Putnam
Investment Grade
Municipal
Trust
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
5-31-99
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
Rising interest rates are not good news for bond investors, but the impact
of this news in the municipal bond market was somewhat deflected in the
face of steady demand for municipals and shrinking supply. Recently,
long-term Treasuries edged past 6% for the first time in more than a year.
Long-term municipal bond yields have risen too but not as dramatically,
illustrating the resistance of the municipal market to a rise in interest
rates. This relative stability in an uncertain rate environment has
enabled Putnam Investment Grade Municipal Trust to deliver solid
performance and attractive levels of income for the six months ended May
31, 1999.
Total return for 6 months ended 5/31/99
Net asset value Market price
- ----------------------------------------------------------------
1.18% 0.77%
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Past performance is no indication of future results. Performance
information for longer periods begins on page 6.
* SUPPLY LOW; DEMAND REMAINS STRONG
This year's climbing interest rates continued to take their toll on
new-issue volume, as the national supply fell 40% compared with the spring
of 1998. On the demand side, cash flow into municipal bonds has increased
- -- a by-product of a volatile stock market and investors' need to
rebalance their portfolios. The ensuing supply/demand relationship is
positive for the municipal bond market and should help support bond prices
in a rising interest-rate environment.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Utilities 24.9%
Transportation 22.4%
Health care 16.5%
Housing 11.1%
Education 7.1%
Footnote reads:
*Based on net assets as of 5/31/99. Holdings will vary over time.
As interest rates have moved up, Fund Manager Richard Wyke has begun the
process of increasing maturities incrementally in order to lock in higher
yields. He cannot predict when interest rates will reach their peak, of
course, but he does believe that this is a good time to implement this
strategy.
* EMPHASIS ON TRANSPORTATION, UTILITY SECTORS
Rick has identified two industry sectors that continue to provide
rewarding results: transportation and utilities. The economy's strength
affords solid underpinnings for the transportation industry -- especially
airlines and air freight. As an example, Denver City & County Airport
revenue bonds continue to provide solid income for the fund. A record
number of passengers traveled through this airport in 1998, and net income
and revenues increased as well.
"Though municipal bonds aren't the conspicuous value they were last year --
when yields on Treasury bonds and municipals were nearly identical -- tax-free
bonds are still attractive."
- -- Forbes, April 5, 1999
In the utility sector, Rick believes that while deregulation and
restructuring are still in the early stages, the prices of many municipal
electric utility bonds have already been fully discounted and now
represent significant value. For example, two Nevada revenue bond issues,
Southwest Gas Company and Nevada Power Company, contributed to the fund's
positive performance. Nevada Power has a strong service territory with a
concentration of nonnuclear power assets. The proposed merger of Southwest
Gas with ONEOK would create the largest independent gas distributor in the
United States. While these holdings, along with others discussed in this
report, were viewed favorably at the end of the period, all are subject to
review and adjustment in accordance with the fund's investment strategy
and may vary in the future.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
A -- 11.5%
Baa/BBB -- 31.1%
Ba/BB and below -- 8.7%
Aaa/AAA -- 45.4%
Aa/AA -- 3.3%
Footnote reads:
* As a percentage of market value as of 5/31/99. A bond rated Baa or higher
is considered investment grade. All ratings reflect Standard & Poor's and
Moody's descriptions unless noted otherwise; percentages may include
unrated bonds considered by Putnam Management to be of comparable quality.
Ratings will vary over time.
* OUTLOOK: INFLATION SLIGHTLY HIGHER BUT STILL LOW
With some indications that inflation may be starting to rise, the consumer
price index is moving toward an annualized core inflation rate of
approximately 2%. Since inflation in 1998 was practically nonexistent, a
move to 2% may seem tremendous but is actually still well below the 4%
that has generally been considered average. Despite some signs of
inflation, we still live in a strong economy in a deflationary world in
which many prices are falling. Just look at online stock trading prices
and the discounts available from online bookstores for evidence of
deflation.
It is important to keep inflation in mind when investors determine what
constitutes a good rate of return. Simply put, a yield of 6% with 2%
inflation is still a solid return, especially once the psychology of an
advancing stock market begins to shift. When that happens, a steady 4%
after-tax, after-inflation yield looks exceptionally good in addition to
the benefit of substantially less volatility.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
July 21, 1999
The views expressed here are exclusively those of Putnam Management. They
are not meant as investment advice. Although the described holdings were
viewed favorably as of 5/31/99, there is no guarantee the fund will
continue to hold these securities in the future.
Performance summary
This section provides information about your fund's performance, which should
always be considered in light of its investment strategy. Putnam Investment
Grade Municipal Trust is designed for investors seeking high current income
free from federal income tax, consistent with preservation of capital.
TOTAL RETURN FOR PERIODS ENDED 5/31/99
Lehman Bros.
Market Municipal Consumer
NAV price Bond Index price index
- ---------------------------------------------------------------------------
6 months 1.18% 0.77% 0.80% 1.34%
- ---------------------------------------------------------------------------
1 year 4.63 11.90 4.67 2.09
- ---------------------------------------------------------------------------
5 years 38.39 61.71 41.51 12.68
Annual average 6.71 10.09 7.19 2.42
- ---------------------------------------------------------------------------
Life of fund (10/26/89) 118.98 151.20 105.16 32.32
Annual average 8.52 10.08 7.79 2.97
- ---------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment
returns, net asset value and market price will fluctuate so that an
investor's shares when sold may be worth more or less than their original
cost.
