[H & M Final]
[Translation]
SECURITIES REGISTRATION STATEMENT
ANNUAL SECURITIES REPORT
(THE FOURTH FISCAL YEAR)
FROM: JULY 1, 1997
TO: JUNE 30, 1998
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
PUTNAM EUROPE GROWTH FUND
SECURITIES REGISTRATION STATEMENT
PUTNAM EUROPE GROWTH FUND
SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing
Date: December 18, 1998
Name of the Registrant Trust: PUTNAM EUROPE GROWTH FUND
Name of Trustees: George Putnam
William F. Pounds
Jameson A. Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin, III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
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 EUROPE GROWTH FUND
Offering or Sale of Foreign
Investment Fund Securities:
Type and Aggregate Amount of Up to 30 million Class M Shares.
Foreign Investment Fund Securities Up to the total amount obtained by
to be Publicly Offered or Sold: aggregating the net asset value
per Class M Share in respect of
30 million Class M Shares
(The maximum amount expected to be
sold is 627.9 million U.S.
dollars (73.2 billion.)
Note 1: U.S.$ amount is translated into Japanese Yen at the
rate of U.S.$l.00=116.50, 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 October 30, 1998.
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 October 30, 1998 (U.S.$20.93) by 30 million
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 is 17)
C O N T E N T S
Japanese This
OriginalEnglish
Translation
PART I. INFORMATION CONCERNING SECURITIES 1 1
PART II. INFORMATION CONCERNING ISSUER 4 6
I. DESCRIPTION OF THE FUND 4 6
II. OUTLINE OF THE FUND 4 6
III. OUTLINE OF THE OTHER RELATED COMPANIES 4 6
IV. FINANCIAL CONDITION OF THE FUND 4 6
V. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT TRUST SECURITIES 4 6
VI. MISCELLANEOUS 4 6
PART III. SPECIAL INFORMATION 6 8
I. OUTLINE OF THE REGULATORY SYSTEM IN
THE UNITED STATES 6 8
II. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY 12 14
III. FORM OF FOREIGN INVESTMENT
FUND SECURITIES 12 14
PART I. INFORMATION CONCERNING
SECURITIES
1. NAME OF FUND: PUTNAM EUROPE GROWTH FUND
(hereinafter referred to as the
"Fund")
2. NATURE OF FOREIGN Three
classes of shares (Class A
shares, Class B
INVESTMENT FUND SECU- shares
and Class M shares) being all
registered
RITIES CERTIFICATES:
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
30 million Shares
BE OFFERED FOR SALE
(IN JAPAN)
4. TOTAL AMOUNT OF Up to
the total amount obtained by
aggregating the
OFFERING PRICE:
the respective net asset value
of each Share in respect of 30
million Shares
(The maximum amount expected to be
sold is 627.9 million U.S.
Dollars (73.2 billion).
Note 1: The maximum amount expected to be sold is the
amount calculated, for convenience, by multiplying
the larger of the net asset value per Share of Class
M Shares as of October 30, 1998 ($20.93) by the
number of Shares to be offered (30 million).
Note 2: Dollar amount is translated, for convenience,
at the rate of $1.00=116.50 (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 October 30,
1998). 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 rounding
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 after the application
for purchase is received by the
Fund.
6. SALES CHARGE: Class M Shares:
Sales charge (in Japan) is 3.50% of
the net asset value.
Note: From the above amount, 0.50% of the amount
calculated by dividing the net asset value by (1-
0.035) and rounded to three decimal places will be
retained by Putnam Mutual Funds Corp.
7. MINIMUM AMOUNT OR The
minimum amount for purchase of
NUMBER OF SHARES Shares
is 100 Shares. Shares may be
purchased in
FOR SUBSCRIPTION:
integral multiples of 10 Shares.
8. PERIOD OF SUBSCRIPTION: From:
January 4, 1999 (Monday)
To:
July 2, 1999 (Friday)
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.
Note:A "Fund Business Day" means a day on which the New
York Stock Exchange is open for business.
9. DEPOSIT FOR SUBSCRIPTION:
None.
10. PLACE OF SUBSCRIPTION:
Yamatane Securities Co., Ltd.
(hereinafter referred to as "
Yamatane" or the "Distributor")
7-12,
Nihonbashi-kabutocho,
Chuo-ku, Tokyo
Note:The subscription is handled at the head office and
the branch offices in Japan of the above-mentioned
securities company.
11. DATE AND PLACE
Investors shall pay the Issue
Price and Sales
OF PAYMENT: Charge
to Yamatane within 4 business
days in Japan from the day when
Yamatane confirms the execution
of the order (the "Trade Day").
The
total issue price for each
Application Day will be
transferred by Yamatane 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) Yamatane undertakes to make a public offering of
Shares in accordance with an agreement dated June 19,
1998 with Putnam Mutual Funds Corp. in connection with
the sale of the Shares in Japan.
(B) Yamatane will execute or forward purchase orders and
repurchase requests relating to the Shares received
directly or indirectly through other sales and repurchase
handling companies (together with the Distributor,
hereinafter referred to as the "Sales Handling
Companies") to the Fund.
Note: The "Sales Handling Company" mean a securities agent
company and/or registration agent financial institution
which shall conclude the agreement with a Distributor
concerning agency business of shares of the Fund, act
as agent for a Distributor for subscription or
repurchase of shares of the Fund from investors and
handle the business, etc. concerning receipt of
subscription money from investors or payment of
repurchase proceeds to investors, etc.
(C) The Fund has appointed Yamatane as the Agent Company
in Japan.
Note: The "Agent Company" shall mean a company which, under a
contract made with a foreign issuer 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 other Sales Handling Companies rendering
such other services.
13. MISCELLANEOUS:
(A) Method of Subscription:
Investors who subscribe to Shares shall enter into
with a Sales Handling Company an agreement concerning
transactions of foreign securities. A Sales Handling
Company shall provide to the investors a Contract
Concerning a Foreign Securities Transactions Account and
other prescribed contracts ("Contracts") and the
investors shall submit to the Sales Handling Company an
application for requesting the opening of a transactions
account under the Contracts. The subscription amount
shall be paid in yen in principle and the yen exchange
rate shall be the foreign exchange rate quoted in the
Tokyo Foreign Exchange Market on the Trade Day of each
subscription, which shall be determined by such Sales
Handling Company.
The subscription amount shall be paid in dollars to
the account of the Fund with Putnam Fiduciary Trust
Company as custodian for the Fund by Yamatane 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 one of the fund's classes
of shares, class A shares. The table following the chart
compares the fund's performance to that of a broad
measure of market performance. Of course, the fund's
past performance is not an indication of future
performance.
Calendar year total returns for class A shares
1991 1992 1993 1994 1995 1996 1997
14.16% -1.34% 31.05% 6.44% 21.24% 22.67% 21.96%
Performance figures in the bar chart do not reflect
the impact of sales charges. If they did, performance
would be less than that shown. Year-to-date performance
through 9/30/98 was 3.92%. During the periods shown in
the bar chart, the highest return for a quarter was
11.67% (quarter ending 6/30/95) and the lowest return for
a quarter was
-5.15% (quarter ending 9/30/92).
Average Annual Total Returns (for periods ending
12/31/97)
Past 1 year Past 5 years Since Inception
*
Class M 17.05% NA 19.92%
MSCI Europe 23.80% 19.25 13.15%
Index
* Inception date: 12/1/94
Unlike the bar chart, this performance information
reflects the impact of the current maximum initial sales
charges. The fund's performance is compared to the Morgan
Stanley Capital International Europe Index (MSCI), an
unmanaged list of approximately 627 equity securities
originating in one of the fifteen European countries.
(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 3.50%
Purchases
(as a percentage of the offering price)
Maximum Deferred Sales Charge (Load) (as a NONE
percentage of the original purchase price or
redemption proceeds, whichever is lower)
Annual Operating Expenses (expenses that are deducted
from fund assets)
Management Distribution Other Total Annual
Fund
Class M 0.75% 0.75% 0.32% 1.82%
(D) EXAMPLE
This example translates the "total annual fund
operating expenses" shown in the preceding table into
dollar amounts. By doing this, investors can 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 $528 $902 $1,301 $2,412
(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 Annual Securities
Report (The Fourth Fiscal Year) attached hereafter.
II. OUTLINE OF THE FUND
The description in this item is same as the description
in II. OUTLINE OF THE FUND of the Annual Securities
Report (The Fourth Fiscal Year) attached hereafter.
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
Annual Securities Report (The Fourth Fiscal Year)
attached hereafter.
IV. FINANCIAL CONDITIONS OF THE FUND
The description in this item is same as the description
in IV. FINANCIAL CONDITIONS OF THE FUND of the Annual
Securities Report (The Fourth Fiscal Year) attached
hereafter.
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 Annual Securities
Report (The Fourth Fiscal Year) attached hereafter.
VI. MISCELLANEOUS
(1) The following documents in relation to the Fund were
filed with the Minister of Finance or the Director of
Kanto Local Finance Bureau (sinde June 22, 1998).
June 15, 1998: Securities Registration
Statement
June 22, 1998: Amendment to Securities
Registration Statement
July 1, 1998: 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. Financial 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, 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 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. Photos and
illustrations set forth in the attached may be used.
(c) For information of the Fund's achievements, 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 may be set out in the
figures or graphs. Such information regarding the
Fund's achievement may be converted into and presented
in yen.
PART III. SPECIAL INFORMATION
I. OUTLINE OF THE REGULATORY SYSTEM IN THE UNITED STATES
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 entirely 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 offering and sale of
securities to their residents or within their
jurisdictions and the activities of brokers,
dealers, or other persons directly or indirectly
engaged in related activities.
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 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 (generally 4:00 p.m., New York time) each
day the Exchange is open.
B. Redemption
Shareholders may generally sell shares of an open-
end fund to that fund any day the fund 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 days, 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 a
pro rata portion of the net assets of a fund upon its
liquidation.
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",
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 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 foreign currencies, foreign
currency-denominated debt securities and certain foreign
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 foreign currency concerned.
Investments by the Fund in "passive foreign 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 foreign investment company as
a "qualified electing fund".
A "passive foreign investment company" is any foreign
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
foreign currency gains. Passive income for this purpose does
not include rents and royalties received by the foreign
corporation from active business and certain income received
from related persons.
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.
Special tax rules apply to investments though defined
contribution plans and other tax-qualified plans.
Shareholders should consult their tax adviser to determine the
suitability of shares of the Fund as an investment through
such plans and the precise effect of an investment on their
particular tax situation.
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.
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 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 state 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. 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 more than 182 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", above.
(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
Deloitte & Touche LLP is responsible for this part.
Japanese translation of fiscal 1997 and 1998 and the
interim financial statement are attached to the Japanese
version of the Annual Securities Report.
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
[Translation]
ANNUAL SECURITIES REPORT
(THE FOURTH FISCAL YEAR)
FROM: JULY 1, 1997
TO: JUNE 30, 1998
PUTNAM EUROPE GROWTH FUND
ANNUAL SECURITIES REPORT
(The Fourth Fiscal Year)
From: July 1, 1997
To: June 30, 1998
To: Director of Kanto Local Finance Bureau
Filing
Date: December 18, 1998
Name of the Registrant Trust: PUTNAM EUROPE GROWTH
FUND
Name of Trustees: George Putnam
William F. Pounds
Jameson A. Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin, III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
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 is 77.)
C O N T E N T S
Japanese This
OriginalEnglish
Translation
I. DESCRIPTION OF THE FUND 1 1
1. GENERAL INFORMATION 1 1
2. INVESTMENT POLICY 6 5
3. MANAGEMENT STRUCTURE 10 13
4. INFORMATION CONCERNING THE EXERCISE OF
RIGHTS BY SHAREHOLDERS, ETC. 20 25
5. STATUS OF INVESTMENT PORTFOLIO 22 30
II. OUTLINE OF THE FUND 25 32
III. OUTLINE OF THE OTHER RELATED COMPANIES 64 66
IV. FINANCIAL CONDITION OF THE FUND 66 68
V. FINANCIAL CONDITION OF THE INVESTMENT
MANAGEMENT COMPANY 128 74
VI. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT TRUST SECURITIES 149 74
VII. REFERENCE INFORMATION 149 74
Note 1: U.S.$ amount is translated into Japanese Yen at the
rate of U.S.$l.00=116.50, 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 October 30, 1998.
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
July 1 to June 30 of the following year. However, the
first fiscal year refers to a period from December 1,
1994 (Incorporation of the Fund) to June 30, 1995.
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 Europe Growth Fund (the
"Fund")
(2) Form of the Fund
Putnam Europe Growth Fund is a Massachusetts
business trust organized on November 10, 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 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 may
also offer 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, 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
choose to redeem the shareholders' shares. Shareholders
will receive at least 30 days' written notice before the
Fund redeems their 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.
