Putnam
New York
Tax Exempt
Opportunities
Fund
SEMIANNUAL REPORT
March 31, 1996
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* According to Lipper Analytical Services, Putnam New York Tax Exempt
Opportunities Fund's class A share total return ranked 11 out of 55
New York municipal bond funds for the three-year period ended March
31, 1996, placing the fund in the top 20% of funds in this category.
For one year, the fund's class A shares ranked 27 out of 94 funds.*
* "Receding flat-tax fears, low inflation, and a relatively tight supply
of New York municipal bonds are contributing to a very favorable
environment for tax-free securities. Furthermore, investment-grade
municipal bonds are capturing close to 90% of the 30-year Treasury
bond yield, suggesting that the municipal bond market could be poised
for another positive period of advance."
-- Michael F. Bouscaren, Fund Manager
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
13 Portfolio holdings
17 Financial statements
*Lipper Analytical Services, an independent research organization, ranks
funds according to total-return performance. Their rankings vary over
time and do not reflect the effects of sales charges. For periods ended
3/31/96, the fund's class A shares ranked 27 out of 94, 11 out of 55,
and 30 out of 41 New York state municipal bond funds for 1-, 3-, and 5-
year performance, respectively. Class B shares ranked 45 out of 94 New
York state municipal bond funds for 1-year performance. Class M shares
were ranked 41 out of 94 for the 1-year period ended 3/31/96. Past
performance is not indicative of future results.
[GRAPHIC OMMITTED: photo of George Putnam]
(copyright) Karsh, Ottawa
From the Chairman
Dear Shareholder:
For most of the first half of Putnam New York Tax Exempt Opportunities
Fund's current fiscal year, the six months ended March 31, 1996, tax-
free bonds rose in the updraft of one of the most vibrant bond markets
in recent memory. Concern over the possible negative effects of a flat
tax on municipal bonds, however, dampened performance relative to other
fixed-income investments.
On the other hand, when the bond market turned abruptly downward toward
the end of the period, flat-tax fears were abating. This improved
outlook for municipal bonds tended to cushion their decline.
The bond market was reacting to concern over a pickup in inflation
resulting from economic overheating. Putnam Management believes this new
worry is premature and expects the rest of 1996 will bring steady but
manageable growth. Fund Manager Michael Bouscaren provides a full
discussion of your fund's performance and outlook in the report that
follows.
Respectfully yours,
/S/George Putnam
George Putnam
Chairman of the Trustees
May 15, 1996
Report from the Fund Manager
Michael F. Bouscaren
The whole is often more than the sum of its parts, and this is
especially true of the first half of your fund's 1996 fiscal year. A
glance at Putnam New York Tax Exempt Opportunities Fund's total return
for the six months ended March 31, 1996, only tells part of the story.
During the first three months of the semiannual period, sluggish growth,
historically low interest rates, and low inflation contributed to an
ideal environment for bonds. The fund's positive performance during the
first half of the semiannual period made a valuable contribution to the
fund's calendar 1995 total return of 16.49% at net asset value (10.98%
at POP).
However, your fund -- like all other fixed-income investments -- lost
ground in March as investors, reacting to February's stronger-than-
expected employment figures, anticipated an interest rate increase.
While March's performance erased some of the gains made earlier in the
period, the fund's net return of 2.47% at net asset value for class A
shares for the semiannual period was respectable, close to its Lipper
New York municipal debt universe's average of 2.54%. Return at POP was -
2.41%; returns for class B and class M shares, which can be found on
pages 8 and 9, reflect a similar pattern.
* INTEREST RATE REVERSAL SOFTENED BY TIMELY REDUCTION IN DURATION
Adjusting duration in response to interest rate trends is an important
component of the fund's strategy. Early in the period, we lengthened the
portfolio's duration to eight years in hopes of increasing its total
return potential given the lower interest rate environment. Duration is
a measure of the portfolio's maturity structure and reflects the price
sensitivity of portfolio holdings to changes in interest rates.
Typically, bonds with longer maturities are more sensitive to these
changes, and thus may offer greater potential for appreciation when
rates are declining.
Continued signs of an economic slowdown, most notably the sluggish
retail sales during the holiday season, led the Federal Reserve Board to
reduce short-term interest rates by a quarter of a percentage point on
December 19, 1995. By year's end, the yield on the bellwether 30-year
Treasury bond was approaching 6%, giving bond investors an extra measure
of holiday cheer.
By early January, however, bond prices reflected more optimism than we
believed was justified by market fundamentals. The Fed's second quarter-
point drop at the end of the month only served to further bolster bond
investors' euphoria. Despite the breakdown of budget talks in
Washington, bond prices climbed. Exercising some caution, we reduced the
portfolio's duration to its normal level of seven years.
This decision proved fortuitous. February's unemployment numbers, which
were announced on March 8, were much stronger than expected, sending a
shock wave through the stock and bond markets. Bond prices had their
worst day in nearly two decades, with the 30-year Treasury bond off
$30.94 for each $1,000 invested. Its yield climbed about a quarter
percentage point to 6.72%, the largest single-day increase in several
years. Fortunately, the adjustment we had made in the fund's duration
softened the impact of the market decline as bond prices readjusted to
the prospect of a stronger economy.
[GRAPHIC OMMITTED: horizontal bar chart TOP INDUSTRY SECTORS
showing:
Hospital/health care - 22.8%
Utilities - 15.9%
Education - 15.5%
Water & Sewer - 13.8%
Paper products - 4.7%
* Based on net assets as of 3/31/96. Holdings will vary over time.]
* DEVELOPING CONCERN OVER BUDGETS IN ALBANY AND NEW YORK CITY
The inability of the state and New York City to balance their respective
budgets has been a great concern for several months. With less money
flowing from Washington, we think the likelihood of a balanced budget is
small as state lawmakers wrestle with dwindling resources.