TOTAL RETURN FOR PERIODS ENDED 6/30/99 (most recent calendar quarter)
NAV Market price
- ---------------------------------------------------------------------------
6 months -0.38% -3.89%
- ---------------------------------------------------------------------------
1 year 3.12 3.85
- ---------------------------------------------------------------------------
5 years 37.31 54.54
Annual average 6.55 9.10
- ---------------------------------------------------------------------------
Life of fund (10/26/89) 116.34 143.92
Annual average 8.30 9.65
- ---------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment
returns and principal value will fluctuate so that an investor's shares
when sold may be worth more or less than their original cost.
PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 5/31/99
- -----------------------------------------------------------------------------
Distributions (common shares)
- -----------------------------------------------------------------------------
Number 6
- -----------------------------------------------------------------------------
Income $0.4812
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Capital gains1 --
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Total $0.4812
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Preferred shares Series A (1,400 shares)
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Income $1,607.96
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Capital gains1 --
- -----------------------------------------------------------------------------
Total $1,607.96
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Share value (common shares) NAV Market price
- -----------------------------------------------------------------------------
11/30/98 $11.98 $14.937
- -----------------------------------------------------------------------------
5/31/99 11.64 14.562
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Current return (common shares/end of period)
- -----------------------------------------------------------------------------
Current dividend rate2 8.25% 6.59%
- -----------------------------------------------------------------------------
Taxable equivalent3 13.65 10.91
- -----------------------------------------------------------------------------
1 Capital gains, if any, are taxable for federal and, in most cases, state
tax purposes. For some investors, investment income may also be subject to
the federal alternative minimum tax. Investment income may be subject to
state and local taxes.
2 Income portion of most recent distribution, annualized and divided by
NAV or market price at end of period.
3 Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities and the net assets allocated to remarketed preferred shares,
divided by the number of outstanding common shares.
Market price is the current trading price of one share of the fund. Market
prices are set by transactions between buyers and sellers on the New York
Stock Exchange.
Comparative benchmarks
Lehman Brothers Municipal Bond Index is an unmanaged list of long-term
fixed-rate investment-grade tax-exempt bonds representative of the
municipal bond market. The index does not take into account brokerage
commissions or other costs and may pose different risks than the fund.
Securities in the fund do not match those in the index and performance of
the fund will differ. It is not possible to invest directly in an index.
Consumer price index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
A guide to the financial statements
These sections of the report constitute the fund's financial
statements.
The fund's portfolio lists all the fund's investments and their values as
of the last day of the reporting period. Holdings are organized by asset
type and industry sector, country, or state to show areas of concentration
and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price is determined. All investment and non-investment assets are
added together. Any unpaid expenses and other liabilities are subtracted
from this total. The result is divided by the number of shares to determine
the net asset value per share, which is calculated separately for each class
of shares. (For funds with preferred shares, the amount subtracted from total
assets includes the net assets allocated to remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss for the
reporting period. This is determined by adding up all the fund's earnings --
from dividends and interest income -- and subtracting its operating expenses.
This statement also lists any net gain or loss the fund realized on the sales
of its holdings and -- for holdings that remain in the portfolio -- any change
in unrealized gains or losses over the period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number of the
fund's shares. It lists distributions and their sources (net investment income
or realized capital gains) over the current reporting period and the most
recent fiscal year-end. The distributions listed here may not match the
amounts listed in the Statement of Operations because the distributions are
determined on a tax basis and may be paid in a different period from the one
in which they were earned.
Financial highlights provide an overview of the fund's investment results,
per-share distributions, expense ratios, net investment income ratios and
portfolio turnover in one summary table, reflecting the five most recent
reporting periods. In a semiannual report, the highlight table also includes
the current reporting period. For open-ended funds, a separate table is
provided for each share class.