(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 United States 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
The Fund intends to qualify as a "regulated
investment company" for federal income tax purposes
and to meet all other requirements 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 offering and sale of
securities to their residents or within their
jurisdictions and the activities of brokers,
dealers, or other persons directly or indirectly
engaged in related activities.
(C) Objects and Basic Nature of the Fund:
GOAL
The Fund seeks capital appreciation.
MAIN INVESTMENT STRATEGIES- EUROPEAN GROWTH AND VALUE
STOCKS
Under normal market conditions, the Fund will seek
its goal by investing mostly in common stocks issued by
European companies.
The Fund may invest in both growth and value stocks.
Growth stocks are issued by companies whose earnings the
Investment Management Company believes are likely to grow
faster than the economy as a whole. Growth in earnings
may lead to an increase in the price of the stock. Value
stocks are those that the Investment Management Company
believes are currently undervalued compared to their true
worth. If the Investment Management Company is correct
and other investors recognize this discount, the price of
the stock may rise. The Fund invests mainly in medium
and large-sized companies, although it can invest in
companies of any size. Although the Fund emphasizes
investments in developed countries, it may also invest in
companies located in emerging markets, such as those in
Eastern Europe.
MAIN RISKS
The main risks that could adversely affect the value
of this Fund's shares and the total return on investor's
investment include;
- The risks of investing outside the United States,
such as currency fluctuations, economic or financial
instability, or unfavorable political or legal
developments in foreign markets. These risks are
increased when investing in emerging markets.
- The risk of investing mostly in one geographic
region. Investments in a single region, even though
representing a number of different countries within
the region, may be affected by common economic
forces and other factors. The vulnerability of the
Fund to factors affecting European investments will
be significantly greater than of a more
geographically diversified fund, which may result in
greater losses and volatility.
- The risk that the stock price of one or more of the
companies in the Fund's portfolio will fall, or will
fail to appreciate as anticipated by the Investment
Management Company. Many factors can adversely
affect a stock's performance. This risk is
generally greater for small and medium-sized
companies, which tend to be more vulnerable to
adverse developments.
- The risk that movements in the securities markets
will adversely affect the price of the Fund's
investments, regardless of how well the companies in
which the Fund invests perform.
Investors 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 of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation
or any other government agency.
(D) History of the Fund:
November 10, 1988:
Organization of the Fund as a
Massachusetts business trust.
Adoption of the Agreement and
Declaration of Trust.
July 13, 1990:
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) Yamatane 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.
Related Companies of the Fund
Fund
Putnam Europe Growth Fund
Investor Servicing
Agreement
Trustees
(Agreement and
Declaration of Trust)
Distribution 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 Management Contract
Agreement
Distributor in Japan Investment
Agent Company Management Company
Yamatane Securities Co., Ltd. Putnam Investment Management, Inc.
(forwarding of sales in Japan (acts as investment management of
and rendering of service as the Fund and investment advisor
agent company) concerning the Fund's assets)
2. INVESTMENT POLICY
(A) Basic Policy for Investment and Objects of Investment
(including risk factors):
Any investment carries with it some level of risk
that generally reflects its potential for reward. The
Fund pursues its goal of capital appreciation by
investing mainly in growth and value stocks issued by
European companies . The Investment Management Company
will consider, among other things, a company's financial
strength, competitive position in its industry and
projected future earnings and dividends when deciding
whether to buy or sell investments. A description of the
risks associated with the Fund's main investment
strategies follows.
COMMON STOCKS
Common stock represents an ownership interest in a
company. The value of a company's stock may fall as a
result of factors relating directly to that company, such
as decisions made by its management or lower demand for
the company's products or services. Similarly, a stock's
value may fall because of factors affecting not just the
company, but companies in a number of different
industries, such as increases in production costs. The
value of a company's stock may also be affected by
changes in financial market conditions that are
relatively unrelated to the company or its industry, such
as changes in interest rates or currency exchange rates.
In addition, a company's stock generally pays dividends
only after the company makes required payments to holders
of its bonds and other debt. For this reason, the value
of the stock will usually react more strongly than the
bonds and other debt to actual or perceived changes in
the company's financial condition or prospects.
GROWTH STOCKS
The Fund may invest in stocks of companies that the
Investment Management Company believes have earnings that
will grow faster than the economy as a whole. Theses
growth stocks typically trade at higher multiples of
current earnings than other stocks. Therefore, the
values of growth stocks may be more sensitive to changes
in current or expected earnings than the values of other
stocks. If the Investment Management Company's
assessment of the prospects for the company's earnings
growth is wrong, or if its judgment of how other
investors will value the company's earnings growth is
wrong, than the price of the company's stock may fall or
not approach the value that the Investment Management
Company has placed on it.
VALUE STOCKS
The Fund may also invest in companies that are not
expected to experience significant earnings growth, but
whose stock the Investment Management Company believes is
undervalued compared to its true worth. These companies
may have experienced adverse business developments or may
be subject to special risks that have caused their stocks
to be out of favor. If the Investment Management
Company's assessment of a company's prospects is wrong,
or if other investors do not eventually recognize the
value of the company, then price of the company's stock
may fall or may not approach the value that the
Investment Management Company has placed on it.
NON-U.S. INVESTMENTS
The Fund may invest without limit in securities of
non-U.S. issuers. Non-U.S. investments involve certain
special risks, including;
- Unfavorable changes in currency exchange rates: Non-
U.S. investments are normally issued and traded in
non-U.S. currencies. As a result, their values may
be affected by changes in the exchange rates between
particular 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 transport 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 comparable to those in the United States.
- Limited legal recourse: Legal remedies for investors
such as the Fund may be more limited than those
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 domestic investments, which means the
Fund may at times be unable to sell these non-U.S.
investments at desirable prices. For the same
reason, the Fund may at times find it difficult to
value its non-U.S. investments.
- Trading practices: Brokerage commissions and other
fees are generally higher for non-U.S. investments
than for domestic investments. The procedures and
rules for settling non-U.S. transactions may also
involve delays in payment, delivery or recovery of
money or investments.
Common stocks of non-U.S. companies have
historically offered lower dividends than comparable U.S.
companies. Foreign withholding taxes may further reduce
the amount of income available to distribute to
shareholders of the Fund. The Fund's yield is therefore
expected to be lower than yields of most funds that
invest mainly in common stocks of U.S. companies.
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 foreign markets, or to investments in U.S.
companies that have significant non-U.S. operations.
Special U.S. tax considerations may apply to the Fund's
non-U.S. investments.
EMERGING MARKETS
The risks of non-U.S. investments are typically
increased in emerging markets. For example, political
and economic structures in these countries may be young
and developing 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.
GEOGRAPHIC FOCUS
The Fund considers the following to be "European
companies"
- companies organized under the laws of a European
country with a principal office in a European
country;
- companies that earn 50% or more of their total
revenues from business in Europe; or
- companies whose common stock is traded principally
on securities exchange in Europe.
The Fund anticipates that under normal market
conditions it will invest 85% of its assets in European
companies and at least 65% of its assets will be invested
in securities of issuers that meet at least one of the
first two of these criteria.
Developments in European economies will generally
have a greater effect on the Fund than if it were more
geographically diversified, which may result in greater
losses and volatility. This risk may be heightened by
efforts of the member countries of the European Union to
unify their economic and monetary policies. This may
increase the potential for similarities in the movement
of European markets and reduce the benefits of
diversification within the region.
DERIVATIVES
The Fund may engage in a variety of transactions
using "derivatives" such as futures, options, warrants,
forwards 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, indexes or currencies.
Derivatives may be traded on organized exchanges, or in
individually negotiated transactions with other parties
(those are known as "over the counter"). The Fund may
use derivatives both for hedging and non-hedging
purposes.
Derivatives involve special risks and costs and may
result in losses to the Fund. The successful use of
derivatives requires sophisticated management and the
Fund will depend on the Investment Management Company's
ability to analyze and manage derivatives transactions.
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 to the Fund. The
Fund's 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 will not be liquid. Over-the-
counter instruments also involve the risk that the other
party will not meet its obligations to the Fund.
SMALLER COMPANIES
The Fund can invest in small and medium-sized
companies, including companies with market
capitalizations of less than $500 million. These
companies are more likely than larger companies to have
limited product lines, markets or financial resources, or
to depend on a small, inexperienced management group.
Stocks of these companies may trade less frequently and
in limited volume, and their prices may fluctuate more
than stocks of other companies. Stocks of these
companies may therefore be more vulnerable to adverse
developments than those of larger companies.
OTHER INVESTMENTS
In addition to the main investment strategies
described above, the Fund may also make other types of
investments, such as investments in preferred stocks,
convertible securities and fixed income securities and,
therefore, may be subject to other risks.
ALTERNATIVE STRATEGIES
At times the Investment Management Company may judge
that market conditions make pursuing the Fund's
investment strategies inconsistent with the best
interests of its shareholders. The Investment Management
Company then may temporarily use alternative strategies
that are mainly designed to limit the Fund's losses,
including investing solely in the United States. Although
the Investment Management Company has the flexibility to
use these strategies, it may choose not to 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) Restrictions of Investment:
Except as otherwise specifically designated, the
investment restrictions described in this document are
not fundamental investment restrictions. The Trustees
may change any non-fundamental restrictions without
shareholder approval. 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) Borrow money in excess of 10% 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, and then only from banks as a
temporary measure to facilitate the meeting of redemption
requests (not for leverage) which might otherwise require
the untimely disposition of portfolio investments or for
extraordinary or emergency purposes. Such borrowings
will be repaid before any additional investments are
purchased.
(2) 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 certain federal securities laws.
(3) 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 representing 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.
(4) 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.
(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) 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.
(7) With respect to 75% of its total assets, acquire
more than 10% of the outstanding voting securities of any
issuer.
(8) Purchase securities (other than securities of the
U.S. government) if as a result of such purchase more
than 25% of the Fund's total assets would be invested in
any one industry.
(9) Issue any class of securities which is senior to the
Fund's shares of beneficial interest, except for
permitted borrowings.
Although certain of the Fund's fundamental
investment restrictions permit it to borrow money to a
limited extent, it does not currently intend to do so and
did not do so last year.
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 of the Fund are
represented at the meeting in person or by proxy.
IT IS CONTRARY TO THE FUND'S PRESENT POLICY, WHICH MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL, TO:
Invest in (a) securities which are not readily
marketable, (b) securities restricted as to resale
(excluding securities determined by the Trustees (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.
In addition, the Fund will, so long as shares of the
Fund are being offered for sale by the Fund in Japan and
such standards are required as a condition of such offer
for sale, comply with the following standards of
selection of the Japan Securities Dealers Association.
1. The Fund may not 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 federal securities
laws;
2. The Fund may not make short sales of securities or
maintain a short position for the account of the Fund
unless at all times when a short position is open it owns
an equal amount of such securities or owns securities
which, without payment of any further consideration, are
convertible into or exchangeable for securities of the
same issue as, and equal in amount to, the securities
sold short;
3. The Fund may not borrow money in excess of 10% 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 and then only from
banks, or, if approved by the Securities and Exchange
Commission and the shareholders of the Fund, from another
Putnam Fund, as a temporary measure to facilitate the
meeting of redemption requests (not for leverage) which
might otherwise require the untimely disposition of
portfolio investments or for extraordinary or emergency
purposes. Such borrowings will be repaid before any
additional investments are purchased;
4. The Fund may not invest in 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;
5. The Fund may not acquire more than 10% of the
outstanding voting securities of any issuer and may not
acquire more than 15% of the outstanding voting
securities of any issuer together with other mutual funds
managed by Putnam Investment Management, Inc.;
6. The Fund may not invest in the securities of other
registered open-end investment funds or companies, except
as they may be acquired as part of a merger,
consolidation or acquisition of assets;
7. The Fund may not invest more than 10% of the net
assets of the Fund in securities which are not traded on
an official stock exchange or other regulated market,
operating regularly and being recognized and open to the
public (which shall include, without limitation, the
National Association of Securities Dealers Automated
Quotation System). This restriction shall not be
applicable to securities determined by Putnam Investment
Management, Inc. to be liquid and for which a market
price (including a dealer quotation) is generally
obtainable or determinable;
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.
All percentage limitations on investments (other
than pursuant to non-fundamental restriction (1)) 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.
(C) Distribution Policy:
The Fund distributes any net investment income and
any net realized capital gains at least annually.
Distributions from net investment income, if any, are
expected to be small. Distributions from capital gains
are made after applying any available capital loss
carryovers. The payment to Japanese investors may be
made, in principle, in accordance with the record date in
December each year by Yamatane.
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, Rev. Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, the Fourth of July, Labor Day, Thanksgiving and
Christmas. The Fund determines the net asset value of
each class 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.
Securities for which market quotations are readily
available are valued 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. All other securities and assets are valued
at their fair value following procedures approved by the
Trustees. Liabilities are deducted from the total value
of the assets attributable to a class, and the resulting
amount is divided by the number of shares of the class
outstanding.