Further fiscal tightening will necessitate budgetary cutbacks in
programs, which we believe will only make the economics of public
agencies more problematic. Most of the state-appropriated agencies are
likely to feel continued stress. Moody's, an independent rating service,
has indicated that New York City is in jeopardy of being downgraded from
its current rating of BAA1 to a lower investment-grade rating of BAA.
We do not believe New York City bonds will drop below investment grade.
However, the potential downgrade is likely to cause the yield on
investment-grade state-appropriated bonds to increase to compensate
investors for the uncertainty. The yield spread between these bonds and
other municipal bonds from around the Empire State can be expected to
widen.
In anticipation of credit pressures, we have significantly reduced
holdings in state-appropriated issues and New York City government
obligations (GOs). Proceeds have been reinvested in essential-service
bonds, such as those issued by the New York City Municipal Water Finance
Authority. Essential-service bonds are attractive because they are self-
funding; that is, user fees paid for the services become the sources of
the bonds' payment to investors. Since the issuers have the ability to
set user fees, income from these bonds tends to be relatively stable and
carries a lower risk of default than income from other types of
municipal bonds.
* BALANCE OF FISCAL YEAR LOOKS PROMISING
In our opinion, investor anxieties concerning an overheating economy are
premature. We anticipate that the remainder of 1996 will be marked by
steady, but manageable, economic growth and foresee only limited risk of
a sharp increase in inflationary pressures. Such an environment, in
contrast with last year's slowing economy, is unlikely to lead to
falling interest rates and price appreciation for the bond market.
Rather, we believe coupon income will provide the bulk of total return
for fixed-income investors for the remainder of 1996.
[GRAPHIC OMMITTED: pie chart CREDIT QUALITY OVERVIEW*
showing:
AAA - 36.5%
AA - 14.9%
A - 20.8%
B - 2.4%
BB - 7.6%
BBB - 17.8%
*Based on portfolio market value as of 3/31/96. Based on Standard and
Poor's rating terminology. While the fund has the flexibility to invest
in higher-yielding lower-rated bonds, generally at least 75% of the
portfolio will be investment grade. Investment-grade securities are
those rated BBB or higher by Standard and Poor's or Moody's Investor
Service, Inc. Holdings will vary over time.]
The flat tax, which in its purest form would jeopardize the tax
advantages enjoyed by tax-exempt bonds, no longer seems to be a hot
topic in Washington. Although we expect discussions of broader tax
reform to reappear this fall as the presidential election nears, our
current assessment is that any radical changes in the tax code appear
less likely than they did a few months ago.
The new-issue supply will be reduced until there is a budget agreement,
which may not happen until at least the third quarter of calendar 1996.
Any noticeable increase is not likely until the 1997 budget is signed.
We believe these developments, along with the recent market correction,
may offer investors who have shied away from municipals an attractive
opportunity to retest the waters. Furthermore, municipal yields remain
generous on a taxable-equivalent basis, providing an attractive
alternative to Treasuries and investment-grade corporate bonds.
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 3/31/96, there is no guarantee the fund will
continue to hold these securities in the future.
Performance summary
Performance should always be considered in light of a fund's investment
strategy. Putnam New York Tax Exempt Opportunities Fund is designed for
investors seeking high current income free from federal, New York State
and New York City income taxes.
This section provides, at a glance, information about your fund's
performance. 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.
TOTAL RETURN FOR PERIODS ENDED 3/31/96
Class A Class B Class M
(inception date) (11/7/90) (2/1/94) (2/10/95)
NAV POP NAV CDSC NAV POP
- -----------------------------------------------------------------------
6 months 2.47% -2.41% 2.13% -2.85% 2.31% -1.07%
- -----------------------------------------------------------------------
1 year 7.75 2.64 6.94 1.94 7.29 3.79
- -----------------------------------------------------------------------
5 years 43.87 37.08 -- -- -- --
Annual average 7.55 6.51 -- -- -- --
- -----------------------------------------------------------------------
Life of class A 47.50 40.56 -- -- -- --
Annual average 7.46 6.51 -- -- -- --
- -----------------------------------------------------------------------
Life of class B -- -- 8.37 5.47 -- --
Annual average -- -- 3.79 2.50 -- --
- -----------------------------------------------------------------------
Life of class M -- -- -- -- 9.57 5.96
Annual average -- -- -- -- 8.20 5.12
- -----------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 3/31/96
Lehman Bros. Consumer
Municipal Bond Price
Index Index
- ----------------------------------------------------------------
6 months 2.88% 1.63%
- ----------------------------------------------------------------
1 year 8.38 2.84
- ----------------------------------------------------------------
5 years 47.45 15.33
Annual average 8.07 2.89
- ----------------------------------------------------------------
Life of class A 54.48 16.63
Annual average 8.39 2.89
- ----------------------------------------------------------------
Life of class B 8.80 6.50
Annual average 3.98 2.96
- ----------------------------------------------------------------
Life of class M 12.82 3.59
Annual average 11.16 3.14
- ----------------------------------------------------------------
Performance data represent past results, do not reflect future
performance, and will differ for each share class. They do not take into
account any adjustment for taxes payable on reinvested distributions or,
for class A shares, distribution fees prior to implementation of the
class A distribution plan in 1990. Investment returns and net asset
value will fluctuate so that an investor's shares, when sold, may be
worth more or less than their original cost. POP assumes 4.75% maximum
sales charge for class A shares and 3.25% for class M shares. CDSC for
class B shares assumes the applicable sales charge, with the maximum
being 5%.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 3/31/96
Class A Class B Class M
- -----------------------------------------------------------------------
Distributions (number) 6 6 6
- -----------------------------------------------------------------------
Income $0.248560 $0.218472 $0.234085
- -----------------------------------------------------------------------
Total $0.248560 $0.218472 $0.234085
- -----------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- -----------------------------------------------------------------------
09/31/95 $8.80 $9.24 $8.79 $8.79 $9.09
- -----------------------------------------------------------------------
3/31/96 8.77 9.21 8.76 8.76 9.05
- -----------------------------------------------------------------------
Current return
End of period
- -----------------------------------------------------------------------
Current dividend rate1 5.40% 5.14% 4.72% 5.02% 4.85%
- -----------------------------------------------------------------------
Taxable equivalent2 9.62 9.16 8.41 8.94 8.65
- -----------------------------------------------------------------------
Taxable equivalent3 10.04 9.56 8.78 9.33 9.04
- -----------------------------------------------------------------------
Current 30-day SEC yield4 5.16 4.92 4.44 4.73 4.58
- -----------------------------------------------------------------------
Taxable equivalent2 9.20 8.77 7.91 8.43 8.16
- -----------------------------------------------------------------------
Taxable equivalent3 9.60 9.16 8.26 8.80 8.52
- -----------------------------------------------------------------------
1 Income portion of most recent distribution, annualized and divided by
NAV or POP at end of period.