<TABLE>
<CAPTION>
The fund's portfolio
May 31, 1999 (Unaudited)
KEY TO ABBREVIATIONS
AMBAC -- AMBAC Indemnity Corporation
COP -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GNMA Coll. -- Government National Mortgage Association Collateralized
G.O. Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- Municipal Bond Investors Assurance Corporation
MUNICIPAL BONDS AND NOTES (97.4%) (a)
PRINCIPAL AMOUNT RATING(RAT) VALUE
<S> <C> <C> <C>
Alabama (1.6%)
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$ 5,500,000 Gadsden East, Med. Clinic Board Rev. Bonds
(Baptist Hosp. of Gadsden Inc.), Ser. A,
7.8s, 11/1/21 BBB $ 6,105,000
Arkansas (1.1%)
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4,000,000 Northwest Regl. Apt. Auth. Rev. Bonds, 7s, 2/1/10 BB-/P 4,350,000
California (6.1%)
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2,000,000 Anaheim, Pub. Fin. Auth. IFB, MBIA, 9.32s,
12/28/18 Aaa 2,570,000
4,650,000 CA State U. IFB, AMBAC, 10.088s, 11/1/21
(acquired 3/2/92, cost $4,659,603) (RES) Aaa 5,295,188
1,750,000 CA Statewide Cmnty. Dev. Auth. COP
(The Internext Group), 5 3/8s, 4/1/30 BBB 1,690,938
5,200,000 Central Valley Fin. Auth. Rev. Bonds
(Carson Ice-Cogeneration), 6s, 7/1/09 BBB/P 5,499,000
Los Angeles Cnty., Metro. Trans. Auth. Sales
Tax Rev. Bonds
3,235,000 1st Tier Lien, Ser. A, MBIA , 5 3/4s, 7/1/11 Aaa 3,558,500
3,030,000 2nd Tier Lien, MBIA 5 5/8s, 7/1/11 Aaa 3,310,275
1,400,000 Orange Cnty., Local Trans. Auth. IFB, FGIC,
8.468s, 2/14/11 (acquired 2/6/96,
cost $1,474,153) (RES) Aaa 1,620,500
--------------
23,544,401
Colorado (8.6%)
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CO Hsg. Fin. Auth. Rev. Bonds (Single Fam.), Ser. B-2
2,000,000 7s, 5/1/26 Aa2 2,202,500
1,000,000 6.8s, 11/1/28 Aa2 1,111,250
Denver, City & Cnty. Arpt. Rev. Bonds
735,000 Ser. A, 8 3/4s, 11/15/23 Baa1 814,013
265,000 Prerefunded, Ser. A, 8 3/4s, 11/15/23 Aaa 299,781
4,365,000 Ser. A, 8 1/2s, 11/15/23 Baa1 4,686,919
Denver, City & Cnty. Arpt. Rev. Bonds
410,000 Prerefunded, Ser. A, 8 1/2s, 11/15/23 Aaa 445,875
4,480,000 Ser. A, 8 1/4s, 11/15/12 Baa1 4,816,000
420,000 Prerefunded, Ser. A, 8 1/4s, 11/15/12 Aaa 455,175
3,820,000 Ser. A, 8s, 11/15/25 Baa1 4,096,950
1,380,000 Prerefunded, Ser. A, 8s, 11/15/25 Aaa 1,511,100
6,330,000 Ser. A, 7 3/4s, 11/15/21 Baa1 6,891,788
1,670,000 Prerefunded, Ser. A, 7 3/4s, 11/15/21 Aaa 1,849,525
3,000,000 Ser. D, 7 3/4s, 11/15/13 Baa1 3,716,250
--------------
32,897,126
Connecticut (1.8%)
- --------------------------------------------------------------------------------------------------------------------------
4,825,000 CT State Dev. Auth. Poll. Control Rev. Bonds
(New England Power Co.), 7 1/4s, 10/15/15 A1 4,990,642
2,000,000 CT State Resource Recvy. Auth. Muni. Rev.
Bonds (Bridgeport Service Fee), Ser. A,
7 1/2s, 1/1/09 A2 2,043,200
--------------
7,033,842
Florida (3.5%)
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10,525,000 Broward Cnty., Resource Recvy. Rev. Bonds
(SES Broward Cnty. LP South), 7.95s, 12/1/08 A3 11,029,674
2,000,000 Hernando Cnty., Indl. Dev. Rev. Bonds
(FL Crushed Stone Co.), 8 1/2s, 12/1/14 B+/P 2,287,500
--------------
13,317,174
Georgia (2.9%)
- --------------------------------------------------------------------------------------------------------------------------
4,000,000 Burke Cnty., Dev. Auth. Poll. Control Rev. Bonds
(Oglethorpe Pwr. Co. Vogtle), MBIA, 8s, 1/1/22 Aaa 4,630,000
4,800,000 De Kalb Cnty., Muni. Hsg. Auth. Rev. Bonds
(Briarcliff Park Apts.), Ser. A, 7 1/2s, 4/1/17 AAA 5,346,000
1,000,000 GA Med. Ctr. Hosp. Auth. IFB (Columbus Regl.
Hlth. Care Syst.), Ser. B, MBIA, 9.104s, 8/1/10 Aaa 1,165,000
--------------
11,141,000
Hawaii (1.6%)
- --------------------------------------------------------------------------------------------------------------------------
5,500,000 HI State Dept. of Budget & Fin. Special Purpose
Mtge. IFB, 8.473s, 11/1/21 AA- 6,276,875
Illinois (5.3%)
- --------------------------------------------------------------------------------------------------------------------------
8,405,000 Chicago, Midway Arpt. Rev. Bonds, Ser. A, MBIA,
5 1/8s, 1/1/35 Aaa 7,911,206
Chicago, O'Hare Intl. Arpt. Special Fac. Rev. Bonds
2,335,000 (United Air Lines, Inc.), Ser. B, 8.95s, 5/1/18 Baa2 2,542,231
6,500,000 (American Airlines, Inc.), 8.2s, 12/1/24 Baa1 7,629,375
2,500,000 IL, Dev. Fin. Auth. Hosp. Rev. Bonds (Adventist
Hlth. Syst./Sunbelt Obligation), 5.65s, 11/15/24 A- 2,428,125
--------------
20,510,937
Indiana (2.5%)
- --------------------------------------------------------------------------------------------------------------------------
5,000,000 IN State Dev. Fin. Auth. Rev. Bonds (USX Corp.),
5.6s, 12/1/32 Baa2 4,887,500
215,000 Indiana Bond Bank Rev. Bonds (Special Loan
Program), Ser. B, 8 1/2s, 2/1/18 A+ 218,548
3,000,000 Indianapolis Indl. Arpt. Auth. Special Fac. Rev.