Reliable market quotations are not considered to be
readily available for long-term corporate bonds and
notes, certain preferred stocks, tax-exempt securities,
and certain foreign securities. These investments are
valued at fair value on the basis of valuations furnished
by pricing services, 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 which 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 using 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
foreign 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 using procedures approved by the
Trustees.
B. Management Fee, etc.:
(1) Management Fee:
(a) Management and Agent Securities Company Fees
Under a Management Contract dated October 21, 1996,
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 0.80% of the first $500
million of average net assets, 0.70% of the next $500
million, 0.65% of the next $500 million, 0.60% of the
next $5 billion, 0.575% of the next $5 billion, 0.555% of
the next $5 billion, 0.540% of the next $5 billion, and
0.530% thereafter.
For the fiscal year ending on June 30, 1998, 1997
and 1996, the Fund paid $6,715,370, $2,875,190 and
$1,411,198, respectively, as a management fee.
(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 June 30, 1998, the
Fund paid $2,339,412 as a custodian fee and investor
servicing agent fee.
(c) Fees under Class M Distribution Plans
The Class M distribution plans provide for payments
by the Fund to Putnam Mutual Funds Corp. at the annual
rate of 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 0.75% 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 the
Fund's shares, including 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 Yamatane 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 Yamatane and other dealers are
designated as the dealer of record. Putnam Mutual Funds
Corp. makes quarterly payments to dealers (including
Yamatane) at the annual rate of 0.25% of the average net
asset value of Class M shares.
Putnam Mutual Funds Corp. also pays to Yamatane and
other dealers, as additional compensation with respect to
the sale of Class M shares, 0.40% of such average net
asset value of Class M shares, respectively. For Class M
shares, the total annual payment to Yamatane and other
dealers equals 0.65% of such average net asset value.
For the fiscal year ending on June 30, 1998, the
Fund paid fees under the distribution plan of $176,038
for 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 $16,268
for fiscal 1998.
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 Compensation 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 1998 and the fees
paid to each Trustee by all of the Putnam funds during
calendar 1997:
COMPENSATION TABLE
Pension on Estimated Total
retirement annual benefits compensation
benefits from all from all
Aggregate accrued as Putnam funds Putnam
compensation part of upon retirement funds(4)
Trustees/Year from the fund expenses (3)
funds(1) (2)
Jameson A. Baxter/1994 (4)$1,528$302 $87,500 $176,000
Hans H. Estin/1972 1,331 637 87,500 175,000
John A. Hill/1985 (4) 1,315 239 98,000 175,000
Ronald J. Jackson/1996 (4)1,476 149 87,500 176,000
Paul L. Joskow/1997 (4)(5)915 15 87,500 25,500
Elizabeth T. Kennan/19921,476 339 87,500 174,000
Lawrence J. Lasser/1992 *1,300 253 87,500 172,000
John H. Mullin, III/1997 (4) 915 23 87,500
25,500
Robert E. Patterson/19841,323 191 87,500 176,000
Donald S. Perkins/1982 *1,331 689 87,500 176,000
William F. Pounds/1971 (6)1,456 715 98,000 201,000
George Putnam/1957 * 1,308 729 87,500 175,000
George Putnam, III/1984 *1,324 126 87,500 174,000
A.J.C. Smith/1986 * 1,300 429 87,500 170,000
W. Thomas Stephens/1997 (4) 1,145 21 87,500
53,000
W. Nicholas Thorndike/19921,331 487 87,500 176,000
* Is or may be deemed to be an "interested person" as
defined in the Investment Company Act of 1940 of the
Fund, Investment Management Company or Putnam Mutual
Funds Corp.
(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
1997.
(3) As of December 31, 1997, there were 101 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
and Messrs. Hill, Jackson, Joskow, Mullin and Stephens as
of June 30, 1998 were $881, $697, $796, $760, $707 and
$721, respectively, including income earned on such
amounts.
(5) Includes additional compensation for service as Vice
Chairman of the Putnam funds.
(6) Elected as a Trustee in November 1997.
Under a Retirement Plan for Trustees of the Putnam
funds (the "Plan") each Trustee who retires with at least
five years of service as a Trustee of the funds is
entitled to receive an annual retirement benefit equal to
one-half of the average annual compensation paid to such
Trustee for the last three years of service prior to
retirement. This retirement benefit is payable during a
Trustee's lifetime, beginning the year following
retirement, for a number of years equal to such Trustee's
years of service. A death benefit is also available
under the Plan which assures that the Trustee and his or
her beneficiaries will receive benefit payments for the
lesser of an aggregate period of (i) ten years or (ii)
such Trustee's total years of service.
The Plan Administrator (a committee comprised of
Trustees who 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
had he or she retired immediately prior to such
termination or amendment.
Investment Management Company places all orders for
purchases and sales of Fund 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 1996, 1997 and 1998, the Fund paid $488,749,
$1,427.1, and 2,893.46 in brokerage commissions,
respectively. During fiscal 1998 the Fund did not pay
any fee to brokers and dealers to recognize research,
statistical and quotation services provided to Investment
Management Company and its affiliates.
For the fiscal year ending June 30, 1998, the Fund
paid $5,783,380 in total other expenses (including
payments under its distribution plan 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. 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
Your advisor will be responsible for furnishing all
necessary documents to Putnam Investor Services, and may
charge you for his or her 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 3.50%
- Lower sales charges for larger Investments of
$50,000 or more
- No deferred sales charge
- Lower annual expenses, and higher dividends,
than class B shares because of lower 12b-1 fee
- Higher annual expenses, and lower dividends,
than class A shares because of higher 12b-1 fee
- No conversion to class A shares,so future 12b-1
fee does not decrease
Initial sales charges for class M shares
Sales charge as a percentage of:
Net
Amount of purchase amount Offering
at offering price ($) invested price *
Under 50,000 3.63 % 3.50%
50,000 but under 100,000 2.56 2.50
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 0.35% on
class A shares and 1.00% on class B and class M shares.
The Trustees currently limit payments on class A and
class M shares to 0.25% and 0.75% of average net assets,
respectively. Because these fees are paid out of the
Fund's assets on an ongoing basis, they will increase the
cost of investors' investments. The higher fees for
class B and class M shares may cost investors more than
paying the initial sales charge for class A shares.
Because class M shares, unlike class B shares, do not
convert to class A shares, class M shares may cost
investors more over time than class B shares.
An investor may be eligible to buy Class M Shares at
reduced sales charges. For fiscal 1998, Putnam Mutual
Funds Corp. received $268,590 in sales charges for Class
M Shares, of which it retained $44,390.
b. Sales in Japan
In Japan, Shares of the Fund are offered on any
Business Day and any business day of securities companies
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. A Sales Handling Company shall
provide to the investors a contract Concerning a Foreign
Securities Transactions Account and other prescribed
contracts (the "Contracts") and receive from such
investors an application for requesting the opening of a
transactions account under the Contracts. The purchase
shall be made in the minimum investment amount of 100
shares. Purchases may be made in integral multiples of
10 shares.
The issue price for Shares 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 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 applicable to Class M Shares in
Japan shall be 3.5% of the net asset value of such
shares. From such amount, 0.50% of the amount calculated
by dividing the net asset value by (1-0.035) and rounded
to three decimal places shall be retained by Putnam
Mutual Fund Corp., principal underwriter of the Fund.
The Investors having entrusted a 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 principle and the applicable
exchange rate shall be the foreign exchange rate quoted
in the Tokyo Foreign Exchange Market on the Trade Day,
which shall be determined by such Sales Handling Company.
The payment may be made in dollars to the extent that the
Sales Handling Companies can agree.
In addition, 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 100,000,000 or the
Shares otherwise cease to comply with the "Standards of
Selection of Foreign Investment Fund Securities"
contained 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 signed letter of instruction 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. Unless
investors indicate otherwise on the account application,
Putnam Investor Services will be authorized to accept
redemption and transfer 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 DOCUMENTS
If investors
- sell shares with a value of $100,000 or more,
- want investors' redemption proceeds sent to an
address other than the investor's address as it
appears on Putnam's records, or
- have notified Putnam of a change in address within
the preceding 15 days,
the signatures of registered owners or their legal
representatives must be guaranteed by a bank, broker-
dealer or certain other financial institutions. Stock
power forms are available from investors' financial
advisor, Putnam Investor Services and many commercial
banks.
Putnam Investor Services usually requires additional
documents for the sale of shares by a corporation,
partnership, agent or fiduciary, or a surviving joint
owner. Contact Putnam Investor Services for details.
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 shares more 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. Repurchase requests in Japan
may be made to Investor Servicing Agent through the Sales
Handling Company on a Fund Business Day that is a
business day of securities companies in Japan without a
contingent deferred sales charge. 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 Yamatane, provided the
request is received before the close of regular trading
on the New York Stock Exchange. The payment of the price
shall be made in yen through the Sales Handling Companies
pursuant to the Contracts or, if the 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 U.S. 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 U.S. Securities and
Exchange 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)
representing Shares sold to Japanese shareholders shall,
unless otherwise instructed by the shareholder, be held,
in the name of the custodian, by the custodian of
Yamatane. Certificates of custody for the Shares shall
be delivered by the 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 June.
(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
Fund 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
Fund 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 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.
"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 (in the case of Class M Shares). 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-year, five-year and the life of the Fund
periods ended June 30, 1998, the average annual total
return for Class M shares was 29.87%, 22.83% and 17.08%,
respectively. Returns for Class M shares for periods
prior to its inception are derived from the performance
of the Fund's Class A Shares, adjusted to reflect
thededuction of the the initial sales charge currently
applicable to Class M Shares..
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 annually 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 certain amount in yen in Japan, it shall
submit to the Director of Kanto Local Finance Bureau of
the Ministry of Finance of Japan securities registration
statements together with the copies of the Agreement and
Declaration of the Fund and the agreements with major
related companies as attachments thereto. The said
documents are made available for public inspection for
investors and any other persons who desire at the Kanto
Local Finance Bureau of the Ministry of Finance.
The Sales Handling Companies of the Shares shall
deliver to the investors prospectuses the contents of
which are substantially identical to 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 of Japan
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 the 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 Investment Management Company conducts the
business of offering for sale shares of the Fund, it must
file in advance certain information relating to 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 Investment Management Company amends
the Agreement and Declaration of Trust of the Fund, it
must file in advance such amendment and the details
thereof with the Commissioner of Financial Supervisory
Agent. Further, the Investment 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 Investment Management Company makes any
amendment to the Agreement and Declaration of Trust 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 written documents containing the amendment to the
shareholders known in Japan. Provided, however, that if
the said written documents are delivered to all the
shareholders in Japan, the relevant public notice is not
required to be given.
The Japanese Shareholders will be notified of
changes in material facts which would change their
position, including notices from the Trustees, through
the Sales Handling Companies.
The above-described Management Report on the Fund
will be sent to the shareholders 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:
Shareholders must register their shares in their own
name in order to exercise directly their rights as
Shareholders. Therefore, the Shareholders in Japan who
entrust the custody of their Shares to the Sales Handling
Company cannot exercise directly their Shareholder
rights, because their Shares are registered in the name
of the custodian. Shareholders in Japan may have the
Sales Handling Companies exercise their rights on their
behalf in accordance with the Contracts with the Sales
Handling Companies.
Shareholders in Japan who do not entrust the custody
of their Shares to the Sales Handling Companies may
exercise their rights in accordance with their own
arrangement under their own responsibility.
The major rights enjoyed by Shareholders 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 are entitled to receive any
distributions from net investment income and any net
realized capital gains at least annually. Distributions
from net investment income, if any, are expected to be
small. Distributions from capital gains are made after
applying any available capital loss carryovers.
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 in
cash while reinvesting
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 the 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 any
shareholders' meetings.
(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, at any time it
became effective, any material false statement in the
U.S. registration statement, or any omission of any
material statement to be stated therein necessary or not
to cause the statements made therein to be materially
misleading, shareholders are generally entitled to
institute a lawsuit, against the person who had signed
the relevant Registration Statement, the trustees of the
issuer (or any person placed in the same position), any
person involved in preparing such Statement or any
underwriter 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
Sales 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.
(4) The Japanese securities transaction tax will not be
imposed so far as the transactions concerned are
conducted outside Japan. Such tax, however, is
applicable to dealers' transactions for their own account
and to privately negotiated transactions conducted in
Japan.
(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 the 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 INVESTMENT FUND
(A) Diversification of Investment Portfolio
(As of the end of October 1998)
Name of Total Investment Ratio
Types of Assets Country U.S. Dollar (%)
Common Stock United Kingdom 411,505,221 25.50
France 241,765,221 14.97
Germany 175,748,987 10.88
Netherlands 157,762,231 9.77
Switzerland 139,553,040 8.64
Ireland 81,817,117 5.07
Sweden 80,020,686 4.95
Italy 75,499,844 4.67
Spain 54,245,028 3.40
Portugal 49,186,601 3.05
Finland 23,057,075 1.43
Austria 14,547,833 0.90
Greece 14,332,972 0.89
Poland 12,875,712 0.80
Denmark 10,920,003 0.68
Liechtenstein 7,089,661 0.44
Canada 5,985,804 0.37
Sub-Total 1,555,913,036 96.35
Cash, Deposit and Other
Assets (After deduction
of liabilities) 59,379,381 3.68
Total (Net Asset Value) 1,615,292,417 100.00
(yen 188,182 million)
Note:Investment ration is calculated by dividing each
asset at its market value by the total Net Asset
Value of the Fund. The same applies hereinafter.