2 Assumes maximum 43.90% combined federal and state tax rate.
3 Assumes maximum 46.27% combined federal, state, and city tax rate.
Results for investors subject to lower tax rates would not be as
advantageous.
4 Based only on investment income, calculated using SEC guidelines.
TERMS AND DEFINITIONS
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the maximum 4.75% sales charge for class A
shares and 3.25% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time
of the redemption of class B shares and assumes redemption at the end of
the period. Your fund's CDSC declines from a 5% maximum during the first
year to 1% during the sixth year. After the sixth year, the CDSC no
longer applies.
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, may include bonds different from those in
the fund, and may pose different risks than the fund. It is not possible
to invest directly in an index.
Consumer Price Index (CPI) is a commonly used measure of inflation; does
not represent an investment return.
A Putnam perspective on risk and reward
You've probably been told how important it is to understand the
relationship between an investment's potential rewards and its
accompanying risks. Given the cautionary nature of such
instructions, it may take most investors a while to realize that risk
has a positive side.
Every risk signals a potential reward. Selecting only those investments
that offer the greatest degree of security generally leads to only
modest rewards. Furthermore, even insured or guaranteed investments may
be subject to changes in their rates of return or, in some cases, in
their principal values. Experienced investors know that no investment is
truly risk free and are therefore willing to take on some measure of
risk in order to increase their potential gains.
The greater the risk, the greater the potential reward. Accepting an
appropriate level of investment risk can give you a better chance of
outpacing inflation over time and seeking to maximize your investment's
return. How much risk? Your financial advisor's feedback and your time
horizon can make all the difference in determining how much risk is
compatible with your investment goals and your peace of mind.
* FITTING YOUR FUND SELECTION TO YOUR RISK TOLERANCE
How do you find the right balance between investment risks and their
potential rewards? It's helpful to understand the types of risks that
can apply to different types of investments, and to look at your own
portfolio with this perspective.
For short-term goals, your first priority may be managing market risk.
Longer-term investors may be more concerned with inflation risk. And all
income-oriented investors should consider interest-rate, credit, and
prepayment risks carefully. Within each of Putnam's four investment
categories, you can select funds with differing levels of risk and
reward potential to customize your portfolio.
This list covers only the most general types of risks; however, each
investment will also have its own specific risks. You will find a more
detailed discussion of these risk consideration in each fund's
prospectus.
* A RUNDOWN OF RISK TYPES
MARKET RISK Most important for stock funds, but relevant to all funds,
this is a measure of how sensitive a fund's holdings are to changes in
general market conditions. Remember, though, that securities that lose
value quickly in market declines may also show the strongest gains in
more favorable environments.
INTEREST-RATE RISK Since bond prices fall as interest rates rise, this
type of risk is a particular concern for fixed-income inves-
tors. However, interest-rate increases can also have a substantial
negative effect on the stock market.
INFLATION RISK If your investments cannot keep pace with inflation, your
money will begin to lose its purchasing power. Stock investments are
generally considered among the best ways of addressing inflation risk
over the long term.
CREDIT AND PREPAYMENT RISK Credit risk is the concern that the
security's issuer will not be able to meet its payment, while prepayment
risk involves the premature payoff of a loan, with a resulting loss of
interest income. Professional management and in-depth research are
invaluable in managing both these risks.
LIQUIDITY RISK Not all investments can be readily converted into cash at
their perceived market values. Liquidity risk can affect the price of
securities held in the fund's portfolio and, thus, the fund's share
prices.
<TABLE>
<CAPTION>
Portfolio of investments owned
March 31, 1996 (Unaudited)
Key to Abbreviations
AMBAC - AMBAC Indemnity Corporation
FGIC - Federal Guaranty Insurance Corporation
FHA Insd. - Federal Housing Administration Insured
FSA - Financial Security Assurance
G.O. Bonds - General Obligation Bonds
IFB - Inverse Floating Rate Bonds
MBIA - Municipal Bond Investors Assurance Corporation
VRDN - Variable Rate Demand Notes
MUNICIPAL BONDS AND NOTES (98.6%)*
PRINCIPAL AMOUNT RATING** VALUE
New York (87.4%)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1,130,000 Erie Cnty., Wtr. Auth. Rev. Bonds (Fourth Resolution),
AMBAC, zero %, 12/1/17 AAA $239,063
2,680,000 Ithaca, Hsg. Corp. Mtge. Rev. Bonds (Eddygate Park
Apts. Project), 9s, 6/1/06 BBB/P 2,803,173
2,650,000 Jefferson Cnty., Indl. Dev. Agcy. Solid Waste Disp.
Rev. Bonds (Champion Intl. Corp.), 7.2s, 12/1/20 Baa 2,865,313
3,000,000 NY City, Ser. J, MBIA, 5s, 2/15/07 AAA 2,932,500
2,650,000 NY City, Cultural Rev. Bonds (Museum of
Modern Art), Ser A, AMBAC, 5.4s, 1/1/12 AAA 2,583,750
NY City, G.O. Bonds
1,000,000 Ser. D, Group B, 8 1/4s, 8/1/11 Baa 1,152,500
300,000 Ser. B, 8 1/4s, 6/1/05 Baa 347,250
380,000 Ser. F, 3s, 11/15/00 Baa 346,750
6,400,000 AMBAC, 5.495s, 2/15/23 AAA 6,192,000
4,000,000 AMBAC, 5.396s, 2/15/11 AAA 3,960,000
2,000,000 NY City, Hsg. Dev. Corp. Mtge. Variable Rate Rev.
Bonds (Multi-Fam. Tribeca Towers), Ser. A, 5 3/4s,
12/15/24 A 2,000,000
5,000,000 NY City, Indl. Dev. Agcy. Rev. Bonds (Paer Inc.
Project), 7.95s, 1/1/28 BB/P 5,056,250
NY City, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
8,325,000 (Parking Corp. Project), 8 1/2s, 12/30/22 BB/P 8,814,094
1,500,000 (The Lighthouse Inc. Project), 6 1/2s, 7/1/22 AA 1,573,125
2,000,000 NY City, Indl. Dev. Agcy. Rev. Bonds (Solid Waste
Disp.-Visy Paper Project), 7.8s, 1/1/16 BB/P 2,015,000
1,000,000 NY City, G.O. IFB, AMBAC, 3.85s, 9/1/11 AAA 1,052,500
9,000,000 NY City, Muni. Fin. Auth. Wtr. & Swr. Syst. Rev.
Bonds, MBIA, 5 1/2s, 6/15/23 AAA 8,538,750
NY City, Muni. Wtr. Fin. Auth. Rev. Bonds
140,000 Ser. B, FGIC, 7 1/2s, 6/15/11 AAA 170,100
45,000 Prerefunded, Ser. B, FGIC, 7 1/2s, 6/15/11 AAA 54,731
1,500,000 Ser. A, 7s, 6/15/15 A 1,627,500
4,000,000 Ser. A, FGIC, 7s, 6/15/15 AAA 4,365,000
NY City, Muni. Wtr. Fin. Auth. VRDN
$650,000 Ser. C, 7 3/4s, 6/15/20 A 754,813
3,000,000 Ser. G, FGIC. 3.7s, 6/15/24 AAA 3,000,000
5,750,000 NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
(North Shore U. Hosp.), MBIA, 7.2s, 11/1/20 AAA 6,325,000
NY State Dorm. Auth. Rev. Bonds
170,000 (City U.), Ser. D, 8 3/4s, 7/1/03 Baa 203,575
5,250,000 (City U.), Ser. D, 8.2s, 7/1/12 Baa 5,775,000
6,975,000 (City U.), Ser. C, 8 1/8s, 7/1/08 Baa 7,655,063
2,750,000 (Long Island Med. Ctr.), Ser. A, FHA Insd., 7 3/4s,
8/15/27 AAA 2,942,500
835,000 (NY Dept. of Ed.), 7 3/4s, 7/1/21 Baa 927,894
750,000 (State U. Edl. Fac.), Ser. A, 7 1/2s, 5/15/13 Baa 865,313
605,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/30 AA 672,306
6,000,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/20 AA 6,667,500
500,000 (Wildwood School), 7.3s, 7/1/15 A 553,125
2,050,000 (Our Lady of Mercy), 6.3s, 8/1/32 AA 2,116,625
4,000,000 (State U. Edl. Fac.), Ser. A, 5 7/8s, 5/15/11 BBB 3,965,000
2,365,000 (Mental Hlth. Svcs.), MBIA, 5 1/4s, 8/15/05 AAA 2,406,388
2,430,000 (Mental Hlth. Svcs.), MBIA, 5 1/4s, 8/15/04 AAA 2,469,488
725,000 (State U. Edl. Fac.), Ser. B, zero %, 5/15/09 Baa 343,469
1,865,000 Ser. A, 5 1/2s, 5/15/10 Baa 1,750,769
NY State Energy Research & Dev. Auth. Gas Fac.
IFB (Brooklyn Union Gas Co. Project)
2,000,000 Ser. B, 10 3/8s, 7/1/26 A 2,370,000
2,000,000 8.142s, 4/1/20 A 2,137,500
NY State Energy Research & Dev. Auth. Poll.
Control Rev. Bonds
1,700,000 (Hudson Gas), FGIC, 7 3/8s, 10/1/14 AAA 1,878,500
1,750,000 (Niagara Mohawk Power Corp.), Ser. A, FGIC,
7.2s, 7/1/29 AAA 1,962,188
2,000,000 (Niagara Mohawk Power Corp.), Ser. A, 5.1s,
7/1/15 AA 2,000,000
6,000,000 (NY State Elec. & Gas Co.), Ser. C, 3.4s, 6/1/29 A 6,000,000
1,000,000 NY State Environmental Rev. Bonds, 7 1/2s, 3/15/11 AA 1,097,500
NY State Environmental Fac. Corp. Poll. Control
Rev. Bonds (State Wtr. Revolving Fund)
8,000,000 Ser. A, 7 1/2s, 6/15/12 # AA 8,870,000
7,185,000 7s, 6/15/12 AA 7,912,481
5,000,000 Ser. E, 6 1/2s, 6/15/14 AA 5,318,750
500,000 NY State Hsg. Fin. Agcy. Svcs. Contract Oblig. Rev.