Bonds (United Airlines), Ser. A, 6 1/2s, 11/15/31 Baa2 3,221,250
1,000,000 Rockport, Indl. Poll. Ctrl. Rev. Bonds (Indiana-
Michigan Pwr.), Ser. B, FGIC, 7.6s, 3/1/16 Aaa 1,077,500
--------------
9,404,798
Kansas (1.3%)
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4,500,000 Burlington, Poll. Control Rev. Bonds (Kansas
Gas & Electric Co.), MBIA, 7s, 6/1/31 Aaa 4,837,500
Kentucky (1.1%)
- --------------------------------------------------------------------------------------------------------------------------
4,000,000 Kenton Cnty., Special Fac. Arpt. Rev. Bonds
(Delta Airlines), Ser. A, 7 1/2s, 2/1/12 Baa3 4,335,000
Louisiana (7.2%)
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9,250,000 St. Charles Parish, Poll. Control Rev. Bonds
(LA Pwr. & Lt. Co.), 8s, 12/1/14 Baa3 9,667,638
W. Feliciana, Parish Poll. Control Rev. Bonds
(Gulf States Util. Co.)
2,500,000 8s, 12/1/24 Ba1 2,589,450
5,100,000 Ser. II, 7.7s, 12/1/14 Ba1 5,565,375
3,000,000 Ser. III, 7.7s, 12/1/14 Ba1 3,273,750
6,000,000 Ser. A, 7 1/2s, 5/1/15 BB+ 6,555,000
--------------
27,651,213
Maine (1.4%)
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5,000,000 ME Fin. Auth. Solid Waste Recycling Fac. Rev.
Bonds (Great Northern Paper-Bowater),
7 3/4s, 10/1/22 Baa1 5,525,000
Maryland (1.4%)
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3,035,000 MD Econ. Dev. Corp. Hlth. Care Facs. Rev.
Bonds (Crescent Cities), Ser. A, GNMA Coll.,
5.45s, 12/20/37 AAA 3,038,794
2,000,000 MD State Hlth. & Higher Edl. Fac. Auth. Rev.
Bonds (Doctors Cmnty. Hosp.), 8 3/4s, 7/1/12 Aaa 2,154,580
--------------
5,193,374
Massachusetts (5.5%)
- --------------------------------------------------------------------------------------------------------------------------
8,750,000 MA State Hlth. & Edl. Fac. Auth. IFB (Med. Ctr.
of Central MA), Ser. B, AMBAC, 9.47s, 6/23/22 Aaa 11,210,938
4,000,000 MA State Hlth. & Edl. Fac. Auth. Rev. Bonds
(MA Eye & Ear Infirmary), Ser. A, 7 3/8s, 7/1/11 Baa3 4,355,000
5,000,000 MA State Indl. Fin. Agcy. Rev. Bonds (Cape Cod
Hlth. Syst. Issue), 8 1/2s, 11/15/20 Aaa 5,450,000
--------------
21,015,938
Michigan (2.0%)
- --------------------------------------------------------------------------------------------------------------------------
1,695,000 Detroit, Dev. Fin. Auth. Tax Increment Rev. Bonds,
Ser. A, 9 1/2s, 5/1/21 BBB+/P 2,021,288
2,200,000 Detroit, Wtr. Supply Syst. IFB, FGIC, 9.17s, 7/1/22 Aaa 2,532,750
2,800,000 MI State Strategic Fund Ltd. Oblig. Rev. Bonds
(Mercy Svcs. for Aging), 9.4s, 5/15/20 Aaa 2,976,764
--------------
7,530,802
Missouri (3.2%)
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2,500,000 MO State Hlth. & Edl. Fac. Auth. Rev. Bonds
(BJC Hlth. Syst.), Ser. A, 6 1/2s, 5/15/20 Aa2 2,803,125
8,900,000 SCA Tax Exempt Trust Multi-Fam. Mtge. Rev.
