PUTNAM UTILITIES GROWTH AND INCOME FUND
Prospectus Supplement dated August 29, 1996
to Prospectus dated March 1, 1996
At a shareholder meeting to be held on October 3, 1996, the
shareholders of the fund are being asked to approve amendments to
the fund's fundamental investment restrictions, including the
elimination of certain restrictions. If these amendments are
approved, the fund will be able to:
-- acquire more than 10% of the outstanding voting
securities of any issuer with respect to 25% of its
total assets.
The policy set forth above is fundamental and may not be changed
without shareholder approval. See the Statement of Additional
Information of the fund for the full text of this policy as well
as the fund's other fundamental policies, some of which are also
proposed to be amended at the upcoming meeting.
To the extent the fund invests a significant portion of its
assets in the securities of a particular issuer, such fund will
be subject to an increased risk of loss if the market value of
such issuer's securities declines.
If shareholders do not ultimately approve some or all of the
proposed changes, the prospectus will be revised accordingly.
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