Bonds, Ser. A, 7 1/4s, 9/15/12 Baa 547,500
100,000 NY State Local Govt. Assistance Corp. Rev. Bonds,
Ser. C, 7s, 4/1/21 AAA 112,625
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
205,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B, FHA
Insd., 9 1/8s, 2/15/25 AA 210,520
620,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B, FHA
Insd., 8 7/8s, 8/15/27 AA 668,050
395,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/08 Baa 442,894
360,000 Prerefunded, (Mental Hlth. Svcs. Fac.), Ser. B,
7 7/8s, 8/15/08 AAA 415,350
130,000 Prerefunded, (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s,
2/15/19 AAA 144,950
70,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 Baa 76,038
New York (continued)
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
(continued)
$620,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 AAA $710,675
2,000,000 7.6s, 2/15/29 AAA 2,175,000
230,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 Baa 255,300
200,000 (Bronx, Lebanon & the Jamaica Hosps.), Ser. A,
7.1s, 2/15/27 Baa 204,000
700,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. D,
FHA Insd., 6.6s, 2/15/31 AAA 722,750
NY State Mtge. Agcy. Rev. Bonds
150,000 5th Ser., 9 3/4s, 10/1/10 AA 155,403
1,730,000 (Single Fam.), Ser. 2, zero %, 10/1/14 AA 306,331
NY State Urban Dev. Corp. Rev. Bonds
1,305,000 (Higher Ed. Technology Grants), MBIA, 6s, 4/1/10 AAA 1,362,094
1,685,000 (Clarkson Ctr.), 5 1/2s, 1/1/20 BBB 1,562,838
2,000,000 (Syracuse U.), 5 1/2s, 1/1/15 BBB 1,890,000
3,345,000 (Clarkson Ctr.), 5 1/2s, 1/1/15 BBB 3,152,663
7,375,000 (Correctional Fac.), MBIA, 5 3/8s, 1/1/12 AAA 7,135,313
175,000 Port Auth. of NY & NJ, Cons. Bonds, 78th Ser.,
6 1/2s, 10/15/08 AA 187,906
5,000,000 Tompkins Cnty., Indl. Dev. Agcy. Rev. Bonds (Life
Care Cmnty., Kendal Ithaca), 7 7/8s, 6/1/24 B/P 5,075,000
United Nations Dev. Corp. Rev. Bonds
200,000 (Sr. Lien, Phase 2 & 3), Ser. A, 7 7/8s, 7/1/26 AAA 206,154
3,250,000 Ser. B, 6 1/4s, 7/1/26 A 3,286,563
1,000,000 (Sr. Lien, Phase 2 & 3), Ser. A, 6s, 7/1/12 A 1,003,750
1,455,000 Valley Hlth. Dev. Corp. Mtge. Rev. Bonds
(Valley Hlth. Project), FHA Insd., 11.3s, 2/1/23 A 1,746,000
2,900,000 Yonkers, G.O. Bonds, Ser. A, FGIC, 7.8s, 8/1/09 AAA 3,226,250
-------------
184,612,013
Puerto Rico (11.2%)
- -------------------------------------------------------------------------------------------------
4,700,000 Cmnwlth. of PR Hwy. & Trans. Auth. IFB, Ser. W,
6.67s, 7/1/08 A 4,658,875
PR Elec. Pwr. Auth. IFB
5,000,000 FSA, 8.018s, 7/1/23 AAA 5,062,500
4,000,000 Rev. Bonds, 6 3/8s, 7/1/24 A 4,105,000
1,000,000 PR Indl. & Environ. Poll. Control Fac. Fin. Auth.
Rev. Bonds, 7.6s, 5/1/14 AA 1,101,250
3,800,000 PR Tel. Auth. Rev. Bonds, MBIA, 5.365s, 1/16/15 AAA 3,676,500
5,000,000 PR Tel. Auth. IFB, 8.372s, 1/1/20 (acquired 9/25/92,
cost $4,837,500) ++ A 5,143,750
--------------
23,747,875
- -------------------------------------------------------------------------------------------------
Total Investments (cost $205,999,280) *** $208,359,888
- -------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $211,267,685.
** The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings
available at March 31, 1996 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 March 31, 1996. Securities rated by Putnam are indicated by "/P" and are
not publicly rated.
*** The aggregate identified cost on a tax basis is $205,999,280, resulting in gross unrealized
appreciation and depreciation of $4,283,697 and $1,923,089, respectively, or net unrealized
appreciation of $2,360,608.
++ Restricted as to public resale, excluding Rule 144A securities. The total market value of restricted
securities owned at March 31, 1996 was $5,143,750 or 2.4% of net assets.
# A portion of this security was pledged to cover margin requirements for futures contracts at
March 31, 1996. The market value of segregated securities with the custodian for transactions on
futures contracts is $419,900 or 0.2% of net assets.
The rates shown on IFBs, which are securities paying variable interest rates that vary inversely to
changes in the market interest rates, and VRDNs are the current interest rates at March 31, 1996,
which are subject to change based on the terms of the security.