Bonds (Whispering Lake), Ser. A-11, FSA,
7.1s, 1/1/30 Aaa 9,578,625
--------------
12,381,750
Nebraska (0.4%)
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1,500,000 NE Investment Fin. Auth. Single Fam. Mtge. IFB,
Ser. B, GNMA Coll., 11.623s, 3/15/22 Aaa 1,606,200
Nevada (2.6%)
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Clark Cnty., Indl. Dev. Rev. Bonds
6,500,000 (NV Pwr. Co.), 7.8s, 6/1/20 Baa3 6,818,955
3,000,000 (Southwest Gas Corp.), Ser. B, 7 1/2s, 9/1/32 Baa2 3,273,750
--------------
10,092,705
New York (6.2%)
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4,000,000 Long Island, Pwr. Auth. NY Elec. Syst. Rev. Bonds,
Ser. A, 5 1/4s, 12/1/26 A- 3,910,000
2,000,000 NY City, Indl. Dev. Agcy. Rev. Bonds (Brooklyn
Navy Yard Cogen. Partners), Ser. G, 5 3/4s,
10/1/36 Baa3 2,035,000
4,100,000 NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds,
Ser. C, 5 3/4s, 6/15/26 A1 4,279,375
NY State Dorm. Auth. Rev. Bonds
4,500,000 (City U. Syst.), Ser. F, 7 7/8s, 7/1/17 Aaa 4,803,930
6,250,000 (State U. Edl. Fac.), Ser. A, 7.7s, 5/15/12 Aaa 6,630,375
2,000,000 (City U. Syst.), Ser. A, 7 5/8s, 7/1/20 Aaa 2,130,940
--------------
23,789,620
North Carolina (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
2,000,000 NC Muni. Pwr. Agcy. Syst. Rev. Bonds,
Ser. A, 5 3/4s, 1/1/26 BBB 2,000,000
Ohio (1.5%)
- --------------------------------------------------------------------------------------------------------------------------
5,000,000 OH State Air Quality Dev. Auth. Rev. Bonds
(Cleveland Co.), FGIC, 8s, 12/1/13 Aaa 5,668,750
Pennsylvania (4.1%)
- --------------------------------------------------------------------------------------------------------------------------
2,000,000 Allegheny Cnty., Res. Fin. Auth. Rev. Bonds, Ser. M,
GNMA Coll., 7.9s, 6/1/11 Aaa 2,080,000
5,000,000 Montgomery Cnty., Indl. Dev. Auth. Resource
Recvy. Rev. Bonds, 7 1/2s, 1/1/12 A 5,243,750
7,600,000 PA State Higher Ed. Assistance Agcy. IFB, Ser. B,
MBIA, 11.463s, 3/1/20 Aaa 8,407,500
--------------
15,731,250
Tennessee (3.9%)
- --------------------------------------------------------------------------------------------------------------------------
2,600,000 Metropolitan Govt. Nashville & Davidson Cnty.,
Tenn. Wtr. & Swr. IFB, AMBAC, 8.783s, 1/1/22 Aaa 2,970,500
10,900,000 SCA Tax Exempt Trust Multi-Fam. Mtge. Rev.
Bonds (Steeplechase Falls), Ser. A-10, FSA,
7 1/8s, 1/1/30 Aaa 11,990,000
--------------
14,960,500
Texas (11.6%)
- --------------------------------------------------------------------------------------------------------------------------
11,500,000 Alliance, Arpt. Auth. Rev. Bonds (Federal
Express Corp.), 6 3/8s, 4/1/21 Baa2 12,218,750
2,500,000 Bexar Cnty., Hlth. Fac. Dev. Corp. Rev. Bonds
(St. Luke's Lutheran Hosp.), 7.9s, 5/1/11 AAA/P 2,846,875
5,000,000 Brazos River, Poll. Control Auth. Rev. Bonds
(TX Utils. Elec. Co.), Ser. A, 7 7/8s, 3/1/21 A3 5,362,500
2,500,000 Dallas-Fort Worth, Intl. Arpt. Fac. Impt. Corp.
Rev. Bonds (American Airlines, Inc.),
7 1/2s, 11/1/25 Baa1 2,650,000
3,000,000 Houston, Arpt. Syst. Rev. Bonds (Continental),
Ser. B, 5.7s, 7/15/29 Ba1 2,936,250
4,390,000 Matagorda Cnty., Poll. Control Rev. Bonds
(Houston Pwr. & Lt. Co.), Ser. D, FGIC,
7.6s, 10/1/19 Aaa 4,531,354
8,000,000 North Central Hlth. Fac. Dev. Corp. IFB
(Presbyterian Hlth. Care Syst.), Ser. C,
MBIA, 9.605s, 6/22/21 Aaa 9,170,000
4,500,000 TX State G.O. Bonds (Nat'l. Research Lab.
Communication Superconductor), 7 1/8s, 4/1/20 Aaa 4,729,410
--------------
44,445,139
Utah (4.6%)
- --------------------------------------------------------------------------------------------------------------------------
3,000,000 Carbon Cnty., Solid Waste Disp. Rev. Bonds
(Ladilaw Env.), Ser. A, 7.45s, 7/1/17 B/P 3,288,750
13,000,000 Utah Pwr. Supply Rev. Bonds (Intermountain
Pwr. Agcy.), Ser. A, MBIA, 6.15s, 7/1/14 Aaa 14,495,000
--------------
17,783,750
Vermont (1.4%)
- --------------------------------------------------------------------------------------------------------------------------
4,700,000 VT Edl. & Hlth. Bldg. Fin. Agcy. Rev. Bonds
(Brattleboro Memorial Hosp.), 7s, 3/1/24 BBB+ 5,246,375
Wisconsin (2.5%)
- --------------------------------------------------------------------------------------------------------------------------
3,400,000 WI Hsg. & Econ. Dev. Auth. Rev. Bonds, Ser. B,
7.05s, 11/1/22 A1 3,616,750
5,600,000 WI State Hlth. & Edl. Fac. Auth. Rev. Bonds
(United Hlth. Group, Inc.), Ser. B, MBIA,
5 1/2s, 2020 Aaa 5,768,000
--------------
9,384,750
--------------
Total Municipal Bonds and Notes (cost $357,653,059) $ 373,760,769
PREFERRED STOCKS (0.5%) (a) (cost $2,000,000)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
$ 2,000,000 MuniMae Tax Exempt Bond Subsidiary, LLC 144A,
6 7/8s, 6/30/49 (acquired 5/7/99,
cost $2,000,000) (RES) BB/P $ 2,020,000
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $359,653,059) (b) $ 375,780,769
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $383,564,136.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings available at
May 31, 1999 for the securities listed. Ratings are generally ascribed to securities at the time of issuance.