(B) Results of Past Operations
(1) Record of Changes in Net Assets (Class M Shares)
(unaudited)
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 October 1998 is as
follows:
Total Net Asset Value Net Asset Value per Share
Dollar Yen
(thousands) (millions) Dollar Yen
1st Fiscal Year $746 87 $13.90 1,619
(June 30, 1995)
2nd Fiscal Year 4,047 471 15.86 1,848
(June 30, 1996)
3rd Fiscal Year 15,811 1,842 18.85 2,196
(June 30, 1997)
4th Fiscal Year 42,614 4,965 23.51 2,739
1997 End of November 19,334 2,252 19.55 2,278
December 20,002 2,330 18.52 2,158
1998 End of January 20,999 2,446 18.82 2,193
February 23,418 2,728 20.52 2,391
March 26,875 3,131 22.21 2,587
April 31,145 3,628 22.97 2,676
May 36,768 4,283 23.45 2,732
June 42,614 4,965 23.51 2,739
July 114,329 13,319 23.96 2,791
August 163,573 19,056 20.31 2,366
September 137,523 16,021 19.19 2,236
October 124,309 14,482 20.93 2,438
(Note) Operations of Class M Shares were commenced on
December 1, 1994.
(2) Record of Distributions Paid (unaudited)
Class M Shares
Period Amount of Dividend paid per Share
Income Capital Gains
1st Fiscal Year
(12/1/94-6/30/95) -- -- $0.16 (yen18.64)
2nd Fiscal Year
(7/1/95-6/30/96) -- -- $0.40 (yen46.60)
3rd Fiscal Year
(7/1/96-6/30/97) $0.17 (yen19.81) $1.06 (yen123.49)
4th Fiscal Year
(7/1/97-6/30/98) $0.30 (yen34.95) $1.13 (yen131.65)
(Note) Record of distribution paid from December 1994 to
December 1998 are as follows:
Dividend NAV per Share
Ex-dividend Date Dollar Yen Dollar
1996 December 20 $1.230 143.30 $16.11
1997 December 19 $1.430 166.60 $18.09
1998 December 18 $1.196 139.33 $20.76
(C) Record of Sales and Repurchases
Record of sales and repurchases during the following
fiscal years and number of outstanding Shares of the Fund as
of the end of such Fiscal Years are as follows:
Class M Shares
Number of Number of Net Increase Number of
Shares Sold Shares (Decrease) in Outstanding
Repurchased Shares Shares
Outstanding
1st Fiscal 91,235 37,562 53,673 53,673
Year (0) (0) (0)
(12/1/94-
6/30/95)
2nd Fiscal 297,970 96,466 201,504 255,177
Year (0) (0) (0)
(7/1/95-
6/30/96)
3rd Fiscal 1,962,484 1,378,637 583,847 839,024
Year (0) (0) (0)
(7/1/96-
6/30/97)
4th Fiscal 2,299,229 1,325,283 973,946 1,812,970
Year (0) (0) (0)
(7/1/97-
6/30/98)
Note: The number of Shares sold, repurchased and
outstanding in the parentheses represents those sold,
repurchased and outstanding in Japan. The Shares have
started to sell in Japan since July 1, 1998.
II. OUTLINE OF THE FUND
1. Fund
(A) Law of Place of Incorporation
The Fund is a Massachusetts business trust organized
in Massachusetts, U.S.A. on November 10, 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 Fund 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 Fund
The purpose of the Fund 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 Fund
Organization of the Fund as a
Massachusetts business trust.
Adoption of the Agreement and Declaration of Trust. November 10, 1988:
Adoption of the Amended and Restated Agreement
and Declaration of Trust July 13, 1990
(E) Amount of Capital Stock
Not applicable.
(F) Structure of the management of the Fund
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 Fund. 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 Fund are authorized by the
Agreement and Declaration of Trust to issue shares of the
Fund 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, divide the shares of any series into two or
more classes, with such preferences and special or
relative rights and privileges as the Trustees may
determine.
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 Fund, 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 Fund
or the shareholders, and (vii) with respect to such
additional matters relating to the Fund as may be
required by the Agreement and Declaration of Trust, the
Bylaws of the Fund, or any registration of the Fund 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 Fund.
On any matter submitted to a vote of shareholders,
all shares of the Fund 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, share are voted by individual series or
class; and (2) when the Trustees have determined that the
matter affects only 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 Fund. The Bylaws
contemplate that the Trustees shall elect a Chairman of
the Trustees, the President, the Treasurer, and the Clerk
of the Fund, 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 Fund under the circumstances and
on the terms specified therein.
The Fund 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 Fund, 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
(1) Trustees and Officers of the Trust
(as of October 30, 1998)
Shares
Name Office and Resume Owned
Title
George Putnam Chairman and present: Chairman and 5,094.70
President Director of
Putnam Management
and Putnam Mutual
Funds Corp.
Director, Marsh &
McLennan
Companies, Inc.
John A. Hill Vice present: Chairman and 4,271.42
Chairman Managing
Director, First
Reserve
Corporation
William F. Vice present: Professor 8,323.78
Pounds Chairman Emeritus of
Management,
Alfred P. Sloan
School of
Management,
Massachusetts
Institute of
Technology
Jameson Adkins Trustee present: President, 642.69
Baxter Baxter
Associates, Inc.
Hans H. Estin Trustee present: Vice Chairman, 392.33
North American
Management Corp.
Ronald J. Trustee present: Former
Jackson Chairman, 1,126.007
President and
Chief Executive
Officer of Fisher-
Price, Inc.,
Trustee of Salem
Hospital and the
Peabody Essex
Museum
Paul. L. Trustee present: Professor of 0.0
Joskow Economics and
Management,
Massachusetts
Institute of
Technology,
Director, New
England
Electrical
System, State
Farm Indemnity
Company and
Whitehead
Institute for
Biomedical
Research
Elizabeth T. Trustee present: President 295.98
Kennan Emeritus and
Professor, Mount
Holyoke College
Lawrence J. Trustee and present: President, 101.83
Lasser Vice Chief Executive
President Officer and
Director of
Putnam
Investments, Inc.
and the
Investment
Management
Company
Director, Marsh &
McLennan
Companies, Inc.
John H. Trustee present: Chairman and 545.69
Mullin, III Chief Executive
Officer of
Ridgeway Farm,
Director of ACX
Technologies,
Inc., Alex. Brown
Realty, Inc., and
The Liberty
Corporation
Robert E. Trustee present: President and 1,616.23
Patterson Trustee of Cabot
Industrial Trust
and Trustee of
SEA Education
Association
Donald S. Trustee present: Director of 1,526.59
Perkins various
corporations,
including Cummins
Engine Company,
Lucent
Technologies,
Inc., Nanophase
Technologies,
Inc. and Springs
Industries, Inc.
George Putnam, Trustee present: President, New 309.15
III Generation
Research, Inc.
A.J.C. Smith Trustee present: Chairman and 130.78
Chief Executive
Officer, Marsh &
McLennan
Companies, Inc.
W. Thomas Trustee present: President and 110.19
Stephens Chief Executive
Officer of
MacMillan Bloedel
Ltd., Director of
Mail-well Inc.,
Qwest
Communications,
The Eagle Picher
Trust and New
Century Energies
W. Nicholas Trustee present: Director of 121.58
Thorndike various
corporations and
charitable
organizations,
including Data
General
Corporation,
Bradley Real
Estate, Inc. and
Providence
Journal Co.
Trustee of Cabot
Industrial Trust,
Massachusetts
General Hospital
and Eastern
Utilities
Associations
Charles E. Executive present: Managing 0.0
Porter Vice Director of
President Putnam
Investments, Inc.
and Putnam
Investment
Management, Inc.
Patricia C. Senior Vice present: Senior Vice 0.0
Flaherty President President of
Putnam
Investments, Inc.
and Putnam
Investment
Management
Ian C. Vice present: Senior 0.0
Ferguson President Managing Director
of Putnam
Investments, Inc.
and Putnam
Investment
Management, Inc.
Gordon H. Vice present: Director and 10,170.01
Silver President Senior Managing
Director of
Putnam
Investments, Inc.
and Putnam
Investment
Management, Inc.
John D. Hughes Vice present Senior Vice 0.0
President President of
and Putnam Investment
Treasurer Management, Inc.
Beverly Marcus Clerk and N/A 117.63
Assistant
Treasurer
John R. Verani Vice present Senior Vice 0.0
President President of
Putnam
Investments, Inc.
and Putnam
Investment
Management
Nigel P. Hart Vice present Vice President 0.0
President of Putnam
Investments, Inc.
and Putnam
Investment
Management, Inc.
Omid Kamshad Vice present Managing 0.0
President Director of
Putnam
Investments, Inc.
and Putnam
Investment
Management, Inc.
Mark Pollard Vice present Senior Vice 0.0
President Predsident of
Putnam
Investments Inc.,
and Putnam
Investment
Management, Inc.
Justin M. Vice present Managing 0.0
Scott President Director of
Putnam
Investments, Inc.
and Putnam
Investment
Management, Inc.
(2) Employees of the Fund
The Fund does not have any employees.
(I) Description of Business and Outline of Operation
The Fund 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 Fund 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 Fund has occurred which is required
to be disclosed and has not been disclosed. The fiscal
year end of the Fund is June 30. The Fund 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 nearly
$200 billion in assets in over 10 million shareholder
accounts at the end of October 1998. 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 located at One Post
Office Square, Boston, Massachusetts 02109 and except for
a minority stake owned by employees, is 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 October 1998)
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 1993 $49,847,760
End of 1994 $48,149,491
End of 1995 $45,521,351
End of 1996 $45,817,658
End of 1997 $48,617,160
(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 Global Core and Growth Equities
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
equity, 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
stated below:
(as of the end of October 1998)
Names Year Business Experience
(at least 5 years)
Justin M. Scott 1990 Employed as an investment professional by
Managing Putnam Investment Management, Inc. since
Director 1988.
Omid Kamshad 1996 Employed as an investment professional by
Managing Putnam Management since January 1996. Prior
Director to January, 1996, Mr. Kamshad was Director
of Investments at Lombard Odier
International. Prior to April, 1995, Mr.
Kamshad was Director at Baring Asset
Management Company
Mark D. Pollard 1995 Employed as an investment professional by
Senior Vice Putnam Investment Management, Inc. since
President 1990
Nigel P. Hart 1998 Employed as an investment professional by
Vice President Putnam Investment Management, Inc. since
1997. Prior to November 1997, Mr. Hart was
a Vice President and Portfolio Manager at
IAI International
(G) Information Concerning Major Stockholders
As of the end of October 1998, 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:
List of Officers and Directors of Putnam Investment Management, Inc.
(as of the end of October 1998)
Position
with Putnam
Name Investment Other Business Affiliation
Management,
Inc.
1 Putnam, George Chairman Director of Putnam Mutual
Funds Corp.
2 Lasser, Lawrence President
J. and
Director
3 Silver, Gordon Director Director of Putnam
H. and Senior Fiduciary Trust Company and
Managing Senior Managing Director of
Director Putnam Mutual Funds Corp.
4 Burke, Robert W. Senior Senior Managing Director of
Managing Putnam Mutual Funds Corp.
Director
5 Collman, Senior Senior Managing Director of
Kathleen M. Managing Putnam Mutual Funds Corp.
Director
6 Ferguson, Ian C. Senior
Managing
Director
7 Regan, Anthony Senior
W. Managing
Director
8 Spiegel, Steven Senior Senior Managing Director of
Managing Putnam Mutual Funds Corp.
Director
9 Anderson, Blake Managing
E. Director
10 Antill, Jennifer Managing
Director
11 Beck, Robert R. Managing
Director
12 Bogan, Thomas R. Managing
Director
13 Browchuk, Brett Managing
Director
14 Cassaro, Joseph Managing
A. Director
15 Cotner, C. Beth Managing
Director
16 Cronin, Kevin M. Managing Managing Director of Putnam
Director Fiduciary Trust Company
17 D'Alelio, Edward Managing
H. Director
18 Daly, Kenneth L. Managing Managing Director of Putnam
Director Mutual Funds Corp.
19 DeTore, John A. Managing Managing Director of Putnam
Director Fiduciary Trust Company
20 Durgarian, Managing Director and Managing
Karnig H. Director Director of Putnam
and Chief Fiduciary Trust Company
Financial
Officer
21 Esteves, Irene Managing Treasurer of Putnam
M. Director Fiduciary Trust Company
and Chief
Financial
Officer
22 Gillis, Roland Managing
Director
23 Haslett, Thomas Managing
R. Director
24 Hurley, William Managing Managing Director and CFO
J. Director of Putnam Mutual Funds
Corp.