The fund had the following insurance group concentrations greater than 10% of net assets at
March 31, 1996:
MBIA 12.5%
The fund had the following industry group concentrations greater than 10% of net assets at
March 31, 1996:
Hospital / Health Care 22.8%
Utilities 15.9
Education 15.5
<CAPTION>
- --------------------------------------------------------------------------------------------
Futures Contracts Outstanding at March 31, 1996
Aggregate Expiration Unrealized
Total Value Face Value Date Appreciation
- --------------------------------------------------------------------------------------------
Municipal Bond Index $9,005,000 $9,037,500 JUN 96 $32,500
- --------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
March 31,1996 (Unaudited)
- -----------------------------------------------------------------------------
<S> <C>
Assets
- -----------------------------------------------------------------------------
Investments in securities, at value
(identified cost $205,999,280) (Note 1) $208,359,888
- -----------------------------------------------------------------------------
Cash 62,566
- -----------------------------------------------------------------------------
Interest receivable 3,150,537
- -----------------------------------------------------------------------------
Receivable for shares of the fund sold 725,928
- -----------------------------------------------------------------------------
Receivable for securities sold 1,645
- -----------------------------------------------------------------------------
Total assets 212,300,564
Liabilities
- -----------------------------------------------------------------------------
Payable for variable margin 42,500
- -----------------------------------------------------------------------------
Distributions payable to shareholders 366,726
- -----------------------------------------------------------------------------
Payable for shares of the fund repurchased 187,022
- -----------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 286,746
- -----------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 344
- -----------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,052
- -----------------------------------------------------------------------------
Payable for distribution fees (Note 2) 114,365
- -----------------------------------------------------------------------------
Other accrued expenses 33,124
- -----------------------------------------------------------------------------
Total liabilities 1,032,879
- -----------------------------------------------------------------------------
Net assets $211,267,685
Represented by
- -----------------------------------------------------------------------------
Paid-in-capital (Notes 1 and 4) $211,955,230
- -----------------------------------------------------------------------------
Undistributed net investment income (Note 1) 37,987
- -----------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (3,118,640)
- -----------------------------------------------------------------------------
Net unrealized appreciation of investments 2,393,108
- -----------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $211,267,685
Computation of net asset value and offering price
- -----------------------------------------------------------------------------
Net asset value and redemption price per class A share
($175,536,390 divided by 20,007,596 shares) $8.77
- -----------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $8.77)* $9.21
- -----------------------------------------------------------------------------
Net asset value and offering price per class B share
($34,678,909 divided by 3,956,531 shares)+ $8.76
- -----------------------------------------------------------------------------
Net asset value and redemption price per class M share
($1,052,386 divided by 120,103 shares) $8.76
- -----------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $8.76)* $9.05
- -----------------------------------------------------------------------------
* On single retail sales of less than $25,000. On sales of $25,000 or more and
on group sales the offering price is reduced.
** On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price is reduced.
+ Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended March 31,1996 (Unaudited)
- -----------------------------------------------------------------------------
<S> <C>
Tax exempt interest income: $6,605,577
- -----------------------------------------------------------------------------
Expenses:
- -----------------------------------------------------------------------------
Compensation of Manager (Note 2) 625,164
- -----------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 125,505
- -----------------------------------------------------------------------------
Compensation of Trustees (Note 2) 6,132
- -----------------------------------------------------------------------------
Reports to shareholders 7,291
- -----------------------------------------------------------------------------
Auditing 16,103
- -----------------------------------------------------------------------------
Legal 2,166
- -----------------------------------------------------------------------------
Postage 9,759
- -----------------------------------------------------------------------------
Registration fees 3,034
- -----------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 174,567
- -----------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 125,672
- -----------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 1,910
- -----------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 1,439
- -----------------------------------------------------------------------------
Administrative services (Note 2) 3,978
- -----------------------------------------------------------------------------
Other 4,811
- -----------------------------------------------------------------------------
Total expenses 1,107,531
- -----------------------------------------------------------------------------
Expense reduction (Note 2) (177,194)
- -----------------------------------------------------------------------------
Net expenses 930,337
- -----------------------------------------------------------------------------
Net investment income 5,675,240
- -----------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 1,056,920
- -----------------------------------------------------------------------------
Net realized loss on futures contracts (Notes 1 and 3) (252,520)
- -----------------------------------------------------------------------------
Net unrealized depreciation on investments and
futures during the period (1,633,324)
- -----------------------------------------------------------------------------
Net loss on investments (828,924)
- -----------------------------------------------------------------------------
Net increase in net assets resulting from operations $4,846,316
- -----------------------------------------------------------------------------
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
March 31 September 30
1996* 1995
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ------------------------------------------------------------------------------------------------
Operations:
- ------------------------------------------------------------------------------------------------
Net investment income $5,675,240 $11,270,965
- ------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions 804,400 (2,207,244)
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investment transactions (1,633,324) 9,000,081
- ------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 4,846,316 18,063,802
- ------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ------------------------------------------------------------------------------------------------
From net investment income:
Class A (4,969,772) (10,369,002)
- ------------------------------------------------------------------------------------------------
Class B (720,221) (840,237)
- ------------------------------------------------------------------------------------------------
Class M (19,632) (4,453)
- ------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 12,363,379 8,554,854
- ------------------------------------------------------------------------------------------------
Total increase in net assets 11,500,070 15,404,964
- ------------------------------------------------------------------------------------------------
Net assets
- ------------------------------------------------------------------------------------------------
Beginning of period 199,767,615 184,362,651
- ------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $37,987 and $72,372, respectively) $211,267,685 $199,767,615
- ------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
For the period
February 10,
1995
Six months (commencement Six months
ended of operations) to ended Year ended
March 31 September 30 March 31 September 30
- ---------------------------------------------------------------------------------------------------------
1996* 1995 1996* 1995
- ---------------------------------------------------------------------------------------------------------
Class M Class B
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $8.79 $8.51 $8.79 $8.48
- ---------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------
Net investment income .24 .31 .22 .47
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (.04) .29 (.03) .31
- ---------------------------------------------------------------------------------------------------------
Total from investment operations .20 .60 .19 .78
- ---------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------