While the agencies may from time to time revise such ratings, they undertake no obligation to do so, and the
ratings do not necessarily represent what the agencies would ascribe to these securities at May 31, 1999.
Securities rated by Putnam are indicated by "/P" and are not publicly rated.
(b) The aggregate identified cost on a tax basis is $359,653,059, resulting in gross unrealized appreciation and
depreciation of $19,822,979 and $3,695,269, respectively, or net unrealized appreciation of $16,127,710.
(RES) Restricted, excluding 144A securities, as to public resale. The total market value of restricted securities held
at May 31, 1999 was $8,935,688 or 2.3% of net assets.
The rates shown on IFB's, which are securities paying interest rates that vary inversely to changes in the market
interest rates, are the current interest rates at May 31, 1999.
The fund had the following industry group concentrations greater than 10% at May 31, 1999 (as a percentage of net
assets):
Utilities 24.9%
Transportation 22.4
Hospitals/health care 16.5
Housing 11.1
The fund had the following insurance concentration greater than 10% at May 31, 1999 (as a percentage of net assets):
MBIA 17.6%
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
May 31, 1999 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $359,653,059 (Note 1) $375,780,769
- -----------------------------------------------------------------------------------------------
Cash 423,903
- -----------------------------------------------------------------------------------------------
Interest receivable 6,797,776
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 3,009,792
- -----------------------------------------------------------------------------------------------
Total assets 386,012,240
Liabilities
- -----------------------------------------------------------------------------------------------
Distributions payable to shareholders 1,674,152
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 686,640
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 31,057
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 11,786
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,116
- -----------------------------------------------------------------------------------------------
Other accrued expenses 43,353
- -----------------------------------------------------------------------------------------------
Total liabilities 2,448,104
- -----------------------------------------------------------------------------------------------
Net assets $383,564,136
Represented by
- -----------------------------------------------------------------------------------------------
Series A remarketed preferred shares, (1,400 shares
authorized and outstanding at $100,000 per share) (Note 4) $140,000,000
- -----------------------------------------------------------------------------------------------
Paid-in capital -- common shares (unlimited shares authorized) (Note 1) 232,541,343
- -----------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 2,579,420
- -----------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (7,684,337)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 16,127,710
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $383,564,136
Computation of net asset value
- -----------------------------------------------------------------------------------------------
Series A remarketed preferred shares $140,000,000
- -----------------------------------------------------------------------------------------------
Cumulative undeclared dividends on remarketed preferred shares 56,896
- -----------------------------------------------------------------------------------------------
Net assets allocated to remarketed preferred shares --
liquidation preference $140,056,896
- -----------------------------------------------------------------------------------------------
Net assets available to common shares $243,507,240
- -----------------------------------------------------------------------------------------------
Net asset value per common share
($243,507,240 divided by 20,927,598 shares) $11.64
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended May 31, 1999 (Unaudited)
<S> <C>
Tax exempt interest income: $12,936,943
- -----------------------------------------------------------------------------------------------
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 1,335,526
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 155,634
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 4,988
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,263
- -----------------------------------------------------------------------------------------------
Reports to shareholders 10,185
- -----------------------------------------------------------------------------------------------
Registration fees 75
- -----------------------------------------------------------------------------------------------
Auditing 36,005
- -----------------------------------------------------------------------------------------------
Legal 7,675
- -----------------------------------------------------------------------------------------------
Postage 7,237
- -----------------------------------------------------------------------------------------------
Exchange listing fees 16,505
- -----------------------------------------------------------------------------------------------
Preferred share remarketing agent fees 196,555
- -----------------------------------------------------------------------------------------------
Other 5,811
- -----------------------------------------------------------------------------------------------
Total expenses 1,779,459
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (12,074)
- -----------------------------------------------------------------------------------------------
Net expenses 1,767,385
- -----------------------------------------------------------------------------------------------
Net investment income 11,169,558
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 737,892
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (6,874,734)
- -----------------------------------------------------------------------------------------------
Net loss on investments (6,136,842)
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 5,032,716
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
May 31 November 30
1999* 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 11,169,558 $ 22,137,047
- ---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 737,892 (1,368,499)
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments (6,874,734) 2,425,356
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 5,032,716 23,193,904
Distributions to remarketed preferred shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income (2,251,143) (5,081,552)
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations
applicable to common shareholders (excluding
cumulative undeclared dividends on remarketed
preferred shares of $56,896 and $36,822 respectively) 2,781,573 18,112,352