25 Jacobs, Jerome Managing
J. Director
26 Joseph, Joseph Managing
P. Director
27 Kamshad, Omid Managing
Director
28 King, David L. Managing Managing Director of Putnam
Director Mutual Funds Corp.
29 Kohli, D. Managing
William Director
30 Kreisel, Anthony Managing
I. Director
31 Kuenstner, Managing
Deborah F. Director
32 Landes, William Managing
J. Director
33 Leichter, Managing
Jennifer Director
34 Maloney, Kevin Managing
J. Director
35 Martino, Michael Managing Managing Director of Putnam
Director Fiduciary Trust Company
36 Maxwell, Scott Managing
M. Director
37 McGue, William Managing
F. Director
38 McMullen, Carol Managing
C. Director
39 Mcmani, Krisha Managing
Director
40 Miller, Daniel Managing
L. Director
41 Morgan Jr., John Managing Managing Director of Putnam
J. Director Fiduciary Trust Company
42 O'Donnell Jr., Managing
C. Patrick Director
43 Oristaglio, Managing
Stephen Director
44 Peacher, Stephen Managing
C. Director
45 Porter, Charles Managing
E. Director
46 Reilly, Thomas Managing
V. Director
47 Schultz, Managing Managing Director of Putnam
Mitchell D. Director Mutual Funds Corp.
48 Scott, Justin M. Managing Managing Director of Putnam
Director Fiduciary Trust Company
49 Shadek Jr., Managing Managing Director of Putnam
Edward T. Director Fiduciary Trust Company
50 Starr, Loren Managing Managing Director of Putnam
Director Mutual Funds Corp.
51 Swift, Robert Managing
Director
52 Talanian, John Managing Managing Director of Putnam
C. Director Mutual Funds Corp.
53 Tibbetts, Managing Managing Director of Putnam
Richard B. Director Mutual Funds Corp.
54 Waldman, David Managing
L. Director
55 Wetlaufer, Eric Managing
Director
56 Woolverton, Managing Managing Director of Putnam
William H. Director Mutual Funds Corp.
57 Zieff, William Managing
E. Director
58 Arends, Michael Senior Vice Senior Vice President of
K. President Putnam Mutual Funds Corp.
59 Asher, Steven E. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
and Senior Vice President
of Putnam Fiduciary Trust
Company
60 Atkin, Michael Senior Vice
J. President
61 Attridge, Gail Senior Vice Senior Vice President of
S. President Putnam Fiduciary Trust
Company
62 Augustine, Senior Vice
Jeffrey B. President
63 Bakshi, Manjit Senior Vice
S. President
64 Bamford, Dolores Senior Vice
Snyder President
65 Baumbach, Robert Senior Vice
K. President
66 Berka, Sharon A. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
67 Boselli, John A. Senior Vice
President
68 Bousa, Edward P. Senior Vice
President
69 Bresnahan, Senior Vice Senior Vice President of
Leslee R. President Putnam Mutual Funds Corp.
70 Burke, Andrea Senior Vice
President
71 Burns, Cheryl A. Senior Vice
President
72 Byrne, Joshua L. Senior Vice
President
73 Callahan, Ellen Senior Vice
S. President
74 Carlson, David Senior Vice
G. President
75 Chrostowski, Senior Vice Senior Vice President of
Louis F. President Putnam Mutual Funds Corp.
76 Curran, Peter J. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
77 Dalferro, John Senior Vice
R. President
78 Derbyshire, Senior Vice
Ralph C. President
79 England, Richard Senior Vice
B. President
80 Farrell, Deborah Senior Vice Senior Vice President of
S. President Putnam Mutual Funds Corp.
81 Finch, Edward R. Senior Vice
President
82 Fitzgerald, Senior Vice
Michael T. President
83 Flaherty, Senior Vice Senior Vice President of
Patricia C. President Putnam Mutual Funds Corp.
84 Fontana, Forrest Senior Vice
N. President
85 Francis, Senior Vice
Jonathan H. President
86 Frost, Karen T. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
87 Frucci, Richard Senior Vice Senior Vice President of
M. President Putnam Fiduciary Trust
Company
88 Fullerton, Brian Senior Vice Senior Vice President of
J. President Putnam Mutual Funds Corp.
89 Grant, Peter J. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
90 Graviere, Senior Vice
Patrice President
91 Grim, Daniel J. Senior Vice
President
92 Haagensen, Paul Senior Vice
E. President
93 Hadden, Peter J. Senior Vice
President
94 Halperin, Senior Vice
Matthew C. President
95 Healey, Deborah Senior Vice
R. President
96 Holding, Pamela Senior Vice
President
97 Hotchkiss, Senior Vice
Michael F. President
98 Kaufman, Jeffrey Senior Vice
President
99 Kay, Karen R. Senior Vice Clerk, Director and Senior
President Vice President of Putnam
Fiduciary Trust Company and
Senior Vice President of
Putnam Mutual Funds Corp.
100 Kirson, Steven Senior Vice
L. President
101 Knight, Jeffrey Senior Vice
L. President
102 Kobylarz, Senior Vice
Jeffrey J. President
103 Koontz, Jill A. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
104 Korn, Karen R. Senior Vice
President
105 Lannum III, Senior Vice
Coleman N. President
106 Lindsey, Jeffrey Senior Vice
R. President
107 Lomba, Rufino R. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
108 MacElwee, Jones, Senior Vice
Elizabeth M. President
109 Madore, Robert Senior Vice Senior Vice President of
A. President Putnam Fiduciary Trust
Company
110 Malloy, Julie M. Senior Vice
President
111 Marrkand, Paul Senior Vice
E. President
112 Matteis, Andrew Senior Vice
S. President
113 McDonald, Senior Vice
Richard E. President
114 Meehan, Thalia Senior Vice
President
115 Mehta, Sandeep Senior Vice
President
116 Miller, William Senior Vice
H. President
117 Minn, Seung H. Senior Vice
President
118 Mockard, Jeanne Senior Vice
L. President
119 Morgan, Kelly A. Senior Vice
President
120 Mufson, Michael Senior Vice
J. President
121 Mullen, Donald Senior Vice Senior Vice President of
E. President Putnam Mutual Funds Corp.
122 Mullin, Hugh H. Senior Vice
President
123 Netols, Jeffrey Senior Vice Senior Vice President of
W. President Putnam Fiduciary Trust
Company
124 Oler, Stephen S. Senior Vice
President
125 Paine, Robert M. Senior Vice
President
126 Parker, Margery Senior Vice
C. President
127 Perry, William Senior Vice
President
128 Peters, Carmel Senior Vice
President
129 Petralia, Senior Vice Senior Vice President of
Randolph S. President Putnam Mutual Funds Corp.
130 Plapinger, Keith Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
131 Pohl, Charles G. Senior Vice
President
132 Pollard, Mark D. Senior Vice
President
133 Prusko, James M. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
135 Quistberg, Paul Senior Vice
T. President
136 Ray, Christopher Senior Vice
A. President
137 Rogers, Kevin J. Senior Vice
President
138 Ruys de Perez, Senior Vice Senior Vice President of
Charles A. President Putnam Fiduciary Trust
Company and Senior Vice
President of Putnam Mutual
Funds Corp.
139 Santos, David J. Senior Vice Senior Vice President of
President Putnam Fiduciary Trust
Company
140 Santosus, Senior Vice
Anthony C. President
141 Schwister, Jay Senior Vice Senior Vice President of
E. President Putnam Fiduciary Trust
Company
142 Scordato, Senior Vice Senior Vice President of
Christine A. President Putnam Mutual Funds Corp.
143 Simon, Sheldon Senior Vice
N. President
144 Simozar, Saied Senior Vice
President
145 Smith Jr., Leo Senior Vice
J. President
146 Smith, Margaret Senior Vice
D. President
147 Spatz, Erin J. Senior Vice
President
148 Stack, Michael Senior Vice Senior Vice President of
P. President Putnam Mutual Funds Corp.
149 Stairs, George Senior Vice
W. President
150 Strumpf, Casey Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
151 Sullivan, Roger Senior Vice
R. President
152 Svensson, Lisa Senior Vice
H. President
153 Swanberg, Senior Vice
Charles H. President
154 Thomas, David K. Senior Vice
President
155 Thomsen, Senior Vice Senior Vice President of
Rosemary H. President Putnam Fiduciary Trust
Company
156 Troped, Bonnie Senior Vice Senior Vice President of
L. President Putnam Mutual Funds Corp.
157 Verani, John R. Senior Vice Senior Vice President of
President Putnam Mutual Funds Corp.
158 Walsh, Francis Senior Vice
P. President
159 Warren, Paul C. Senior Vice
President
160 Weinstein, Senior Vice
Michael R. President
161 Weiss, Manuel Senior Vice
President
162 Whalen, Edward Senior Vice Senior Vice President of
F. President Putnam Mutual Funds Corp.
163 Wheeler, Diane Senior Vice
D.F. President
164 Wyke, Richard P. Senior Vice
President
165 Yogg, Michael R. Senior Vice
President
166 Zukowski, Gerald Senior Vice
S. 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
October 1998, Investment Management Company managed,
advised, and/or administered the following 113 funds and
fund portfolios (having an aggregate net asset value of
approximately $199 billion):
(As of the end of October 1998)
Name Month/Date Principal Total Net
Year Principal Net Asset
Established Characte- Asset Value
ristics Value per
($million) share
($)
The George Putnam Fund of 11/5/37 Open/Equity 3,472.8 18.48
Boston; A 3
The George Putnam Fund of 4/24/92 Open/Equ 1,351.3 18.33
Boston; B ity 9
The George Putnam Fund of 12/1/94 Open/Equ 279.41 18.33
Boston; M ity
The George Putnam Fund of 1/1/94 Open/Equ 462.87 18.51
Boston; Y ity
Putnam American Government 3/1/85 Open/Bon 1,475.5 9.03
Income Fund; A d 7
Putnam American Government 5/20/94 Open/Bon 100.79 9.00
Income Fund; B d
Putnam American Government 2/14/95 Open/Bon 4.32 9.05
Income Fund; M d
Putnam Asia Pacific Growth 2/20/91 Open/Equ 173.78 9.54
Fund; A ity
Putnam Asia Pacific Growth 6/1/93 Open/Equ 109.10 9.36
Fund; B ity
Putnam Asia Pacific Growth 2/1/95 Open/Equ 5.90 9.47
Fund; M ity
Putnam Asia Pacific Fund II 3/23/98 Open/Equ 1.79 6.79
ity
Putnam Asset Allocation: 2/7/94 Open/Bal 895.56 11.12
Balanced Portfolio; A anced
Putnam Asset Allocation: 2/11/94 Open/Bal 501.23 11.05
Balanced Portfolio; B anced
Putnam Asset Allocation: 9/1/94 Open/Bal 99.20 11.00
Balanced Portfolio; C anced
Putnam Asset Allocation: 2/6/95 Open/Bal 59.65 11.10