From net investment income (.23) (.32) (.22) (.47)
- ---------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- --
- ---------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- --
- ---------------------------------------------------------------------------------------------------------
Total distributions (.23) (.32) (.22) (.47)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.76 $8.79 $8.76 $8.79
- ---------------------------------------------------------------------------------------------------------
Total investment return at net asset value
(%) (a) 2.31(d) 7.11(d) 2.13(d) 9.46
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,052 $299 $34,679 $24,259
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .63(d) 0.83(d) .81(d) 1.65
- ---------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets (%) 2.53(d) 3.21(d) 2.42(d) 5.28
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 125.44(d) 120.38 125.44(d) 120.38
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (Continued)
(For a share outstanding throughout the period)
For the period
February 1, 1994
(commencement Six months
operations) ended Year ended
to September 30 March 31 September 30
- ---------------------------------------------------------------------------------------------------------
1994 1996* 1995 1994
- ---------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $9.07 $8.80 $8.48 $9.12
- ---------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------
Net investment income .32 .25 .52 .54
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (.60) (.03) .32 (.62)
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (.28) .22 .84 (.08)
- ---------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------
From net investment income (.31) (.25) (.52) (.54)
- ---------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- --
- ---------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- (.02)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.31) (.25) (.52) (.56)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.48 $8.77 $8.80 $8.48
- ---------------------------------------------------------------------------------------------------------
Total investment return at net asset value
(%) (a) (3.06)(d) 2.47(d) 10.27 (.89)
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $8,622 $175,536 $175,210 $175,741
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.05(d) .48(d) 1.01 .98
- ---------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets (%) 3.39(d) 2.77(d) 6.12 6.22
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 13.85 125.44(d) 120.38 13.85
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (Continued)
(For a share outstanding throughout the period)
For the period
November 7,
1990
(commencement
Year ended of operations)
September 30 to September 30
- -----------------------------------------------------------------------------------------
1993 1992 1991
- -----------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $8.86 $8.67 $8.50
- -----------------------------------------------------------------------------------------
Investment operations
- -----------------------------------------------------------------------------------------
Net investment income .57 .63(c) .58(c)
- -----------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments .27 .19 .17
- -----------------------------------------------------------------------------------------
Total from investment operations .84 .82 .75
- -----------------------------------------------------------------------------------------
Less distributions:
- -----------------------------------------------------------------------------------------
From net investment income (.57) (.63) (.58)
- -----------------------------------------------------------------------------------------
In excess of net investment income (.01) -- --
- -----------------------------------------------------------------------------------------
From net realized gain on investments -- -- --
- -----------------------------------------------------------------------------------------
Total distributions (.58) (.63) (.58)
- -----------------------------------------------------------------------------------------
Net asset value, end of period $9.12 $8.86 $8.67
- -----------------------------------------------------------------------------------------
Total investment return at net asset value
(%) (a) 9.80 9.89 9.16(d)
- -----------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $170,533 $108,609 $30,864
- -----------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.02 .91(c) .64(c)(d)
- -----------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets (%) 6.32 7.04(c) 6.73(c)(d)
- -----------------------------------------------------------------------------------------
Portfolio turnover (%) 17.68 11.56 5.74(d)
- -----------------------------------------------------------------------------------------
* Unaudited
(a) Total investment return assumes dividend reinvestment and does not reflect the effect
of sales charges.
(b) The ratio of expenses to average net assets for the periods ended September 30, 1995
and thereafter, include amounts paid through expense offset arrangements. Prior period
ratios exclude these amounts. (Note 2).
(c) Reflects an expense limitation in effect during the period. As a result of such limitation,
expenses for the year ended September 30, 1992 and the period ended September 30, 1991
reflect a reduction of $0.02 and $0.07 per share, respectively.
(d) Not annualized.
</TABLE>
Notes to financial statements
March 31, 1996 (Unaudited)
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940, as
amended, as a non-diversified, open-end management investment company.
The fund seeks as high a level of current income exempt from federal
income tax and New York State and City personal income taxes which
Putnam Management, Inc. ("Putnam Management"), the fund's Manager, a
wholly-owned subsidiary of Putnam Investments, Inc., believes does not
involve undue risk to income or principal by investing primarily in a
portfolio of investment grade New York tax-exempt securities.
The fund offers class A, class B and class M shares. Class A shares are
sold with a maximum front-end sales charge of 4.75%. Class B shares,
which convert to class A shares after approximately six years, do not
pay a front-end sales charge, but pay a higher ongoing distribution fee
than class A shares, and are subject to a contingent deferred sales
charge, if those shares are redeemed within six years of purchase. Class
M shares are sold with a maximum front-end sales charge of 3.25% and pay
an ongoing distribution fee that is lower than class B shares and higher
than class A shares. Expenses of the fund are borne pro-rata by the
holders of each class of shares, except that each class bears expenses
unique to that class (including the distribution fees applicable to such
class). Each class votes as a class only with respect to its own
distribution plan or other matters on which a class vote is required by
law or determined by the Trustees. Shares of each class would receive
their pro-rata share of the net assets of the fund, if the fund were
liquidated. In addition, the Trustees declare separate dividends on each
class of shares.
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. The fair
value of restricted securities is determined by the fund manager
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) Futures and options contracts The fund may use futures and options
contracts to hedge against changes in the values of securities the fund
owns or expects to purchase. The fund may also write options on
securities it owns or which it invests to increase its current returns.
The potential risk to the fund is that the change in value of futures
and options contracts may not correspond to the change in value of
the hedged instruments. In addition, losses may arise from changes in
the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparty to the
contract is unable to perform.
Futures contracts are valued at the quoted daily settlement prices
established by the exchange on which they trade. Exchange traded options
are valued at the last sale price, or if no sales are reported, the last
bid price for purchased options and the last ask price for written
options. Options traded over-the-counter are valued using prices
supplied by dealers.
D) 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. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held and for excise tax on income and capital
gains.
E) Distributions to shareholders Income dividends are recorded daily by
the fund and are distributed monthly. Capital gain distributions if any,
are recorded on the ex-dividend date and paid annually. 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.
F) Amortization of bond premium and 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, original issue,
stepped-coupon bonds and payment in kind bonds are accreted according to
the effective yield method.
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 for the quarter. Such fees is based on the following annual
rates: 0.60% of the first $500 million of average net assets, 0.50% of
the next $500 million, 0.45% of the next $500 million and 0.40% of the
next $5 billion, 0.375% of the next $5 billion, 0.355% of the next $5
billion, 0.34% of the next $5 billion, and 0.33% of any amount
thereafter, subject under current law, to reduction in any year by the
amount of certain brokerage commissions and fees (less expenses)
received by affiliates of the Manager on the fund's portfolio
transactions.