- ---------------------------------------------------------------------------------------------------------------
Distributions to common shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income (10,052,324) (19,919,416)
- ---------------------------------------------------------------------------------------------------------------
Issuance of common shares in connection with
reinvestment of distributions 1,213,338 2,597,553
- ---------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (6,057,413) 790,489
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 389,621,549 388,831,060
- ---------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $2,579,420 and $3,713,329 respectively) $383,564,136 $389,621,549
- ---------------------------------------------------------------------------------------------------------------
Number of fund shares
- ---------------------------------------------------------------------------------------------------------------
Common shares outstanding at beginning of period 20,838,596 20,646,799
- ---------------------------------------------------------------------------------------------------------------
Shares issued in connection with reinvestment of distributions 89,002 191,797
- ---------------------------------------------------------------------------------------------------------------
Common shares outstanding at end of period 20,927,598 20,838,596
- ---------------------------------------------------------------------------------------------------------------
Remarketed preferred shares outstanding at beginning
and end of period 1,400 1,400
- ---------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share May 31
operating performance (Unaudited) Year ended November 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period (common shares) $11.98 $12.05 $11.94 $12.37 $11.22 $13.44
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .53 1.07 1.09 1.06 1.17 1.20
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.28) .06 .23 (.28) 1.23 (2.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations .25 1.13 1.32 .78 2.40 (.83)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income
- ------------------------------------------------------------------------------------------------------------------------------------
to Common Shareholders (.48) (.96) (.96) (.96) (.94) (.97)
- ------------------------------------------------------------------------------------------------------------------------------------
to Preferred Shareholders (.11) (.24) (.25) (.25) (.28) (.19)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
to Common Shareholders -- -- -- -- -- (.21)
- ------------------------------------------------------------------------------------------------------------------------------------
to Preferred Shareholders -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
to Common Shareholders -- -- -- -- (.02) (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
to Preferred Shareholders -- -- -- --(d) (.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.59) (1.20) (1.21) (1.21) (1.25) (1.39)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
(common shares) $11.64 $11.98 $12.05 $11.94 $12.37 $11.22
- ------------------------------------------------------------------------------------------------------------------------------------
Market value, end of period
(common shares) $14.562 $14.937 $14.750 $13.625 $13.500 $11.880
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at market price
(common shares) (%)(a) .77* 8.73 16.25 8.65 22.95 (6.74)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(total fund) (in thousands) $383,564 $389,622 $388,831 $384,490 $391,003 $364,814
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b)(c) .72* 1.47 1.43 1.49 1.50 1.45
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%)(b) 3.59* 6.82 7.13 6.84 7.50 8.07
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 6.09* 14.44 26.91 146.43 122.65 78.97
- ------------------------------------------------------------------------------------------------------------------------------------
* Not annualized
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Ratios reflect net assets available to common shares only; net investment income ratio also reflects reduction for
dividend payments to preferred shareholders.
(c) The ratio of expenses to average net assets for the year ended November 30, 1995 and thereafter, includes amounts paid
through expense offset arrangements. Prior period ratios exclude these amounts (Note 2).
(d) Distributions in excess of net realized gain to the preferred stockholders amounted to less than $0.01 per common share.
</TABLE>
Notes to financial statements
May 31, 1999 (Unaudited)
Note 1
Significant accounting policies
Putnam Investment Grade Municipal Trust (the "fund") is registered under
the Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The fund's investment objective
is to provide as high a level of current income exempt from federal income
tax as is believed to be consistent with preservation of capital. The fund
intends to achieve its objective by investing in a diversified portfolio
of tax-exempt municipal securities that Putnam Investment Management Inc.
("Putnam Management"), the fund's Manager, a wholly-owned subsidiary of
Putnam Investments Inc., believes do not involve undue risk to income or
principal. Under normal market conditions, the fund will invest at least
80% of its total assets in tax-exempt municipal securities rated
"investment grade" at the time of investment or, if not rated, determined
by Putnam Management to be of comparable quality.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities. Actual results could differ from those estimates.
A) Security valuation Tax-exempt bonds and notes are stated on the basis
of valuations provided by a pricing service, approved by the Trustees,
which uses information with respect to transactions in bonds, quotations
from bond dealers, market transactions in comparable securities and
various relationships between securities in determining value.
Short-term investments having remaining maturities of 60 days or less are
stated at amortized cost, which approximates market value and other
investments including restricted securities are stated at fair market
value following procedures approved by the Trustees.
B) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Interest income is recorded on the accrual basis.
C) Federal taxes It is the policy of the fund to distribute all of its
income within the prescribed time and otherwise comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies.
It is also the intention of the fund to distribute an amount sufficient to
avoid imposition of any excise tax under Section 4982 of the Internal
Revenue Code of 1986, as amended. Therefore, no provision has been made
for federal taxes on income, capital gains or unrealized appreciation on
securities held nor for excise tax on income and capital gains.
At November 30, 1998, the fund had a capital loss carryover of
approximately $4,259,000 available to offset future capital gains, if any.
