Prospectus Supplement
dated July 26, 1999 to: 53084 7/99
Putnam Capital Opportunities Fund
Prospectus dated June 1, 1998, as revised June 29, 1998
Putnam New Opportunities Fund
Prospectus dated October 30, 1998
Each fund will offer Class C shares beginning July 26, 1999.
Information about class C shares may be found in this Supplement.
1. THE SECTION ENTITLED "EXPENSES SUMMARY" IS SUPPLEMENTED BY
THE FOLLOWING INFORMATION ABOUT CLASS C SHARES:
Expenses are one of several factors to consider when investing.
The following table summarizes your maximum transaction costs
from investing in Class C shares of a fund and expenses based on
the most recent fiscal year. The examples show the cumulative
expenses attributable to a hypothetical $1,000 investment over
specified periods.
Shareholder transaction expenses
Maximum sales charge NONE*
imposed on purchases
(as a percentage
of offering price)
Deferred sales charge 1.0%
in the first year and eliminated
thereafter (as a percentage of the
lower of original
purchase price or
redemption proceeds)
Annual fund operating expenses
(as a percentage of average net assets)
Total fund
Management Other operating
fees expenses expenses
(after expense 12b-1 (after expense(after expense
limitation)* fees limitation)*limitation)*
-----------------------------------------------------------
Capital Opportunities NONE* 1.00% 1.00%* 2.00%*+
New Opportunities 0.49% 1.00% 0.24% 1.73%
*In absence of an expense limitation, estimated management fees,
"other expenses" and total fund operating expenses would have
been 0.65%, 1.76% and 3.41%, respectively.
+ Reflects estimated expenses for the fund's first full fiscal
year.
The figures listed under "Class C 12b-1 fees" and "Total
operating expenses" reflect estimated Class C 12b-1 fees of 1.00%
and actual expenses of the fund's class B shares for its most
recent fiscal year. The table is provided to help you understand
the expenses of investing and your share of fund operating
expenses. The expenses shown in the table do not reflect the
application of credits that reduce fund expenses.
Examples
Your investment of $1,000 in Class C shares would incur the
following expenses, assuming 5% annual return and, except as
indicated, redemption at the end of each period:
1 year 1 3 5 10
no redemptionyear years years years
Capital Opportunities $20 $30 $63 N/A N/A
New Opportunities $18 $28 $54 $94 $204
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 varies.
The higher 12b-1 fees borne by class B, class C and class M
shares may cause long-term shareholders to pay more than the
economic equivalent of the maximum permitted front-end sales
charge on class A shares.
2. THE SECOND PARAGRAPH OF THE SECTION "ORGANIZATION AND
HISTORY" IS REPLACED BY THE FOLLOWING:
The Trust 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 porfolios. 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 series. Only class A, B, C and M shares
are offered by this prospectus. The fund may also offer 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. For more
information, including your eligibility to purchase any other
class of shares, contact your investment dealer or Putnam Mutual
Funds (at 1-800-225-1581).
3. THE SECTION "ABOUT YOUR INVESTMENT ALTERNATIVE SALES
ARRANGEMENTS" IS REPLACED BY THE FOLLOWING:
CLASS A SHARES. If you purchase class A shares, you will
generally pay a sales charge at the time of purchase and, as a
result, will not have to pay any charges when you redeem the
shares. If you purchase class A shares at net asset value you
may have to pay a contingent deferred sales charge ("CDSC") when
you redeem the shares. Certain purchases of class A shares
qualify for reduced sales charges. Class A shares pay lower 12b-1
fees than class B, class C and class M shares. See "How to buy
shares -- Class A shares" and "Distribution plans."
CLASS B SHARES. If you purchase class B shares, you will not pay
an initial sales charge, but you may have to pay a CDSC if you
redeem the shares within six years. Class B shares also pay a
higher 12b-1 fee than class A and class M shares. Class B shares
automatically convert into class A shares, based on relative net
asset value, approximately eight years after purchase. For more
information about the conversion of class B shares, including
information about how shares acquired through reinvestment of
distributions are treated and certain circumstances under which
class B shares may not convert into class A shares, see the SAI.
Class B shares provide an investor the benefit of putting all of
the investor's dollars to work from the time the investment is
made. Until conversion, class B shares will have a higher
expense ratio and pay lower dividends than class A and class M
shares because of the higher 12b-1 fee. See "How to buy shares -
- - Class B shares" and "Distribution plans."
CLASS C SHARES. Like class B shares, class C shares are sold
without an initial sales charge and are subject to a CDSC if
redeemed within one year of purchase. Class C shares also bear a
higher 12b-1 fee than class A and class M shares. Unlike class B
shares, class C shares do not convert into any other class of
shares. Like class B shares, class C shares provide an investor
the benefit of putting all of the investor's dollars to work from
the time the investment is made. See "How to buy shares -- Class
C shares" and "Distribution plans."
CLASS M SHARES. If you purchase class M shares, you will
generally pay a sales charge at the time of purchase that is
lower than the sales charge you would pay for class A shares.
Certain purchases of class M shares qualify for reduced sales
charges. Class M shares pay 12b-1 fees that are lower than class
B and class C shares but higher than class A shares. You will
not have to pay any charges when you redeem class M shares, but
class M shares will not convert into any other class of shares.
See "How to buy shares -- Class M shares" and "Distribution
plans."
Which class is best for you? Which class of shares provides the
most suitable investment for you depends on a number of factors,
including the amount you intend to invest and how long you intend
to hold the shares. If your intended purchase qualifies for
reduced sales charges, you might consider class A or class M
shares. If you prefer not to pay a sales charge at the time of
purchase, you might consider class B or class C shares. Orders
for class B shares for $250,000 or more will be treated as orders
for class A shares or declined. In the case of class C shares,
orders of $1,000,000 or more and orders which because of a right
of accumulation or statement of intent would qualify for the
class A shares breakpoint of $1,000,000 will be treated as orders
for class A shares or declined. See the SAI for more
information. For more information about these sales
arrangements, consult your investment dealer or Putnam Investor
Services. Shares may only be exchanged for shares of the same
class of another Putnam fund. See "How to exchange shares."
4. THE SECTION "HOW TO BUY SHARES" IS SUPPLEMENTED BY THE
FOLLOWING:
CLASS C SHARES
Class C shares are sold without an initial sales charge, although
a 1.00% CDSC is imposed if you redeem your shares within one year
of purchase. Class C shares have no conversion feature and
therefore will be subject to a higher 12b-1 fee than class A
shares indefinitely.
Putnam Mutual Funds pays a sales commission equal to 1.00% of the
amount invested to dealers who sell class C shares. These
commissions are not paid on sales to investors exempt from the
CDSC.
5. THE SECOND PARAGRAPH OF THE SECTION "HOW TO BUY SHARES
GENERAL" IS REPLACED BY THE FOLLOWING:
You may be eligible to buy fund shares at reduced sales charges
or to sell fund shares without a CDSC.
The fund may sell class A, class B, class C and class M shares at
net asset value without an initial sales charge or a CDSC to
current and retired Trustees (and their families), current and
retired employees (and their families) of Putnam Management and
affiliates, registered representatives and other employees (and
their families) of broker-dealers having sales agreements with
Putnam Mutual Funds, employees (and their families) of financial
institutions having sales agreements with Putnam Mutual Funds (or
otherwise having an arrangement with a broker-dealer or financial
institution with respect to sales of fund shares), financial
institution trust departments investing an aggregate of $1
million or more in Putnam funds, clients of certain
administrators of tax-qualified plans, tax-qualified plans when
proceeds from repayments of loans to participants are invested
(or reinvested) in Putnam funds, "wrap accounts" for the benefit
of clients of broker-dealers, financial institutions or financial
planners adhering to certain standards established by Putnam
Mutual Funds, and investors meeting certain requirements who sold
shares of certain Putnam closed-end funds pursuant to a tender
offer by the closed-end fund.
6. THE SECTION "DISTRIBUTION PLANS" IS REPLACED BY THE
FOLLOWING:
The fund has adopted distribution plans to compensate Putnam
Mutual Funds for services provided and expenses incurred by it as
principal underwriter of fund shares, including the payments to
dealers mentioned below. The plans provide for payments by the
fund to Putnam Mutual Funds at the annual rates (expressed as a
percentage of average net assets) of up to 0.35% on class A
shares and 1.00% on class B, class C 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.
Putnam Mutual Funds compensates qualifying dealers (including,
for this purpose, certain financial institutions) for sales of
shares and the maintenance of shareholder accounts.
Putnam Mutual Funds makes quarterly payments to dealers at the
annual rate of 0.25% of the average net asset value of class A
shares for which such dealers are designated as the dealer of
record, except that payments to dealers for shares held by class
A qualified benefit plans are made at reduced rates, as described
in the SAI. No payments are made during the first year after
purchase on shares purchased at net asset value by shareholders
investing $1 million or more or by employer-sponsored retirement
plans that have at least 200 eligible employees or that are class
A qualified benefit plans, unless the shareholder has made
arrangements with Putnam Mutual Funds and the dealer of record
has waived the sales commission.
Putnam Mutual Funds makes quarterly payments to dealers at the
annual rates of 0.25%, 1.00% and 0.65%, of the average net asset
of class B, class C and class M shares, respectively, for which
such dealers are designated as the dealer of record, provided,
however, no payment will be made with respect to the first four
quarters following the sale of class C shares.
Putnam Mutual Funds may suspend or modify its payments to
dealers. The payments are also subject to the continuation of
the relevant distribution plan, the terms of service agreements
between dealers and Putnam Mutual Funds, and any applicable
limits imposed by the National Association of Securities Dealers,
Inc.
7. THE FOURTH SENTENCE OF THE SECTION "HOW THE FUND MAKES
DISTRIBUTIONS TO SHAREHOLDERS; TAX INFORMATION" IS REPLACED
BY THE FOLLOWING:
Distributions paid on class A shares will generally be greater
than those paid on class B shares, class C shares and class M
shares because expenses attributable to class B shares, class C
shares and class M shares will generally be higher.