Balanced Portfolio; M anced
Putnam Asset Allocation: 7/14/94 Open/Bal 223.44 11.12
Balanced Portfolio; Y anced
Putnam Asset Allocation : 2/7/94 Open/Bal 385.20 10.07
Conservative Portfolio; A anced
Putnam Asset Allocation : 2/18/94 Open/Bal 167.74 10.04
Conservative Portfolio; B anced
Putnam Asset Allocation : 9/1/94 Open/Bal 49.27 10.01
Conservative Portfolio; C anced
Putnam Asset Allocation : 2/7/95 Open/Bal 19.97 10.04
Conservative Portfolio; M anced
Putnam Asset Allocation : 7/14/94 Open/Bal 42.26 10.08
Conservative Portfolio; Y anced
Putnam Asset Allocation: 2/8/94 Open/Bal 633.02 12.42
Growth Portfolio; A anced
Putnam Asset Allocation: 2/16/94 Open/Bal 408.59 12.23
Growth Portfolio; B anced
Putnam Asset Allocation: 9/1/94 Open/Bal 92.93 12.14
Growth Portfolio; C anced
Putnam Asset Allocation: 2/1/95 Open/Bal 55.06 12.25
Growth Portfolio; M anced
Putnam Asset Allocation: 7/14/94 Open/Bal 213.14 12.51
Growth Portfolio; Y anced
Putnam Arizona Tax Exempt 1/30/91 Open/Bon 117.36 9.37
Income Fund; A d
Putnam Arizona Tax Exempt 7/15/93 Open/Bon 33.04 9.35
Income Fund; B d
Putnam Arizona Tax Exempt 7/3/95 Open/Bon 0.52 9.38
Income Fund; M d
Putnam Balanced Fund 10/2/95 Open/Bal 3.21 12.07
anced
Putnam Balanced Retirement 4/19/85 Open/Bal 645.02 11.02
Fund; A anced
Putnam Balanced Retirement 2/1/94 Open/Bal 149.40 10.93
Fund; B anced
Putnam Balanced Retirement 3/17/95 Open/Bal 12.00 10.96
Fund; M anced
Putnam California 11/27/92Closed/B 72.59 15.76
Investment Grade Municipal ond
Trust
Putnam California Tax 4/29/83 Open/Bon 3,048.9 8.85
Exempt Income Fund; A d 3
Putnam California Tax 1/4/93 Open/Bon 643.47 8.84
Exempt Income Fund; B d
Putnam California Tax 2/14/95 Open/Bon 15.06 8.85
Exempt Income Fund; M d
Putnam California Tax 10/26/87Open/Bon 58.22 1.00
Exempt Money Market Fund d
Putnam Capital 8/5/83 Open/Equ 33.89 7.14
Opportunities Fund; A ity
Putnam Capital 11/2/94 Open/Equ 45.77 7.12
Opportunities Fund; B ity
Putnam Capital 1/22/96 Open/Equ 3.06 7.13
Opportunities Fund; M ity
Putnam Capital Appreciation 8/5/93 Open/Equ 1,411.9 20.78
Fund; A ity 2
Putnam Capital Appreciation 11/2/94 Open/Equ 1,571.3 20.47
Fund; B ity 5
Putnam Capital Appreciation 1/22/96 Open/Equ 106.05 20.52
Fund; M ity
Putnam Convertible 6/29/95 Closed/B 85.71 23.14
Opportunities & Income ond
Trust
Putnam Convertible Income- 6/29/72 Open/Bal 1,056.2 20.03
Growth Trust; A anced 9
Putnam Convertible Income- 7/15/93 Open/Bal 289.48 19.83
Growth Trust; B anced
Putnam Convertible Income- 3/13/95 Open/Bal 18.08 19.92
Growth Trust; M anced
Putnam Diversified Equity 7/1/94 Open/Equ 262.47 12.77
Trust; A ity
Putnam Diversified Equity 7/2/94 Open/Equ 332.45 12.60
Trust; B ity
Putnam Diversified Equity 7/3/95 Open/Equ 26.71 12.66
Trust; M ity
Putnam Dividend Income Fund 9/28/89 Closed/B 125.89 11.63
ond
Putnam Diversified Income 10/3/88 Open/Bon 1,845.8 11.33
Trust; A d 0
Putnam Diversified Income 3/1/93 Open/Bon 2,101.6 11.28
Trust; B d 1
Putnam Diversified Income 12/1/94 Open/Bon 1,033.0 11.30
Trust; M d 5
Putnam Diversified Income 7/11/96 Open/Bon 19.20 11.34
Trust ; Y d
Putnam Emerging Markets 10/2/95 Open/Equ 34.99 6.65
Fund; A ity
Putnam Emerging Markets 10/2/95 Open/Equ 24.57 6.57
Fund; B ity
Putnam Emerging Markets 10/2/95 Open/Equ 2.16 6.59
Fund; M ity
Putnam Equity Fund 98 12/30/97Open/Equ 4.13 8.71
ity
Putnam Equity Income Fund; 6/15/77 Open/Bal 1,058.0 16.16
A anced 7
Putnam Equity Income Fund; 9/13/93 Open/Bal 602.92 16.06
B anced
Putnam Equity Income Fund; 12/2/94 Open/Bal 55.71 16.07
M anced
Putnam Europe Growth Fund; 9/7/90 Open/Equ 811.57 21.10
A ity
Putnam Europe Growth Fund; 2/1/94 Open/Equ 679.42 20.54
B ity
Putnam Europe Growth Fund; 12/1/94 Open/Equ 124.31 20.93
M ity
Putnam Florida Tax Exempt 8/24/90 Open/Bon 240.08 9.49
Income Fund; A d
Putnam Florida Tax Exempt 1/4/93 Open/Bon 77.59 9.49
Income Fund; B d
Putnam Florida Tax Exempt 5/1/95 Open/Bon 1.36 9.49
Income Fund; M d
Putnam Global Equity Fund 5/6/98 Open/Equ 1.96 7.87
ity
Putnam Global Natural 7/24/80 Open/Equ 182.11 18.23
Resources Fund; A ity
Putnam Global Natural 2/1/94 Open/Equ 126.09 17.87
Resources Fund; B ity
Putnam Global Natural 7/3/95 Open/Equ 6.97 18.05
Resources Fund; M ity
Putnam Global Growth and 1/3/95 Open/Equ 23.65 12.31
Income Fund; A ity
Putnam Global Growth and 1/3/95 Open/Equ 17.80 12.25
Income Fund; B ity
Putnam Global Growth and 1/3/95 Open/Equ 1.98 12.28
Income Fund; M ity
Putnam Global Governmental 6/1/87 Open/Bon 252.97 12.77
Income Trust; A d
Putnam Global Governmental 2/1/94 Open/Bon 35.86 12.74
Income Trust; B d
Putnam Global Governmental 3/17/95 Open/Bon 213.20 12.72
Income Trust; M d
Putnam Global Growth Fund; 9/1/67 Open/Equ 2,879.8 11.01
A ity 0
Putnam Global Growth Fund; 4/27/92 Open/Equ 1,730.9 10.58
B ity 1
Putnam Global Growth Fund; 3/1/95 Open/Equ 50.66 10.90
M ity
Putnam Global Growth Fund; 6/15/94 Open/Equ 62.52 11.19
Y ity
Putnam Growth and Income 1/5/95 Open/Bal 1,176.9 14.05
Fund II; A anced 3
Putnam Growth and Income 1/5/95 Open/Bal 1,406.1 13.94
Fund II; B anced 3
Putnam Growth and Income 1/5/95 Open/Bal 160.92 13.98
Fund II; M anced
The Putnam Fund for Growth 11/6/57 Open/Bal 18,815. 20.45
and Income; A anced 53
The Putnam Fund for Growth 4/27/92 Open/Bal 15,672. 20.20
and Income; B anced 29
The Putnam Fund for Growth 5/1/95 Open/Bal 421.51 20.33
and Income; M anced
The Putnam Fund for Growth 6/15/94 Open/Bal 838.99 20.48
and Income; Y anced
Putnam Growth Fund 4/30/98 Open/Equ 1.95 8.09
ity
Putnam Growth 10/2/95 Open/Equ 349.00 16.04
Opportunities; A ity
Putnam Growth 8/1/97 Open/Equ 371.25 15.89
Opportunities; B ity
Putnam Growth 8/1/97 Open/Equ 30.41 15.94
Opportunities; M ity
Putnam High Income 7/9/87 Closed/B 113.72 8.40
Convertible and Bond Fund ond
Putnam High Yield Advantage 3/25/86 Open/Bon 1,183.7 7.98
Fund; A d 4
Putnam High Yield Advantage 5/16/94 Open/Bon 993.61 7.94
Fund; B d
Putnam High Yield Advantage 12/1/94 Open/Bon 899.42 7.97
Fund; M d
Putnam High Yield Municipal 5/25/89 Closed/B 247.99 9.23
Trust ond
Putnam High Yield Total 1/1/97 Open/Bon 42.41 7.34
Return Fund; A d
Putnam High Yield Total 1/1/97 Open/Bon 46.38 7.27
Return Fund; B d
Putnam High Yield Total 1/1/97 Open/Bon 3.53 7.28
Return Fund; M d
Putnam High Quality Bond 6/2/86 Open/Bon 340.01 10.22
Fund; A d
Putnam High Quality Bond 6/6/94 Open/Bon 34.71 10.17
Fund; B d
Putnam High Quality Bond 4/12/95 Open/Bon 4.80 10.22
Fund; M d
Putnam High Yield Fund II; 12/31/97Open/Bon 317.38 7.63
A d
Putnam High Yield Fund II; 12/31/97Open/Bon 491.87 7.62
B d
Putnam High Yield Fund II; 12/31/97Open/Bon 21.27 7.62
M d
Putnam High Yield Trust; A 2/14/78 Open/Bon 2,589.0 10.54
d 6
Putnam High Yield Trust; B 3/1/93 Open/Bon 901.68 10.50
d
Putnam High Yield Trust; M 7/3/95 Open/Bon 17.70 10.54
d
Putnam Health Sciences 5/28/82 Open/Equ 2,538.5 61.99
Trust; A ity 4
Putnam Health Sciences 3/1/93 Open/Equ 1,612.0 59.88
Trust; B ity 1
Putnam Health Sciences 7/3/95 Open/Equ 70.01 61.22
Trust; M ity
Putnam Income Fund; A 11/1/54 Open/Bon 1,428.2 6.87
d 6
Putnam Income Fund; B 3/1/93 Open/Bon 494.39 6.84
d
Putnam Income Fund; M 12/14/94Open/Bon 1,185.4 6.84
d 1
Putnam Income Fund; Y 2/12/94 Open/Bon 246.85 6.88
d
Putnam Intermediate U.S. 2/16/93 Open/Bon 227.09 5.04
Government Income Fund; A d
Putnam Intermediate U.S. 2/16/93 Open/Bon 142.78 5.04
Government Income Fund; B d
Putnam Intermediate U.S. 4/3/95 Open/Bon 9.23 5.05
Government Income Fund; M d
Putnam Intermediate U.S. 10/1/97 Open/Bon 117.55 5.04
Government Income Fund; Y d
Putnam International Fund 12/28/95Open/Equ 4.03 10.38
ity
Putnam International Growth 8/1/96 Open/Equ 377.20 10.81
and Income Fund; A ity
Putnam International Growth 8/1/96 Open/Equ 373.37 10.74
and Income Fund; B ity
Putnam International Growth 8/1/96 Open/Equ 33.66 10.78
and Income Fund; M ity
Putnam International Growth 2/28/91 Open/Equ 1,936.9 17.97
Fund; A ity 0
Putnam International Growth 6/1/94 Open/Equ 1,260.9 17.59
Fund; B ity 5
Putnam International Growth 12/1/94 Open/Equ 139.25 17.80
Fund; M ity
Putnam International Growth 7/12/96 Open/Equ 134.83 18.03
Fund; Y ity
Putnam International New 1/3/95 Open/Equ 681.71 11.49
Opportunities Fund; A ity
Putnam International New 7/21/95 Open/Equ 838.37 11.26
Opportunities Fund; B ity
Putnam International New 7/21/95 Open/Equ 66.57 11.35
Opportunities Fund; M ity
Putnam International 12/28/95Open/Equ 104.58 12.80
Voyager Fund; A ity
Putnam International 10/30/96Open/Equ 78.00 12.66
Voyager Fund; B ity
Putnam International 10/30/96Open/Equ 9.25 12.72
Voyager Fund; M ity
Putnam Investment Grade 10/26/89Closed/B 249.91 12.00
Municipal Trust I ond
Putnam Investment Grade 11/27/92Closed/B 189.98 14.22
Municipal Trust II ond
Putnam Investment Grade 11/29/93Closed/B 54.14 13.51
Municipal Trust III ond
Putnam Investors Fund; A 12/1/25 Open/Equ 3,329.3 12.82
ity 7
Putnam Investors Fund; B 3/1/93 Open/Equ 1,245.8 12.32
ity 6
Putnam Investors Fund; M 12/2/94 Open/Equ 100.18 12.61
ity
Putnam Investors Fund; Y 11/30/96Open/Equ 197.67 12.85
ity
Putnam Investment Fund 98 2/17/98 Open/Equ 2.49 9.23
ity
Putnam Japan Fund 12/28/95Open/Equ 2.20 5.07
ity
Putnam Latin America Fund 3/23/98 Open/Equ 1.35 5.28
ity
Putnam Massachusetts Tax 10/23/89Open/Bon 298.89 9.64
Exempt Income Fund; A d
Putnam Massachusetts Tax 7/15/93 Open/Bon 114.83 9.63
Exempt Income Fund; B d
Putnam Massachusetts Tax 5/12/95 Open/Bon 3.40 9.63
Exempt Income Fund; M d
Putnam Master Income Trust 12/28/87Closed/B 439.52 8.28
ond
Putnam Master Intermediate 4/29/88 Closed/B 797.54 7.97
Income Trust ond
Putnam Managed High Yield 6/25/93 Closed/B 92.15 12.28
Trust ond
Putnam Michigan Tax Exempt 10/23/89Open/Bon 147.75 9.36
Income Fund; A d