The fund reimburses Putnam Management 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.
Trustees of the fund receive an annual Trustees fee of $790 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 adopted a Trustee Fee Deferral Plan (the "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 the fund or in other Putnam funds until distribution
in accordance with the Plan.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam
Investments, Inc. Investor servicing agent functions are provided by
Putnam Investor Services, a division of PFTC.
For the six months ended March 31, 1996, fund expenses were reduced by
$177,194 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 the assets utilized in connection
with the expense offset arrangements in an income producing asset if it
had not entered into such arrangements.
The fund has adopted distribution plans (the "Plans") with respect to
its class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to
compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of
Putnam Investments, Inc., for services provided and expenses incurred by
it in distributing shares of the fund. The Plans provide for payments by
the fund to Putnam Mutual Funds Corp. at an annual rate up to .35%,
1.00% and 1.00% of the average net assets attributable to class A, class
B and class M shares, respectively. The Trustees have approved payment
by the fund at an annual rate of .20%, .85% and .50% of the average net
assets attributable to class A, class B and class M shares,
respectively.
For the six months ended March 31, 1996, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $39,237 and $1,578
from the sale of class A and class M shares, respectively and received
$38,974 in contingent deferred sales charges from redemptions of class B
shares. A deferred sales charge of up to 1% is assessed on certain
redemptions of class A shares. For the six months ended March 31, 1996,
Putnam Mutual Funds Corp., acting as underwriter received no monies on
class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended March 31, 1996, purchases and sales of
investment securities other than short-term municipal obligations
aggregated $252,697,482 and $247,938,572, respectively. Purchases and
sales of short-term municipal obligations aggregated $65,100,000 and
$58,685,000, respectively. In determining the net gain or loss on
securities sold, the cost of securities has been determined on the
identified cost basis.
Note 4
Capital shares
At March 31, 1996, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
March 31, 1996
- ----------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------
Shares sold 2,539,027 $22,728,460
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 269,889 2,412,071
- ----------------------------------------------------
2,808,916 25,140,531
Shares
repurchased (2,708,316) (24,265,323)
- ----------------------------------------------------
Net increase 100,600 $875,208
- ----------------------------------------------------
Year ended
September 30, 1995
- ----------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------
Shares sold 4,362,516 $37,214,894
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 587,902 5,019,522
- ----------------------------------------------------
4,950,418 42,234,416
Shares
repurchased (5,756,670) (48,914,592)
- ----------------------------------------------------
Net decrease (806,252) $(6,680,176)
- ----------------------------------------------------
Six months ended
March 31, 1996
- ----------------------------------------------------
Class B Shares Amount
- ----------------------------------------------------
Shares sold 1,387,803 $12,431,115
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 45,293 404,338
- ----------------------------------------------------
1,433,096 12,835,453
Shares
repurchased (236,067) (2,113,078)
- ----------------------------------------------------
Net increase 1,197,029 $10,722,375
- ----------------------------------------------------
Year ended
September 30, 1995
- ----------------------------------------------------
Class B Shares Amount
- ----------------------------------------------------
Shares sold 2,047,174 $17,535,586
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 54,190 465,295
- ----------------------------------------------------
2,101,364 18,000,881
Shares
repurchased (358,544) (3,061,066)
- ----------------------------------------------------
Net increase 1,742,820 $14,939,815
- ----------------------------------------------------
Six months ended
March 31, 1996
- ----------------------------------------------------
Class M Shares Amount
- ----------------------------------------------------
Shares sold 87,512 $777,942
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,585 14,144
- ----------------------------------------------------
89,097 792,086
Shares
repurchased (2,953) (26,290)
- ----------------------------------------------------
Net increase 86,144 $765,796
- ----------------------------------------------------
For the period
February 10, 1995
(commencement of
operations) to
September 30, 1995
- ----------------------------------------------------
Class M Shares Amount
- ----------------------------------------------------
Shares sold 35,453 $308,178
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 374 3,262
- ----------------------------------------------------
35,827 311,440
Shares
repurchased (1,868) (16,225)
- ----------------------------------------------------
Net increase 33,959 $295,215
- ----------------------------------------------------
Our commitment to quality service
* CHOOSE AWARD-WINNING SERVICE
Putnam Investor Services has won the DALBAR Quality Tested Service Seal
for the past six years. In 1995, over 146,000 tests of 56 shareholder
service components demonstrated that Putnam outperformed the industry
standard in every category.
* HELP YOUR INVESTMENT GROW
Set up a systematic program for investing with as little as $25 a month
from a Putnam money market fund or from your checking or savings
account.*
* SWITCH FUNDS EASILY
You can move money from one account to another with the same class of
shares without a service charge. (This privilege is subject to change or
termination.)
* ACCESS YOUR MONEY QUICKLY
You can get checks sent regularly or redeem shares any business day at
the then-current net asset value, which may be more or less than the
original cost of the shares.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a
helpful Putnam representative.
To make an additional investment in this or any other Putnam fund,
contact your financial advisor or call our toll-free number:
1-800-225-1581.
* Regular investing of course, does not guarantee a profit or protect
against a loss in a declining market.
Fund information
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
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
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
Gary N. Coburn
Vice President
James E. Erickson
Vice President
Michael F. Bouscaren
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New York
Tax Exempt Opportunities Fund. It may also be used as sales literature
when preceded or accompanied by the current prospectus, which gives
details of sales charges, investment objectives, and operating policies
of the fund, and the most recent copy of Putnam's Quarterly Performance
Summary. For more information, or to request a prospectus, call toll
free: 1-800-225-1581.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution, are not insured by the
Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board
or any other agency, and involve risk, including the possible loss of
principal amount invested.
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- -------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- -------------------
24529-854/228/759 5/96