The amount of the carryover and the expiration dates are:
Loss Carryover Expiration
- -------------- -----------------
$1,985,000 November 30, 2004
612,000 November 30, 2005
1,662,000 November 30, 2006
D) Distributions to shareholders Distributions to common and preferred
shareholders are recorded by the fund on the ex-dividend date. If the
market price of your fund's shares is equal to or exceeds their net asset
value on the payment date, you will be issued shares of the fund at a
value equal to the higher of the net asset value or 95% of the market
price on that date. Dividends on remarketed preferred shares become
payable when, as and if declared by the Trustees. Each dividend period for
the remarketed preferred shares is generally a seven-day period. The
applicable dividend rate for the remarketed preferred shares on May 31,
1999 was 3.245%. The amount and character of income and gains to be
distributed are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles.
Reclassifications are made to the fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
E) Determination of net asset value Net asset value of the common shares
is determined by dividing the value of all assets of the fund less all
liabilities and the liquidation preference of any outstanding remarketed
preferred shares, by the total number of common shares outstanding.
F) Amortization of bond premium and accretion of bond discount Any premium
resulting from the purchase of securities in excess of maturity value is
amortized on a yield-to-maturity basis. Discounts on zero coupon bonds and
original issue bonds are accreted according to the yield-to-maturity
basis.
Note 2
Management fee, administrative
services, and other transactions
Compensation of Putnam Management for management and investment advisory
services is paid quarterly based on the average net assets of the fund,
including those allocated to the remarketed preferred shares. Such fee is
based on the annual rate of 0.70% of the average weekly net assets.
If dividends payable on remarketed preferred shares during any dividend
payment period plus any expenses attributable to remarketed preferred
shares for that period exceed the fund's net income attributable to the
proceeds of the remarketed preferred shares during that period, then the
fee payable to Putnam for that period will be reduced by the amount of the
excess (but not more than 0.70% of the liquidation preference of the
remarketed preferred shares outstanding during the period).
The fund reimburses Putnam Management an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The aggregate
amount of all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam Fiduciary
Trust Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the six months ended May 31, 1999, fund expenses were reduced by
$12,074 under expense offset arrangements with PFTC. Investor servicing
and custodian fees reported in the Statement of operations exclude these
credits. The fund could have invested a portion of the assets utilized in
connection with the expense offset arrangements in an income producing
asset if it had not entered into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $530 has
been allocated to the fund, and an additional fee for each Trustee's
meeting attended. Trustees who are not interested persons of Putnam
Management and who serve on committees of the Trustees receive additional
fees for attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
in the fund and are invested in certain Putnam funds until distribution in
accordance with the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as Trustee for at least five years. Benefits under the Pension Plan
are equal to 50% of the Trustee's average total retainer and meeting fees
for the three years preceding retirement. Pension expense for the fund is
included in Compensation of Trustees in the Statement of operations.
Accrued pension liability is included in Payable for compensation of
Trustees in the Statement of assets and liabilities.
Note 3
Purchase and sales of securities
During the six months ended May 31, 1999, purchases and sales of
investment securities other than short-term investments aggregated
$36,319,869 and $23,175,895, respectively. There were no purchases and
sales of U.S. government obligations. In determining the net gain or loss
on securities sold, the cost of securities has been determined on the
identified cost basis.
Note 4
Remarketed preferred shares
The Series A remarketed preferred shares are redeemable at the option of
the fund on any dividend payment date at a redemption price of $100,000
per share, plus an amount equal to any dividends accumulated on a daily
basis but unpaid through the redemption date (whether or not such
dividends have been declared) and, in certain circumstances, a call
premium.
Additionally, the fund has authorized a separate series of 2,000 Serial
Remarketed Preferred shares, which are issuable only under certain
conditions in exchange for Series A shares. No Serial Remarketed Preferred
shares are currently outstanding.
It is anticipated that dividends paid to holders of remarketed preferred
shares will be considered tax-exempt dividends under the Internal Revenue
Code of 1986. To the extent that the fund earns taxable income and capital
gains by the conclusion of a fiscal year, it will be required to apportion
to the holders of the remarketed preferred shares throughout that year
additional dividends as necessary to result in an after-tax equivalent to
the applicable dividend rate for the period.
Under the Investment Company Act of 1940, the fund is required to maintain
asset coverage of at least 200% with respect to the remarketed preferred
shares as of the last business day of each month in which any such shares
are outstanding. Additionally, the fund is required to meet more stringent
asset coverage requirements under terms of the remarketed preferred shares
and the shares' rating agencies. Should these requirements not be met, or
should dividends accrued on the remarketed preferred shares not be paid,
the fund may be restricted in its ability to declare dividends to common
shareholders or may be required to redeem certain of the remarketed
preferred shares. At May 31, 1999, no such restrictions have been placed
on the fund.
Fund information
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Stephen Oristaglio
Vice President
Jerome J. Jacobs
Vice President
Richard P. Wyke
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
Call 1-800-225-1581 weekdays from 9 a.m. to 5 p.m. Eastern Time, or visit
our Web site (www.putnaminv.com) any time for up-to-date information about
the fund's NAV.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
53215 058 7/99