Putnam Michigan Tax Exempt 7/15/93 Open/Bon 43.97 9.35
Income Fund; B d
Putnam Michigan Tax Exempt 4/17/95 Open/Bon 1.86 9.36
Income Fund; M d
Putnam Minnesota Tax Exempt 10/23/89Open/Bon 102.42 9.22
Income Fund; A d
Putnam Minnesota Tax Exempt 7/15/93 Open/Bon 46.00 9.19
Income Fund; B d
Putnam Minnesota Tax Exempt 4/3/95 Open/Bon 1.45 9.22
Income Fund; M d
Putnam Managed Municipal 2/24/89 Closed/B 453.57 9.81
Income Trust ond
Putnam Money Market Fund; A 10/1/76 Open/Bon 2,727.4 1.00
d 0
Putnam Money Market Fund; B 4/27/92 Open/Bon 808.21 1.00
d
Putnam Money Market Fund; M 12/8/94 Open/Bon 86.32 1.00
d
Putnam Master Intermediate 4/29/88 Closed/B 797.54 7.97
Income Trust ond
Putnam Municipal Income 5/22/89 Open/Bon 823.09 9.33
Fund; A d
Putnam Municipal Income 1/4/93 Open/Bon 503.07 9.32
Fund; B d
Putnam Municipal Income 12/1/94 Open/Bon 15.11 9.33
Fund; M d
Putnam Municipal 5/28/93 Closed/B 230.11 14.24
Opportunities Trust ond
Putnam New Opportunities 8/31/90 Open/Equ 8,784.9 49.47
Fund; A ity 2
Putnam New Opportunities 3/1/93 Open/Equ 6,583.2 47.41
Fund; B ity 3
Putnam New Opportunities 12/1/94 Open/Equ 377.49 48.50
Fund; M ity
Putnam New Opportunities 7/19/94 Open/Equ 422.17 50.03
Fund; Y ity
Putnam New Value Fund; A 1/3/96 Open/Equ 385.43 13.77
ity
Putnam New Value Fund; B 2/26/96 Open/Equ 392.33 13.59
ity
Putnam New Value Fund; M 2/26/96 Open/Equ 38.92 13.66
ity
Putnam New Jersey Tax 2/20/90 Open/Bon 217.87 9.37
Exempt Income Fund; A d
Putnam New Jersey Tax 1/4/93 Open/Bon 100.41 9.37
Exempt Income Fund; B d
Putnam New Jersey Tax 5/1/95 Open/Bon 0.79 9.38
Exempt Income Fund; M d
Putnam New York Investment 11/27/92Closed/B 40.55 14.24
Grade Municipal Trust ond
Putnam New York Tax Exempt 9/2/83 Open/Bon 1,630.9 9.06
Income Fund; A d 1
Putnam New York Tax Exempt 1/4/93 Open/Bon 231.50 9.05
Income Fund; B d
Putnam New York Tax Exempt 4/10/95 Open/Bon 2.34 9.06
Income Fund; M d
Putnam New York Tax Exempt 10/26/87Open/Bon 38.45 1.00
Money Market Fund d
Putnam New York Tax Exempt 11/7/90 Open/Bon 166.93 9.21
Opportunities Fund; A d
Putnam New York Tax Exempt 2/1/94 Open/Bon 68.09 9.20
Opportunities Fund; B d
Putnam New York Tax Exempt 2/10/95 Open/Bon 2.44 9.19
Opportunities Fund; M d
Putnam Ohio Tax Exempt 10/23/89Open/Bon 185.47 9.25
Income Fund; A d
Putnam Ohio Tax Exempt 7/15/93 Open/Bon 55.50 9.24
Income Fund; B d
Putnam Ohio Tax Exempt 4/3/95 Open/Bon 2.30 9.25
Income Fund; M d
Putnam OTC & Emerging 11/1/82 Open/Equ 2,053.3 14.13
Growth Fund; A ity 9
Putnam OTC & Emerging 7/15/93 Open/Equ 1,011.4 13.50
Growth Fund; B ity 6
Putnam OTC & Emerging 12/2/94 Open/Equ 203.17 13.81
Growth Fund; M ity
Putnam OTC & Emerging 7/12/96 Open/Equ 79.60 14.23
Growth Fund; Y ity
Putnam Pennsylvania Tax 7/21/89 Open/Bon 185.65 9.41
Exempt Income Fund; A d
Putnam Pennsylvania Tax 7/15/93 Open/Bon 95.73 9.40
Exempt Income Fund; B d
Putnam Pennsylvania Tax 7/3/95 Open/Bon 2.31 9.42
Exempt Income Fund; M d
Putnam Preferred Income 1/4/84 Open/Bon 124.44 9.00
Fund; A d
Putnam Preferred Income 4/20/95 Open/Bon 12.15 8.97
Fund; M d
Putnam Premier Income Trust 2/29/88 Closed/B 1,113.6 7.94
ond 7
Putnam Research Fund; A 10/2/95 Open/Equ 163.23 13.47
ity
Putnam Research Fund; B 6/15/98 Open/Equ 152.08 13.43
ity
Putnam Research Fund; M 6/15/98 Open/Equ 14.22 13.44
ity
Putnam Strategic Income 2/19/95 Open/Bon 70.14 7.67
Fund; A d
Putnam Strategic Income 2/19/96 Open/Bon 107.93 7.67
Fund; B d
Putnam Strategic Income 2/19/96 Open/Bon 9.22 7.66
Fund; M d
Putnam Tax Exempt Income 12/31/76Open/Bon 1,974.1 9.24
Fund; A d 7
Putnam Tax Exempt Income 1/4/93 Open/Bon 248.57 9.24
Fund; B d
Putnam Tax Exempt Income 2/16/95 Open/Bon 9.54 9.26
Fund; M d
Putnam Tax Exempt Money 10/26/87Open/Bon 80.36 1.00
Market Fund d
Putnam Tax - Free Heath 6/29/92 Closed/B 206.04 14.92
Care Fund ond
Putnam Tax - Free Income 9/20/93 Open/Bon 1,001.8 14.63
Trust d 0
Tax - Free High Yield Fund;
A
Putnam Tax - Free Income 9/9/85 Open/Bon 1,000.1 14.65
Trust d 7
Tax - Free High Yield Fund
B
Putnam Tax - Free Income 12/29/94Open/Bon 19.52 14.64
Trust d
Tax - Free High Yield Fund
M
Putnam Tax - Free Income 9/30/93 Open/Bon 236.10 15.56
Trust d
Tax - Free Insured Fund; A
Putnam Tax - Free Income 9/9/85 Open/Bon 350.26 15.58
Trust d
Tax - Free Insured Fund; B
Putnam Tax - Free Income 6/1/95 Open/Bon 2.31 15.55
Trust d
Tax - Free Insured Fund; M
Putnam U.S. Core Growth 5/4/98 Open/Equ 1.98 8.26
Fund ity
Putnam U.S. Government 2/8/84 Open/Bon 2,110.2 13.17
Income Trust; A d 3
Putnam U.S. Government 4/27/92 Open/Bon 1,343.5 13.11
Income Trust; B d 3
Putnam U.S. Government 2/6/95 Open/Bon 162.51 13.15
Income Trust; M d
Putnam U.S. Government 4/11/94 Open/Bon 8.39 13.17
Income Trust; Y d
Putnam Utilities Growth and 11/19/90Open/Bal 826.09 13.62
Income Fund; A anced
Putnam Utilities Growth and 4/27/92 Open/Bal 706.24 13.54
Income Fund; B anced
Putnam Utilities Growth and 3/1/95 Open/Bal 13.82 13.60
Income Fund; M anced
Putnam Value Fund 4/30/98 Open/Equ 1.88 7.90
ity
Putnam Vista Fund; A 6/3/68 Open/Equ 2,872.8 11.74
ity 4
Putnam Vista Fund; B 3/1/93 Open/Equ 1,388.5 11.20
ity 1
Putnam Vista Fund; M 12/1/94 Open/Equ 113.50 11.49
ity
Putnam Vista Fund; Y 3/28/95 Open/Equ 250.95 11.88
ity
Putnam Voyager Fund II; A 4/14/93 Open/Equ 614.42 19.43
ity
Putnam Voyager Fund II; B 10/2/95 Open/Equ 570.17 18.99
ity
Putnam Voyager Fund II; M 10/2/95 Open/Equ 69.37 19.15
ity
Putnam Voyager Fund; A 4/1/96 Open/Equ 12,988. 19.85
ity 17
Putnam Voyager Fund; B 4/27/92 Open/Equ 6,724.0 18.67
ity 6
Putnam Voyager Fund; M 12/1/94 Open/Equ 306.11 19.43
ity
Putnam Voyager Fund; Y 4/1/94 Open/Equ 1,366.3 20.14
ity 5
Putnam VT Asia Pacific 5/1/95 Open/Equ 83.60 7.63
Growth Fund; A ity
Putnam VT Asia Pacific 4/30/98 Open/Equ 0.02 7.62
Growth Fund; B ity
Putnam VT Diversified 9/15/93 Open/Bon 645.84 10.22
Income Fund; A d
Putnam VT Diversified 4/6/98 Open/Bon 0.87 10.21
Income Fund; B d
Putnam VT Global Asset 2/1/88 Open/Bal 948.41 17.39
Allocation Fund; A anced
Putnam VT Global Asset 4/30/98 Open/Bal 0.68 17.40
Allocation Fund; B anced
Putnam VT George Putnam 4/30/98 Open/Equ 77.03 9.90
Fund; A ity
Putnam VT George Putnam 4/30/98 Open/Equ 0.83 9.90
Fund; B ity
Putnam VT Global Growth 5/1/90 Open/Equ 1,705.7 17.38
Fund; A ity 5
Putnam VT Global Growth 4/30/98 Open/Equ 0.20 17.37
Fund; B ity
Putnam VT Growth and Income 2/1/88 Open/Bal 9,155.7 26.59
Fund; A anced 4
Putnam VT Growth and Income 4/6/98 Open/Bal 2.22 26.57
Fund; B anced
Putnam VT High Yield Fund; 2/1/88 Open/Bon 967.01 11.18
A d
Putnam VT High Yield Fund; 4/30/98 Open/Bon 0.89 11.18
B d
Putnam VT Health and 4/30/98 Open/Equ 91.08 9.81
Sciences Fund; A ity
Putnam VT Health and 4/30/98 Open/Equ 0.32 9.81
Sciences Fund; B ity
Putnam VT International 1/1/97 Open/Bal 282.06 11.77
Growth and Income; A anced
Putnam VT International 4/6/98 Open/Bal 0.39 11.77
Growth and Income; B anced
Putnam VT International New 1/1/97 Open/Equ 118.41 10.21
Opportunities Fund; A ity
Putnam VT International New 4/30/98 Open/Equ 0.04 10.21
Opportunities Fund; B ity
Putnam VT International 1/1/97 Open/Equ 280.65 12.30
Growth Fund; A ity
Putnam VT International 4/30/98 Open/Equ 4.19 12.29
Growth Fund; B ity
Putnam VT Investors Fund; 4/30/98 Open/Equ 143.48 9.83
A ity
Putnam VT Investors Fund; 4/30/98 Open/Equ 0.96 9.83
B ity
Putnam VT Money Market 2/1/88 Open/Bon 669.79 1.00
Fund; A d
Putnam VT Money Market 4/30/98 Open/Bon 2.16 1.00
Fund; B d
Putnam VT New Opportunities 5/2/94 Open/Equ 2,886.9 21.33
Fund; A ity 1
Putnam VT New Opportunities 4/30/98 Open/Equ 0.63 21.32
Fund; B ity
Putnam VT New Value Fund; A 1/2/97 Open/Equ 235.90 11.21
ity
Putnam VT New Value Fund; B 4/30/98 Open/Equ 0.11 11.21
ity
Putnam VT OTC & Emerging 4/30/98 Open/Equ 18.49 8.07
Growth Fund; A ity
Putnam VT OTC & Emerging 4/30/98 Open/Equ 0.21 8.07
Growth Fund; B ity
Putnam VT Research Fund; A 10/1/98 Open/Equ 9.81 10.58
ity
Putnam VT Research Fund; B 10/1/98 Open/Equ 0.10 10.58
ity
Putnam VT Utilities Growth 5/1/92 Open/Bal 941.78 17.06
and Income Fund; A anced
Putnam VT Utilities Growth 4/30/98 Open/Bal 0.38 17.06
and Income Fund; B anced
Putnam VT Vista Fund; A 1/2/97 Open/Equ 250.18 12.21
ity
Putnam VT Vista Fund; B 4/30/98 Open/Equ 0.46 12.22
ity
Putnam VT Voyager Fund; A 2/1/88 Open/Equ 4,840.7 38.43
ity 7
Putnam VT Voyager Fund; B 4/30/98 Open/Equ 1.42 38.41
ity
(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
Investment Management Company 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.
Under Section 9 (b) of the Investment Company Act of
1940 SEC may prohibit the directors and officers from
remaining in office, if SEC will judge that such
directors and officers have willfully violated any
provision of the federal securities law.
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.$51,300,042 as of the end of October 1998
(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.$51,300,042 as of the end of October 1998
(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. engages in providing
marketing services to the Fund.
(C) Yamatane Securities Co., Ltd. (Distributor in Japan and
Agent Company)
(1) Amount of Capital
14,760,035,531 billion as of the end of October
1998
(2) Description of Business
Yamatane Securities Co., Ltd. is a diversified
securities company in Japan. Also, it engages the
fund units for the investment trust funds of Asahi
Investment Trust Management Co., Ltd., Sakura
Investment Trust Management Co., Ltd., Nissei
Investment Trust Management Co., Ltd., NCG
Investment Trust Management Co., Ltd. and Nomura
Investment Trust Management Co., Ltd., and acts as
the Agent Company and engages in handling the sales
and repurchase for Fidelity Funds International
Fund.
