Number of shares represented
c. Signatures of the Chairman and Transfer Agent
d. Description stating that the Declaration of Trust applies to
shareholders and assignees therefrom
(2) Back
a. Space for endorsement
b. Description concerning delegation of transfer agency
[Final]
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(NAV Sale)
PUTNAM DIVERSIFIED INCOME TRUST
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date of SRS: February 4, 2000
Name of the Registrant Trust: PUTNAM DIVERSIFIED INCOME TRUST
Name and Official Title Charles E. Porter
of Representative: Executive Vice President
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
- - ii -
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM DIVERSIFIED INCOME TRUST
Offering or Sale of Foreign
Investment Fund Securities:
Type and Aggregate Amount of Up to 1 billion Class M Shares
Foreign Investment Fund Securities Up to the total amount obtained
to be Publicly Offered or Sold: by aggregating the respective net
asset value per Class M Share in
respect of 1 billion Class M Shares
(The Maximum amount expected to
be sold is 11.46 billion U.S.
dollars (approximately
(YEN)1,173.5 billion).
Note 1: U.S.$amount is translated into Japanese Yen at the rate of
U.S.$l.00=(YEN)102.40 the mean of the exchange rate quotations
by The Bank of Tokyo-Mitsubishi, Ltd. for buying and selling spot
dollars by telegraphic transfer against yen on 30th December, 1999.
Note 2: The maximum amount expected to be sold is an amount calculated by
multiplying the net asset value per Class M Share as of the end of
December, 1998 (U.S.$11.46) by 1 billion Class M Shares for
convenience.
Places where a copy of this Amendment to the Securities Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Amendment to Securities Registration
Statement in Japanese is 2 including front and back pages.)
I. REASON FOR FILING THIS AMENDMENT TO SECURITIES REGISTRATION STATEMENT:
This statement amends and updates the relevant information of the
Securities Registration Statement ("SRS") filed on February 5, 1999 due to
the fact that the aforementioned Securities Report was filed today.
The exchange rates used in this statement to translate the amended amounts
of foreign currencies are different from those used before these
amendments, as the latest exchange rates are used in this statement.
II. CONTENTS OF THE AMENDMENTS (the page numbers refer to those of the
Japanese original)
Part II. INFORMATION CONCERNING ISSUER
(page 4 of the original Japanese SRS)
The following matters in the original Japanese SRS are amended to have the
same contents as those provided in the following items of the
aforementioned Securities Report:
Before amendment After amendment
[Original Japanese SRS] [Aforementioned Annual Securities Report]
I. DESCRIPTION OF THE FUND I. DESCRIPTION OF THE FUND (the
aforementioned Japanese Annual
Securities Report, from page 1
to page 26)
II. OUTLINE OF THE FUND II. OUTLINE OF THE TRUST
(Ditto, from page 27 to page 58)
III. OUTLINE OF THE OTHER III. OUTLINE OF THE OTHER
RELATED COMPANIES RELATED COMPANIES (Ditto, from
page 59 to page 60)
IV. FINANCIAL CONDITIONS OF IV. FINANCIAL CONDITIONS OF
THE FUND THE FUND (Ditto, from page 61 to page 180)
V. SUMMARY OF INFORMATION VI. SUMMARY OF INFORMATION
CONCERNING THE EXERCISE OF CONCERNING THE EXERCISE OF
RIGHTS BY HOLDERS OF FOREIGN RIGHTS BY HOLDERS OF FOREIGN
INVESTMENT FUND SECURITIES INVESTMENT FUND SECURITIES
(Ditto, page 200)
VI. MISCELLANEOUS VII. REFERENCE INFORMATION
Note 1: U.S.$amount is translated into Japanese Yen at the rate of
U.S.$1 = (YEN)102.40, the mean of the exchange rate quotations
at The Bank of Tokyo-Mitsubishi, Ltd. for buying and selling
spot dollars by telegraphic transfer against yen on 30th
December, 1999, for convenience.
Note 2: In this document, money amounts and percentages have been rounded.
Therefore, there are cases in which the amount of the "total column"
is not equal to the aggregate amount. Also, translation into yen is
made simply by multiplying the corresponding amount by the conversion
rate specified and rounded up when necessary. As a result, in this
document, there are cases in which Japanese yen figures for the same
information differ from each other.
Note 3: In this Report, "fiscal year" refers to a year from October 1
to September 30 of following year.
Part III. SPECIAL INFORMATION
(Ditto, page 6)
II. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of the
Original SRS is amended to have the same contents as those provided
in V. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of
the aforementioned Securities "Report:
