PUTNAM MUNICIPAL INCOME FUND
Supplement dated February 8, 1995
to Prospectus dated August 1, 1994,
as revised December 1, 1994
THE SECTION "EXPENSES SUMMARY" ON PAGES 3 AND 4 OF THE PROSPECTUS
IS REPLACED BY THE FOLLOWING:
ABOUT THE FUND
EXPENSES SUMMARY
Expenses are one of several factors to consider when investing in
the Fund. The following table summarizes your maximum
transaction costs from investing in the Fund and expenses
incurred by the Fund based on its most recent fiscal year. The
Examples show the cumulative expenses attributable to a
hypothetical $1,000 investment in the Fund over specified
periods.
CLASS A CLASS B CLASS M
SHARES SHARES SHARES
SHAREHOLDER TRANSACTION
EXPENSES
Maximum Sales Charge
Imposed on Purchases
(as a percentage of
offering price) 4.75% NONE* 3.25%
5.0% in the first
Deferred Sales Charge (as a year, declining
percentage of the lower of to 1.0% in the
original purchase price or sixth year, and
redemption proceeds) NONE** eliminated NONE
thereafter
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average
net assets)
Management Fees 0.60% 0.58% 0.60%
12b-1 Fees 0.25% 0.85% 0.50%
Other Expenses 0.12% 0.11% 0.12%
Total Fund Operating
Expenses 0.97% 1.54% 1.22%
The table is provided to help you understand the expenses of
investing in the Fund and your share of the operating expenses
which the Fund incurs. The 12b-1 fees for Class M shares shown
in the table reflect the amount to which the Trustees currently
limit payments under the Class M Distribution Plan. For Class M
shares, management fees and "Other Expenses" are based on the
operating expenses for the Fund's Class A shares.
EXAMPLES
Your investment of $1,000 would incur the following expenses,
assuming 5% annual return and redemption at the end of each
period:
1 3 5 10
year years years years
CLASS A $57 $77 $99 $161
CLASS B $66 $79 $104 $168***
CLASS M $45 $70 $97 $175
Your investment of $1,000 would incur the following expenses,
assuming 5% annual return but no redemption:
1 3 5 10
year years years years
CLASS A $57 $77 $99 $161
CLASS B $16 $49 $84 $168***
CLASS M $45 $70 $97 $175
The Examples do not represent past or future expense levels.
Actual expenses may be greater or less than those shown. Federal
regulations require the Examples to assume a 5% annual return,
but actual annual return has varied.
* The 12b-1 fees borne by Class B and Class M shares may cause
long-term shareholders to pay more than the economic
equivalent of the maximum permitted Class A shares front-end
sales charge on Class A shares.
** A deferred sales charge of up to 1.00% is assessed on
certain redemptions of Class A shares that were purchased
without an initial sales charge as part of an investment of
$1 million or more. See "How to buy shares - Class A
shares."
*** Reflects conversion of Class B shares to Class A shares
(which pay lower ongoing expenses) approximately eight years
after purchase. See "How to buy shares - Class B shares -
Conversion of Class B shares."