(3) 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 Officers
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
Officer Management and
or Fund Company Shareholder
Trustee Service Agent
George Chairman and Chairman and None
Putnam Trustee Director
Charles Executive Vice Managing None
E. Porter President Director
Patricia Senior Vice Senior Vice None
C. President President
Flaherty
Lawrence Trustee and President and None
J. Lasser Vice President CEO
Gordon H. Vice President Senior Director
Silver Managing
Director
John R. Vice President Senior Vice None
Verani President
Ian C. Vice President Senior None
Ferguson Managing
Director
IV. FINANCIAL CONDITION OF THE FUND
1. FINANCIAL STATEMENTS
[Omitted, in Japanese version, financial statements of
the Fund and Japanese translations thereof are
incorporated here]
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. Its
report and the Fund's financial statements are included
in the Fund's annual report to shareholders, which is
available upon request.
CLASS M
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
YEAR ENDED JUNE 30
1998 1997 1996 1995 +
NET ASSET VALUE, $18.85 $15.86 $13.90 $12.35
BEGINNING OF PERIOD
INVESTMENT OPERATIONS .20 (c) .19 (c) .24 (c) .09
NET INVESTMENT INCOME
NET REALIZED AND 5.89 4.03 2.12 1.62
UNREALIZED GAIN ON
INVESTMENTS
TOTAL FROM INVESTMENT 6.09 4.22 2.36 1.71
OPERATIONS
LESS DISTRIBUTIONS: (.30) (.17) - -
FROM NET INVESTMENT
INCOME
FROM NET REALIZED GAIN (1.13) (1.06) (.40) (.16)
ON INVESTMENTS
TOTAL DISTRIBUTIONS (1.43) (1.23) (.40) (.16)
NET ASSET VALUE, END OF $23.51 $18.85 $15.86 $13.90
PERIOD
RATIOS AND SUPPLEMENTAL
DATA
TOTAL INVESTMENT RETURN 34.56 27.91 17.28 14.06 *
AT NET ASSET VALUE
(%)(A)
NET ASSETS, END OF $42,614 $15,811 $4.047 $746
PERIOD
(IN THOUSANDS)
RATIO OF EXPENSES TO 1.82 1.95 2.02 1.08 *
AVERAGE NET ASSETS
(%)(B)
RATIO OF NET INVESTMENT .99 1.10 1.59 1.61 *
INCOME (LOSS) TO
AVERAGE NET ASSETS (%)
PORTFOLIO TURNOVER RATE 48.86 55.45 38.85 44.33
(%)
+ For the period from the commencement of operations on
December 1, 1994 through June 30, 1995.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the year
ended June 30, 1996 and thereafter includes amounts paid
through expense offset and brokerage service
arrangements. Prior period ratios exclude these amounts.
(c) Per share net investment income (loss) has been
determined on the basis of the weighted average number of
shares outstanding during the period.
The following financial documents are omitted here.
Statement of assets and liabilities June 30, 1998
Statement of operations Year ended June 30, 1998
Statement of changes in net assets
Financial highlights (For a share outstanding throughout the
period)
Notes to financial statements June 30, 1998
Portfolio of investments owned June 30, 1998
Statement of assets and liabilities June 30, 1997
Statement of operations Year ended June 30, 1997
Statement of changes in net assets
Financial highlights (For a share outstanding throughout the
period)
Notes to financial statements June 30, 1997
Report of independent accountants For the fiscal year ended
June 30, 1998
Report of independent accountants For the year ended June 30,
1997
2. CONDITION OF THE FUND (unaudited)
(a) Statement of Net Assets
(As of the end of October 1998)
$ Yen
(in thousands)
a. Total Assets 1,648,314,845 192,028,679
b. Total Liabilities 33,022,426 3,847,113
c. Total Net Assets 1,615,292,419 188,181,567
d. Total Number of Shares Class A. 38,463,033 Shares
Oustanding Class B. 33,074,358 Shares
Class M. 5,938,325 Shares
e. Net Asset Value Class A. 21.10 Yen2,458.15
per Share (c/d) Class B. 20.54 Yen2,392.91
Class M. 20.93 Yen2,438.35
b. Names of Major Portfolio Equity Shares (Top 30 Equity Shares)
(As of the end of October 1998)
<TABLE><CAPTION>
U.S. Dollars
Acquisition Cost Current Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Quantity
(Number) Investment
Name of of per per Ratio
Name of Issue Country Business Shares) Share Total Share Total (%)
1. Novartis AG Switzerla Pharmaceuticals 24,321 1,426.64 34,697,393 43,941,681 2.72
ADR nd
2. Nestle S.A. Switzerla Food and 18,489 1.612.61 29,815,552 39,428,597 2.44
nd Beverages
3. Vivendi France Environmental 152,723 140.82 21,507,012 228.77 34,938,579 2.16
Control
4. Allied Irish Ireland Banks 2,359,336 8.53 20,123,938 14.45 34,098,053 2.11
Banks PLC
5. UBS AG Switzerla Insurance and 113,987 269.53 30,722,775 275.08 31,355,920 1.94
nd Finance
6. Internationale Netherlan Insurance and 629,764 47.32 29,802,161 48.46 30,516,009 1.89
Nederlanden ds Finance
Groep
7. CRH PLC Ireland Building and 2,076,892 11.17 23,193,072 14.66 30,445,419 1.88
Construction
8. Mannesmann AG Germany Business 300,520 62.36 18,741,143 98.53 29,608,777 1.83
Equipment &
Services
9. Akzo-Nobel Ord Netherlan Chemicals 712,896 43.22 30,811,209 38.92 27,742,415 1.72
ds
10 Ahold Netherlan Retail 784,016 30.11 23,609,959 33.29 26,097,445 1.62
. Koninklijke ds
11 Telefonica de Spain Telecommunication 544,157 42.12 22,922,198 45.22 24,606,043 1.52
. Espana s
12 Philips Netherlan Electonics and 454,124 61.91 28,114,234 53.28 24,195,929 1.50
. Electronics ds Electrical
N.V. Eqipment
13 Tomkins PLC United Conglomerates 5,218,339 4.92 25,651,182 4.63 24,153,656 1.50
. Kingdom
14 Scottish Power United Utilities 2,452,515 6.95 17,051,100 9.84 24,140,399 1.49
. PLC Kingdom
15 Granada Group United Conglomerates 1,573,075 17.42 27,407,395 15.07 23,713,115 1.47
. PLC Kingdom
16 Allied Zurich Switzerla Insurance and 1,930,174 12.13 23,403,727 11.95 23,070,129 1.43
. AG (Non) nd Finance
17 Swisscom AG Switzerla Telecommunication 65,900 252.90 16,666,171 339.87 22,397,705 1.39
. nd s
18 Banque France Banks 339,546 67.74 22,999,984 63.44 21,540,695 1.33
. Nationale de
Paris
19 British United Oil and Gas 1,458,059 14.06 20,505,025 14.68 21,405,735 1.33
. Petroleum Co. Kingdom
PLC
20 Peninsular and United Transportation 2,021,827 12.73 25,735,012 10.43 21,085,673 1.31
. Oriental Steam Kingdom
Navigation
21 Avis Europe United Automobile 4,775,177 2.21 10,535,701 4.37 20,863,417 1.29
. PLC 144A ADR Kingdom
22 Bass PLC United Food and 1,704,336 18.45 31,438,704 12.14 20,684,673 1.28
. Kigdom Beverages
23 Total S.A. France Oil and Gas 177,998 102.79 18,295,793 115.56 20,569,086 1.27
. Class B
24 Telecom Italia Italy Telecommunication 2,824,250 7.59 21,426,032 7.24 20,449,323 1.27
. SPA s
25 Elf Aquitaine France Oil and Gas 174,211 123.45 21,507,012 115.92 20,194,280 1.25
.
26 Portugal Portugal Telecommunication 422,518 39.23 16,576,865 47.46 20,054,670 1.24
. Telecom S.A. s
27 British United Transportation 2,675,947 10.00 26,761,865 7.27 19,441,183 1.20
. Airways PLC Kingom
28 Oy Nokia AB Finland Telecommunication 213,327 47.70 10,175,842 91.13 19,440,003 1.20
. Class A s
29 Cable & United Telecommunication 1,722,000 13.27 22,856,407 11.22 19,313,608 1.20
. Wireless PLC Kingdom s
30 Ericsson Class Sweden Telecommunication 807,749 24.27 19,604,466 22.61 18,261,249 1.13
. B s
</TABLE>
V. FINANCIAL CONDITION OF THE INVESTMENT MANAGEMENT COMPANY
Deloitte & Touche LLP is responsible for this part.
Japanese translation of fiscal 1998 and 1997 are attached
to the Japanese version of the Annual Securities Report.
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 a 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 relation to the Fund were
filed with the Ministrer of Finance or the Director of
Kanto Local Finance Bureau.
June 15, 1998: Securities Registration Statement
June 22, 1998: Amendment to Securities Registration Statement
July 1, 1998: Amendment to Securities Registration Statement
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
PUTNAM EUROPE GROWTH FUND
AMENDMENT TO
SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing
Date: December 18, 1998
Name of the Registrant Trust: PUTNAM EUROPE GROWTH FUND
Name of Trustees: George Putnam
William F. Pounds
Jameson A. Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin, III
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
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
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]_____
(Seal)
Address or Place of Business Kasumigaseki Building,
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 EUROPE GROWTH FUND
Offering or Sale of Foreign
Investment Fund Securities:
Type and Aggregate Amount of Up to 30 million Class M Shares.
Foreign Investment Fund Securities Up to the total amount obtained by
to be Publicly Offered or Sold: aggregating the net asset value
per Class M Share in respect of
30 million Class M Shares
(The maximum amount expected to be
sold is 627.9 million U.S.
dollars (73.2 billion.)
Note 1: U.S.$ amount is translated into Japanese Yen at the
rate of U.S.$l.00=116.50, 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 October 30, 1998.
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 October 30, 1998 (U.S.$20.93) by 30 million
Class M Shares for convenience.
Places where a copy of this Amendment to Securities
Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Amendment to Securities
Registration Statement is 4).
I. REASON FOR FILING THIS AMENDMENT TO SECURITIES REGISTRATION
STATEMENT:
This statement purports to amend and update the relevant
information of the Securities Registration Statement
("Original SRS") filed on June 15, 1998 due to the fact
that the aforementioned Annual Securities Report was filed
today.
The exchange rates used in this statement to translate the
amended amounts of foreign currencies are different from
those used before these amendments, as the latest exchange
rates are used in this statement.
II. CONTENTS OF THE AMENDMENTS (the page numbers refer to in
the Original SRS)
Part II. INFORMATION CONCERNING ISSUER (page 5 of the Original
SRS)
The following matters in the Original SRS are amende
have the same contents as those provided in the following
items of the aforementioned Annual Securities Report:
Before amendment After amendment
[Original SRS] [Aforementioned Annual Securities
Report]
I. DESCRIPTION OF THE FUND I. DESCRIPTION OF THE FUND
(the aforementioned Japanese
Annual Securities Report,
from page 1 to page 31)
II. OUTLINE OF THE FUND II. OUTLINE OF THE FUND (Ditto,
from page 32 to page 65)
III. OUTLINE OF THE OTHER III. OUTLINE OF THE OTHER
RELATED COMPANIES RELATED COMPANIES (Ditto,
from page 66 to page 67)
IV. FINANCIAL CONDITIONS OF IV. FINANCIAL CONDITIONS OF
THE FUND THE FUND
(Ditto, from page 66 to page
67)
V. SUMMARY OF INFORMATION VI. SUMMARY OF INFORMATION
CONCERNING FOREIGN CONCERNING FOREIGN
INVESTMENT FUND SECURITIES INVESTMENT FUND SECURITIES
(Ditto, page 74)
Note 1: U.S.$ amount is translated into Japanese Yen at the
rate of U.S.$l.00=116.50, 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 October 30, 1998.
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
July 1 to June 30 of the following year. However, the
first fiscal year refers to a period from December 1, 1994
(Incorporation of the Fund) to June 30, 1995.
VI. MISCELLANEOUS
(1) The following documents in relation to the Fund were filed
with the Minister of Finance or the Director of Kanto Local
Finance Bureau;
June 15, 1998: Securities Registration Statement
June 22, 1998: Amendment to Securities Registration Statement
July 1, 1998: 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.
Financial 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, 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 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. Photos and
illustrations set forth in the attached may be used.
(c) For information of the Fund's achievements, 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 may be set out in the figures
or graphs. Such information regarding the Fund's
achievement may be converted into and presented in yen.
Part III. SPECIAL INFORMATION (Ditto, page 79)
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
Annual Securities Report:
