PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND, 485BPOS, 1998-11-30

PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND
485BPOS, 1998-11-30

Previous: ABRAXAS PETROLEUM CORP, 8-K, 1998-11-30

Next: CORPORATE VISION INC /OK, 10KSB, 1998-11-30

As filed with the Securities and Exchange Commission on
November 30, 1998
- - - -----------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-1A
----
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/ X /
--
--
--
--
Pre-Effective Amendment No. / /
--
--
--
--
Post-Effective Amendment No. 9 / X /
and -----
---
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X
/
ACT OF 1940 -----
---
Amendment No. 10 / X /
(Check appropriate box or boxes) -----
---------------
PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND
Registration No. 33-37001
811-6176
(Exact name of registrant as specified in
charter) ----------------------------------
---------------------
One Post Office Square, Boston, Massachusetts
02109 (Address of principal
executive offices)

Registrants' Telephone Number, including Area
Code (617) 292-1000
---------------

It is proposed that this filing will become effective
(check appropriate box)
----
/ / immediately upon filing pursuant to
paragraph (b)
- - - ----
----
/ X / on December 30, 1998 pursuant to
paragraph (b)
- - - ----
----
/ / 60 days after filing pursuant to
paragraph (a)(1)
- - - ----
----
/ / on (date) pursuant to paragraph (a)(1)
- - - ----
----
/ / 75 days after filing pursuant to
paragraph (a)(2)
- - - ----
----
/ / on (date) pursuant to paragraph (a)(2)
of Rule 485.
- - - ----
If appropriate, check the following box:
----
/ / this post-effective amendment designates
a new
- - - ---- effective date for a previously filed
post-effective amendment.
--------------
JOHN R. VERANI, Vice
PresidentPutnam New York Tax Exempt Income Fund Putnam New
York Tax Exempt Opportunities Fund
Putnam New York Tax Exempt
Money Market Fund
One Post Office Square
Boston, Massachusetts 02109
(Name and address of agent
for service) --------------
-
Copy to:
JOHN W. GERSTMAYR, Esquire
ROPES & GRAY
One International Place
Boston, Massachusetts 02110
Prospectus Supplement dated
December 30, 1998 to: -------------------------------
- - - ---------------------------------PUTNAM NEW YORK TAX
EXEMPT OPPORTUNITIES FUND ("OPPORTUNITIES FUND")
PUTNAM NEW YORK TAX EXEMPT INCOME FUND ("INCOME
FUND")
PUTNAM NEW YORK TAX EXEMPT MONEY MARKET FUND ("MONEY
MARKET FUND")

Prospectus dated January 30, 1998

1. The section of the prospectus entitled "Expenses
Summary-
Annual fund operating expenses" for the
Opportunities Fund is replaced with the
following:

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

Total fund Management 12b-1
Other operating
fees fees expenses
expenses
---------- ----- -------- ---
- - - -------Opportunities Fund
Class A 0.60% 0.20% 0.20%
1.00%
Class B 0.60% 0.85% 0.20%
1.65%
Class M 0.60% 0.50% 0.20%
1.30%

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 would incur the following
expenses,
assuming 5% annual return and, except as indicated,
redemption at the end of each period:

1 3 5 10
year years years years

OPPORTUNITIES FUND
CLASS A $57 $78 $100 $164
CLASS B $67 $82 $110 $178*
CLASS B (NO REDEMPTION) $17 $52 $90 $178*
CLASS M $45 $72 $101 $184

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. Reflects conversion of class B shares to
class A shares(which pay lower ongoing expenses)
approximately eight years after purchase. See
"Alternative sales arrangements."
</TABLE>
2. The first paragraph of the section of the
prospectus entitled "Financial highlights" is
replaced with the following:
FINANCIAL HIGHLIGHTS

The following table presents per share financial
information for class A, class B and class M shares
of Opportunities Fund and Income Fund and for shares
of Money Market Fund. The fiscal yearend information
has been audited and reported on by the fund's
independent accountants. The financial information
for the six months ended May 31, 1998 for Income Fund
and Money Market Fund is unaudited. The "Report of
independent accountants" and financial statements
included in each fund's annual report to shareholders
for the 1998 fiscal year for Opportunities Fund and
1997 fiscal year for Income and Money Market Funds
are incorporated by reference into this prospectus.
Each fund's annual report and the 1998 semi-annual
reports of Income Fund and Money Market Funds, which
contain additional unaudited performance information,
are available without charge upon request.

3. The following information supplements the
table under the section of the prospectus entitled
"Financial highlights":
<TABLE><CAPTION>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)

<S> <C> <C> <C>
OPPORTUNITIES FUND CLASS A SHARES CLASS B SHARES CLASS M
SHARES
Year ended Year ended Year ended
September 30, 1998September 30, 1998September 30,
1998
NET ASSET VALUE, BEGINNING
OF PERIOD $9.10 $9.09 $9.08
INVESTMENT OPERATIONS
Net investment income .46 .40 .43
Net realized and
unrealized gain
on investments .21 .21 .21
TOTAL FROM INVESTMENT
OPERATIONS .67 .61 .64
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
Income (.47) (.41) (.44)
From net realized gain on
investments (.03) (.03) (.03)
TOTAL DISTRIBUTIONS (.50) (.44) (.47)
NET ASSET VALUE,
END OF PERIOD $9.27 $9.26 $9.25
RATIOS AND SUPPLEMENTAL DATA
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(A) 7.55 6.86 7.23
NET ASSETS, END OF PERIOD
(in thousands) $168,032 $68,547 $2,433
Ratio of expenses to
average net assets
(%) (b) 1.00 1.65 1.30
Ratio of net investment
Income to average net
assets (%) 5.00 4.36 4.71
Portfolio turnover (%)42.76 42.76 42.76
(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 includes
amounts paid through expense offset arrangements.

</TABLE>

INCOME FUND CLASS A SHARES CLASS B SHARES CLASS M SHARES

Six Months ended Six Months ended Six Months ended
May 31, 1998 May 31, 1998 May 31, 1998
(unaudited) (unaudited) (unaudited)
NET ASSET VALUE, BEGINNING
OF PERIOD $9.02 $9.00 $9.02
INVESTMENT OPERATIONS
Net investment
income .22 .19 .21
Net realized and unrealized gain
on investments .09 .09 .08
TOTAL FROM INVESTMENT OPERATIONS
.31 .28 .29
DISTRIBUTIONS TO SHAREHOLDERS:

From net investment
income (.22) (.19) (.20)
From net realized
gain on investments(.10) (.10) (.10)
In excess of net realized
gain on investments -- -- --
TOTAL DISTRIBUTIONS (.32) (.29) (.30)
NET ASSET VALUE,
END OF PERIOD $9.01 $8.99 $9.01
RATIOS AND SUPPLEMENTAL DATA
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(A) 3.49* 3.16* 3.34*
NET ASSETS, END OF PERIOD
(in thousands) $1,670,844 $226,963 $2,215
Ratio of expenses to average net
assets (%) (b) .41* .73* .56*
Ratio of net investment income
to average net assets (%)
2.44* 2.12* 2.29*
Portfolio turnover (%)48.31* 81.95* 48.31*

* Not annualized
(a) Total investment return assumes dividend reinvestment and
does not reflect the effect of sales charge.
(b) The ratio of expenses to average net assets includes amounts
paid through expense offset arrangements and brokerage service
arrangements.

</TABLE>

<S> <C>

MONEY MARKET FUND

Six Months ended
May 31, 1998
(unaudited)

NET ASSET VALUE, BEGINNING
OF PERIOD $1.00
INVESTMENT OPERATIONS
Net investment income .0150
Net realized and unrealized gain
on investments --
TOTAL FROM INVESTMENT OPERATIONS .0150
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (.0150)
From net realized gain on investments --
TOTAL DISTRIBUTIONS (.0150)
NET ASSET VALUE, END OF PERIOD $1.00
RATIOS AND SUPPLEMENTAL DATA
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(A) 1.51
NET ASSETS, END OF PERIOD
(in thousands) $36,189
Ratio of expenses to average net
assets (%) (b) .38
Ratio of net investment income
to average net assets (%) 1.49

(a) Total investment return assumes dividend
reinvestments.
(b) The ratio of expenses to average net assets
includes amounts paid through expense offset
arrangements and brokerage service arrangements.

</TABLE>

PROSPECTUS JANUARY 30, 1998
PUTNAM NEW YORK TAX EXEMPT INCOME FUND
CLASS A, B AND M SHARES
PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND
CLASS A, B AND M SHARES
PUTNAM NEW YORK TAX EXEMPT MONEY MARKET FUND

INVESTMENT STRATEGY: TAX-FREE

This prospectus explains concisely what you should
know before investing in Putnam New York Tax Exempt
Income Fund (the "Income Fund"), Putnam New York Tax
Exempt Opportunities Fund (the "Opportunities Fund"),
and Putnam New York Tax Exempt Money Market Fund (the
"Money Market Fund") (collectively, the "funds").
Please read it carefully and keep it for future
reference. You can find more detailed information
about each fund in the January 30, 1998 statement of
additional information (the "SAI"), as amended from
time to time. For a free copy of the SAI or other
information, call Putnam Investor Services at 1800-
225-1581. The SAI has been filed with the Securities
and Exchange Commission and is incorporated into this
prospectus by reference. The Commission maintains a
Web site (http://www.sec.gov) that contains the SAI,
material incorporated by reference into this
prospectus and the SAI, and other information
regarding registrants that file electronically with
the Commission.

AN INVESTMENT IN THE MONEY MARKET FUND IS NEITHER
INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT. THERE
CAN BE NO ASSURANCE THAT THE MONEY MARKET FUND WILL
BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE. THE MONEY MARKET FUND MAY INVEST A
SIGNIFICANT PERCENTAGE OF ITS ASSETS IN THE
SECURITIES OF A SINGLE ISSUER, AND AN INVESTMENT IN
THE FUND MAY THEREFORE BE RISKIER THAN AN INVESTMENT
IN OTHER TYPES OF MONEY MARKET FUNDS.

Each fund invests primarily in a portfolio of New
York tax-exempt securities, which may include
securities of issuers other than New York and its
political subdivisions.

THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED OR ENDORSED BY, ANY FINANCIAL
INSTITUTION, ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY, AND INVOLVE RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
BOSTON * LONDON * TOKYO

ABOUT THE FUNDS

EXPENSES SUMMARY
This section describes the sales charges, management
fees, and annual operating expenses that apply to
various classes of a fund's shares. Use it to help
you estimate the impact of transaction costs and
recurring expenses on your investment over time.

FINANCIAL HIGHLIGHTS
Study this table to see, among other things, how a
fund performed each year for the past 10 years or
since it began investment operations if it has been
in operation for less than 10 years.

OBJECTIVES
Read this section to make sure a fund's objectives
are consistent with your own.

HOW THE FUNDS PURSUE THEIR OBJECTIVES
This section explains in detail how a fund seeks its
investment objectives.

HOW PERFORMANCE IS SHOWN
This section describes and defines the measures used
to assess fund performance. All data are based on
past investment results and do not predict future
performance.

HOW THE FUNDS ARE MANAGED
Consult this section for information about a fund's
management, allocation of its expenses, and how it
purchases and sells securities.

ORGANIZATION AND HISTORY
In this section, you will learn when a fund was
introduced, how it is organized, how it may offer
shares, and who its Trustees are.

ABOUT YOUR INVESTMENT

ALTERNATIVE SALES ARRANGEMENTS
Read this section for descriptions of the classes of
shares this prospectus offers and for points you
should consider when making your choice.

HOW TO BUY SHARES
This section describes the ways you may purchase
shares and tells you the minimum amounts required to
open various types of accounts. It explains how
sales charges are determined and how you may become
eligible for reduced sales charges on each class of
shares.

DISTRIBUTION PLANS
This section tells you what distribution fees are
charged against each class of shares.

HOW TO SELL SHARES
In this section you can learn how to sell fund
shares, either directly to the fund or through an
investment dealer.

HOW TO EXCHANGE SHARES
Find out in this section how you may exchange fund
shares for shares of other Putnam funds. The
section also explains how exchanges can be made
without sales charges and the conditions under which
sales charges may be required.

HOW A FUND VALUES ITS SHARES
This section explains how a fund determines the
value of its shares.

HOW A FUND MAKES DISTRIBUTIONS TO SHAREHOLDERS; TAX
INFORMATION This section describes the various
options you have in choosing how to receive fund
dividends. It also discusses tax status of the
payments and counsels you to seek specific advice
about your own situation.

ABOUT PUTNAM INVESTMENTS, INC.

Read this section to learn more about the companies
that provide marketing, investment management, and
shareholder account services to Putnam funds and
their shareholders.

APPENDIX
Securities ratings
ABOUT THE FUNDS

EXPENSES SUMMARY

Expenses are one of several factors to consider when
investing. The following tables summarize your
maximum transaction costs from investing in 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.

INCOME FUND AND OPPORTUNITIES FUND

CLASS A SHARES CLASS B SHARES CLASS M SHARES
SHAREHOLDER TRANSACTION
EXPENSES

Maximum sales charge
imposed on purchases (as a percentage of
offering price) 4.75% NONE* 3.25%*

Deferred sales charge 5.0% in the first(as a percentage year,
declining of the lower of to 1.0% in the original purchase
sixth year, and price or redemption eliminated proceeds)
NONE** thereafter NONE
MONEY MARKET FUND
SHAREHOLDER TRANSACTION
EXPENSES

Maximum sales charge imposed on purchases (as a
percentage of
offering price) NONE
Deferred sales charge(as a percentage
of the lower of original purchase
price or redemption proceeds) NONE
<TABLE><CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

Total fund Management 12b-1
Other operating fees and expenses
---------- ----- -------- ---
- - - --------

INCOME FUND
Class A 0.49% 0.20% 0.10% 0.79%
Class B 0.49% 0.85% 0.10% 1.44%
Class M 0.49% 0.50% 0.10% 1.09%

OPPORTUNITIES FUND
Class A 0.60% 0.20% 0.16% .96%
Class B 0.60% 0.85% 0.16% 1.61%
Class M 0.60% 0.50% 0.16% 1.26%

MONEY MARKET FUND 0.45% NONE 0.38% 0.83%
</TABLE>
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. "Other expenses" shown in the table
reflect expenses related to insurance expense
incurred by the Money Market Fund. See "Insurance."
EXAMPLES
Your investment of $1,000 would incur the following
expenses,
assuming 5% annual return and, except as indicated,
redemption at the end of each period:

1 3 5 10
year years years years
INCOME FUND
Class A $55 $72 $89 $141
Class B $65 $76 $99 $155***
Class B (no redemption) $15 $46 $79 $155***
Class M $43 $66 $91 $161

OPPORTUNITIES FUND
Class A $57 $77 $98 $160
Class B $66 $81 $108 $174 ***
Class B (no redemption) $16 $51 $88 $174 ***
Class M $45 $71 $99 $180

MONEY MARKET FUND $8 $26 $46 $103

* The higher 12b-1 fees borne by class B and class M shares
may cause long-term shareholders to pay more than the economic
equivalent of the maximum permitted front-end sales charge on class
A shares.

** A deferred sales charge of up to 1.00% is assessed on certain
redemptions of class A shares that were purchased without an
initial sales charge. See "How to buy shares-Class A shares."
*** Reflects conversion of class B shares to class A shares (which pay
lower ongoing expenses) approximately eight years after purchase.
See "Alternative sales arrangements."

FINANCIAL HIGHLIGHTS

The following tables present per share financial information for class
A, B and M shares. This information has been audited and reported on by
each fund's independent accountants. The "Report of independent
accountants" and financial statements included in each fund's annual
report to shareholders for the 1997 fiscal year are incorporated by
reference into this prospectus. Each fund's annual report, which
contains additional unaudited performance information, is available
without charge upon request.

FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)

PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
Class A
riod
Nove
mber
7,
1990
to
Sept
embe
r
30+
<S> <C> <C> <C> <C> <C> <C> <C>
Per-share
operating performance
Year ended September 30
1997 1996 1995 1994 1993 1992 1991
NET ASSET VALUE,
BEGINNING OF PERIOD $8.87 $8.80 $8.48 $9.12 $8.86 $8.67 $8.50
INVESTMENT OPERATIONS
Net investment income .49 .49 .52 .54 .57 .63(a).58(a)
Net realized and unrealized gain
(loss) on investments .23 .07 .32 (.62) .27 .19 .17
TOTAL FROM INVESTMENT .72 .56 .84 (.08) .84 .82 .75
OPERATIONS
Less distributions:
From net investment
income (.49) (.49) (.52) (.54) (.57) (.63) (.58)
In excess of net
investment income -- -- -- -- (.01) -- $8.67
From net realized gain
on investments -- -- -- (.02) -- -- 9.16*
From return of capital -- -- -- -- -- -- $30,864
TOTAL DISTRIBUTIONS (.49) (.49) (.52)(.56) (.58) (.63) .64(c)*
NET ASSET VALUE, END OF PERIOD $9.10 $8.87 $8.80 $8.48 $9.12 $8.86 6.73(c)*
Ratios and supplemental data
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(A) 8.33 6.48 10.27 (.89) 9.80 9.89 5.74*
NET ASSETS, END OF PERIOD
(in thousands) $165,993 $172,170 $175,210 $175,741 $170,553 $108,609
Ratio of expenses to average
net assets (%)(b) .96 1.00 1.01 .98 1.02
.91(c)
Ratio of net investment income to
average net assets (%) 5.42 5.53 6.12 6.22 6.32
7.04(c)
Portfolio turnover (%) 117.00 270.34 120.38 13.85
17.68 11.56
+ Commencement of operations
* Not annualized.
(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 on or
after September 30, 1995 and thereafter, includes amounts paid
through expense offset arrangements. Prior period ratios exclude
these amounts.
(c) Reflects an expense limitation. As a result, expenses of the
fund for the year ended September 30, 1992 and the period ended
September 30, 1991 reflect reductions of approximately $0.02 and
$0.07 per share, respectively.

</TABLE>
PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND
<TABLE><CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
Class B
For
the
perio
d
Feb.
1,
1994+
to Sept. 30
Year ended September 30
1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $8.86 $8.79 $8.48 $9.07
$10.38
INVESTMENT OPERATIONS
Net investment income .43 .43 .47 .32 .88
Net realized and unrealized
gain (loss) on investments .23 .07 .31 (.60) .32
TOTAL FROM INVESTMENT
OPERATIONS .66 .50 .78 (.28) 1.20
Less distributions:
From net investment income (.43) (.43) (.47) (.31)
(.88)
From net realized gain on
investments -- -- -- --
--
In excess of net investment
income -- -- -- --
(.36)
Return of capital -- -- -- (.03)
(.04)
TOTAL DISTRIBUTIONS (.43) (.43) (.47) (.31)
(1.28)
Ratios and supplemental data
NET ASSET VALUE,
END OF PERIOD $9.09 $8.86 $8.79 $8.48
$10.30
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(a) 7.63 5.78 9.46 (3.06)* 11.97
NET ASSETS, END OF PERIOD
(in thousands) $56,244 $41,795 $24,259 $8,622
Ratio of expenses to average
net assets (%)(b) 1.61 1.66 1.65 1.05* .75
Ratio of net investment income
to average net assets (%) 4.76 4.83 5.28 3.39* 8.31
Portfolio turnover (%) 117.00 270.34 120.38 13.85 52.18
<FN>
+ Commencement of operations
* Not annualized.
(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 on
or
after September 30, 1995 and thereafter, includes amounts paid
through expense offset arrangements. Prior period ratios exclude
these amounts.
outstanding during the period.

</TABLE>
<TABLE><CAPTION>
PUTNAM NEW YORK TAX EXEMPT NEW OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
Class M

For the period
Per-share May 20, 1994+
operating performance Year ended September 30 to
September 30
1997 1996 1995

<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $8.86 $8.79 $8.51
INVESTMENT OPERATIONS
Net investment income .46 .47 .31
Net realized and unrealized gain
(loss) on investments .22 .06 .29
TOTAL FROM INVESTMENT OPERATIONS .68
.53 .60
Less distributions:
From net investment income (.46)
(.46) (.32) In excess of net
investment income --
- - - -- --
From net realized gain (loss)
on investments --
- - - -- --
From return of capital --
- - - -- (.05)
TOTAL DISTRIBUTIONS (.46)
(.46) (.32) NET ASSET VALUE, END OF PERIOD
$9.08 $8.86 $8.79 Ratios and supplemental data
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(A) 7.89
6.15 7.11*
NET ASSETS, END OF PERIOD
(in thousands) $2,365
$1,492 $299
Ratio of expenses to average
net assets (%)(b) 1.26
1.30 .83*
Ratio of net investment income to
average net assets (%) 5.09
5.03 3.21*
Portfolio turnover (%) 117.00
270.34120.38
+ Commencement of operations
* Not annualized.
(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 on or after September 30, 1995 and thereafter, includes
amounts paid through expense offset arrangements. Prior period
ratios exclude these amounts.

</TABLE>

PUTNAM NEW YORK TAX EXEMPT INCOME FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
Class A

Per-share
operating performance Year ended November 30
1997 1996 1995 1994 1993 1992
1991

<S> <C> <C> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $8.91 $8.97 $8.05 $9.38 $8.98 $8.75
$8.34 INVESTMENT OPERATIONS
Net investment income(a) .46 .48 .49 .53 .53
.57 .58
Net realized and unrealized gain
(loss) on investments .12 (.06) .92 (1.24) .52
.32 .42
TOTAL FROM INVESTMENT OPERATIONS .58 .42 1.41 (.71) 1.05
.89 1.00
Less distributions:
From net investment income (.47) (.48) (.49) (.51) (.53)
(.58) (.59)
From net realized gain(loss)
on investments -- -- -- (.05) (.10)
(.08) --
In excess of net realized gain(loss)
on investments -- -- -- (.06) (.02)
- - - -- --
TOTAL DISTRIBUTIONS (.47) (.48) (.49) (.62) (.65)
(.66) (.59)
NET ASSET VALUE, END OF PERIOD $9.02 $8.91 $8.97 $8.05 $9.38
$8.98 $8.75 Ratios and supplemental data
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(b) 6.69 4.92 17.95 (8.02) 12.02
10.6012.44
NET ASSETS, END OF PERIOD
(in thousands)
$1,725,77373$1,873,649$2,013,022$1,901,901$2,280,604$1,960,5
00 $1,659,383
Ratio of expenses to average
net assets (%)(c) .79 .81 .78 .75 .76
.66 .63
Ratio of net investment income to
average net assets (%) 5.19 5.47 5.63 5.82 5.67
6.446.84
Portfolio turnover (%) 81.95 59.60 73.85 47.56 26.60
20.1349.91

The table has been restated to reflect a 3-for-1 share split of Class A shares
declared by the fund to shareholders of record on October 27, 1989,
effective
October 28, 1989.
(a) Per share net investment income for the period ended November 30, 1995
has
been determined on the basis of the weighted average number of shares
outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does not
reflect
the effect of sales charges.
(c) The ratio of expenses to average net assets for the periods ended
November
30, 1995 and thereafter includes amounts paid through expense offset
arrangements. Prior period ratios exclude these amounts.

</TABLE>
PUTNAM NEW YORK TAX EXEMPT INCOME FUND
<TABLE><CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
Class A

Year ended November 30
1990 1989 1988
<S> <C> <C> <C> <C>
<C>
NET ASSET VALUE,
BEGINNING OF PERIOD $8.61 $8.33 $7.99
INVESTMENT OPERATIONS
Net investment income(a) .58 .60 .61
Net realized and unrealized
gain (loss) on investments (.23) .27 .39
TOTAL FROM INVESTMENT
OPERATIONS .35 .87 1.00
Less distributions:
From net investment income (.56) (.59) (.60)
From net realized gain(loss)
on investments (.06) -- (.06)
In excess of net realized
gain(loss) on investments -- -- --
TOTAL DISTRIBUTIONS (.62) (.59)
(.66)
Ratios and supplemental data
NET ASSET VALUE,
END OF PERIOD $8.34 $8.61
$8.33
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(b) 4.37 10.77
12.99
NET ASSETS, END OF PERIOD
(in thousands) $1,416,555 $1,313,050
$1,063,650
Ratio of expenses to average
net assets (%)(c) .56 .57 .54
Ratio of net investment income
to average net assets (%) 6.96 6.94 7.34
Portfolio turnover (%) 17.22 42.87 31.91

<FN>
The table has been restated to reflect a 3-for-1 share split of
Class A shares declared by the fund to shareholders of record on
October 27, 1989, effective October 28, 1989.
(a) Per share net investment income for the period ended November
30, 1995 has been determined on the basis of the weighted average
number of shares outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(c) The ratio of expenses to average net assets for the periods
ended November 30, 1995 and thereafter includes amounts paid
through expense offset arrangements. Prior period ratios exclude
these amounts.

</TABLE>

PUTNAM NEW YORK TAX EXEMPT INCOME FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
Class B
For
the
per
iod
Jan
uar
y
4,
199
3
to
Nov
emb
er
30+
Per-share
operating performance Year ended
November 30
1997 1996 1995 1994
1993
<S> <C> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $8.90 $8.95 $8.02 $9.37 $8.95
INVESTMENT OPERATIONS
Net investment income(a) .40 .42 .43 .46 .40
Net realized and unrealized gain
(loss) on investments .11 (.05) .93 (1.24) .42
TOTAL FROM INVESTMENT OPERATIONS .51 .37 1.36
(.78) .82
Less distributions:
From net investment income (.41) (.42) (.43)
(.46) (.40)
From net realized gain(loss)
on investments -- -- --
(.05) --
In excess of net realized gain(loss)
on investments -- -- --
(.06) --
TOTAL DISTRIBUTIONS (.41) (.42) (.43)
(.57) (.40)
NET ASSET VALUE, END OF PERIOD $9.00 $8.90 $8.95
$8.02 $9.37
Ratios and supplemental data
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(b) 5.89 4.35 17.26
(8.75) 9.25*
NET ASSETS, END OF PERIOD
(in thousands) $227,747$227,405 $215,614
$173,213 $146,665
Ratio of expenses to average
net assets (%)(c) 1.44 1.46 1.43
1.39 1.28*
Ratio of net investment income to
average net assets (%) 4.53 4.81 4.95
5.16 4.29*
Portfolio turnover (%) 81.95 59.60 73.85
47.56 26.60

The table has been restated to reflect a 3-for-1 share split of Class A shares
declared by the fund to shareholders of record on October 27,
1989, effective October 28, 1989.
(a) Per share net investment income for the period ended November
30, 1995 has been determined on the basis of the weighted average
number of shares outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(c) The ratio of expenses to average net assets for the periods
ended November 30, 1995 and thereafter includes amounts paid
through expense offset arrangements. Prior period ratios exclude
these amounts.

</TABLE>

PUTNAM NEW YORK TAX EXEMPT INCOME FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
Class M
For
the
period
April
10,
1995
to
November 30+
Per-share
operating performance
Year ended
November 30
1997 1996
1995

<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $8.91 $8.97
$8.79 INVESTMENT OPERATIONS
Net investment income(a) .43 .45
.26(a)
Net realized and unrealized gain
(loss) on investments .12 (.06) .21
TOTAL FROM INVESTMENT OPERATIONS .55 .39 .47
Less distributions:
From net investment income (.44)
(.45) (.29) From net realized gain(loss)
on investments --
- - - -- --
In excess of net realized gain(loss)
on investments --
- - - -- --
TOTAL DISTRIBUTIONS (.44)
(.45) (.29) NET ASSET VALUE, END OF PERIOD
$9.02 $8.91 $8.97 Ratios and supplemental data
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE (%)(b) 6.37 4.59
5.44*
NET ASSETS, END OF PERIOD
(in thousands) $1,865 $1,266
$588
Ratio of expenses to average
net assets (%)(c) 1.09 1.11
.65*
Ratio of net investment income to
average net assets (%) 4.87 5.17
3.30*
Portfolio turnover (%) 81.95 59.60 73.85
The table has been restated to reflect a 3-for-1 share split of
Class A shares declared by the fund to shareholders of record on
October 27, 1989, effective October 28, 1989.
(a) Per share net investment income for the period ended November
30, 1995 has been determined on the basis of the weighted average
number of shares
outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(c) The ratio of expenses to average net assets for the periods ended
November 30, 1995 and thereafter includes amounts paid through
expense offset arrangements. Prior period ratios exclude these
amounts.

</TABLE>

Putnam New York Tax Exempt Money Market Fund

Financial highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>

Year
ended November 30
<S> <C> <C> <C>
<C> <C>
1997 1996 1995
1994 1993 Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00
$1.00
Investment operations:
Net investment income .0287 .0289 .0318
.0188 .0165 Net realized gain on investments -- --
- - - -- -- .0001
Total from investment operations .0287 $.0289 $.0318
$.0188 $.0166 Distributions to shareholders:
Net investment income (.0287) (.0289) (.0318)
(.0188) (.0165) Net realized gain
on investments -- --- -- -
- - - - (.0001)
Total distributions (.0287) (.0289) (.0318)
(.0188) (.0166) Net asset value, end of period $1.00
$1.00 $1.00 $1.00 $1.00 Total investment return
at net asset value (%)(b) 2.91 2.93 3.23
1.90 1.67
Net assets, end of period
(in thousands) $44,101 $39,456 $38,873 $44,815
$50,473
Ratio of expenses to average
net assets (%)(d) .83 .88 .91
.77 .91
Ratio of net investment income
to average net assets (%) 2.92 2.75 3.18
1.86 1.69

Year ended November 30
<C> <C> <C> <C> <C>
1992 1991 1990 1989 1988
$1.00 $1.00 $1.00 $1.00 $1.00

.0259(a) 0399(a) .0497(a) .0530(a) .0436(a)
-- -- -- -- --
$.0259 $.0399 $.0497 $.0530
$.0436

(.0259) (.0399) (.0497) (.0530) (.0436)
-- -- -- --
(.0259) (.0399) (.0497) (.0530) (.0436)
$1.00 $1.00 $1.00 $1.00 $1.00

2.62 4.07 5.09 5.44 4.46
$57,705 $64,286 $63,671 $51,113 $34,432
.78(a) .80(a) .67(a) .67(a)
.64(a)

2.59(a) 3.96(a) 4.95(a) 5.31(a) 4.34(a)

(a) Reflects an expense limitation and, during the year ended
November 30, 1988 and the period ended November 30,1987, a waiver
of distribution fees in effect
during the period. As a result of such limitations, expenses of
the fund for the years ended November 30, 1992, 1991, 1990, 1989,
1988 and for the period ended November 30, 1987 reflect reductions
of $0.0024, $0.0034, $0.0043, $0.0048, $0.0061 and $0.0015 per
share respectively.
(b) Total investment return assumes dividend reinvestment.
(c) Not annualized.
(d) The ratio of expenses to average net assets for the year ended
November 30, 1995 includes amounts paid through expense offset
arrangements. Prior year ratios exclude these amounts.
</TABLE>

OBJECTIVES

The Income and Money Market Funds seek as high a level of current
income exempt from federal income tax and New York
State and City personal income taxes as Putnam
Investment Management, Inc. ("Putnam Management")
believes is consistent with preservation of capital
and, in the case of the Money Market Fund,
maintenance of liquidity and stability of principal.
The Opportunities Fund seeks high current income
exempt from federal income tax and New York State and
City personal income taxes. Under current law, to
the extent distributions by a fund are derived from
interest on New York tax-exempt securities (which are
described below) and are designated as such, they
will be exempt from federal income tax and New York
State and City personal income taxes. A fund is not
intended to be a complete investment program, and
there is no assurance it will achieve its objective.

HOW THE FUNDS PURSUE THEIR OBJECTIVES

BASIC INVESTMENT STRATEGY

EACH FUND SEEKS ITS OBJECTIVE BY INVESTING PRIMARILY
IN A PORTFOLIO OF NEW YORK TAX-EXEMPT SECURITIES (AS
DEFINED BELOW). The funds have separate investment
policies involving different levels of yield and
risk.

THE INCOME FUND

PUTNAM NEW YORK TAX EXEMPT INCOME FUND SEEKS ITS
OBJECTIVE BY INVESTING PRIMARILY IN LONGER-TERM NEW
YORK TAX-EXEMPT SECURITIES (WHICH ARE DESCRIBED
BELOW). It is a fundamental policy of the Income
Fund that at least 90% of the Income Fund's
investment income distributions will be exempt from
federal income tax and New York State and City
personal income taxes, except during times of adverse
market conditions when more than 10% of investment
income distributions could be subject to those taxes.

The Income Fund may also hold its assets in cash or
money market instruments. Investments by the Income
Fund in New York taxexempt securities and taxable
obligations will be limited to securities rated at
the time of purchase at least Ba or BB by a
nationally recognized securities rating agency, such
as Standard & Poor's ("S&P") or Moody's Investors
Service, Inc. ("Moody's"), or unrated securities
which Putnam Management determines are of comparable
quality.

The Income Fund will not purchase any New York tax-
exempt security rated below BBB or Baa by each rating
agency rating such security or any unrated New York
tax-exempt security determined by Putnam Management
to be of comparable quality if, as a result, more
than 25% of its total assets would be of that
quality. The ratings services descriptions of the
five highest grades of debt securities are included
in the appendix to this prospectus. Securities rated
Ba or BB (and comparable unrated securities) are
considered to have speculative elements, with large
uncertainties or major exposures to adverse
conditions. To the extent that a security is
assigned a different rating by one or more of the
various rating agencies, Putnam Management will use
the highest rating assigned by any agency. For more
detailed information about the risks of investing in
lower-rated securities, see "Risk Factors" below.

Putnam Management may take full advantage of the
entire range of New York tax-exempt securities and
may adjust the average maturity of the Income Fund's
portfolio from time to time depending on its
assessment of relative yields on securities of
different maturities and its expectations of future
changes in interest rates.

THE OPPORTUNITIES FUND

PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND SEEKS
ITS OBJECTIVE BY INVESTING IN A PORTFOLIO OF NEW YORK
TAX-EXEMPT SECURITIES WHICH PUTNAM MANAGEMENT
BELIEVES DOES NOT INVOLVE UNDUE RISK TO INCOME OR
PRINCIPAL. THE FUND IS DESIGNED FOR INVESTORS
WILLING TO ASSUME ADDITIONAL RISK IN RETURN FOR THE
OPPORTUNITY TO EARN ABOVE-AVERAGE TAX-EXEMPT INCOME.
It is a fundamental policy of the fund that under
normal circumstances at least 80% of the fund's net
assets will be invested in New York tax-exempt
securities. The fund may hold a portion of its
assets in cash or money market instruments.

The Opportunities Fund will invest at least a
majority of its assets in securities considered to be
"investment grade." Such securities will be rated at
the time of purchase at least Baa or BBB by a rating
agency, or will be unrated securities that Putnam
Management determines are of comparable quality. The
fund may invest the balance of its assets in high
yielding lower-rated securities that at the time of
purchase are rated at least B by a rating agency and
in unrated securities that Putnam Management
determines are of comparable quality. Securities in
these lower rating categories are considered to be of
poor standing and predominantly speculative. To the
extent a security is assigned a different rating by
one or more rating agencies, Putnam Management will
use the highest rating assigned by any agency. For
more detailed information about the risks associated
with investing in lower-rated securities, see "Risk
factors" below. For these rating services'
descriptions of tax-exempt securities and other
rating information, see "Securities ratings."

Putnam Management may take full advantage of the
entire range of New York tax-exempt securities and
may adjust the average maturity of the Opportunities
Fund's portfolio from time to time depending on its
assessment of relative yields on securities of
different maturities and its expectations of future
changes in interest rates.

THE MONEY MARKET FUND

PUTNAM NEW YORK TAX EXEMPT MONEY MARKET FUND FOLLOWS
THE FUNDAMENTAL POLICY THAT 90% OF THE FUND'S
INVESTMENT INCOME DISTRIBUTIONS NORMALLY WILL BE
EXEMPT FROM FEDERAL INCOME TAX AND NEW YORK STATE AND
CITY PERSONAL INCOME TAXES. Subject to this
limitation, the Money Market Fund may also invest in
high quality taxable money market instruments of the
type described under "Alternative investment
strategies" below.

The Money Market Fund will only invest in the
following New York tax-exempt securities: (i)
municipal notes rated at least MIG-2 by Moody's; (ii)
municipal bonds rated Aa or better by Moody's or
AA or better by S&P; (iii) municipal securities
backed by the U.S. government; (iv) short-term
discount notes (tax-exempt commercial paper) rated at
least Prime-2 by Moody's or A-2 by S&P; (v)
participation interests in any of the foregoing; and
(vi) unrated securities or new types of tax-exempt
instruments which become available in the future if
the Money Market Fund's Trustees determine they are
of comparable quality. In connection with the
purchase of New York tax-exempt securities, the Money
Market Fund may acquire stand-by commitments, which
give the Money Market Fund the right to resell the
security to the dealer at a specified price. Stand-
by commitments may provide additional liquidity for
the Money Market Fund but are subject to the risk
that the dealer may fail to meet its obligations.
The Money Market Fund does not generally expect to
pay additional consideration for stand-by commitments
nor to assign any value to them. The Money Market
Fund's investments are concentrated in New York tax-
exempt securities and an investment in the fund may
therefore be riskier than an investment in a money
market fund that does not concentrate its investments
in tax-exempt securities relating to a single state.

THE MONEY MARKET FUND FOLLOWS INVESTMENT AND
VALUATION POLICIES DESIGNED TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE. There can be no
assurance that the fund will be able to maintain a
stable net asset value of $1.00 per share. The Money
Market Fund will invest in New York tax-exempt
securities maturing in 397 days or less from the time
of investment and will maintain a dollar-weighted
average portfolio maturity of 90 days or less. The
Money Market Fund may invest in variable or floating-
rate New York tax-exempt securities which bear
interest at rates subject to periodic adjustment or
which provide for periodic recovery of principal on
demand. Under certain conditions, these securities
may be deemed to have remaining maturities equal to
the time remaining until the next interest adjustment
date or the date on which principal can be recovered
on demand.

Considerations of liquidity and preservation of
capital mean that the Money Market Fund may not
necessarily invest in New York taxexempt securities
paying the highest available yield at a particular
time. Consistent with its investment objective, the
Money Market Fund will attempt to maximize yields by
portfolio trading and by buying and selling portfolio
investments in anticipation of or in response to
changing economic and money market conditions and
trends. The Money Market Fund will also invest to
take advantage of what Putnam Management believes to
be temporary disparities in yields of different
segments of the market for New York tax-exempt
securities or among particular instruments within the
same segment of the market. These policies, as well
as the relatively short maturity of obligations
purchased by the Money Market Fund, may result in
frequent changes in the Money Market Fund's
portfolio. Portfolio turnover may give rise to
taxable gains.

The portfolio of the Money Market Fund will be
affected by general changes in interest rates
resulting in increases or decreases in the value of
the obligations held by the Money Market Fund.
Although the Money Market Fund's investment policies
are designed to minimize these changes and to
maintain a net asset value of $1.00 per share, there
is no assurance that these policies will be
successful. Withdrawals by shareholders could
require the sale of portfolio investments at a time
when such a sale might not otherwise be desirable.

GENERAL

ALTERNATIVE INVESTMENT STRATEGIES

At times Putnam Management may judge that conditions
in the markets for New York tax-exempt securities
make pursuing a fund's basic investment strategy
inconsistent with the best interests of its
shareholders. At such times Putnam Management may
temporarily use alternative investment strategies
primarily designed to reduce fluctuations in the
value of fund assets.

In implementing these defensive strategies, the
Income and Opportunities Funds may invest without
limit in taxable obligations, such as obligations of
the U.S. government, its agencies or
instrumentalities; other debt securities rated within
the four highest grades by a nationally recognized
securities rating agency, such as Moody's or S&P;
commercial paper rated in the highest grade by a
nationally recognized securities rating agency;
certificates of deposit and bankers' acceptances;
repurchase agreements with respect to any of the
foregoing investments; or any other securities that
Putnam Management considers consistent with such
defensive strategies. Similarly, for defensive
purposes, the Money Market Fund may invest in taxable
high quality money market instruments, including bank
certificates of deposit, bankers' acceptances, prime
commercial paper, high-grade, short-term corporate
obligations, short-term U.S. government securities,
repurchase agreements, or other securities Putnam
Management considers consistent with such defensive
strategies.

It is impossible to predict when, or for how long,
these alternative strategies will be used. The
interest income from these instruments would be
subject to federal income tax and/or New York State
and City personal income taxes.

NEW YORK TAX-EXEMPT SECURITIES

NEW YORK TAX-EXEMPT SECURITIES INCLUDE OBLIGATIONS OF
THE STATE OF NEW YORK, ITS POLITICAL SUBDIVISIONS,
AND THEIR AGENCIES, INSTRUMENTALITIES, OR OTHER
GOVERNMENTAL UNITS, THE INTEREST ON WHICH, IN THE
OPINION OF BOND COUNSEL, IS EXEMPT FROM FEDERAL
INCOME TAX AND NEW YORK STATE AND CITY PERSONAL
INCOME TAXES.

These securities are issued to obtain funds for
various public purposes, such as the construction of
public facilities, the payment of general operating
expenses or the refunding of outstanding debts.

They may also be issued to finance various private
activities, including the lending of funds to public
or private institutions for the construction of
housing, educational or medical facilities, or to
fund short-term cash requirements. They may also
include certain types of industrial development
bonds, private activity bonds or notes issued by
public authorities to finance privately owned or
operated facilities.

Short-term New York tax-exempt securities may be
issued as interim financing in anticipation of tax
collections, revenue receipts or bond sales to
finance various public purposes. New York tax-exempt
securities may also include debt obligations issued
by certain other governmental entities, such as U.S.
territories, if these debt obligations generate
interest income that is exempt from federal income
tax and New York State and City personal income
taxes.

THE TWO PRINCIPAL CLASSIFICATIONS OF NEW YORK TAX-
EXEMPT SECURITIES ARE GENERAL OBLIGATION AND SPECIAL
OBLIGATION (OR SPECIAL REVENUE OBLIGATION)
SECURITIES.

GENERAL OBLIGATION securities involve a pledge of the
credit of an issuer possessing taxing power and are
payable from the issuer's general unrestricted
revenues. Their payment may depend on an
appropriation by the issuer's legislative body. The
characteristics and methods of enforcement of general
obligation securities vary according to the law
applicable to the particular issuer.

SPECIAL OBLIGATION (or SPECIAL REVENUE OBLIGATION)
securities are payable only from the revenues derived
from a particular facility or class of facilities, or
a specific revenue source, and generally are not
payable from the unrestricted revenues of the issuer.
Industrial development bonds and private activity
bonds are in most cases special obligation
securities, whose credit quality is tied to the
private user of the facilities.

The funds (excluding the Money Market Fund) may also
invest in securities representing interests in New
York tax-exempt securities, known as "inverse
floating obligations" or "residual interest bonds."
These obligations pay interest rates that vary
inversely with changes in the interest rates of
specified shortterm tax-exempt securities or an index
of short-term tax-exempt securities. The interest
rates on inverse floating obligations or residual
interest bonds will typically decline as short-term
market interest rates increase and increase as short-
term market rates decline.

These securities have the effect of providing a
degree of investment leverage. They will generally
respond to changes in market interest rates more
rapidly than fixed-rate long-term securities
(typically twice as fast). As a result, the market
values of inverse floating obligations and residual
interest bonds will generally be more volatile than
the market values of fixed-rate tax-exempt
securities.

ALTERNATIVE MINIMUM TAX

INTEREST INCOME DISTRIBUTED BY A FUND FROM CERTAIN
TYPES OF NEW YORK TAX-EXEMPT SECURITIES MAY BE
SUBJECT TO FEDERAL ALTERNATIVE MINIMUM TAX FOR
INDIVIDUALS AND CORPORATIONS.

In determining compliance with its 80% test (in the
case of the Opportunities Fund) and its 90% test (in
the case of the Income and Money Market Funds)
described above, it is a fundamental policy of each
fund to exclude from New York tax-exempt securities
any securities the interest from which may be subject
to the federal alternative minimum tax for
individuals. All taxexempt interest dividends will,
however, be included in determining the federal
alternative minimum taxable income of corporations.

RISK FACTORS

THE INCOME AND OPPORTUNITIES FUNDS

THE VALUES OF NEW YORK TAX-EXEMPT SECURITIES
FLUCTUATE IN RESPONSE TO CHANGES IN INTEREST RATES.
A decrease in interest rates will generally result in
an increase in the value of fund assets. Conversely,
during periods of rising interest rates, the value of
fund assets will generally decline. The magnitude of
these fluctuations generally is greater for
securities with longer maturities. However, the
yields on such securities are also generally higher.
In addition, the values of fixed-income securities
are affected by changes in general economic and
business conditions affecting the specific industries
of their issuers.

Changes by nationally recognized securities rating
agencies in their ratings of a fixed-income security
and changes in the ability of an issuer to make
payments of interest and principal may also affect
the value of these investments. Changes in the value
of portfolio securities will not affect income
derived from these securities, but will affect a
fund's net asset value.

EACH OF THE INCOME AND OPPORTUNITIES FUNDS MAY INVEST
IN BOTH HIGHER-RATED AND LOWER-RATED NEW YORK TAX-
EXEMPT SECURITIES. LOWER-RATED SECURITIES ARE
SECURITIES RATED BELOW BAA OR BBB BY A RATING AGENCY
AND, TOGETHER WITH UNRATED SECURITIES OF COMPARABLE
QUALITY, ARE COMMONLY KNOWN AS "JUNK BONDS." The
values of these securities generally fluctuate more
than those of higher-rated securities. In addition,
the lower rating reflects a greater possibility that
the financial condition of the issuer or adverse
changes in general economic conditions, or both, may
impair the ability of the issuer to make payments of
income and principal.

The table below shows the percentages of the
Opportunities Fund's assets invested during fiscal
1997 in securities assigned to the various rating
categories by S&P, or, if unrated by S&P, assigned to
comparable rating categories by another rating
agency, and in unrated securities determined by
Putnam Management to be of comparable quality:
<TABLE><CAPTION>
<S> <C> <C>
UNRATED
SECURITIES
RATED SECURITIES, OF COMPARABLE
QUALITY,
AS A PERCENTAGE OF AS A
PERCENTAGE
OPPORTUNITIES FUND'S OF
OPPORTUNITIES FUND'S RATING
NET ASSETS NET ASSETS

"AAA" 31.13% -
- - - --
"AA" 20.43%
- - - ---
"A" 11.93%
- - - ---
"BBB" 22.17%
1.27%
"BB" 2.32%
8.72%
"B" 0.68%
- - - ------
------
- - - ------
Total 88.66%
9.99%
======
======
</TABLE>

Putnam Management seeks to minimize the risks of
investing in lower-rated securities through careful
investment analysis. However, the amount of
information available about the financial condition
of an issuer of New York tax-exempt securities may
not be as extensive as that which is made available
by corporations whose securities are publicly traded.
When a fund invests in New York tax-exempt securities
in the lower rating categories, the achievement of
its goals is more dependent on Putnam Management's
ability than would be the case if it were investing
in New York tax-exempt securities in the higher
rating categories. Investors should consider
carefully their ability to assume the risks of owning
shares of a mutual fund that may invest in securities
in the lower rating categories.

A fund will not necessarily dispose of a security
when its rating is reduced below its rating at the
time of purchase. However, Putnam Management will
consider such reduction in its determination of
whether a fund should continue to hold the security
in its portfolio.

At times, a substantial portion of fund assets may be
invested in
securities of which a fund, by itself or together
with other funds and accounts managed by Putnam
Management or its affiliates, holds all or a major
portion. Under adverse market or economic conditions
or in the event of adverse changes in the financial
condition of the issuer, it may be more difficult to
sell these securities when Putnam Management believes
it advisable to do so or the fund may be able to sell
the securities only at prices lower than if they were
more widely held. Under these circumstances, it may
also be more difficult to determine the fair value of
such securities for purposes of computing the fund's
net asset value.

In order to enforce its rights in the event of a
default of these securities, a fund may be required
to participate in various legal proceedings or take
possession of and manage assets securing the issuer's
obligations on the securities. This could increase a
fund's operating expenses and adversely affect a
fund's net asset value. Any income derived from a
fund's ownership or operation of such assets would
not be tax-exempt. The ability of a holder of a tax-
exempt security to enforce the terms of that security
in a bankruptcy proceeding may be more limited than
would be the case with respect to a privately-issued
security.

Certain securities held by a fund may permit the
issuer at its option to "call," or redeem, the
securities. If an issuer were to redeem securities
held by a fund during a time of declining interest
rates, the fund may not be able to reinvest the
proceeds in securities providing the same investment
return as the securities redeemed.

Each of the Income and Opportunities Funds may invest
in socalled "zero-coupon" bonds, which are issued at
a significant discount from face value and pay
interest only at maturity rather than at intervals
during the life of the security. The values of zero-
coupon bonds are subject to greater fluctuation in
response to changes in market interest rates than
bonds that pay interest currently.

Zero-coupon bonds allow an issuer to avoid the need
to generate cash to meet current interest payments.
Accordingly, such bonds may involve greater credit
risks than bonds paying interest currently. Each
fund is required, under applicable tax regulations,
to accrue and distribute interest income from zero
coupon bonds on a current basis, even though it does
not receive that income currently in cash. Thus it
may be necessary to sell other investments to obtain
cash needed to make income distributions.

The secondary market for New York tax-exempt
securities is generally less liquid than that for
taxable fixed-income securities, particularly in the
lower rating categories. Thus it may be more
difficult to value or buy and sell certain of these
securities. Certain investment grade securities
share some of the risk factors discussed above with
respect to lower-rated securities.

FOR ADDITIONAL INFORMATION CONCERNING THE RISKS
ASSOCIATED WITH INVESTING IN SECURITIES IN THE LOWER
RATING CATEGORIES, SEE THE SAI.

SINCE THE FUNDS INVESTS PRIMARILY IN NEW YORK TAX-
EXEMPT SECURITIES, THE VALUE OF THEIR SHARES MAY BE
ESPECIALLY AFFECTED BY FACTORS PERTAINING TO THE NEW
YORK STATE ECONOMY AND OTHER FACTORS SPECIFICALLY
AFFECTING THE ABILITY OF ISSUERS OF NEW YORK TAX-
EXEMPT SECURITIES TO MEET THEIR OBLIGATIONS.

As a result, the value of each of the Income and
Opportunities Funds' shares may fluctuate more widely
than the value of shares of a portfolio investing in
securities relating to a number of different states.
The ability of state, county or local governments to
meet their obligations will depend primarily on the
availability of tax and other revenues to those
governments and on their fiscal conditions generally.

The amounts of tax and other revenues available to
governmental issuers of New York tax-exempt
securities may be affected from time to time by
economic, political and demographic conditions within
or outside of New York. In addition, constitutional
or statutory restrictions may limit a government's
power to raise revenues or increase taxes. The
availability of federal, state and local aid to
issuers of New York tax-exempt securities may also
affect their ability to meet their obligations.

Payments of principal and interest on special
obligation securities will depend on the economic
condition of the facility or specific revenue source
from whose revenues the payments will be made. The
facility's economic status, in turn, could be
affected by economic, political and demographic
conditions affecting the state.

Any reduction in the actual or perceived ability of
an issuer of New York tax-exempt securities to meet
its obligations, including a reduction in the rating
of the issuer's outstanding securities, would likely
have an adverse effect on the market value and
marketability of its obligations. Doubts surrounding
an issuer's ability to meet its obligations could
also adversely affect the values of other New York
tax-exempt securities.

ALL FUNDS

DIVERSIFICATION AND CONCENTRATION POLICIES

The Income Fund is a "diversified" investment company
under the Investment Company Act of 1940 (the "1940
Act"). This means that with respect to 75% of its
total assets, the Income Fund may not invest more
than 5% of its total assets in the securities of any
one issuer (except U.S. government securities). The
remaining 25% of its total assets is not subject to
this restriction.

Each of the Opportunities and Money Market Funds is a
"nondiversified" investment company under the 1940
Act. A nondiversified investment company may invest
its assets in a limited number of issuers, allowing a
fund to invest up to 25% of its assets in each of any
two issuers. However, the Money Market Fund is also
subject to 1940 Act rules applicable to money market
funds, which generally limit the fund, with respect
to 75% of its total assets, from investing more than
5% of its assets in the securities of any one issuer,
except U.S. government securities.

As a result of the relatively small number of issuers
of New York tax-exempt securities, the funds may be
more likely to invest a higher percentage of assets
in the securities of a single issuer than an
investment company that invests in a broad range of
taxexempt securities. This practice involves an
increased risk of loss to a fund if the issuer were
unable to make interest or principal payments or if
the market value of these securities were to decline.

A FUND WILL NOT INVEST MORE THAN 25% OF ITS TOTAL
ASSETS IN ANY ONE INDUSTRY. Governmental issuers of
New York tax-exempt securities are not considered
part of any "industry." However,
for this purpose (and for diversification purposes
discussed above) New York tax-exempt securities
backed only by the assets and revenues of privately
owned or operated facilities may be deemed to be
issued by such private owners or operators. Thus,
the 25% limitation would apply to these obligations.
It is possible that a fund may invest more than 25%
of its assets in a broader segment of the market for
New York tax-exempt securities, such as revenue
obligations of hospitals and other health care
facilities, housing revenue obligations, or airport
revenue obligations. This would be the case only if
Putnam Management determined that the yields
available from obligations in a particular segment of
the market justified the additional risks associated
with such concentration.

Although these obligations could be supported by the
credit of governmental issuers or by the credit of
nongovernmental issuers engaged in a number of
industries, economic, business, political and other
developments generally affecting the revenues of such
issuers may have a general adverse effect on all New
York taxexempt securities in a particular market
segment. Examples of such developments include
proposed legislation or pending court decisions
affecting the financing of such projects and market
factors affecting the demand for the services or
products of a particular market segment.

Each fund reserves the right to invest more than 25%
of its assets in industrial development bonds and
private activity securities.

INVESTMENTS IN PREMIUM SECURITIES

During a period of declining interest rates, many of
the portfolio investments of each of the Income and
Opportunities Funds will likely bear coupon rates
that are higher than current market rates, regardless
of whether these securities were originally purchased
at a premium. These securities would generally carry
market values greater than the principal amounts
payable on maturity, which would be reflected in the
net asset value of fund shares.

The values of these "premium" securities tend to
approach the principal amount as the securities
approach maturity (or call price in the case of
securities approaching their first call date). As a
result, an investor who purchases fund shares during
these periods would initially receive higher monthly
distributions (derived from the higher coupon rates
payable on fund investments) than might be available
from alternative investments bearing current market
interest rates. But the investor may face an
increased risk of capital loss as these higher coupon
securities approach maturity (or first call date). In
evaluating the potential performance of an
investment, investors may find it useful to compare
the current dividend rate with a fund's "yield,"
which is computed on a yield-to-maturity basis in
accordance with SEC regulations and which reflects
amortization of market premiums. See "How
performance is shown."

PORTFOLIO TURNOVER
The length of time a fund has held a particular
security is not generally a consideration in
investment decisions. A change in the securities
held by a fund is known as "portfolio turnover." As a
result of a fund's investment policies, under certain
market conditions its portfolio turnover rate may be
higher than that of other mutual funds.

Portfolio turnover generally involves some expense,
including brokerage commissions or dealer markups and
other transaction
costs in connection with the sale of securities and
reinvestment in other securities. These transactions
may result in realization of taxable capital gains.
Portfolio turnover rates for the Income and
Opportunities Funds are shown in the section
"Financial highlights."

FINANCIAL FUTURES AND OPTIONS

EACH OF THE INCOME AND OPPORTUNITIES FUNDS MAY
PURCHASE AND SELL FINANCIAL FUTURES CONTRACTS AND
OPTIONS.

Each of the Income and Opportunities Funds may
purchase and sell index futures contracts on the
Municipal Bond Index. This index is intended to
represent a numerical measure of market performance
for long-term tax-exempt bonds. An "index future" is
a contract to buy or sell units of a particular
securities index at an agreed price on a specified
future date. Depending on the change in value of the
index between the time a fund enters into and
terminates an index futures contract, the fund
realizes a gain or loss.

Each of the funds may purchase and sell index futures
contracts on the index (or any other tax-exempt bond
index approved for trading by the Commodity Futures
Trading Commission) to hedge against general changes
in market values of New York tax-exempt securities
that a fund owns or expects to purchase.

Each of the Income and Opportunities Funds may also
purchase and sell put and call options on index
futures or on indexes directly, in addition to or as
an alternative to purchasing and selling index
futures. Each of the Income and Opportunities Funds
may also purchase and sell futures contracts and
related options on U.S. Treasury securities,
including U.S. Treasury bills, notes and bonds ("U.S.
government securities") and options directly on U.S.
government securities. U.S. government securities
futures and options would be used for purposes
similar to index futures and options.

In addition, each of the Income and Opportunities
Funds may purchase put and call options on, or
warrants to purchase, New York tax-exempt securities,
either directly or through custodial arrangements in
which a fund and other investors own an interest in
one or more options on New York tax-exempt
securities.
Each of the funds will engage in these transactions
for hedging purposes and, to the extent permitted by
applicable law, for nonhedging purposes, such as to
manage the effective duration of the fund's portfolio
or as a substitute for direct investment.

THE USE OF FUTURES AND OPTIONS INVOLVES CERTAIN
SPECIAL RISKS AND MAY RESULT IN REALIZATION OF
TAXABLE INCOME OR CAPITAL GAINS. FUTURES AND OPTIONS
TRANSACTIONS INVOLVE COSTS AND MAY RESULT IN LOSSES.

Certain risks arise from the possibility of imperfect
correlations among movements in the prices of
financial futures and options purchased or sold by a
fund, of the underlying bond index or U.S. government
securities and, in the case of hedging transactions,
of the New York tax-exempt securities that are the
subject of the hedge.

Other risks arise from the potential inability to
close out futures or options positions. There can be
no assurance that a liquid secondary market will
exist for any futures contract or option at a
particular time. Certain provisions of the Internal
Revenue Code and certain regulatory requirements may
limit the use of futures and options transactions.
The successful use of
these strategies further depends on the ability of
Putnam Management to forecast interest rates and
market movements correctly.

FOR A MORE DETAILED EXPLANATION OF FINANCIAL FUTURES
AND OPTIONS TRANSACTIONS, AND THE RISKS ASSOCIATED
WITH THEM, SEE THE SAI.

OTHER INVESTMENT PRACTICES

A FUND MAY ALSO ENGAGE IN THE FOLLOWING INVESTMENT
PRACTICES, EACH OF WHICH MAY RESULT IN TAXABLE INCOME
OR CAPITAL GAINS AND INVOLVES CERTAIN SPECIAL RISKS.
THE SAI CONTAINS MORE DETAILED INFORMATION ABOUT
THESE PRACTICES, INCLUDING LIMITATIONS DESIGNED TO
REDUCE THESE RISKS.

REPURCHASE AGREEMENTS AND FORWARD COMMITMENTS. A
fund may enter into repurchase agreements on up to
25% of its assets. These transactions must be fully
collateralized at all times. A fund may also
purchase securities for future delivery, which may
increase its overall investment exposure and involves
a risk of loss if the value of the securities
declines prior to the settlement date. These
transactions involve some risk if the other party
should default on its obligation and that fund is
delayed or prevented from recovering the collateral
or completing the transaction.

DERIVATIVES

Certain of the instruments in which the Income and
Opportunities Funds may invest, such as financial
futures and options and inverse floating obligations,
are considered to be "derivatives." Derivatives are
financial instruments whose value depends upon, or is
derived from, the value of an underlying asset, such
as a security or an index. Further information about
these instruments and the risks involved in their use
is included elsewhere in this prospectus and in the
SAI.

INSURANCE

The Money Market Fund, along with four other Putnam
money market funds, has purchased liability
insurance, which, among other things, will insure the
fund against a decrease in the value of a security
held by it due to the issuer's default or bankruptcy.
Most securities and instruments in which the fund
invests, other than U. S. government securities, are
covered by this insurance. Although the insurance may
provide the Money Market Fund with some protection in
the event of a decrease in value of certain of its
portfolio securities, the policy does not insure or
guarantee that the Money Market Fund will maintain a
stable net asset value of $1.00.

The maximum amount of total coverage under the policy
is $30 million, subject to a deductible in respect of
each loss equal to the lesser of $1 million or 0.30%
of the fund's net assets. As of January 12, 1998,
the Money Market Fund's net assets totaled
$42,914,564.62. Each of the money market funds that
has purchased the insurance has access to the full
amount of insurance under the policy, subject to the
deductible. Accordingly, depending upon the
circumstances, the Money Market Fund may not be
entitled to recover under the policy, even thought is
has experienced a loss that would otherwise be
insurable. This policy may be canceled under certain
circumstances and may not be renewed upon its
expiration.

LIMITING INVESTMENT RISK

SPECIFIC INVESTMENT RESTRICTIONS HELP TO LIMIT
INVESTMENT RISKS FOR THE FUNDS' SHAREHOLDERS. These
restrictions prohibit a fund from acquiring (in the
case of the Money Market and Opportunities Funds,
with respect to 50% of its total assets, and in the
case of the Income fund, with respect to 75% of its
total assets), more than 10% of the voting securities
of any one issuer.* They also prohibit a fund from
investing more than:

(a) (in the case of the Income Fund, with respect to
75% of its total assets, and in the case of the Money
Market and Opportunities Funds, with respect to 50%
of its total assets) (5% of its total assets in the
securities of any one issuer (other than U.S.
government securities)*;
(b) (in the case of each fund) 15% of its net assets
in any combination of securities that are not readily
marketable, in securities restricted as to resale
(excluding restricted securities that have been
determined by the Trustees (or the person designated
by them to make such determinations) to be readily
marketable) and in repurchase agreements maturing in
more than seven days.

The Money Market Fund has not invested more than 10%
of its net assets in the types of securities listed
in item (b) and has no current intention of doing so.

Restrictions marked with an asterisk (*) above are
summaries of fundamental investment policies. See
the SAI for the full text of these policies and other
fundamental investment policies. Except as otherwise
noted, all percentage limitations described in this
prospectus and the SAI will apply at the time an
investment is made, and will not be considered
violated unless an excess or deficiency occurs or
exists immediately after and as a result of such
investment. Except for investment policies designated
as fundamental in this prospectus or the SAI, the
investment policies described in this prospectus and
in the SAI are not fundamental policies. The
Trustees may change any nonfundamental investment
policy without shareholder approval. As a matter of
policy, the Trustees would not materially change a
fund's investment objective without shareholder
approval.

HOW PERFORMANCE IS SHOWN

THE INCOME AND OPPORTUNITIES FUNDS

FUND ADVERTISEMENTS MAY, FROM TIME TO TIME, INCLUDE
PERFORMANCE INFORMATION. "Yield" for each class of
shares is calculated by dividing the annualized net
investment income per share during a recent 30-day
period by the maximum public offering price per share
of the class on the last day of that period.

For purposes of calculating yield, net investment
income is calculated in accordance with SEC
regulations and may differ from net investment income
as determined for financial reporting purposes. SEC
regulations require that net investment income be
calculated on a "yield-to-maturity" basis, which has
the effect of amortizing any premiums or discounts in
the current market value of fixed-income securities.
The current dividend rate is based on net investment
income as determined for tax purposes, which may not
reflect amortization in the same manner. See "How
the funds pursue their objectives -- Investments in
premium securities."

Yield is based on the price of the shares, including
the maximum initial sales charge in the case of class
A and class M shares,
but does not reflect any contingent deferred sales
charge in the case of class B shares. "Tax-
equivalent" yield for each class of shares shows the
effect on performance of the tax-exempt status of
distributions received from a fund. It reflects the
approximate yield that a taxable investment must earn
for shareholders at stated income levels to produce
an after-tax yield equivalent to a class's tax-exempt
yield.

"Total return" for the one-, five- and ten-year
periods (or for the life of a fund, if shorter)
through the most recent calendar quarter represents
the average annual compounded rate of return on an
investment of $1,000 in a fund invested at the
maximum public offering price (in the case of class A
and class M shares) or reflecting the deduction of
any applicable contingent deferred sales charge (in
the case of class B shares). Total return may also
be presented for other periods or based on investment
at reduced sales charge levels. Any quotation of
investment performance not reflecting the maximum
initial sales charge or contingent deferred sales
charge would be reduced if the sales charge were
used.

THE MONEY MARKET FUND

THE MONEY MARKET FUND'S INVESTMENT PERFORMANCE MAY
FROM TIME TO TIME BE INCLUDED IN ADVERTISEMENTS ABOUT
THE FUND. "Yield" represents an annualization of the
change in value of a shareholder account (excluding
any capital changes) for a specific seven-day period.
"Effective yield" compounds the Money Market Fund's
yield for a year and is, for that reason, greater
than the Money Market Fund's yield. "Tax-equivalent
yield" shows the effect on performance of the tax-
exempt status of distributions received from the
Money Market Fund. It reflects the approximate yield
that a taxable investment must earn for shareholders
at stated income levels to produce an after-tax yield
equivalent to the Money Market Fund's tax-exempt
yield or tax-exempt effective yield.

ALL FUNDS

ALL DATA ARE BASED ON PAST INVESTMENT RESULTS AND DO
NOT PREDICT FUTURE PERFORMANCE. Investment
performance, which will vary, is based on many
factors, including market conditions, portfolio
composition, fund operating expenses and the class of
shares the investor purchases. Investment
performance also often reflects the risks associated
with a fund's investment objective and policies.
These factors should be considered when comparing a
fund's investment results with those of other mutual
funds and other investment vehicles.

Quotations of investment performance for any period
when an expense limitation was in effect will be
greater than if the limitation had not been in
effect. A fund's performance may be compared to that
of various indexes. See the SAI.
HOW THE FUNDS ARE MANAGED

THE TRUSTEES ARE RESPONSIBLE FOR GENERALLY OVERSEEING
THE CONDUCT OF FUND BUSINESS. Subject to such
policies as the Trustees may determine, Putnam
Management furnishes a continuing investment program
for each fund and makes investment decisions on its
behalf. Subject to the control of the Trustees,
Putnam Management also manages each fund's other
affairs and business.

Each fund pays Putnam Management a quarterly fee for
these services based on average net assets. See
"Expenses summary" and the SAI.

The following officers of Putnam Management have had
primary responsibility for the day-to-day management
of the indicated funds' portfolios since the years
stated below:
INCOME FUND AND BUSINESS
EXPERIENCE
OPPORTUNITIES FUND YEAR (AT LEAST 5 YEARS)
- - - ------------------- ---- ------------------
- - - -

Howard K. Manning
Senior Vice President 1996 Employed as
an investment
professional by
Putnam Management
since 1986.

MONEY MARKET FUND
- - - -----------------

Brian Torpey 1997 Employed as an
investment
Assistant Vice President professional by
Putnam
Management since
September, 1996. Prior to September, 1996, Mr.
Torpey was a
Municipal Market Analyst and Product
Manager at
Municipal Market Data, Inc.

Each fund pays all expenses not assumed by Putnam
Management, including Trustees' fees, auditing,
legal, custodial, investor servicing, and shareholder
reporting expenses, and payments under any
distribution plans. In the case of the Income and
Opportunities Funds, payments under any distribution
plan are in turn allocated to the relevant class of
shares. Each fund also reimburses Putnam Management
for the compensation and related expenses of certain
fund officers and their staff who provide
administrative services. The total reimbursement is
determined annually by the Trustees.

Putnam Management places all orders for purchases and
sales of fund securities. In selecting broker-
dealers, Putnam Management may consider research and
brokerage services furnished to it and its
affiliates. Subject to seeking the most favorable
price and execution available, Putnam Management may
consider sales of fund shares (and, if permitted by
law, shares of the other Putnam funds) as a factor in
the selection of broker-dealers.

ORGANIZATION AND HISTORY

Each of the funds is a Massachusetts business trust.
The Income Fund, the Opportunities Fund and the Money
Market Fund were organized on May 12, 1983, September
20, 1990 and September 2, 1987, respectively. Copies
of the Agreement and Declaration of Trust of each
fund, which are governed by Massachusetts law, are on
file with the Secretary of State of The Commonwealth
of Massachusetts.

Each fund is an open-end 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 portfolios. 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. Only class A,
B and M shares of the Income Fund and the
Opportunities Fund and shares of the Money Market
Fund are offered by this prospectus. Such funds 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).

Each share has one vote, with fractional shares
voting proportionally. Shares of all classes will
vote together as a single class except when otherwise
required by law or as determined by the Trustees.
Shares are freely transferable, are entitled to
dividends as declared by the Trustees, and, if a fund
were liquidated, would receive the net assets of that
fund. Each fund may suspend the sale of shares at
any time and may refuse any order to purchase shares.
Although each fund is not required to hold annual
meetings of its shareholders, shareholders holding at
least 10% of the outstanding shares entitled to vote
have the right to call a meeting to elect or remove
Trustees, or to take other actions as provided in
each relevant Agreement and Declaration of Trust.
Although each fund is offering only its own shares in
this prospectus, it is possible that a fund might
become liable for any misstatement in the prospectus
about another fund. The Trustees of each fund have
considered this factor in approving the use of a
single prospectus.

If you own fewer shares than the minimum set by the
Trustees (presently 20 shares for each of the Income
and Opportunities Funds and 500 shares for the Money
Market Fund), a fund may choose to redeem your
shares. You will receive at least 30 days' written
notice before a fund redeems your shares, and you may
purchase additional shares at any time to avoid a
redemption. A fund may also redeem shares if you own
shares above a maximum amount set by the Trustees.
There is presently no maximum, but the Trustees may,
at any time, establish one, which could apply to both
present and future shareholders.

THE FUNDS' TRUSTEES: GEORGE PUTNAM,* CHAIRMAN.
President of the Putnam funds. Chairman and Director
of Putnam Management and Putnam Mutual Funds Corp.
("Putnam Mutual Funds"). Director, Marsh & McLennan
Companies, Inc.; WILLIAM F. POUNDS, VICE CHAIRMAN.
Professor of Management, Alfred P. Sloan School of
Management, Massachusetts Institute of Technology;
JAMESON ADKINS BAXTER, President, Baxter Associates,
Inc.; HANS H. ESTIN, Vice Chairman, North American
Management Corp.; JOHN A. HILL, Chairman and Managing
Director, First Reserve Corporation; RONALD J.
JACKSON, Former Chairman, President and Chief
Executive Officer of Fisher-Price, Inc., Trustee of
Salem Hospital and the Peabody Essex Museum; PAUL L.
JOSKOW,* Professor of Economics and Management,
Massachusetts Institute of Technology, Director, New
England Electric System, State Farm Indemnity Company
and Whitehead Institute for Biomedical Research;
ELIZABETH T. KENNAN, President Emeritus and
Professor, Mount Holyoke College; LAWRENCE J.
LASSER,* Vice President of the Putnam funds.
President, Chief Executive Officer and Director of
Putnam Investments, Inc. and Putnam Management.
Director, Marsh & McLennan Companies, Inc.; JOHN H.
MULLIN, III, Chairman and CEO of Ridgeway Farm,
Director of ACX Technologies, Inc., Alex. Brown
Realty, Inc., The Liberty Corporation, and The Ryland
Group Inc.; ROBERT E. PATTERSON, Executive Vice
President and Director of Acquisitions, Cabot
Partners Limited Partnership; DONALD S. PERKINS,*
Director of various corporations, including Cummins
Engine Company, Inc., Lucent Technologies, Inc.,
Springs Industries, Inc. and Time Warner Inc.; GEORGE
PUTNAM, III,* President, New Generation Research,
Inc.; A.J.C. SMITH,* Chairman and Chief Executive
Officer, Marsh & McLennan Companies, Inc.; W. THOMAS
STEPHENS,
President and Chief Executive Officer of MacMillan

Bloedel Ltd., Director of Mail-Well Inc., Qwest

Communications, The Eagle Picher Trust and New

Century Energies; and W. NICHOLAS THORNDIKE, Director

of various corporations and charitable organizations,

including Data General Corporation, Bradley Real

Estate, Inc. and Providence Journal Co. Also,

Trustee of Massachusetts General Hospital and Eastern

Utilities Associates. The Trustees are also Trustees

of the other Putnam funds. Those marked with an

asterisk (*) are or may be deemed to be "interested

persons" of the funds, Putnam Management or Putnam

Mutual Funds.

ABOUT YOUR INVESTMENT

ALTERNATIVE SALES ARRANGEMENTS

THE INCOME AND OPPORTUNITIES FUNDS

Each of the Income and Opportunities Funds offer
investors three classes of shares that bear sales
charges in different forms and amounts and that bear
different levels of expenses:

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 12b1 fees than class B 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 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 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 ARRANGEMENT 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 shares. Orders for class B shares for
$250,000 or more will be treated as orders
for class A shares or declined. 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."
HOW TO BUY SHARES
THE INCOME AND OPPORTUNITIES FUNDS
You can open a fund account with as little as $500
and make additional investments at any time with as
little as $50. You can buy shares of each of the
Income and Opportunities Funds three ways - through
most investment dealers, through Putnam Mutual Funds
(at 1-800-225-1581), or through a systematic
investment plan. If you do not have a dealer, Putnam
Mutual Funds can refer you to one.
BUYING SHARES THROUGH PUTNAM MUTUAL FUNDS. Complete
an order form and write a check for the amount you
wish to invest, payable to the appropriate fund.
Return the completed form and check to Putnam Mutual
Funds, which will act as your agent in purchasing
shares.
BUYING SHARES THROUGH SYSTEMATIC INVESTING. You can
make regular investments of $25 or more per month
through automatic deductions from your bank checking
or savings account. Application forms are available
from your investment dealer or through Putnam
Investor Services.
Shares are sold at the public offering price based on
the net asset value next determined after Putnam
Investor Services receives your order. In most
cases, in order to receive that day's public offering
price, Putnam Investor Services must receive your
order before the close of regular trading on the New
York Stock Exchange. If you buy shares through your
investment dealer, the dealer must receive your order
before the close of regular trading on the New York
Stock Exchange to receive that day's public offering
price.
CLASS A SHARES
The public offering price of class A shares is the
net asset value plus a sales charge that varies
depending on the size of your purchase. A fund
receives the net asset value. The sales charge is
allocated between your investment dealer and Putnam
Mutual Funds as shown in the following table, except
when Putnam Mutual Funds, in its discretion,
allocates the entire amount to your investment
dealer.

SALES CHARGE
AMOUNT OF AS A
PERCENTAGE OF: SALES
CHARGE ----------------
--- REALLOWED TO
NET
DEALERS AS A
AMOUNT OF TRANSACTION AMOUNT OFFERING
PERCENTAGE OF
AT OFFERING PRICE ($) INVESTED PRICE
OFFERING PRICE
- - - -----------------------------------------------------
- - - -----------Under 25,000 4.99% 4.75%
4.50%
25,000 but under 100,000 4.71 4.50
4.25
100,000 but under 250,000 3.90 3.75
3.50
250,000 but under 500,000 3.09 3.00
2.75
500,000 but under 1,000,000 2.04 2.00
1.85
- - - -----------------------------------------------------
- - - -----------No initial sales charge applies to
purchases of class A shares of $1 million or more.
However, a CDSC of 1.00% or 0.50% is imposed
on redemptions of these shares within the first or
second year, respectively, after purchase, unless the
dealer of record waived its commission with Putnam
Mutual Funds' approval.
Putnam Mutual Funds pays investment dealers of record
commissions on sales of class A shares of $1 million
or more based on an investor's cumulative purchases
during the one-year period beginning with the date of
the initial purchase at net asset value. Each
subsequent one-year measuring period for these
purposes will begin with the first net asset value
purchase following the end of the prior period. Such
commissions are paid at the rate of 1.00% of the
amount under $3 million, 0.50% of the next $47
million and 0.25% thereafter.
CLASS B SHARES
Class B shares are sold without an initial sales
charge, although a CDSC will be imposed if you redeem
shares within a specified period after purchase, as
shown in the table below.
YEAR 1
2 3
4 5 6 7+ --------------------------------
- - - ----------------------------CHARGE 5%
4% 3% 3% 2% 1% 0%

Putnam Mutual Funds pays a sales commission equal to
4.00% of the amount invested (including a prepaid
service fee of 0.20% of the amount invested) to
dealers who sell class B shares. These commissions
are not paid on exchanges from other Putnam funds or
on sales to investors exempt from the CDSC.
CLASS M SHARES

The public offering price of class M shares is the
net asset value plus a sales charge that varies
depending on the size of your purchase. A fund
receives the net asset value. The sales charge is
allocated between your investment dealer and Putnam
Mutual Funds as shown in the following table, except
when Putnam Mutual Funds, at its discretion,
allocates the entire amount to your investment
dealer.

Members of qualified groups may purchase class M
shares without a sales charge.

GENERAL

YOU MAY BE ELIGIBLE TO BUY FUND SHARES AT REDUCED
SALES CHARGES OR TO SELL FUND SHARES WITHOUT A CDSC.

Consult your investment dealer or Putnam Mutual Funds
for details about Putnam's combined purchase
privilege, cumulative quantity discount, statement of
intention, group sales plan, employer-
sponsored retirement plans, and other plans.
Descriptions are also included in the order form and
in the SAI.

Each of the Income and Opportunities Funds may sell
class A, class B 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.

In addition, each fund may sell shares at net asset
value without an initial sales charge or a CDSC in
connection with the acquisition by a fund of assets
of an investment company or personal holding company.
The CDSC will be waived on redemptions of shares
arising out of the death or post-purchase disability
of a shareholder or settlor of a living trust
account, and on redemptions in connection with
certain withdrawals from IRA or other retirement
plans. Up to 12% of the value of shares subject to a
systematic withdrawal plan may also be redeemed each
year without a CDSC. The SAI contains additional
information about purchasing the fund's shares at
reduced sales charges.

In determining whether a CDSC is payable on any
redemption, shares not subject to any charge will be
redeemed first, followed by shares held longest
during the CDSC period. Any CDSC will be based on
the lower of the shares' cost and net asset value.
For this purpose, the amount of any increase in a
share's value above its initial purchase price is not
regarded as a share exempt from the CDSC. Thus, when
you redeem a share that has appreciated in value
during the CDSC period, a CDSC is assessed on its
initial purchase price. Shares acquired by
reinvestment of distributions may be redeemed without
a CDSC at any time. For information on how sales
charges are calculated if you exchange your shares,
see "How to exchange shares." Putnam Mutual Funds
receives the entire amount of any CDSC you pay. See
the SAI for more information about the CDSC.

Shareholders of other Putnam funds may be entitled to
exchange their shares for, or reinvest distributions
from their funds in, fund shares at net asset value.

If you are considering redeeming or transferring
shares to another person shortly after purchase, you
should pay for those shares with a certified check to
avoid any delay in redemption, exchange or transfer.
Otherwise, payment may be delayed until the purchase
price of those shares has been collected or, if you
redeem by telephone, until 15 calendar days after the
purchase date. To eliminate the need for
safekeeping, certificates will not be issued for your
shares unless you request them.

Putnam Mutual Funds will from time to time, at its
expense, provide additional promotional incentives or
payments to dealers
that sell shares of the Putnam funds. These
incentives or payments may include payments for
travel expenses, including lodging, incurred in
connection with trips taken by invited registered
representatives and their guests to locations within
and outside the United States for meetings or
seminars of a business nature. In some instances,
these incentives or payments may be offered only to
certain dealers who have sold or may sell significant
amounts of shares. Certain dealers may not sell all
classes of shares.

THE MONEY MARKET FUND

The Money Market Fund continuously offers its shares
at a price of $1.00 per share. You can open an
account with as little as $1,000 and make additional
investments at any time for as little as $100. You
can buy Money Market Fund shares three ways - by
mail, by wire, or through most investment dealers.
There are no sales charges on the sale of Money
Market Fund shares.

Because the Money Market Fund seeks to be fully
invested at all times, investments must be in Same
Day Funds to be accepted.
Same Day Funds are monies credited to the account of
the Money Market Fund's designated bank by the
Federal Reserve Bank of Boston. When payment in Same
Day Funds is available to the Money Market Fund prior
to the close of regular trading on the New York Stock
Exchange, the Money Market Fund will accept the order
to purchase shares that day.

If you are considering redeeming shares or
transferring shares to another person shortly after
purchase, you should pay for those shares with wired
Same Day Funds or a certified check to avoid any
delay in redemption or transfer. Otherwise, the
Money Market Fund may delay payment for shares until
the purchase price of those shares has been collected
or, if you redeem by check or telephone, until 15
calendar days after the purchase date.

After you make your initial investment in the Money
Market Fund, Putnam Investor Services will establish
an Investing Account for you on the Money Market
Fund's records. This account is a complete record of
all transactions between you and the Money Market
Fund, and at all times shows the balance of shares
you own. The Money Market Fund will not issue share
certificates.

BUYING SHARES BY MAIL. Complete the order form and
send it to Putnam Investor Services with your check,
Federal Reserve Draft or other negotiable bank draft
drawn on a U.S. bank and payable in U.S. dollars to
the order of Putnam New York Tax Exempt Money Market
Fund. If you pay by check or draft, the Money Market
Fund's designated bank will make Same Day Funds
available to the Money Market Fund, and the Money
Market Fund will accept the order on the first
business day after receipt of your check or draft.
If you pay by Federal Reserve Draft, the Money Market
Fund will accept the order the day it is received,
provided it is received before the close of regular
trading on the New York Stock Exchange.

BUYING SHARES BY WIRE. You may invest in the Money
Market Fund by bank wire transfer of Same Day Funds
to the Money Market Fund's designated bank. For
wiring instructions, see the order form.

Any commercial bank can transfer Same Day Funds by
wire. Wired Funds received by the Money Market
Fund's designated bank by 3:00 p.m. Boston time are
normally accepted for investment on the day received.
To be sure that a bank wire order is accepted on the
same day it is sent, your bank should wire funds as
early in the
day as possible. Your bank may charge for sending
Same Day Funds on your behalf. The Money Market
Fund's designated bank presently does not charge you
for receipt of wired Same Day Funds, but reserves the
right to charge you for this service.

BUYING SHARES THROUGH INVESTMENT DEALERS. You may,
if you wish, purchase shares of the Money Market Fund
through investment dealers, which may charge a fee
for their services. Most investment dealers have a
sales agreement with Putnam Mutual Funds and will be
glad to accept your order. If you do not have a
dealer, Putnam Mutual Funds can refer you to one.
Investment dealers must follow the instructions in
the order form.

DISTRIBUTION PLANS

THE INCOME AND OPPORTUNITIES FUNDS

The Income and Opportunities funds have 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 and class M shares. The
Trustees currently limit payments on class A, class B
and class M shares to 0.20%, 0.85% and 0.50% 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 up to 0.15% of the
average net asset value of class A shares of the
Income and Opportunities funds for shares outstanding
as of December 31, 1992 and July 13, 1992,
respectively, and 0.20% of the average net asset
value for class A shares acquired after those dates
(including shares acquired through reinvestment of
distributions). No payments are made during the
first year after purchase on shares purchased at net
asset value by shareholders investing $1 million or
more, 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 0.20% and 0.40% of the
average net asset value of class B and class M
shares, respectively, for which such dealers are
designated as the dealer of record, except that the
first year's service fees of 0.20% for class B shares
are prepaid as described above.

THE MONEY MARKET FUND

The purpose of the distribution plan of the Money
Market Fund is to permit the fund to compensate
Putnam Mutual Funds for services provided and
expenses incurred by it in promoting the sale of
shares of the Money Market Fund, reducing
redemptions, or maintaining or improving services
provided to shareholders by Putnam Mutual Funds or
dealers. The plan provides for payments by the Money
Market Fund to Putnam Mutual Funds at the annual rate
of up to 0.35% of the Money Market Fund's average net
assets. No payments are currently being made under
the plan. Should the Money Market Fund's Trustees
decide in the future to approve payments under the
plan, shareholders will be notified and this
prospectus will be revised.

GENERAL (ALL FUNDS)

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.

HOW TO SELL SHARES

THE INCOME AND OPPORTUNITIES FUNDS

You can sell your shares to the appropriate fund any
day the New York Stock Exchange is open, either
directly to the fund or through your investment
dealer. A fund will only redeem shares for which it
has received payment.

SELLING SHARES DIRECTLY TO YOUR FUND. Send a signed
letter of instruction or stock power form to Putnam
Investor Services, along with any certificates that
represent shares you want to sell. The price you
will receive is the next net asset value calculated
after the fund receives your request in proper form
less any applicable CDSC. In order to receive that
day's net asset value, Putnam Investor Services must
receive your request before the close of regular
trading on the New York Stock Exchange.

If you sell shares having a net asset value of
$100,000 or more, the signatures of registered owners
or their legal representatives must be guaranteed by
a bank, broker-dealer or certain other financial
institutions. See the SAI for more information about
where to obtain a signature guarantee. Stock power
forms are available from your investment dealer,
Putnam Investor Services and many commercial banks.

If you want your redemption proceeds sent to an
address other than your address as it appears on
Putnam's records, a signature guarantee is required.
Putnam Investor Services usually requires additional
documentation for the sale of shares by a
corporation, partnership, agent or fiduciary, or a
surviving joint owner. Contact Putnam Investor
Services for details.

YOUR FUND GENERALLY SENDS YOU PAYMENT FOR YOUR SHARES
THE BUSINESS DAY AFTER YOUR REQUEST IS RECEIVED.
Under unusual circumstances, a fund may suspend
redemptions, or postpone payment for more than seven
days, as permitted by federal securities law.

You may use Putnam's Telephone Redemption Privilege
to redeem shares valued up to $100,000 unless you
have notified Putnam Investor Services of an address
change within the preceding 15 days. Unless you
indicate otherwise on the account application, Putnam
Investor Services will be authorized to act upon
redemption and transfer instructions received by
telephone from you, or any person claiming to act as
your representative, who can provide Putnam Investor
Services with your account registration and address
as it appears on Putnam Investor Services' records.

Putnam Investor Services will employ these and other
reasonable procedures to confirm that instructions
communicated by telephone are genuine; if it fails to
employ reasonable procedures, Putnam Investor
Services may be liable for any losses due to
unauthorized or fraudulent instructions. For
information, consult Putnam Investor Services.

During periods of unusual market changes and
shareholder activity, you may experience delays in
contacting Putnam Investor Services by telephone. In
this event, you may wish to submit a written
redemption request, as described above, or contact
your investment dealer, as described below. The
Telephone Redemption Privilege is not available if
you were issued certificates for shares that remain
outstanding. The Telephone Redemption Privilege may
be modified or terminated without notice.

SELLING SHARES THROUGH YOUR INVESTMENT DEALER. Your
dealer must receive your request before the close of
regular trading on the New York Stock Exchange to
receive that day's net asset value. Your dealer will
be responsible for furnishing all necessary
documentation to Putnam Investor Services, and may
charge you for its services.

THE MONEY MARKET FUND

You can sell your shares to the Money Market Fund any
day the New York Stock Exchange is open, by check, by
telephone, by mail or through your investment dealer.
The Money Market Fund must receive your properly
completed application before you may sell shares;
certain methods require additional documentation (see
below). To enable shareholders to earn daily
dividends as long as possible, the Money Market Fund
has arranged the following methods of selling shares:

SELLING SHARES BY CHECK. If you would like to use
the Money Market Fund's check-writing service, mark
the proper box on the order form and complete the
signature card and, if applicable, the resolution.
Upon receiving these properly completed documents,
the Money Market Fund will send you checks which may
be made payable to the order of any person in the
amount of $500 or more. When a check is presented
for payment, the fund will redeem from your account
at that day's net asset value a sufficient number of
full and fractional shares to cover the amount of the
check. The fund will redeem additional shares to
cover any applicable CDSC.

Shareholders utilizing fund checks are subject to the
bank's rules governing checking accounts. There is
currently no charge to shareholders for the use of
checks. You should make sure that there are
sufficient shares in the account to cover the amount
of any check drawn, since the net asset value of
shares will fluctuate. If insufficient shares are in
the account, the check will be returned and no shares
will be redeemed. Because dividends declared on
shares held in your account, prior redemptions, and
possible changes in net asset value may cause the
value of your account to change, it is impossible to
determine in advance your account's total value.
Accordingly, you should not write a check for the
entire value of your account or close your account by
writing a check. The check-writing service is not
available for tax-qualified retirement plans.

SELLING SHARES BY TELEPHONE. If you would like to
sell Money Market Fund shares by telephone with
proceeds directed to your bank account, please mark
the proper box on the order form. You may call toll-
free 1-800-225-1581. On the following business day,
the amounts withdrawn from your account will either
be mailed by check or wired in Same Day Funds to the
bank account designated on your application. (To
wire proceeds, the amount must be $1,000 or more and
the designated bank must be a commercial bank within
the United States.) You may change a designated bank
account by sending a written request to Putnam
Investor Services with your signature guaranteed by a
bank,
broker-dealer or certain other financial
institutions. See the SAI for more information about
how to obtain a signature guarantee.

You may also use Putnam's Telephone Redemption
Privilege to redeem shares valued up to $100,000 from
your account unless you have notified Putnam Investor
Services of an address change within the preceding 15
days. Unless an investor indicates otherwise on the
Account Application, Putnam Investor Services will be
authorized to act upon redemption and transfer
instructions received by telephone from a
shareholder, or any person claiming to act as his or
her representative, who can provide Putnam Investor
Services with his or her account registration and
address as it appears on Putnam Investor Services'
records. Putnam Investor Services will employ these
and other reasonable procedures to confirm that
instructions communicated by telephone are genuine;
if it fails to employ reasonable procedures, Putnam
Investor Services may be liable for any losses due to
unauthorized or fraudulent instructions. For
information, consult Putnam Investor Services.
During periods of unusual market changes and
shareholder activity, you may experience delays in
contacting Putnam Investor Services by telephone in
which case you may wish to submit a written
redemption request, as described below, or contact
your investment dealer. The Telephone Redemption
Privilege may be modified or terminated without
notice.

SELLING SHARES BY MAIL. You may also sell shares of
the Money Market Fund by sending a written withdrawal
request to: Putnam Investor Services, Mailing
address: P.O. Box 41203, Providence, RI 02940-1203.
If you sell shares having a net asset value of
$100,000 or more, the signatures of registered owners
or their legal representatives must be guaranteed by
a bank, broker-dealer or certain other financial
institutions. See the SAI for more information about
where to obtain a signature guarantee.

Putnam Investor Services may require additional
documentation from shareholders which are
corporations, partnerships, agents, fiduciaries or
surviving joint owners. Corporations, partnerships,
agents, trusts and fiduciary accounts must submit a
completed resolution in proper form before selling
shares by telephone or check. Resolution forms are
available from Putnam Investor Services. If you are
currently a shareholder and did not request the check-
writing service or telephone redemption privilege on
your initial order form, you must first complete and
return an authorization form, available from Putnam
Investor Services. A shareholder may revoke
authorization for the checkwriting service or
telephone redemption by written notice at any time,
effective when Putnam Investor Services receives such
notice.
The Money Market Fund reserves the right to terminate
or modify the terms of the check-writing service or
telephone redemption privilege, or to charge
shareholders for the use of these services at any
time.

THE MONEY MARKET FUND GENERALLY SENDS YOU PAYMENT FOR
YOUR SHARES THE BUSINESS DAY AFTER YOUR REQUEST IS
RECEIVED. Under unusual circumstances, the fund may
suspend repurchases, or postpone payment for more
than seven days, as permitted by federal securities
law.

HOW TO EXCHANGE SHARES

Shareholders of the Money Market Fund who received
their shares in exchange for shares of another Putnam
fund with a sales charge, and shareholders of each of
the Income and Opportunities
Funds, can exchange their shares for shares of other
Putnam funds at net asset value. Other shareholders
of the Money Market Fund may be required to pay a
sales charge, which varies depending on the fund to
which they exchange their shares and the amount
exchanged. Shareholders of the Money Market Fund
exchanging into funds with more than one class of
shares may exchange their shares only for class A
shares of the other fund. Shareholders of each of
the Income and Opportunities Funds may exchange their
shares only for shares of the same class. Not all
Putnam funds offer all classes of shares. If you
exchange shares subject to a CDSC, the transaction
will not be subject to the CDSC. However, when you
redeem the shares acquired through the exchange, the
redemption may be subject to the CDSC, depending upon
when you originally purchased the shares. The CDSC
will be computed using the schedule of any fund into
or from which you have exchanged your shares that
would result in your paying the highest CDSC
applicable to your class of shares. For purposes of
computing the CDSC, the length of time you have owned
your shares will be measured from the date of
original purchase and will not be affected by any
exchange.

To exchange your shares, simply complete an Exchange
Authorization Form and send it to Putnam Investor
Services. The form is available from Putnam Investor
Services. For federal income tax purposes, an
exchange is treated as a sale of shares and generally
results in a capital gain or loss. A Telephone
Exchange Privilege is currently available for amounts
up to $500,000. Putnam Investor Services' procedures
for telephonic transactions are described above under
"How to sell shares." The Telephone Exchange
Privilege is not available if you were issued
certificates for shares that remain outstanding. Ask
your investment dealer or Putnam Investor Services
for prospectuses of other Putnam funds. Shares of
certain Putnam funds are not available to residents
of all states.

The exchange privilege is not intended as a vehicle
for shortterm trading. Excessive exchange activity
may interfere with portfolio management and have an
adverse effect on all shareholders. In order to
limit excessive exchange activity and in other
circumstances where Putnam Management or the Trustees
believe doing so would be in the best interests of
your fund, each fund reserves the right to revise or
terminate the exchange privilege, limit the amount or
number of exchanges or reject any exchange. Consult
Putnam Investor Services before requesting an
exchange. See the SAI to find out more about the
exchange privilege.

HOW A FUND VALUES ITS SHARES

GENERAL. The Money Market Fund calculates the net
asset value of a share, and each of the Income and
Opportunities Funds calculates the net asset value of
a share of each class, by dividing the total value of
its assets, less liabilities, by the number of shares
outstanding. Shares are valued as of the close of
regular trading on the New York Stock Exchange each
day the Exchange is open.

THE INCOME AND OPPORTUNITIES FUNDS. New York tax-
exempt securities are valued 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.

Each fund believes that reliable market quotations
generally are not readily available for purposes of
valuing its portfolio
securities. As a result, it is likely that most of
the valuations provided by a pricing service will be
based upon fair value determined on the basis of the
factors listed above.
Taxable obligations for which market quotations are
readily available are valued at market value. Short-
term investments that will mature in 60 days or less
are valued at amortized cost, which approximates
market value. All other securities and assets are
valued at their fair value following procedures
approved by the Trustees.
THE MONEY MARKET FUND. The Money Market Fund values
its portfolio investments at amortized cost according
to Rule 2a-7 under the 1940 Act. The amortized cost
of an instrument is determined by valuing it at cost
originally and thereafter amortizing any discount or
premium from its face value at a constant rate until
maturity.
HOW A FUND MAKES DISTRIBUTIONS TO SHAREHOLDERS; TAX
INFORMATION
THE INCOME AND OPPORTUNITIES FUNDS. Each fund
declares all of its net interest income as a
distribution on each day it is open for business.
Net interest income consists of interest accrued on
portfolio investments of a fund, less accrued
expenses, computed in each case since the most recent
determination of net asset value. Normally, each of
the Income and Opportunities Funds pays distributions
of net interest income monthly. Each fund will
distribute at least annually all net realized capital
gains, if any, after applying any available capital
loss carryovers. Distributions paid on class A
shares will generally be greater than those paid on
class B shares and class M shares because expenses
attributable to class B shares and class M shares
will generally be higher.
You begin earning distributions on the business day
Putnam Mutual Funds receives payment for your shares.
It is your responsibility to see that your dealer
forwards payment promptly.
THE MONEY MARKET FUND. The Money Market Fund
determines its net income once each day the New York
Stock Exchange is open, as of the close of regular
trading on the Exchange. Each determination of the
Money Market Fund's net income includes (i) all
accrued interest on portfolio investments of the
fund, (ii) plus or minus all realized and unrealized
gains and losses on the fund's investments, (iii)
less all accrued expenses of the fund. (The Money
Market Fund will not have unrealized gains or losses
so long as it values its investments by the amortized
cost method.) All of the net income of the Money
Market Fund is declared each day that the Money
Market Fund is open for business as a dividend to
shareholders of record at the time of each
declaration. Shareholders begin earning dividends on
the day after the Money Market Fund accepts their
orders. Normally, the fund's dividends will be paid
monthly. Since the net income of the fund is
declared as a dividend each time it is determined,
the net asset value per share of the fund generally
remains at $1.00 immediately after each determination
and dividend declaration.
GENERAL. You can choose from three distribution
options:
- - - - (all funds) Reinvest all distributions in
additional fund
shares without a sales charge;

- - - - (Income and Opportunities Funds only) Receive
distributions from net interest income in cash
while reinvesting capital gains distributions
in additional shares of the fund without a
sales charge; or

- - - - (all funds) Receive all distributions in cash.

You can change your distribution option by notifying
Putnam Investor Services in writing. If you do not
select an option when you open your account, all
distributions will be reinvested. All distributions
not paid in cash will be reinvested in shares of the
class on which the distribution is paid. You will
receive a statement confirming reinvestment of
distributions in additional fund shares (or in shares
of other Putnam funds for Dividends Plus accounts)
promptly following the quarter in which the
reinvestment occurs.

If a check representing a fund distribution is not
cashed within a specified period, Putnam Investor
Services will notify you that you have the option of
requesting another check or reinvesting the
distribution. If Putnam Investor Services does not
receive your election, the distribution will be
reinvested in your fund. Similarly, if correspondence
sent by a fund or Putnam Investor Services is
returned as "undeliverable," fund distributions will
automatically be reinvested in that fund or in
another Putnam fund.

Each fund intends to qualify as a "regulated
investment company" for federal income tax purposes
and to meet all other requirements necessary for it
to be relieved of federal taxes on income and gains
it distributes to shareholders. Each fund will
distribute substantially all of its ordinary income
and capital gain net income on a current basis.

Fund distributions designated as "exempt-interest
dividends" are not generally subject to federal
income tax. However, if you receive social security
or railroad retirement benefits, you should consult
your tax adviser to determine what effect, if any, an
investment in a fund may have on the taxation of your
benefits. In addition, an investment in a fund may
result in liability for federal alternative minimum
tax and for state and local taxes, both for
individual and corporate shareholders. See "New York
tax-exempt securities--Alternative Minimum Tax"above.
To the extent that exempt-interest dividends are
derived from interest on New York tax-exempt
securities, such distributions will also be exempt
from New York State and New York City personal income
taxes. However, an investment in a fund may result
in liability for state and/or local taxes for
individual shareholders subject to taxation by states
other than New York State or cities other than New
York City because the exemption from New York State
and New York City personal income taxes does not
prevent such other jurisdictions from taxing
individual shareholders on dividends received from a
fund. In addition, distributions derived from
interest on tax exempt securities other than New York
tax-exempt securities will be treated as taxable
ordinary income for purposes of the New York State
and New York City personal income taxes.

Exempt-interest dividends, including those derived
from New York tax-exempt securities, are included in
a corporation's net investment income for purposes of
calculating such corporation's New York State
corporate franchise tax and New York City general
corporation tax and will be subject to such taxes to
the extent that a corporation's net investment income
is allocated to New York State and/or New York City.

All or a portion of interest on indebtedness incurred
or continued by a shareholder to purchase or carry a
fund's shares generally will not be deductible for
federal or New York State and New York City personal
income tax purposes.

For federal income tax purposes, fund distributions
(other than exempt interest dividends) will be
taxable to you as ordinary income to the extent
derived from the fund's investment income and net
short-term gains (that is, net gains from securities
held for not more than a year). Distributions
deriving from net gains on securities held for more
than one year but not more than 18 months and from
net gains on securities held for more than 18 months
will be taxable to you as such, regardless of how
long you have held your shares. For New York State
and City personal income tax purposes, distributions
of net long-term gains will be taxable at the same
rates as ordinary income. Distributions will be
taxable as described above whether received in cash
or in shares through the reinvestment of
distributions.

The funds may at times purchase New York tax-exempt
securities at a discount from the price at which they
were initially issued. For federal income tax
purposes, some or all of this market discount will be
included in the funds' ordinary income and will be
taxable to you as such when it is distributed to you.

Early in each calendar year each fund will notify you
of the amount and tax status of distributions paid to
you by that fund for the preceding year.

The foregoing is a summary of certain federal, New
York State and New York City income tax consequences
of investing in a fund.
You should consult your tax adviser to determine the
precise effect of an investment in a fund on your
particular tax situation (including possible
liability for federal alternative minimum tax and
state and local taxes).

ABOUT PUTNAM INVESTMENTS, INC.

PUTNAM MANAGEMENT HAS BEEN MANAGING MUTUAL FUNDS
SINCE 1937. Putnam Mutual Funds is the principal
underwriter of the funds and of other Putnam funds.
Putnam Fiduciary Trust Company is the custodian of
the funds. Putnam Investor Services, a division of
Putnam Fiduciary Trust Company, is the investor
servicing and transfer agent for the funds.

Putnam Management, Putnam Mutual Funds, and Putnam
Fiduciary Trust Company are subsidiaries of Putnam
Investments, Inc., which is wholly owned by Marsh &
McLennan Companies, Inc., a publiclyowned holding
company whose principal businesses are international
insurance and reinsurance brokerage, employee benefit
consulting and investment management.
APPENDIX

SECURITIES RATINGS

THE FOLLOWING RATING SERVICES DESCRIBE RATED
SECURITIES AS FOLLOWS:

MOODY'S INVESTORS SERVICE, INC.

BONDS

AAA -- Bonds which are rated AAA are judged to be of
the best quality. They carry the smallest degree of
investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and
principal is secure. While the various protective
elements are likely to change, such changes as can be
visualized are most unlikely to impair the
fundamentally strong position of such issues.

AA -- Bonds which are rated AA are judged to be of
high quality by all standards. Together with the AAA
group they comprise what are generally known as high
grade bonds. They are rated lower than the best
bonds because margins of protection may not be as
large as in AAA securities or fluctuation of
protective elements may be of greater amplitude or
there may be other elements present which make the
long-term risk appear somewhat larger than the AAA
securities.

A -- Bonds which are rated A possess many favorable
investment attributes and are to be considered as
upper-medium-grade obligations. Factors giving
security to principal and interest are considered
adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.

BAA -- Bonds which are rated BAA are considered as
medium grade obligations, (i.e., they are neither
highly protected nor poorly secured). Interest
payments and principal security appear adequate for
the present but certain protective elements may be
lacking or may be characteristically unreliable over
any great length of time. Such bonds lack outstanding
investment characteristics and in fact have
speculative characteristics as well.

BA -- Bonds which are rated BA are judged to have
speculative elements; their future cannot be
considered as well-assured. Often the protection of
interest and principal payments may be very moderate,
and thereby not well safeguarded during both good and
bad times over the future. Uncertainty of position
characterizes bonds in this class.
B -- Bonds which are rated B generally lack
characteristics of the desirable investment.
Assurance of interest and principal payments or of
maintenance of other terms of the contract over any
long period of time may be small.

CAA -- Bonds which are rated CAA are of poor
standing. Such issues may be in default or there may
be present elements of danger with respect to
principal or interest.

CA -- Bonds which are rated CA represent obligations
which are speculative in a high degree. Such issues
are often in default or have other marked
shortcomings.

C -- Bonds which are rated C are the lowest rated
class of bonds, and issues so rated can be regarded
as having extremely poor prospects of ever attaining
any real investment standing.

NOTES

MIG 1/VMIG 1 -- This designation denotes best
quality. There is present strong protection by
established cash flows, superior liquidity support or
demonstrated broad-based access to the market for
refinancing.

MIG 2/VMIG 2 -- This designation denotes high
quality. Margins of protection are ample although
not so large as in the preceding group.

COMMERCIAL PAPER

Issuers rated PRIME-1 (or supporting institutions)
have a superior ability for repayment of senior short-
term debt obligations. Prime-1 repayment ability
will often be evidenced by the following
characteristics:

- - - -- Leading market positions in well established
industries.
- - - -- High rates of return on funds employed.
- - - -- Conservative capitalization structure with
moderate
reliance on debt and ample asset protection.
- - - -- Broad margins in earnings coverage of fixed
financial
charges and high internal cash generation.
- - - -- Well established access to a range of
financial markets
and assured sources of alternate liquidity.

Issuers rated PRIME-2 (or supporting institutions)
have a strong ability for repayment of senior short-
term debt obligations. This will normally be
evidenced by many of the characteristics cited above
to a lesser degree. Earnings trends and coverage
ratios, while sound, may be more subject to
variation. Capitalization characteristics, while
still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
STANDARD & POOR'S

BONDS

AAA -- Debt rated `AAA' has the highest rating
assigned by Standard & Poor's. Capacity to pay
interest and repay principal is extremely strong.

AA -- Debt rated `AA' has a very strong capacity to
pay interest
and repay principal and differs from the higher rated
issues only in small degree.

A -- Debt rated `A' has a strong capacity to pay
interest and repay principal although it is somewhat
more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in
higher rated categories.

BBB -- Debt rated `BBB' is regarded as having an
adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal
for debt in this category than in higher rated
categories.

BB-B-CCC-CC-C -- Debt rated `BB', `B', `CCC', `CC'
and `C' is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of
the obligation. `BB' indicates the lowest degree of
speculation and `C' the highest. While such debt will
likely have some quality and protective
characteristics, these are outweighed by large
uncertainties or major exposures to adverse
conditions.

BB -- Debt rated `BB' has less near-term
vulnerability to default than other speculative
issues. However, it faces major ongoing uncertainties
or exposure to adverse business, financial, or
economic conditions which could lead to inadequate
capacity to meet timely interest and principal
payments. The `BB' rating category is also used for
debt subordinated to senior debt that is assigned an
actual or implied `BBB-' rating.

B -- Debt rated `B' has a greater vulnerability to
default but currently has the capacity to meet
interest payments and principal repayments. Adverse
business, financial, or economic conditions will
likely impair capacity or willingness to pay interest
and repay principal. The `B' rating category is also
used for debt subordinated to senior debt that is
assigned an actual or implied `BB' or `BB-' rating.

CCC -- Debt rated `CCC' has a currently identifiable
vulnerability to default, and is dependent upon
favorable business, financial, and economic
conditions to meet timely payment of interest and
repayment of principal. In the event of adverse
business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and
repay principal. The `CCC' rating category is also
used for debt subordinated to senior debt that is
assigned an actual or implied `B' or `B-' rating.

CC -- The rating `CC' typically is applied to debt
subordinated to senior debt that is assigned an
actual or implied `CCC' rating.

C -- The rating `C' typically is applied to debt
subordinated to senior debt which is assigned an
actual or implied `CCC-' debt rating. The `C' rating
may be used to cover a situation where a bankruptcy
petition has been filed, but debt service payments
are continued.

D -- Bonds rated D are in payment default. The D
rating category is used when interest payments or
principal payments are not made on the date due even
if the applicable grace period has not expired,
unless S&P believes that such payments will be made
during such grace period. The D rating also will be
used on the filing of a bankruptcy petition if debt
service payments are jeopardized.

NOTES

SP-1 -- Strong capacity to pay principal and

interest. Those issues determined to possess

overwhelming safety characteristics are given a plus

(+) designation.

SP-2 -- Satisfactory capacity to pay principal and

interest.

SP-3 -- Speculative capacity to pay principal and

interest. COMMERCIAL PAPER

A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong.
Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign
(+) designation.

A-2 -- Capacity for timely payment on issues with
this designation is satisfactory. However, the
relative degree of safety is not as high as for
issues designated `A-1'.

A-3 -- Issues carrying this designation have
adequate capacity for timely payment. They are,
however, more vulnerable to the adverse effects of
changes in circumstances than obligations carrying
the higher designations.

DUFF & PHELPS CORPORATION

LONG-TERM DEBT

AAA -- Highest credit quality. The risk factors are
negligible, being only slightly more than for risk-
free U.S. Treasury debt.

AA+, AA, AA- -- High credit quality. Protection
factors are strong. Risk is modest but may vary
slightly from time to time because of economic
conditions.

A+, A, A- -- Protection factors are average but
adequate.
However, risk factors are more variable and greater
in periods of economic stress.

BBB+, BBB, BBB- -- Below-average protection factors
but still considered sufficient for prudent
investment. Considerable variability in risk during
economic cycles.

BB+, BB, BB- -- Below investment grade but deemed
likely to meet obligations when due. Present or
prospective financial protection factors fluctuate
according to industry conditions or company fortunes.
Overall quality may move up or down frequently within
this category.

B+, B, B- -- Below investment grade and possessing
risk that obligations will not be met when due.
Financial protection factors will fluctuate widely
according to economic cycles, industry conditions
and/or company fortunes. Potential exists for
frequent changes in the rating within this category
or into a higher or lower rating grade.

CCC -- Well below investment-grade securities.
Considerable uncertainty exists as to timely payment
of principal, interest or preferred dividends.
Protection factors are narrow and risk can be
substantial with unfavorable economic/industry
conditions, and/or with unfavorable company
developments.

DD -- Defaulted debt obligations. Issuer failed to
meet scheduled principal and/or interest payments.

FITCH INVESTORS SERVICE, INC.:

AAA -- Bonds considered to be investment grade and of
the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by
reasonably foreseeable events.

AA -- Bonds considered to be investment grade and of
very high credit quality. The obligor's ability to
pay interest and repay principal is very strong,
although not quite as strong as bonds rated AAA.

A -- Bonds considered to be investment grade and of
high credit quality. The obligor's ability to pay
interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes
in economic conditions and circumstances than bonds
with higher ratings.

BBB -- Bonds considered to be investment grade and of
satisfactory credit quality. The obligor's ability
to pay interest and repay principal is considered to
be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have
adverse impact on these bonds, and therefore impair
timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is
higher than for bonds with higher ratings.

BB -- Bonds considered to be speculative. The
obligor's ability to pay interest and repay principal
may be affected over time by adverse economic
changes. However, business and financial
alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.

B -- Bonds are considered highly speculative. Bonds
in this class are lightly protected as to the
obligor's ability to pay interest over the life of
the issue and repay principal when due.
or reorganization of the obligor.

PUTNAM NEW YORK TAX EXEMPT INCOME
FUND
PUTNAM NEW YORK TAX EXEMPT
OPPORTUNITIES FUND PUTNAM NEW
YORK TAX EXEMPT MONEY MARKET FUND

One Post Office Square
Boston, MA 02109

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

INVESTOR SERVICING AGENT

Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203

CUSTODIAN

Putnam Fiduciary Trust Company
One Post Office Square
Boston, MA 02109

LEGAL COUNSEL

Ropes & Gray
One International Place
Boston, MA 02110

INDEPENDENT ACCOUNTANTS

Putnam New York Tax Exempt Income
Fund and Putnam New York Tax
Exempt Money Market Fund
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109

Putnam New York Tax Exempt
Opportunities Fund Price
Waterhouse LLP
160 Federal Street
Boston, MA 02110

PUTNAMINVESTMENTS

One Post Office
Square Boston,
Massachusetts
02109 Toll-free
1-800-225-1581

PUTNAM NEW YORK TAX EXEMPT
INCOME FUND PUTNAM NEW YORK TAX
EXEMPT OPPORTUNITIES FUND
PUTNAM NEW YORK
TAX EXEMPT
MONEY MARKET
FUND FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION ("SAI")
JANUARY 30, 1998 , AS AMENDED DECEMBER 30,
1998
This SAI is not a prospectus and is only authorized
for
distribution when accompanied or preceded by the
prospectus of Putnam New York Tax Exempt Income Fund
(the "Income Fund"), Putnam New York Tax Exempt
Opportunities Fund (the "Opportunities Fund") and
Putnam New York Tax Exempt Money Market Fund (the
"Money Market Fund") (collectively the "funds") dated
January 30, 1998, as revised from time to time. This
SAI contains information which may be useful to
investors but which is not included in the
prospectus. If a fund has more than one form of
current prospectus, each reference to the prospectus
in this SAI shall include all of the funds'
prospectuses, unless otherwise noted. The SAI should
be read together with the applicable prospectus.
Investors may obtain a free copy of the applicable
prospectus from Putnam Investor Services, Mailing
address: P.O. Box 41203, Providence, RI 02940-1203.

Part I of this SAI contains specific information
about the funds. Part II includes information about
the funds and the other Putnam funds.
TABLE OF CONTENTS

PART I

NEW YORK TAX-EXEMPT SECURITIES

I - 4

INVESTMENT RESTRICTIONS

I - 6

CHARGES AND EXPENSES

I - 9

INVESTMENT PERFORMANCE

I - 18

AMORTIZED COST VALUATION AND DAILY DIVIDENDS (THE
MONEY
MARKET FUND ONLY) I -
20

EQUIVALENT YIELDS: TAX-EXEMPT VERSUS TAXABLE
SECURITIES I - 22

ADDITIONAL OFFICERS I -
25

INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS I -
26

PART II

MISCELLANEOUS INVESTMENT PRACTICES II -

TAXES

II - 30

MANAGEMENT

II - 35

DETERMINATION OF NET ASSET VALUE

II - 45

HOW TO BUY SHARES

II - 46

DISTRIBUTION PLANS

II - 59

INVESTOR SERVICES

II - 60

SIGNATURE GUARANTEES

II - 65

SUSPENSION OF REDEMPTIONS

II - 66

SHAREHOLDER LIABILITY
II - 66

STANDARD PERFORMANCE MEASURES
II - 66

COMPARISON OF PORTFOLIO PERFORMANCE
II - 68

DEFINITIONS
II - 72
SAI
PART I

NEW YORK TAX-EXEMPT SECURITIES

GENERAL DESCRIPTION. As used in the prospectus and
in this SAI, the term "New York tax-exempt
securities" includes debt obligations issued by the
State of New York, its political subdivisions (for
example, counties, cities, towns, villages, districts
and authorities) and their agencies,
instrumentalities or other governmental units, the
interest from which is, in the opinion of bond
counsel, exempt from federal income tax and New York
State and City personal income tax. Such obligations
are issued to obtain funds for various public
purposes, including the construction of a wide range
of public facilities, such as airports, bridges,
highways, housing, hospitals, mass transportation,
schools, streets, and water and sewer works. Other
public purposes for which New York tax-exempt
securities may be issued include the refunding of
outstanding obligations and the payment of general
operating expenses.

Short-term New York tax-exempt securities are
generally issued by state and local governments and
public authorities as interim financing in
anticipation of tax collections, revenue receipts, or
bond sales to finance such public purposes.

In addition, certain types of "private activity"
bonds may be issued by public authorities to finance
such projects as privately operated housing
facilities; certain local facilities for supplying
water, gas or electricity; sewage or solid waste
disposal; student loans; or the obtaining of funds to
lend to public or private institutions for the
construction of educational, hospital, housing, and
other facilities. Such obligations are included
within the term New York tax-exempt securities if the
interest paid thereon is, in the opinion of bond
counsel, exempt from federal income tax and New York
State and City personal income tax (such interest
may, however, be subject to federal alternative
minimum tax). Other types of private activity bonds,
the proceeds of which are used for the construction,
repair or improvement of, or to obtain equipment for,
privately operated industrial or commercial
facilities, may also constitute New York tax-exempt
securities, although the current federal tax laws
place substantial limitations on the size of such
issues.

PARTICIPATION INTERESTS. The Money Market Fund may
invest in New York tax-exempt securities either by
purchasing them directly or by purchasing
certificates of accrual or similar instruments
evidencing direct ownership of interest payments or
principal payments, or both, on New York tax-exempt
securities, provided that, in the opinion of counsel
to the initial seller of each such certificate or
instrument, any discount accruing on the certificate
or instrument that is purchased at a yield not
greater than the coupon rate of interest on the
related New York tax-exempt securities will be exempt
from federal income tax to the same extent as
interest on the New York tax-exempt securities. The
Money Market Fund may also invest in New York tax-
exempt securities by purchasing from banks
participation interests of all or part of specific
holdings of New York tax-
exempt securities. These participations may be
backed in whole or in part by an irrevocable letter
of credit or guarantee of the selling bank. The
selling bank may receive a fee from the Money Market
Fund in connection with the arrangement. The Money
Market Fund will not purchase such participation
interests unless it receives an opinion of counsel or
a ruling of the Internal Revenue Service that
interest earned by it on New York tax-exempt
securities in which it holds such participation
interests is exempt from federal income tax. The
Money Market Fund does not expect to invest more than
5% of its assets in participation interests.

STAND-BY COMMITMENTS. When a fund purchases New York
tax-exempt securities, it has the authority to
acquire stand-by commitments from banks and broker-
dealers with respect to those New York taxexempt
securities. A stand-by commitment may be considered
a security independent of the New York tax-exempt
security to which it relates. The amount payable by
a bank or dealer during the time a stand-by
commitment is exercisable, absent unusual
circumstances, would be substantially the same as the
market value of the underlying New York tax-exempt
security to a third party at any time. The funds
expect that stand-by commitments generally will be
available without the payment of direct or indirect
consideration. The funds do not expect to assign any
value to stand-by commitments.

YIELDS. The yields on New York tax-exempt securities
depend on a variety of factors, including general
money market conditions, effective marginal tax
rates, the financial condition of the issuer, general
conditions of the New York tax-exempt security
market, the size of a particular offering, the
maturity of the obligation and the rating of the
issue. The ratings of nationally recognized
securities rating agencies represent their opinions
as to the credit quality of the New York tax-exempt
securities which they undertake to rate. It should
be emphasized, however, that ratings are general and
are not absolute standards of quality. Consequently,
New York tax-exempt securities with the same maturity
and interest rate but with different ratings may have
the same yield. Yield disparities may occur for
reasons not directly related to the investment
quality of particular issues or the general movement
of interest rates and may be due to factors such as
changes in the overall demand or supply of various
types of New York tax-exempt securities or changes in
the investment objectives of investors. Subsequent to
purchase by a fund, an issue of New York tax-exempt
securities or other investments may cease to be rated
or its rating may be reduced below the minimum rating
required for purchase by that fund. Neither event
will require the elimination of an investment from
the fund's portfolio, but Putnam Management will
consider such an event in its determination of
whether the fund should continue to hold an
investment in its portfolio.

"MORAL OBLIGATION" BONDS. None of the funds
currently intends to invest in so-called "moral
obligation" bonds, where repayment is backed by a
moral commitment of an entity other than the issuer,
unless the credit of the issuer itself, without
regard to the "moral obligation," meets the
investment criteria established for investments by
that fund.

ADDITIONAL RISKS. Securities in which the funds may
invest, including New York tax-exempt securities, are
subject to the provisions of bankruptcy, insolvency
and other laws affecting the rights and remedies of
creditors, such as the federal Bankruptcy Code
(including special provisions related to
municipalities and other public entities), and laws,
if any, which may be enacted by Congress or state
legislatures extending the time for payment of
principal or interest, or both, or imposing other
constraints upon enforcement of such obligations.
There is also the possibility that, as a result of
litigation or other conditions, the power, ability or
willingness of issuers to meet their obligations for
the payment of interest and principal on their New
York tax-exempt securities may be materially
affected.

From time to time, proposals have been introduced
before Congress for the purpose of restricting or
eliminating the federal income tax exemption for
interest on debt obligations issued by states and
their political subdivisions. Federal tax laws limit
the types and amounts of tax-exempt bonds issuable
for certain purposes, especially industrial
development bonds and private activity bonds. Such
limits may affect the future supply and yields of
these types of New York tax-exempt securities.
Further proposals limiting the issuance of tax-exempt
bonds may well be introduced in the future. If it
appeared that the availability of New York tax-exempt
securities for investment by a fund and the value of
the fund's portfolio could be materially affected by
such changes in law, the Trustees would reevaluate
its investment objective and policies and consider
changes in the structure of the fund or its
dissolution.

INVESTMENT RESTRICTIONS

AS FUNDAMENTAL INVESTMENT RESTRICTIONS, WHICH MAY NOT
BE CHANGED WITHOUT A VOTE OF A MAJORITY OF ITS
OUTSTANDING VOTING SECURITIES, A FUND MAY NOT AND
WILL NOT:

(1) Borrow money in excess of 10% of the value
(taken at the lower of cost or current value) of its
total assets (not including the amount borrowed) at
the time the borrowing is made, and then only from
banks as a temporary measure to facilitate the
meeting of redemption requests (not for leverage)
which might otherwise require the untimely
disposition of portfolio investments or for
extraordinary or emergency purposes. Such borrowings
will be repaid before any additional investments are
purchased.

(2) Underwrite securities issued by other persons
except to the extent that, in connection with the
disposition of its portfolio investments, it may be
deemed to be an underwriter under certain federal
securities laws.

(3a) (Income and Money Market Funds only) Purchase
or sell real estate, although it may purchase
securities of issuers that deal in real
estate, securities that are secured by
interests in real estate, and securities that
represent interests in real estate, and it may
acquire and dispose of real estate or interests in
real estate acquired through the exercise of its
rights as a holder of debt obligations secured by
real estate or interests therein.

(3b) (Opportunities Fund only) Purchase or sell real
estate, although it may purchase securities of
issuers which deal in real estate, securities which
are secured by interests in real estate, and
securities representing interests in real estate, and
it may acquire and dispose of real estate or
interests in real estate acquired through the
exercise of its rights as a holder of debt
obligations secured by real estate or interests
therein.

(4a) (Income and Opportunities Funds only) Purchase
or sell commodities or commodity contracts, except
that the fund may purchase and sell financial futures
contracts and options and may enter into foreign
exchange contracts and other financial transactions
not involving physical commodities.

(4b) (Money Market Fund only) Purchase or sell
commodities or commodity contracts except financial
futures contracts and related options.

(5) Make loans, except by purchase of debt
obligations in which the fund may invest consistent
with its investment policies, by entering into
repurchase agreements, or by lending its portfolio
securities.

(6a) (Income Fund only) With respect to 75% of its
total assets, invest in the securities of any issuer
if, immediately after such investment, more than 5%
of the total assets of the fund (taken at current
value) would be invested in the securities of such
issuer; provided that this limitation does not apply
to obligations issued or guaranteed as to interest or
principal by the U.S. government or its agencies or
instrumentalities.

(6b) (Opportunities and Money Market Funds only)
With respect to 50% of its total assets, invest in
the securities of any issuer if, immediately after
such investment, more than 5% of the total assets of
the fund (taken at current value) would be invested
in the securities of such issuer; provided that this
limitation does not apply to obligations issued or
guaranteed as to interest or principal by the U.S.
government or its agencies or instrumentalities.

(7a) (Income Fund and Money Market Funds only)
Purchase securities (other than securities of the
U.S. government, its agencies or instrumentalities or
tax-exempt securities, except tax-exempt securities
backed only by the assets and revenues of
nongovernmental issuers) if, as a result of such
purchase, more than 25% of the fund's total assets
would be invested in any one industry.

(7b) (Opportunities Fund only) Purchase securities
(other than securities of the U.S. government, its
agencies or instrumentalities or New York tax-exempt
securities, except obligations backed only by the
assets and revenues of nongovernmental issuers) if,
as a result of such purchase, more than 25% of the
fund's total assets would be invested in any one
industry.

(8a) (Income Fund only) With respect to 75% of its
total assets, acquire more than 10% of the
outstanding voting securities of any issuer.

(8b) (Opportunities and Money Market Funds only)
With respect to 50% of its total assets, acquire more
than 10% of the outstanding voting securities of any
issuer.

(9a) (Income Fund only) Issue any class of
securities that is senior to the fund's shares
of beneficial interest.

(9b) (Opportunities and Money Market Funds only)
Issue any class of securities that is senior
to the fund's shares of beneficial interest, except
for permitted borrowings.

Although certain of each fund's fundamental
investment restrictions permit the fund to borrow
money to a limited extent, the funds do not currently
intend to do so and did not do so last year.

The Investment Company Act of 1940 provides that a
"vote of a majority of the outstanding voting
securities" of a fund means
the affirmative vote of the lesser of (1) more than
50% of the outstanding fund shares, or (2) 67% or
more of the shares present at a meeting if more than
50% of the outstanding fund shares of are represented
at the meeting in person or by proxy.
The Money Market Fund has no present intention of
engaging in options or futures transactions and the
Income Fund has no present intention of selling
options, as addressed in fundamental investment
restrictions (4a) and (4b).
IT IS CONTRARY TO THE PRESENT POLICY OF EACH FUND,
WHICH POLICY MAY BE CHANGED WITHOUT SHAREHOLDER
APPROVAL, TO:
Invest in (a) securities which are not readily
marketable, (b) securities restricted as to resale
(excluding securities determined by the Trustees (or
the person designated by the Trustees to make such
determinations) to be readily marketable), and (c)
repurchase agreements maturing in more than seven
days, if, as a result, more than 15% of the fund's
net assets (taken at current value) would be invested
in securities described in (a), (b) and (c) above.
-----------------
All percentage limitations on investments (other than

pursuant to the non-fundamental restriction) will

apply at the time of the making of an investment and

shall not be considered violated unless an excess or

deficiency occurs or exists immediately after and as

a result of such investment.

-------------------

CHARGES AND EXPENSES

MANAGEMENT FEES

Each fund pays a quarterly fee to Putnam Management
based on the average net assets of that fund, as
determined at the close of each business day during
the quarter, at the following rates expressed as a
percentage of each fund's average net assets:

FUND NAME CONTRACT DATE RAT ES

Income Fund 01/20/97 0.60% of
the first
$500 mill ion
of average net
asse ts,
0.50% of the next
$500 million, 0.45%
of the next $500
million, 0.40% of
the next $5
billi on,
0.375% of the next
$5 billi on,
0.355% of the next
$5 billi on,
0.340% of the next
$5 billi on,
0.33% of any amount
thereaft er.

Prior to January 20,
1997: 0.60% of the
first $500 million
of average net
asse ts,
0.50% of the next
$500 million, 0.45%
of the next $500
million, and 0.40%
of any amount
thereaft er.

Opportunities Fund 01/20/97 0.60% of
the first
$500 mi llion
of average net
as sets,
0.50% of the next
$500 million, 0.45%
of the next $500
million, 0.40% of
the next $5
bil lion,
0.375% of the next
$5 bil lion,
0.355% of the next
$5 bil lion,
0.340% of the next
$5 billion, and
0.33% of any amount
therea fter.

Prior to January 20,
1997:
0.60% of the first
$500 million of
average net
as sets,
0.50% of the next
$500 mil
lion,
0.45% of the next
$500 million, and
0.40% of any amount
over $1.5 bil
lion.

Money Market Fund 01/20/97 0.45% of
the first
$500 million of
average net
assets,
0.35% of the next
$500 million, 0.30%
of the next $500
million, 0.25% of
the next $5 b
illion,
0.225% of the next
$5 b illion,
0.205% of the next
$5 b illion,
0.19% of the next $5
b illion,
and 0.18% of any
amount ther
eafter.

Prior to January 20,
1997, 0.45% of the
first $500 million
of average net
assets,
0.35% of the next
$500 million, 0.30%
of the next $500
million, and 0.25%
of any amount
ther eafter.

For the past three fiscal years, pursuant to the
management contracts then in effect, each fund
incurred the followi ng fees:

FISCAL MA
NAGEMENT YEA R
FEE PAID
------ ----
- - - ------

Income Fund
199 7 $9,766,704
199 6
$10,240,984 19
95$10,485,165

Opp ortunities Fund
1998 $1,386,191
1997$1,286,58 9

1996$1,259,7 30
Money Market Fund
1997
$190,79
5
1996
$192,3 <
/R> 77
1995
$199,

</
R> 969

BROKERAGE COMMISSI

ONS

Most purchases and sales of portfolio investments are
with underwriters of, or dealers in, New York tax-
exempt securities and other tax-exempt securities,
acting as principal. Accordingly, the funds will not
ordinarily pay significant brokerage commissions.
The following table shows brokerage commissions paid
during the fiscal periods indicat ed.

FISCAL
BROKE RAGE
YEAR
COMMIS
SIONS
------ -----
- - - - ----
- - - --

Inco me Fund
1997
$ 922,379
1996
$176,410
1995
$563,069

Opportun ities Fund
1998
$16,614
1997
$11,45 3
1996
$42,6 92

Money Market Fund
1997
$ 0
1996
$0
1995 $0

The following table shows transactions placed with
brokers and dealers during the most recent fiscal
year to recognize research, statistical and quotation
services received by Putnam Management considered to
be particularly useful to it and its affiliat
es:

DOLLAR VALUE PERCE NT OF
OF THESE TOTAL
AM OUNT OF
TRANSACTIONS
TRANSACTIONSCOM MISS IONS
------------ -------------
----------

Income Fund$922 ,379 0%
$0.00
Opportunities Fund $0.00 0%
$0.0 0
Money Market Fund $0.00 0%
$ 0.00

ADMINISTRATIVE EXPENSE REIMBURSE MENT

The funds reimbursed Putnam Management in the
following amounts for administrative services during
fiscal 1997 for the Income and Money Market funds
and during fiscal 1998 for the Opportunities
fund , including the following amounts for
compensation of certain fund officers and
contributions to the Putnam Investments, Inc. Profit
Sharing Retirement Plan for their benefit:

PORTION
OF TOTAL

REIMBURSEMENT FOR COMPENSATION
TOTAL
AN D
REIMBURSEMENT
CONTRIBUTIO NS -------
------ -------------
---

Income Fund $20,651 $1
8,162
Opportunities Fund $6,443
$5,451
Money Market Fund $3,837 $3,3
75

TRUSTEE FE ES

Each Trustee receives a fee for his or her services.
Each Trustee also receives fees for serving as
Trustee of other Putnam funds. The Trustees
periodically review their fees to assure that such
fees continue to be appropriate in light of their
responsibilities as well as in relation to fees paid
to trustees of other mutual fund complexes. The
Trustees meet monthly over a two-day period, except
in August. The Compensation Committee, which
consists solely of Trustees not affiliated with
Putnam Management and is responsible for recommending
Trustee compensation, estimates that Committee and
Trustee meeting time together with the appropriate
preparation requires the equivalent of at least three
business days per Trustee meeting. The following
table shows the year each Trustee was first elected a
Trustee of the Putnam funds, the fees paid to each
Trustee by each fund for fiscal 1997 for the
Income and Money Market funds and fiscal 1998 for the
Opportunities fund and the fees paid to each
Trustee by all of the Putnam funds during calendar
1997:COMPENSATION TABLE
<TABLE><CAPTION>

<S> <C>
<C> <C> <C>
<C> <C>
Aggregate Aggregate Aggregate Pension or Estimated Tota l
compensation compensation compensation retirement annual
benefitscompen sation from the from the from the benefits accrued from all from
all
Opportunities Income Money Market as part of Pu tnam funds Putnam
TRUSTEES/YEAR Fund(1) Fund(1) Fund(1) fund expenses(2) upon r etirement(3)
funds(4)
- - - -----------------------------------------------------------------------------------------------------------
- - - -----------
Jameson A. Baxter/1994 $642 $2,063 $244 $145 $85,646
$172,29 1
Hans H. Estin/1972 565 2,042 242 291 85,646
171,291
John A. Hill/1985 (5) 559 2,053 243 110 93,146
(6) 170,791
Ronald J. Jackson/1996 (5) 621 2,063 244 75 85,646
94,80 7
Paul L. Joskow/1997 (8) 517 121 13 9 ____ ----
Elizabeth T. Kennan/1992 621 2,043 242 156 85,646 171,29 1
Lawrence J. Lasser/1992 553 2,025 240 117 85,646 169,79 1
John H. Mullin III/1997 (8) 517 121 13 14 ____ ____
Robert E. Patterson/1984 562 2,063 244 88 85,646 182,29 1
Donald S. Perkins/1982 565 2,063 244 315 85,646 170,29 1
William F. Pounds/1971 596 (6) 2,448 (6) 252 (6) 328 98,146 197,29 2
George Putnam/1957 556 2,054 243 333 85,646 171,29 1
George Putnam, III/1984 562 2,044 242 58 85,646 171,29 1
A.J.C. Smith/1986 547 2,003 238 197 85,646 169,79 1
W. Thomas Stephens/1997 (7) 567 385 43 13 ____ ____
W. Nicholas Thorndike/1992 565 2,063 244 225 85,646 181,29 1
</TABLE>
(1) Includes an annual retainer and an attendance fee for each meeting
attende d.
(2) The Trustees approved a Retirement Plan for Trustees of the Putnam funds on
October 1, 1996. Prior to that date, voluntary retirement benefits
were
paid to certain retired Truste es.
(3) Assumes that each Trustee retires at the normal retirement
date. Estimated benefits for each Trustee are based on Trustee
fee rates in effect during
calendar 1998 .
(4) As of December 31, 1997, there were 101 funds in the Putnam
family . (5) Includes compensation deferred pursuant to a
Trustee Compensation Deferral
Plan.
(6) Includes additional compensation for service as Vice
Chairman of
the Putnam funds.
(7) Elected as a Trustee in September 1997
(8) Elected as a Trustee in November 1997
Under a Retirement Plan for Trustees of the
Putnam funds (the "Plan"), each Trustee who retires
with at least five years of service as a Trustee of
the funds is entitled to receive an annual retirement
benefit equal to one-half of the average annual
compensation paid to such Trustee for the last three
years of service prior to retirement. This
retirement benefit is payable during a Trustee's
lifetime, beginning the year following retirement,
for a number of years equal to such Trustee's years
of service. A death benefit is also available under
the Plan which assures that the Trustee and his or
her beneficiaries will receive benefit payments for
the lesser of an aggregate period of (i) ten years or
(ii) such Trustee's total years of service.

The Plan Administrator (a committee comprised of
Trustees that are not "interested persons" of the
fund, as defined in the Investment Company Act of
1940) may terminate or amend the Plan at any time,
but no termination or amendment will result in a
reduction in the amount of benefits (i) currently
being paid to a Trustee at the time of such
termination or amendment, or (ii) to which a current
Trustee would have been entitled had he or she
retired immediately prior to such termination or
amendment.

For additional information concerning the Trustees,
see "Management" in Part II of this SAI.

SHARE OWNERSHIP

At October 31, 1998 , the officers and
Trustees of each fund as a group owned less than 1%
of the outstanding shares of each fund or, in the
case of the Income and Opportunities Funds, any class
of each fund, and, except as noted below, to the
knowledge of each fund no person owned of record or
beneficially 5% or more of the shares of such fund or
any class of such fund.

SHAREHOLDER NAME
PERCENTAG E CLASS AND
ADDRESS OW NED
----- -------------------- ---
-----

Incom e Fund
- - - ------ -----
A Merrill
Lynch, Pierce
12.40%
Fenner &
Smith*

B Merrill
Lynch, Pierce
8.10%
Fenner &
Smith*

M NFSC FEBO
25.20%
1 World
Financial
Center 200
Liberty St.
New
York, NY 10281

M
Siupeli Malamala
5.20%
1000
Fulton
Ave.
New
York
Jets
Hemstead, NY 11550
M Concetta Lacorte
13.10%
John A. Lacorte, Joann
Ambrosio & Ann
Marie Derario
JTWROS
9005
165thAvenue
Howard Beach,
NY 11414

Opportunities Fund
- - - ------------------
A Merrill Lynch,
Pierce
8.60%
Fenner & Smith*

B Merrill Lynch,
Pierce
6.00%
Fenner & Smith*

M Anthony Zeoli &
22.20%
Matilda Zeoli
623 Smith St.
Peekskill, NY
10566

M Donaldson
Lufkin Jenrette
15.20%
P.O. Box 2050
Jersey City,
NJ

M NFSC FEBO
7.30%
1 World
Financial
Center 200
Liberty St.
New York, NY
10281

M May S. King &
5.80%
Nancy Proto-
Robinson
68 E. Hartsdale
Ave. Apt. 4D
Hartsdale, NY
10530-2718

Money Market Fund
- - - -----------------

DISTRIBUTION FEES

During fiscal 1997, the Income and during fiscal
1998 the Opportunities Funds paid the following
12b-1 fees to Putnam Mutual Funds:

CLASS A CLASS B
CLAS S M -------
------- --- ----

Income Fund $3,554,079$1,915,549
$8,035
Opportunities Fund $332,410 $530,607
$11,987

CLASS A SALES CHARGES AND CONTINGENT DEFERRED SALES
CHARGES

Putnam Mutual Funds received sales charges with
respect to class A shares in the following amounts
during the periods indicated:

SALES CHARGES
RETAINED BY
PUTNAMCONTINGEN T TOTAL
MUTUAL FUNDS DEFER RED
FRONT-END AFTER
SALES
SALES CHARGES DEALER CONCESSIONS
CHARGES
------------------------------- -
- - - -------

I ncome Fund

F iscal year
- - - -- ---------
1997 $1,302,434 $95 ,446
$16,199
1996$2,020,83 2 $136,250
$703
1995$2,445,5 43 $165,649
$3,86 4

Opportuni ties Fund

Fis cal year
- - - -----------
1998 $431,479 $28,426
$0
1997 $570,843 $38,748
$38, 353
1996 $728,943 $68, 869
$0

CLASS B CONTINGENT DEFERRED SALES CHARGES

Putnam Mutual Funds received contingent deferred
sales charges upon redemptions of class B shares
in the following amounts during the periods
indicated:

CONTINGENT
DEFERRE
D SALES
CHARGES
----------
- - - ---------
Income Fund
Fiscal year
- - - -----------
1997
$446,82 2
1996
$558,3 63
1995
$567, 167

Opportunities F und

Fiscal y ear
- - - -------- ---
1998
$165,456
1997
$153,20 0
1996
$106,5 81

CLASS M SALES CHARGES

Putnam Mutual Funds received sales charges with
respect to class M shares in the following amounts
during the periods indicated:

SALES
CHARGES
RETAINED BY
PUTNAM
MUTUA
L
FUNDS
TOTAL
AFTE R
SALES CHARGESDEALER
CONCESSIO NS ------------
- --------------- ---

Income F und
1997 $5,740
$947
1996 $9,9 55
$640

Opportunit ies Fund
1998
$7,227 $651
1997 $9,281
$9 00

INVESTOR SERVICING AND CUSTODY FEES AND EXPENSES

During the 1997 fiscal year, the Income fund and
Money Market fund and, during the 1998 fiscal year,
the Opportunities fund, incurred the following
fees and out-of-pocket expenses for investor
servicing and custody services provided by Putnam
Fiduciary Trust Company:

Income Fund $1,637,18 1
Opportunities Fund
$329,116
Money Market Fund
$88,61 6

INVESTMENT PERFORMANC E
STANDARD PERFORMANCE MEASURE S

INCOME FUN D
(for periods ended September 30, 1998)
(unaudited)

Class A Class B
Clas s M Inception date: 9/2/83
1/4/93 4/ 10/95

AVERAGE A NNUAL
TOTAL R ETURN

1 year 2.27%
1.69%3.61%
5 years 4.01% 4.02%
3.99%
10 years 7.22% 6.89%

6.94%

YIELD

30-day Yield 3.82% 3.36%

3.59%

Taxable equivalent yield* 6.79% 5.97%
6.38% Taxable equivalent yield** 7.08%
6.23% 6.66%

OPPORTUNITIES FUND
(for periods ended September 30, 1998)

Class A Class B
Clas s M Inception date: 11/7/90
2/1/94 2/ 10/95

AVERAGE A NNUAL
TOTAL R ETURN

1 year 2.48% 1.86%3.69%
5 years 5.26% 5.22%
5.17%
Life of fund 6.96% 6.85%
6.75%

YIELD

30-day yield 3.70%3.25% 3.48%

Taxable equivalent
yield* 6.58% 5.78%
6.19%

Taxable equivalent
yield** 6.86% 6.03%
6.45%

MONEY MARKET FUND ++
(for period ended September 30, 1998)
(unaudited) Inception date: 10/26/87

YIELD

7-day tax-exempt
yield 2.88%
Taxable equivalent
yield* 5.12 *
Taxable equivalent
yield** 5.34%

Tax-exempt
effective yield 2.92%

Taxable equivalent
yield* 5.19%
Taxable equivalent
yield** 5.42%

* Assumes the maximum combined 43.74% federal and
state tax rate. ** Assumes the maximum combined
46.08% federal, state and New York city tax rate.
Results for investors subject to lower tax rates
would not be as advantageous.
++ Yield more closely reflects the current earnings
of the money market fund than total return.
Data represent past performance and are not
indicative of future results. Total return and yield
for class A and class M shares for the Income and
Opportunities Funds reflect the deduction of the
maximum sales charge of 4.75% and 3.25%,
respectively. Total return at CDSC for class B
shares for the Income and Opportunities Funds reflect
the deduction of the applicable contingent deferred
sales charge ("CDSC"). The maximum class B CDSC is
5.0%. See "Standard performance measures" in Part II
of this SAI for information on how performance is
calculated. Past performance is no guarantee of
future results.

QUALIFICATION AND REGISTRATION FEES (THE MONEY MARKET
FUND ONLY)

The Money Market Fund pays all fees for its
qualification or registration as an issuer or broker-
dealer or for registration of its shares in states in
connection with such qualifications or registrations.

AMORTIZED COST VALUATION AND DAILY DIVIDENDS (THE
MONEY MARKET FUND ONLY)

The valuation of the Money Market Fund's portfolio
instruments at amortized cost is permitted in
accordance with Securities and Exchange Commission
Rule 2a-7 and certain procedures adopted by the
Trustees. The amortized cost of an instrument is
determined by valuing it at cost originally and
thereafter amortizing any discount or premium from
its face value at a constant rate until maturity,
regardless of the effect of fluctuating interest
rates on the market value of the instrument.
Although the amortized cost method provides certainty
in valuation, it may result at times in
determinations of value that are higher or lower than
the price the Money Market Fund would receive if the
instruments were sold. Consequently, in the absence
of circumstances described below, changes in the
market value of portfolio instruments during periods
of rising or falling interest rates will not be
reflected either in the computation of net asset
value of the Money Market Fund's portfolio or in the
daily computation of net income. Under the
procedures adopted by the
Trustees, the Money Market Fund must maintain a
dollar-weighted average portfolio maturity of 90 days
or less, purchase only instruments having remaining
maturities of 397 days or less from the time of
investment and invest in securities determined to be
of high quality with minimal credit risks. The
Trustees have also established procedures designed to
stabilize, to the extent reasonably possible, the
Money Market Fund's price per share as computed for
the purpose of distribution, redemption and
repurchase at $1.00. Such procedures will include
review of the Money Market Fund's portfolio holdings
by the Trustees, at such intervals as they may deem
appropriate, to determine whether the Money Market
Fund's net asset value calculated by using readily
available market quotations deviates from $1.00 per
share, and, if so, whether such deviation may result
in material dilution or is otherwise unfair to
existing shareholders. In the event the Trustees
determine that such a deviation exists, they will
take such corrective action as they regard as
necessary and appropriate, including the sale of
portfolio instruments prior to maturity to realize
capital gains or losses or to shorten average
portfolio maturity; withholding dividends; redeeming
of shares in kind; or establishing a net asset value
per share by using readily available market
quotations.
Since the net income of the Money Market Fund is
declared as a dividend each time it is determined,
the net asset value per share of the Money Market
Fund normally remains at $1.00 per share immediately
after such determination and dividend declaration.
Any increase in the value of a shareholder's
investment in the Money Market Fund representing the
reinvestment of dividend income is reflected by an
increase in the number of shares of the Money Market
Fund in the shareholder's account on the tenth day of
the next month (or, if that day is not a business
day, on the next business day). It is expected that
the Money Market Fund's net income will be positive
each time it is determined. However, if because an
unexpected liability must be accrued or a loss
realized or for any other reason the net income of
the Money Market Fund determined at any time is a
negative amount, each shareholder's pro rata share of
such negative amount will constitute a liability of
the shareholder to the Money Market Fund. Any such
liability will be paid at such times and in such
manner as the Trustees may determine by reducing the
amount of such shareholder's accrued dividend
account, by reducing the number of shares in a
shareholder's account, or otherwise.

EQUIVALENT YIELDS: TAX-EXEMPT VERSUS TAXABLE
SECURITIES

The tables below show the effect of the tax status of New York tax-
exempt securities on the effective yield received by their
individual holders, in the case of table 1, under the federal income
tax and New York State personal income tax laws currently in effect
for 1997 and, in the case of table 2, under the federal, New York
State and New York City personal income tax laws currently in effect
for 1997. The tables give the approximate yield a taxable security
must earn at various income levels to produce after-tax yields
equivalent to those of New York tax-exempt securities yielding from
2.0% to 8.0%.
<TABLE><CAPTION>
TABLE 1
<S> <C>
<C>
<C> <C> <C> <C>
<C> <C>
- - - --------------------------------------------------------------------
- - - ----------------------------------------
1997 COMBINED
TAXABLE INCOME* NEW YORK STATE
NEW
YORK TAX-EXEMPT SECURITY YIELD OF
------------------------------ AND FEDERAL -----------------
- - - --------------------------------------------------------------------
SINGLE JOINT TAX RATE** 2.0% 4.0% 6.0% 8.0%
- - - -------------------------------------------------------------------------------------------------
- - - -----------
EQUIVALENT TAXABLE YIELD
IF DOUBLE TAX- EXEMPT
$0 - 8,000 $0 - 16,000 18.40% 2.45% 4.90% 7.35%
9.80%
8,001 - 11,000 16,001 - 22,000 18.83% 2.45% 4.93% 7.39%
9.86%
11,001 - 13,000 22,001 - 26,000 19.46% 2.48% 4.97% 7.45%
9.93%
13,001 - 20,000 26,001 - 40,000 2 0.02% 2.50% 5.00% 7.50%
10.00%
20,001 - 24,650 40,001 - 41,200 20.82% 2.53% 5.05% 7.58%
10.10%
24,651 - 59,750 41, 201 - 99,600 32.93% 2.98% 5.96% 8.95%
11.93%
59,751 - 124,650*** 9 9,601 - 151,750*** 35.73% 3.11% 6.22% 9.34%
12.45%
124,651 - 271,050*** 151,751 - 271,050*** 40.38% 3.35% 6.71%
10.06%
13.42%
o ver 271,050*** over 271,050*** 43.74% 3.55 7.11%
10.66%
14.22%

</TABLE>

<TABLE><CAPTION>
TA BLE 2
<S> <C> <C>
<C> <C> <C> <C>
<C>
- - - --------------------------------------------------------------------------------
- - - -----------------------------
1997 COMB INED
NEW YORK ST ATE,
TAXABLE INCOME*NEW YORK CITY NEW YORK TAX-EXEMPT SECURITY Y IELD OF ---------
--------------------- AND FEDERAL -----------------
- - - -----------------------------
SINGLEJOINT TAX RATE** 2.0% 4.0% 6.0%
8.0%
- - - -----------------------------------------------------------------------------------
- - - -------------------------
EQUIVALENT TAXABLE YIELD IF TR
IPLE TAX-EXEMPT

$0 - 8,000 $0 - 14,000 21.02% 2.53% 5.06%
7.60% 10.13%
8,001 - 8,400 ---- 21.44% 2.55% 5.09%
7.64% 10.18%
---- 14,401- 16,000 21.51% 2.55% 5.10%
7.64% 10.19%
8,401 - 11,000 16,001 - 21,600 21.94% 2.56% 5.12% 7.6
9% 10.25%
11,001 - 12,000 ---- 22.57% 2.58% 5.17%
7.75% 10.33%
---- 21,600 - 22,000 22.51% 2.58% 5.16%
7.74% 10.32%
12,001 - 13,000 22,001 - 26,000 23.15% 2.60% 5.21%
7.81% 10.41%
13,001 - 15,000 26,001 - 27,000 23.70% 2.62% 5.24%
7.86% 10.49%
15,001 - 20,001 27,001 - 40,000 23.75% 2.62% 6.25%
7.87% 10.49%
20,001 - 24,650 40,001 - 41,200 24.55% 3.65% 6.30%
7.95% 10.60%
24,651 - 25, 000 41,201 - 45,000 36.09% 2.13% 6.26%
9.39% 12.52%
25,001 - 50,000 45,001 - 90,000*** 36.10% 3.13% 6.26%
9.39% 12. 52%
50,001 - 59,750 90,001 - 99,600 36.14% 3.13% 6.26%
9.40 12.5 3%
59,751 - 124,650 99,601 -151,750 *** 38.80% 3.27% 6.54%
9.80% 1 3.07%
124,651- 271,051*** 151,751-271,050*** 43.24% 3.52% 7.05% 10.5
7% 14.09%
Over 271,051 Over 271,051 46.08% 3.73% 7.47%
11.20% 14.93%
</TABLE>[/R]
* This amount represents taxable income as defined in the
Internal Revenue Code of 1986, as amended (the "Code"). It
is assumed that the definition of taxable income
in the Code is the same as under the New York
State and City Personal Income Tax law.
However, New York State and City taxable income
may differ due to differences in exemptions,
itemized deductio ns, and other items.

** For federal tax purposes, these combined rates
reflect the
marginal rates on taxable income currently in effect
for
1997. These rates include the effect of
deducting state and, for the second table, state
and city taxes on your federal return. For New
York purposes, these combined rates reflect the
expected New York State and New York City
inco me tax rates for 1997.

*** The amount of taxable income in this bracket may
be affected by the phase-out of personal
exemptions and the limitation on itemized
deductions, based upon adjusted gross income,
under the Code. A supplemental New York State
tax is also phased in for New York adjusted
gross income between $100,000 and $150,000 and
fully eliminates the benefit of the lower
marginal brackets for taxpayers with New York
adjusted gross income of $150,000 or more. This
adjustment is not reflect ed in the
tables above.

Of course, there is no assurance that the funds will
achieve any specific tax-exempt yield. While it is
expected that the funds will invest principally in
obligations which pay interest exempt from federal
income tax and New York State and City personal
income taxes, other income received by the funds may
be taxable. The tables do not take into account any
state or local taxes payable on fund distributions
except for New York State and for table 2, New York
State and City
p ersonal income taxes .
ADDITIONAL OFFICERS

In addition to the persons listed as fund officers in
Part II of this SAI, each of the following persons is
also a Vice President of the fund indicated and
certain of the other Putnam funds, the total number
of which is noted parenthetically. Officers of
Putnam Management hold the same offices in Putnam
Management's parent company, Put nam
Investment s, Inc.

THE INCOME FUND

GARY N. COBURN (Age 50) (58 funds) Senior Managing
Director of Putnam Management.

JEROME J. JACOBS (Age 38) (26 funds) Managing
Director of Putnam Management. Prior to October,
1996, Mr. Jacobs was Principal at The
Vanguard Group.

WILLIAM J. CURTIN (Age 37) (58 funds) Managing
Director of Putnam Management. Prior to August,
1996, Mr. Curtin was Managing Direct or of
Lehman Brothers.

HOWARD K. MANNING (Age 43) (5 funds) Senior Vice
President of Putnam Management.

T HE OPPORTUNITIES FUND

GARY N. COBURN (Age 50) (58 funds) Senior Managing
Director of Putnam Management.

JEROME J. JACOBS (Age 38) (26 funds) Managing
Director of Putnam Management. Prior to October,
1996, Mr. Jacobs was Principal at The
Vanguard Group.

WILLIAM J. CURTIN (Age 37) (58 funds) Managing
Director of Putnam Management. Prior to August,
1996, Mr. Curtin was Managing Direct or of
Lehman Brothers.

HOWARD K. MANNING (Age 43) (5 funds) Senior Vice
President of Putnam Management .

THE MONEY MARKET FUND
GARY N. COBURN (Age 50) (58 funds) Senior Managing
Director of Putnam Management. Director, Put
nam Investments, Inc.
WILLIAM J. CURTIN (Age 37) (58 funds) Managing
Director of Putnam Management. Prior to August,
1996, Mr. Curtin was Managing Direct or of
Lehman Brothers.
WILLIAM F. MCGUE (Age 46) (4 funds) Managing Director
of Putnam Management.

INDEPENDENT ACCOUNTANTS AND FINANCIAL
STATEMENTS

THE INCOME FUND AN D THE MONEY MARKET FUND

PricewaterhouseCoopers L.L.P., One Post Office
Square, Boston, MA 02109 are the Income Fund and
Money Market Fund's independent accountants,
providing audit services, tax return review and other
tax consulting services and assistance and
consultation in connection with the review of various
Securities and Exchange Commission filings. The
Reports of Independent Accountants, financial
highlights and financial statements included in each
fund's Annual Report for the fiscal year ended
November 30, 1997, filed electronically on January
12, 1998 for the Income Fund (File No. 811-3741), and
January 9, 1998 for the Money Market Fund (File No.
811-5335), are incorporated by reference into this
SAI. The financial highlights included in the
prospectus and incorporated by reference into this
SAI and the financial statements incorporated by
reference into the prospectus and this SAI have been
so included and incorporated in reliance upon the
report of the independent accountants, given on their
authority as experts in auditing and accounting.

THE OPPORTUNITIES FUND

PricewaterhouseCoopers LLP, 160 Federal
Street, Boston, MA 02110 are the fund's independent
accountants, providing audit services, tax return
review and other tax consulting services and
assistance and consultation in connection with the
review of various Securities and Exchange Commission
filings. The Report of independent accountants,
financial highlights and financial statements
included in the fund's Annual Report for the fiscal
year ended September 30, 1998 , filed
electronically on November 19, 1998 (File No.
811-6176), are incorporated by reference into this
SAI. The financial highlights included in the
prospectus and incorporated by reference into this
SAI and the financial statements incorporated by
reference into the prospectus and this SAI have been
so included and incorporated in reliance upon the
Report of the independent accountants, given on their
authority as experts in auditing and accounting.

<PAGE>

10/22/98

TABLE OF CONTENTS

MISCELLANEOUS INVESTMENT PRACTICES II-1

TAXES II-33

MANAGEMENT II-39

DETERMINATION OF NET ASSET VALUE II-51

HOW TO BUY SHARES II-53

DISTRIBUTION PLANS II-66

INVESTOR SERVICES II-67

SIGNATURE GUARANTEES II-73

SUSPENSION OF REDEMPTIONS II-74

SHAREHOLDER LIABILITY II-74

STANDARD PERFORMANCE MEASURES II-74

COMPARISON OF PORTFOLIO PERFORMANCE II-76

DEFINITIONS II-82

THE PUTNAM FUNDS
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
PART II

The following information applies generally to your fund and to
the other Putnam funds. In certain cases the discussion applies
to some but not all of the funds or their shareholders, and you
should refer to your prospectus to determine whether the matter
is applicable to you or your fund. You will also be referred to
Part I for certain information applicable to your particular
fund. Shareholders who purchase shares at net asset value
through employer-sponsored defined contribution plans should also
consult their employer for information about the extent to which
the matters described below apply to them.

MISCELLANEOUS INVESTMENT PRACTICES

YOUR FUND'S PROSPECTUS STATES WHICH OF THE FOLLOWING INVESTMENT
PRACTICES ARE AVAILABLE TO YOUR FUND. THE FACT THAT YOUR FUND IS
AUTHORIZED TO ENGAGE IN A PARTICULAR PRACTICE DOES NOT
NECESSARILY MEAN THAT IT WILL ACTUALLY DO SO. YOU SHOULD
DISREGARD ANY PRACTICE DESCRIBED BELOW WHICH IS NOT MENTIONED IN
THE PROSPECTUS.

SHORT-TERM TRADING

In seeking the fund's objective(s), Putnam Management will buy or
sell portfolio securities whenever Putnam Management believes it
appropriate to do so. In deciding whether to sell a portfolio
security, Putnam Management does not consider how long the fund
has owned the security. From time to time the fund will buy
securities intending to seek short-term trading profits. A
change in the securities held by the fund is known as "portfolio
turnover" and generally involves some expense to the fund. This
expense may include brokerage commissions or dealer markups and
other transaction costs on both the sale of securities and the
reinvestment of the proceeds in other securities. If sales of
portfolio securities cause the fund to realize net short-term
capital gains, such gains will be taxable as ordinary income. As
a result of the fund's investment policies, under certain market
conditions the fund's portfolio turnover rate may be higher than
that of other mutual funds. Portfolio turnover rate for a fiscal
year is the ratio of the lesser of purchases or sales of
portfolio securities to the monthly average of the value of
portfolio securities - excluding securities whose maturities at
acquisition were one year or less. The fund's portfolio turnover
rate is not a limiting factor when Putnam Management considers a
change in the fund's portfolio.

Convertible Securities. Convertible securities include bonds,
debentures, notes, preferred stocks and other securities that may
be converted into or exchanged for, at a specific price or
formula within a particular period of time, a prescribed amount
of common stock or other equity securities of the same or a
different issuer. Convertible securities entitle the holder to
receive interest paid or accrued on debt or dividends paid or
accrued on preferred stock until the security matures or is
redeemed, converted or exchanged.

The market value of a convertible security is a function of its
"investment value" and its "conversion value." A security's
"investment value" represents the value of the security without
its conversion feature (i.e., a nonconvertible fixed income
security). The investment value may be determined by reference
to its credit quality and the current value of its yield to
maturity or probable call date. At any given time, investment
value is dependent upon such factors as the general level of
interest rates, the yield of similar nonconvertible securities,
the financial strength of the issuer and the seniority of the
security in the issuer's capital structure. A security's
"conversion value" is determined by multiplying the number of
shares the holder is entitled to receive upon conversion or
exchange by the current price of the underlying security.

If the conversion value of a convertible security is
significantly below its investment value, the convertible
security will trade like nonconvertible debt or preferred stock
and its market value will not be influenced greatly by
fluctuations in the market price of the underlying security.
Conversely, if the conversion value of a convertible security is
near or above its investment value, the market value of the
convertible security will be more heavily influenced by
fluctuations in the market price of the underlying security.

The fund's investments in convertible securities may at times
include securities that have a mandatory conversion feature,
pursuant to which the securities convert automatically into
common stock or other equity securities at a specified date and a
specified conversion ratio, or that are convertible at the option
of the issuer. Because conversion of the security is not at the
option of the holder, the fund may be required to convert the
security into the underlying common stock even at times when the
value of the underlying common stock or other equity security has
declined substantially.

The fund's investments in convertible securities, particularly
securities that are convertible into securities of an issuer
other than the issuer of the convertible security, may be
illiquid. The fund may not be able to dispose of such securities
in a timely fashion or for a fair price, which could result in
losses to the fund.

LOWER-RATED SECURITIES

The fund may invest in lower-rated fixed-income securities
(commonly known as "junk bonds"), to the extent described in the
prospectus. The lower ratings of certain securities held by the
fund reflect a greater possibility that adverse changes in the
financial condition of the issuer or in general economic
conditions, or both, or an unanticipated rise in interest rates,
may impair the ability of the issuer to make payments of interest
and principal. The inability (or perceived inability) of issuers
to make timely payment of interest and principal would likely
make the values of securities held by the fund more volatile and
could limit the fund's ability to sell its securities at prices
approximating the values the fund had placed on such securities.
In the absence of a liquid trading market for securities held by
it, the fund at times may be unable to establish the fair value
of such securities.

Securities ratings are based largely on the issuer's historical
financial condition and the rating agencies' analysis at the time
of rating. Consequently, the rating assigned to any particular
security is not necessarily a reflection of the issuer's current
financial condition, which may be better or worse than the rating
would indicate. In addition, the rating assigned to a security
by Moody's Investors Service, Inc. or Standard & Poor's (or by
any other nationally recognized securities rating organization)
does not reflect an assessment of the volatility of the
security's market value or the liquidity of an investment in the
security. See the prospectus or Part I of this SAI for a
description of security ratings.

Like those of other fixed-income securities, the values of lower-
rated securities fluctuate in response to changes in interest
rates. A decrease in interest rates will generally result in an
increase in the value of the fund's assets. Conversely, during
periods of rising interest rates, the value of the fund's assets
will generally decline. The values of lower-rated securities may
often be affected to a greater extent by changes in general
economic conditions and business conditions affecting the issuers
of such securities and their industries. Negative publicity or
investor perceptions may also adversely affect the values of
lower-rated securities. Changes by recognized rating services
in their ratings of any fixed-income security and changes in the
ability of an issuer to make payments of interest and principal
may also affect the value of these investments. Changes in the
value of portfolio securities generally will not affect income
derived from these securities, but will affect the fund's net
asset value. The fund will not necessarily dispose of a security
when its rating is reduced below its rating at the time of
purchase. However, Putnam Management will monitor the investment
to determine whether its retention will assist in meeting the
fund's investment objective(s).

Issuers of lower-rated securities are often highly leveraged, so
that their ability to service their debt obligations during an
economic downturn or during sustained periods of rising interest
rates may be impaired. Such issuers may not have more
traditional methods of financing available to them and may be
unable to repay outstanding obligations at maturity by
refinancing. The risk of loss due to default in payment of
interest or repayment of principal by such issuers is
significantly greater because such securities frequently are
unsecured and subordinated to the prior payment of senior
indebtedness.

At times, a substantial portion of the fund's assets may be
invested in securities of which the fund, by itself or together
with other funds and accounts managed by Putnam Management or its
affiliates, holds all or a major portion. Although Putnam
Management generally considers such securities to be liquid
because of the availability of an institutional market for such
securities, it is possible that, under adverse market or economic
conditions or in the event of adverse changes in the financial
condition of the issuer, the fund could find it more difficult to
sell these securities when Putnam Management believes it
advisable to do so or may be able to sell the securities only at
prices lower than if they were more widely held. Under these
circumstances, it may also be more difficult to determine the
fair value of such securities for purposes of computing the
fund's net asset value. In order to enforce its rights in the
event of a default of such securities, the fund may be required
to participate in various legal proceedings or take possession of
and manage assets securing the issuer's obligations on such
securities. This could increase the fund's operating expenses
and adversely affect the fund's net asset value. In the case of
tax-exempt funds, any income derived from the fund's ownership or
operation of such assets would not be tax-exempt. The ability of
a holder of a tax-exempt security to enforce the terms of that
security in a bankruptcy proceeding may be more limited than
would be the case with respect to securities of private issuers.
In addition, the fund's intention to qualify as a "regulated
investment company" under the Internal Revenue Code may limit the
extent to which the fund may exercise its rights by taking
possession of such assets.

Certain securities held by the fund may permit the issuer at its
option to "call," or redeem, its securities. If an issuer were
to redeem securities held by the fund during a time of declining
interest rates, the fund may not be able to reinvest the proceeds
in securities providing the same investment return as the
securities redeemed.

If the fund's prospectus describes so-called "zero-coupon" bonds
and "payment-in-kind" bonds as possible investments, the fund may
invest without limit in such bonds unless otherwise specified in
the prospectus. Zero-coupon bonds are issued at a significant
discount from their principal amount in lieu of paying interest
periodically. Payment-in-kind bonds allow the issuer, at its
option, to make current interest payments on the bonds either in
cash or in additional bonds. Because zero-coupon and payment-in-
kind bonds do not pay current interest in cash, their value is
subject to greater fluctuation in response to changes in market
interest rates than bonds that pay interest currently. Both zero-
coupon and payment-in-kind bonds allow an issuer to avoid the
need to generate cash to meet current interest payments.
Accordingly, such bonds may involve greater credit risks than
bonds paying interest currently in cash. The fund is required to
accrue interest income on such investments and to distribute such
amounts at least annually to shareholders even though such bonds
do not pay current interest in cash. Thus, it may be necessary
at times for the fund to liquidate investments in order to
satisfy its dividend requirements.

To the extent the fund invests in securities in the lower rating
categories, the achievement of the fund's goals is more dependent
on Putnam Management's investment analysis than would be the case
if the fund were investing in securities in the higher rating
categories. This may be particularly true with respect to tax-
exempt securities, as the amount of information about the
financial condition of an issuer of tax-exempt securities may not
be as extensive as that which is made available by corporations
whose securities are publicly traded.

INVESTMENTS IN MISCELLANEOUS FIXED-INCOME SECURITIES

Unless otherwise specified in the prospectus or elsewhere in this
SAI, if the fund may invest in inverse floating obligations,
premium securities, or interest-only or principal-only classes of
mortgage-backed securities (IOs and POs), it may do so without
limit. The fund, however, currently does not intend to invest
more than 15% of its assets in inverse floating obligations or
more than 35% of its assets in IOs and POs under normal market
conditions.

PRIVATE PLACEMENTS

The fund may invest in securities that are purchased in private
placements and, accordingly, are subject to restrictions on
resale as a matter of contract or under federal securities laws.
Because there may be relatively few potential purchasers for such
investments, especially under adverse market or economic
conditions or in the event of adverse changes in the financial
condition of the issuer, the fund could find it more difficult to
sell such securities when Putnam Management believes it advisable
to do so or may be able to sell such securities only at prices
lower than if such securities were more widely held. At times,
it may also be more difficult to determine the fair value of such
securities for purposes of computing the fund's net asset value.

LOAN PARTICIPATIONS

The fund may invest in "loan participations." By purchasing a
loan participation, the fund acquires some or all of the interest
of a bank or other lending institution in a loan to a particular
borrower. Many such loans are secured, and most impose
restrictive covenants which must be met by the borrower.

The loans in which the fund may invest are typically made by a
syndicate of banks, represented by an agent bank which has
negotiated and structured the loan and which is responsible
generally for collecting interest, principal, and other amounts
from the borrower on its own behalf and on behalf of the other
lending institutions in the syndicate and for enforcing its and
their other rights against the borrower. Each of the lending
institutions, including the agent bank, lends to the borrower a
portion of the total amount of the loan, and retains the
corresponding interest in the loan.

The fund's ability to receive payments of principal and interest
and other amounts in connection with loan participations held by
it will depend primarily on the financial condition of the
borrower. The failure by the fund to receive scheduled interest
or principal payments on a loan participation would adversely
affect the income of the fund and would likely reduce the value
of its assets, which would be reflected in a reduction in the
fund's net asset value. Banks and other lending institutions
generally perform a credit analysis of the borrower before
originating a loan or participating in a lending syndicate. In
selecting the loan participations in which the fund will invest,
however, Putnam Management will not rely solely on that credit
analysis, but will perform its own investment analysis of the
borrowers. Putnam Management's analysis may include
consideration of the borrower's financial strength and managerial
experience, debt coverage, additional borrowing requirements or
debt maturity schedules, changing financial conditions, and
responsiveness to changes in business conditions and interest
rates. Because loan participations in which the fund may invest
are not generally rated by independent credit rating agencies, a
decision by the fund to invest in a particular loan participation
will depend almost exclusively on Putnam Management's, and the
original lending institution's, credit analysis of the borrower.

Loan participations may be structured in different forms,
including novations, assignments, and participating interests.
In a novation, the fund assumes all of the rights of a lending
institution in a loan, including the right to receive payments of
principal and interest and other amounts directly from the
borrower and to enforce its rights as a lender directly against
the borrower. The fund assumes the position of a co-lender with
other syndicate members. As an alternative, the fund may
purchase an assignment of a portion of a lender's interest in a
loan. In this case, the fund may be required generally to rely
upon the assigning bank to demand payment and enforce its rights
against the borrower, but would otherwise be entitled to all of
such bank's rights in the loan. The fund may also purchase a
participating interest in a portion of the rights of a lending
institution in a loan. In such case, it will be entitled to
receive payments of principal, interest, and premium, if any, but
will not generally be entitled to enforce its rights directly
against the agent bank or the borrower, but must rely for that
purpose on the lending institution. The fund may also acquire a
loan participation directly by acting as a member of the original
lending syndicate.

The fund will in many cases be required to rely upon the lending
institution from which it purchases the loan participation to
collect and pass on to the fund such payments and to enforce the
fund's rights under the loan. As a result, an insolvency,
bankruptcy, or reorganization of the lending institution may
delay or prevent the fund from receiving principal, interest, and
other amounts with respect to the underlying loan. When the fund
is required to rely upon a lending institution to pay to the fund
principal, interest, and other amounts received by it, Putnam
Management will also evaluate the creditworthiness of the lending
institution.

The borrower of a loan in which the fund holds a participation
interest may, either at its own election or pursuant to terms of
the loan documentation, prepay amounts of the loan from time to
time. There is no assurance that the fund will be able to
reinvest the proceeds of any loan prepayment at the same interest
rate or on the same terms as those of the original loan
participation.

Corporate loans in which the fund may purchase a loan
participation are made generally to finance internal growth,
mergers, acquisitions, stock repurchases, leveraged buy-outs, and
other corporate activities. Under current market conditions,
most of the corporate loan participations purchased by the fund
will represent interests in loans made to finance highly
leveraged corporate acquisitions, known as "leveraged buy-out"
transactions. The highly leveraged capital structure of the
borrowers in such transactions may make such loans especially
vulnerable to adverse changes in economic or market conditions.
In addition, loan participations generally are subject to
restrictions on transfer, and only limited opportunities may
exist to sell such participations in secondary markets. As a
result, the fund may be unable to sell loan participations at a
time when it may otherwise be desirable to do so or may be able
to sell them only at a price that is less than their fair market
value.

Certain of the loan participations acquired by the fund may
involve revolving credit facilities under which a borrower may
from time to time borrow and repay amounts up to the maximum
amount of the facility. In such cases, the fund would have an
obligation to advance its portion of such additional borrowings
upon the terms specified in the loan participation. To the
extent that the fund is committed to make additional loans under
such a participation, it will at all times hold and maintain in a
segregated account liquid assets in an amount sufficient to meet
such commitments. Certain of the loan participations acquired by
the fund may also involve loans made in foreign currencies. The
fund's investment in such participations would involve the risks
of currency fluctuations described above with respect to
investments in the foreign securities.

MORTGAGE RELATED SECURITIES

The fund may invest in mortgage-backed securities, including
collateralized mortgage obligations ("CMOs") and certain stripped
mortgage-backed securities. CMOs and other mortgage-backed
securities represent a participation in, or are secured by,
mortgage loans.

Mortgage-backed securities have yield and maturity
characteristics corresponding to the underlying assets. Unlike
traditional debt securities, which may pay a fixed rate of
interest until maturity, when the entire principal amount comes
due, payments on certain mortgage-backed securities include both
interest and a partial repayment of principal. Besides the
scheduled repayment of principal, repayments of principal may
result from the voluntary prepayment, refinancing, or foreclosure
of the underlying mortgage loans. If property owners make
unscheduled prepayments of their mortgage loans, these
prepayments will result in early payment of the applicable
mortgage-related securities. In that event the fund may be
unable to invest the proceeds from the early payment of the
mortgage-related securities in an investment that provides as
high a yield as the mortgage-related securities. Consequently,
early payment associated with mortgage-related securities may
cause these securities to experience significantly greater price
and yield volatility than that experienced by traditional fixed-
income securities. The occurrence of mortgage prepayments is
affected by factors including the level of interest rates,
general economic conditions, the location and age of the mortgage
and other social and demographic conditions. During periods of
falling interest rates, the rate of mortgage prepayments tends to
increase, thereby tending to decrease the life of mortgage-
related securities. During periods of rising interest rates, the
rate of mortgage prepayments usually decreases, thereby tending
to increase the life of mortgage-related securities. If the life
of a mortgage-related security is inaccurately predicted, the
fund may not be able to realize the rate of return it expected.

Mortgage-backed securities are less effective than other types of
securities as a means of "locking in" attractive long-term
interest rates. One reason is the need to reinvest prepayments
of principal; another is the possibility of significant
unscheduled prepayments resulting from declines in interest
rates. These prepayments would have to be reinvested at lower
rates. As a result, these securities may have less potential for
capital appreciation during periods of declining interest rates
than other securities of comparable maturities, although they may
have a similar risk of decline in market value during periods of
rising interest rates. Prepayments may also significantly shorten
the effective maturities of these securities, especially during
periods of declining interest rates. Conversely, during periods
of rising interest rates, a reduction in prepayments may increase
the effective maturities of these securities, subjecting them to
a greater risk of decline in market value in response to rising
interest rates than traditional debt securities, and, therefore,
potentially increasing the volatility of the fund.

Prepayments may cause losses on securities purchased at a
premium. At times, some of the mortgage-backed securities in
which the fund may invest will have higher than market interest
rates and therefore will be purchased at a premium above their
par value. Unscheduled prepayments, which are made at par, will
cause the fund to experience a loss equal to any unamortized
premium.

CMOs may be issued by a U.S. government agency or instrumentality
or by a private issuer. Although payment of the principal of,
and interest on, the underlying collateral securing privately
issued CMOs may be guaranteed by the U.S. government or its
agencies or instrumentalities, these CMOs represent obligations
solely of the private issuer and are not insured or guaranteed by
the U.S. government, its agencies or instrumentalities or any
other person or entity.

Prepayments could cause early retirement of CMOs. CMOs are
designed to reduce the risk of prepayment for investors by
issuing multiple classes of securities, each having different
maturities, interest rates and payment schedules, and with the
principal and interest on the underlying mortgages allocated
among the several classes in various ways. Payment of interest
or principal on some classes or series of CMOs may be subject to
contingencies or some classes or series may bear some or all of
the risk of default on the underlying mortgages. CMOS of
different classes or series are generally retired in sequence as
the underlying mortgage loans in the mortgage pool are repaid.
If enough mortgages are repaid ahead of schedule, the classes or
series of a CMO with the earliest maturities generally will be
retired prior to their maturities. Thus, the early retirement of
particular classes or series of a CMO held by the fund would have
the same effect as the prepayment of mortgages underlying other
mortgage-backed securities. Conversely, slower than anticipated
prepayments can extend the effective maturities of CMOs,
subjecting them to a greater risk of decline in market value in
response to rising interest rates than traditional debt
securities, and, therefore, potentially increasing the volatility
of the fund.

Prepayments could result in losses on stripped mortgage-backed
securities. Stripped mortgage-backed securities are usually
structured with two classes that receive different portions of
the interest and principal distributions on a pool of mortgage
loans. The fund may invest in both the interest-only or "IO"
class and the principal-only or "PO" class. The yield to
maturity on an IO class of stripped mortgage-backed securities is
extremely sensitive not only to changes in prevailing interest
rates but also to the rate of principal payments (including
prepayments) on the underlying assets. A rapid rate of principal
prepayments may have a measurable adverse effect on the fund's
yield to maturity to the extent it invests in IOs. If the assets
underlying the IO experience greater than anticipated prepayments
of principal, the fund may fail to recoup fully its initial
investment in these securities. Conversely, POs tend to increase
in value if prepayments are greater than anticipated and decline
if prepayments are slower than anticipated.

The secondary market for stripped mortgage-backed securities may
be more volatile and less liquid than that for other mortgage-
backed securities, potentially limiting the fund's ability to buy
or sell those securities at any particular time.

SECURITIES LOANS

The fund may make secured loans of its portfolio securities, on
either a short-term or long-term basis, amounting to not more
than 25% of its total assets, thereby realizing additional
income. The risks in lending portfolio securities, as with other
extensions of credit, consist of possible delay in recovery of
the securities or possible loss of rights in the collateral
should the borrower fail financially. As a matter of policy,
securities loans are made to broker-dealers pursuant to
agreements requiring that the loans be continuously secured by
collateral consisting of cash or short - term debt obligations at
least equal at all times to the value of the securities on loan,
"marked-to-market" daily. The borrower pays to the fund an
amount equal to any dividends or interest received on securities
lent. The fund retains all or a portion of the interest received
on investment of the cash collateral or receives a fee from the
borrower. Although voting rights, or rights to consent, with
respect to the loaned securities may pass to the borrower, the
fund retains the right to call the loans at any time on
reasonable notice, and it will do so to enable the fund to
exercise voting rights on any matters materially affecting the
investment. The fund may also call such loans in order to sell
the securities.

FORWARD COMMITMENTS

The fund may enter into contracts to purchase securities for a
fixed price at a future date beyond customary settlement time
("forward commitments") if the fund sets aside, on the books and
records of its custodian, liquid assets in an amount sufficient
to meet the purchase price, or if the fund enters into offsetting
contracts for the forward sale of other securities it owns. In
the case of to-be-announced ("TBA") purchase commitments, the
unit price and the estimated principal amount are established
when the fund enters into a contract, with the actual principal
amount being within a specified range of the estimate. Forward
commitments may be considered securities in themselves, and
involve a risk of loss if the value of the security to be
purchased declines prior to the settlement date, which risk is in
addition to the risk of decline in the value of the fund's other
assets. Where such purchases are made through dealers, the fund
relies on the dealer to consummate the sale. The dealer's
failure to do so may result in the loss to the fund of an
advantageous yield or price. Although the fund will generally
enter into forward commitments with the intention of acquiring
securities for its portfolio or for delivery pursuant to options
contracts it has entered into, the fund may dispose of a
commitment prior to settlement if Putnam Management deems it
appropriate to do so. The fund may realize short-term profits or
losses upon the sale of forward commitments.

The fund may enter into TBA sale commitments to hedge its
portfolio positions or to sell securities it owns under delayed
delivery arrangements. Proceeds of TBA sale commitments are not
received until the contractual settlement date. During the time
a TBA sale commitment is outstanding, equivalent deliverable
securities, or an offsetting TBA purchase commitment deliverable
on or before the sale commitment date, are held as "cover" for
the transaction. Unsettled TBA sale commitments are valued at
current market value of the underlying securities. If the TBA
sale commitment is closed through the acquisition of an
offsetting purchase commitment, the fund realizes a gain or loss
on the commitment without regard to any unrealized gain or loss
on the underlying security. If the fund delivers securities
under the commitment, the fund realizes a gain or loss from the
sale of the securities based upon the unit price established at
the date the commitment was entered into.

REPURCHASE AGREEMENTS

The fund may enter into repurchase agreements up to the limit
specified in the prospectus. A repurchase agreement is a
contract under which the fund acquires a security for a
relatively short period (usually not more than one week) subject
to the obligation of the seller to repurchase and the fund to
resell such security at a fixed time and price (representing the
fund's cost plus interest). It is the fund's present intention
to enter into repurchase agreements only with commercial banks
and registered broker-dealers and only with respect to
obligations of the U.S. government or its agencies or
instrumentalities. Repurchase agreements may also be viewed as
loans made by the fund which are collateralized by the securities
subject to repurchase. Putnam Management will monitor such
transactions to ensure that the value of the underlying
securities will be at least equal at all times to the total
amount of the repurchase obligation, including the interest
factor. If the seller defaults, the fund could realize a loss on
the sale of the underlying security to the extent that the
proceeds of sale including accrued interest are less than the
resale price provided in the agreement including interest. In
addition, if the seller should be involved in bankruptcy or
insolvency proceedings, the fund may incur delay and costs in
selling the underlying security or may suffer a loss of principal
and interest if the fund is treated as an unsecured creditor and
required to return the underlying collateral to the seller's
estate.

Pursuant to an exemptive order issued by the Securities and
Exchange Commission, the fund may transfer uninvested cash
balances into a joint account, along with cash of other Putnam
funds and certain other accounts. These balances may be invested
in one or more repurchase agreements and/or short-term money
market instruments.

OPTIONS ON SECURITIES

WRITING COVERED OPTIONS. The fund may write covered call options
and covered put options on optionable securities held in its
portfolio, when in the opinion of Putnam Management such
transactions are consistent with the fund's investment
objective(s) and policies. Call options written by the fund give
the purchaser the right to buy the underlying securities from the
fund at a stated exercise price; put options give the purchaser
the right to sell the underlying securities to the fund at a
stated price.

The fund may write only covered options, which means that, so
long as the fund is obligated as the writer of a call option, it
will own the underlying securities subject to the option (or
comparable securities satisfying the cover requirements of
securities exchanges). In the case of put options, the fund will
hold cash and/or high-grade short-term debt obligations equal to
the price to be paid if the option is exercised. In addition,
the fund will be considered to have covered a put or call option
if and to the extent that it holds an option that offsets some or
all of the risk of the option it has written. The fund may write
combinations of covered puts and calls on the same underlying
security.

The fund will receive a premium from writing a put or call
option, which increases the fund's return on the underlying
security in the event the option expires unexercised or is closed
out at a profit. The amount of the premium reflects, among other
things, the relationship between the exercise price and the
current market value of the underlying security, the volatility
of the underlying security, the amount of time remaining until
expiration, current interest rates, and the effect of supply and
demand in the options market and in the market for the underlying
security. By writing a call option, the fund limits its
opportunity to profit from any increase in the market value of
the underlying security above the exercise price of the option
but continues to bear the risk of a decline in the value of the
underlying security. By writing a put option, the fund assumes
the risk that it may be required to purchase the underlying
security for an exercise price higher than its then-current
market value, resulting in a potential capital loss unless the
security subsequently appreciates in value.

The fund may terminate an option that it has written prior to its
expiration by entering into a closing purchase transaction, in
which it purchases an offsetting option. The fund realizes a
profit or loss from a closing transaction if the cost of the
transaction (option premium plus transaction costs) is less or
more than the premium received from writing the option. If the
fund writes a call option but does not own the underlying
security, and when it writes a put option, the fund may be
required to deposit cash or securities with its broker as
"margin," or collateral, for its obligation to buy or sell the
underlying security. As the value of the underlying security
varies, the fund may have to deposit additional margin with the
broker. Margin requirements are complex and are fixed by
individual brokers, subject to minimum requirements currently
imposed by the Federal Reserve Board and by stock exchanges and
other self-regulatory organizations.

PURCHASING PUT OPTIONS. The fund may purchase put options to
protect its portfolio holdings in an underlying security against
a decline in market value. Such protection is provided during
the life of the put option since the fund, as holder of the
option, is able to sell the underlying security at the put
exercise price regardless of any decline in the underlying
security's market price. In order for a put option to be
profitable, the market price of the underlying security must
decline sufficiently below the exercise price to cover the
premium and transaction costs. By using put options in this
manner, the fund will reduce any profit it might otherwise have
realized from appreciation of the underlying security by the
premium paid for the put option and by transaction costs.

PURCHASING CALL OPTIONS. The fund may purchase call options to
hedge against an increase in the price of securities that the
fund wants ultimately to buy. Such hedge protection is provided
during the life of the call option since the fund, as holder of
the call option, is able to buy the underlying security at the
exercise price regardless of any increase in the underlying
security's market price. In order for a call option to be
profitable, the market price of the underlying security must rise
sufficiently above the exercise price to cover the premium and
transaction costs.

RISK FACTORS IN OPTIONS TRANSACTIONS

The successful use of the fund's options strategies depends on
the ability of Putnam Management to forecast correctly interest
rate and market movements. For example, if the fund were to
write a call option based on Putnam Management's expectation that
the price of the underlying security would fall, but the price
were to rise instead, the fund could be required to sell the
security upon exercise at a price below the current market price.
Similarly, if the fund were to write a put option based on Putnam
Management's expectation that the price of the underlying
security would rise, but the price were to fall instead, the fund
could be required to purchase the security upon exercise at a
price higher than the current market price.

When the fund purchases an option, it runs the risk that it will
lose its entire investment in the option in a relatively short
period of time, unless the fund exercises the option or enters
into a closing sale transaction before the option's expiration.
If the price of the underlying security does not rise (in the
case of a call) or fall (in the case of a put) to an extent
sufficient to cover the option premium and transaction costs, the
fund will lose part or all of its investment in the option. This
contrasts with an investment by the fund in the underlying
security, since the fund will not realize a loss if the
security's price does not change.

The effective use of options also depends on the fund's ability
to terminate option positions at times when Putnam Management
deems it desirable to do so. There is no assurance that the fund
will be able to effect closing transactions at any particular
time or at an acceptable price.

If a secondary market in options were to become unavailable, the
fund could no longer engage in closing transactions. Lack of
investor interest might adversely affect the liquidity of the
market for particular options or series of options. A market may
discontinue trading of a particular option or options generally.
In addition, a market could become temporarily unavailable if
unusual events - such as volume in excess of trading or clearing
capability - were to interrupt its normal operations.

A market may at times find it necessary to impose restrictions on
particular types of options transactions, such as opening
transactions. For example, if an underlying security ceases to
meet qualifications imposed by the market or the Options Clearing
Corporation, new series of options on that security will no
longer be opened to replace expiring series, and opening
transactions in existing series may be prohibited. If an options
market were to become unavailable, the fund as a holder of an
option would be able to realize profits or limit losses only by
exercising the option, and the fund, as option writer, would
remain obligated under the option until expiration or exercise.

Disruptions in the markets for the securities underlying options
purchased or sold by the fund could result in losses on the
options. If trading is interrupted in an underlying security,
the trading of options on that security is normally halted as
well. As a result, the fund as purchaser or writer of an option
will be unable to close out its positions until options trading
resumes, and it may be faced with considerable losses if trading
in the security reopens at a substantially different price. In
addition, the Options Clearing Corporation or other options
markets may impose exercise restrictions. If a prohibition on
exercise is imposed at the time when trading in the option has
also been halted, the fund as purchaser or writer of an option
will be locked into its position until one of the two
restrictions has been lifted. If the Options Clearing
Corporation were to determine that the available supply of an
underlying security appears insufficient to permit delivery by
the writers of all outstanding calls in the event of exercise, it
may prohibit indefinitely the exercise of put options. The fund,
as holder of such a put option, could lose its entire investment
if the prohibition remained in effect until the put option's
expiration.

Foreign-traded options are subject to many of the same risks
presented by internationally-traded securities. In addition,
because of time differences between the United States and various
foreign countries, and because different holidays are observed in
different countries, foreign options markets may be open for
trading during hours or on days when U.S. markets are closed. As
a result, option premiums may not reflect the current prices of
the underlying interest in the United States.

Over-the-counter ("OTC") options purchased by the fund and assets
held to cover OTC options written by the fund may, under certain
circumstances, be considered illiquid securities for purposes of
any limitation on the fund's ability to invest in illiquid
securities.

FUTURES CONTRACTS AND RELATED OPTIONS

Subject to applicable law, and unless otherwise specified in the
prospectus, the fund may invest without limit in the types of
futures contracts and related options identified in the
prospectus for hedging and non-hedging purposes, such as to
manage the effective duration of the fund's portfolio or as a
substitute for direct investment. A financial futures contract
sale creates an obligation by the seller to deliver the type of
financial instrument called for in the contract in a specified
delivery month for a stated price. A financial futures contract
purchase creates an obligation by the purchaser to take delivery
of the type of financial instrument called for in the contract in
a specified delivery month at a stated price. The specific
instruments delivered or taken, respectively, at settlement date
are not determined until on or near that date. The determination
is made in accordance with the rules of the exchange on which the
futures contract sale or purchase was made. Futures contracts
are traded in the United States only on commodity exchanges or
boards of trade - known as "contract markets" - approved for such
trading by the Commodity Futures Trading Commission (the "CFTC"),
and must be executed through a futures commission merchant or
brokerage firm which is a member of the relevant contract market.

Although futures contracts (other than index futures) by their
terms call for actual delivery or acceptance of commodities or
securities, in most cases the contracts are closed out before the
settlement date without the making or taking of delivery.
Closing out a futures contract sale is effected by purchasing a
futures contract for the same aggregate amount of the specific
type of financial instrument or commodity with the same delivery
date. If the price of the initial sale of the futures contract
exceeds the price of the offsetting purchase, the seller is paid
the difference and realizes a gain. Conversely, if the price of
the offsetting purchase exceeds the price of the initial sale,
the seller realizes a loss. If the fund is unable to enter into
a closing transaction, the amount of the fund's potential loss is
unlimited. The closing out of a futures contract purchase is
effected by the purchaser's entering into a futures contract
sale. If the offsetting sale price exceeds the purchase price,
the purchaser realizes a gain, and if the purchase price exceeds
the offsetting sale price, he realizes a loss. In general, 40%
of the gain or loss arising from the closing out of a futures
contract traded on an exchange approved by the CFTC is treated as
short-term gain or loss, and 60% is treated as long-term gain or
loss.

Unlike when the fund purchases or sells a security, no price is
paid or received by the fund upon the purchase or sale of a
futures contract. Upon entering into a contract, the fund is
required to deposit with its custodian in a segregated account in
the name of the futures broker an amount of liquid assets. This
amount is known as "initial margin." The nature of initial
margin in futures transactions is different from that of margin
in security transactions in that futures contract margin does not
involve the borrowing of funds to finance the transactions.
Rather, initial margin is similar to a performance bond or good
faith deposit which is returned to the fund upon termination of
the futures contract, assuming all contractual obligations have
been satisfied. Futures contracts also involve brokerage costs.

Subsequent payments, called "variation margin" or "maintenance
margin," to and from the broker (or the custodian) are made on a
daily basis as the price of the underlying security or commodity
fluctuates, making the long and short positions in the futures
contract more or less valuable, a process known as "marking to
the market." For example, when the fund has purchased a futures
contract on a security and the price of the underlying security
has risen, that position will have increased in value and the
fund will receive from the broker a variation margin payment
based on that increase in value. Conversely, when the fund has
purchased a security futures contract and the price of the
underlying security has declined, the position would be less
valuable and the fund would be required to make a variation
margin payment to the broker.

The fund may elect to close some or all of its futures positions
at any time prior to their expiration in order to reduce or
eliminate a hedge position then currently held by the fund. The
fund may close its positions by taking opposite positions which
will operate to terminate the fund's position in the futures
contracts. Final determinations of variation margin are then
made, additional cash is required to be paid by or released to
the fund, and the fund realizes a loss or a gain. Such closing
transactions involve additional commission costs.

The fund does not intend to purchase or sell futures or related
options for other than hedging purposes, if, as a result, the sum
of the initial margin deposits on the fund's existing futures and
related options positions and premiums paid for outstanding
options on futures contracts would exceed 5% of the fund's net
assets.

OPTIONS ON FUTURES CONTRACTS. The fund may purchase and write
call and put options on futures contracts it may buy or sell and
enter into closing transactions with respect to such options to
terminate existing positions. In return for the premium paid,
options on future contracts give the purchaser the right to
assume a position in a futures contract at the specified option
exercise price at any time during the period of the option. The
fund may use options on futures contracts in lieu of writing or
buying options directly on the underlying securities or
purchasing and selling the underlying futures contracts. For
example, to hedge against a possible decrease in the value of its
portfolio securities, the fund may purchase put options or write
call options on futures contracts rather than selling futures
contracts. Similarly, the fund may purchase call options or
write put options on futures contracts as a substitute for the
purchase of futures contracts to hedge against a possible
increase in the price of securities which the fund expects to
purchase. Such options generally operate in the same manner as
options purchased or written directly on the underlying
investments.

As with options on securities, the holder or writer of an option
may terminate his position by selling or purchasing an offsetting
option. There is no guarantee that such closing transactions can
be effected.

The fund will be required to deposit initial margin and
maintenance margin with respect to put and call options on
futures contracts written by it pursuant to brokers' requirements
similar to those described above in connection with the
discussion of futures contracts.

RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS.
Successful use of futures contracts by the fund is subject to
Putnam Management's ability to predict movements in various
factors affecting securities markets, including interest rates.
Compared to the purchase or sale of futures contracts, the
purchase of call or put options on futures contracts involves
less potential risk to the fund because the maximum amount at
risk is the premium paid for the options (plus transaction
costs). However, there may be circumstances when the purchase of
a call or put option on a futures contract would result in a loss
to the fund when the purchase or sale of a futures contract would
not, such as when there is no movement in the prices of the
hedged investments. The writing of an option on a futures
contract involves risks similar to those risks relating to the
sale of futures contracts.

The use of options and futures strategies also involves the risk
of imperfect correlation among movements in the prices of the
securities underlying the futures and options purchased and sold
by the fund, of the options and futures contracts themselves,
and, in the case of hedging transactions, of the securities which
are the subject of a hedge. The successful use of these
strategies further depends on the ability of Putnam Management to
forecast interest rates and market movements correctly.

There is no assurance that higher than anticipated trading
activity or other unforeseen events might not, at times, render
certain market clearing facilities inadequate, and thereby result
in the institution by exchanges of special procedures which may
interfere with the timely execution of customer orders.

To reduce or eliminate a position held by the fund, the fund may
seek to close out such position. The ability to establish and
close out positions will be subject to the development and
maintenance of a liquid secondary market. It is not certain that
this market will develop or continue to exist for a particular
futures contract or option. Reasons for the absence of a liquid
secondary market on an exchange include the following: (i) there
may be insufficient trading interest in certain contracts or
options; (ii) restrictions may be imposed by an exchange on
opening transactions or closing transactions or both; (iii)
trading halts, suspensions or other restrictions may be imposed
with respect to particular classes or series of contracts or
options, or underlying securities; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or a clearing corporation may not
at all times be adequate to handle current trading volume; or
(vi) one or more exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the
trading of contracts or options (or a particular class or series
of contracts or options), in which event the secondary market on
that exchange for such contracts or options (or in the class or
series of contracts or options) would cease to exist, although
outstanding contracts or options on the exchange that had been
issued by a clearing corporation as a result of trades on that
exchange would continue to be exercisable in accordance with
their terms.

U.S. TREASURY SECURITY FUTURES CONTRACTS AND OPTIONS. U.S.
Treasury security futures contracts require the seller to
deliver, or the purchaser to take delivery of, the type of U.S.
Treasury security called for in the contract at a specified date
and price. Options on U.S. Treasury security futures contracts
give the purchaser the right in return for the premium paid to
assume a position in a U.S. Treasury security futures contract at
the specified option exercise price at any time during the period
of the option.

Successful use of U.S. Treasury security futures contracts by the
fund is subject to Putnam Management's ability to predict
movements in the direction of interest rates and other factors
affecting markets for debt securities. For example, if the fund
has sold U.S. Treasury security futures contracts in order to
hedge against the possibility of an increase in interest rates
which would adversely affect securities held in its portfolio,
and the prices of the fund's securities increase instead as a
result of a decline in interest rates, the fund will lose part or
all of the benefit of the increased value of its securities which
it has hedged because it will have offsetting losses in its
futures positions. In addition, in such situations, if the fund
has insufficient cash, it may have to sell securities to meet
daily maintenance margin requirements at a time when it may be
disadvantageous to do so.

There is also a risk that price movements in U.S. Treasury
security futures contracts and related options will not correlate
closely with price movements in markets for particular
securities. For example, if the fund has hedged against a
decline in the values of tax-exempt securities held by it by
selling Treasury security futures and the values of Treasury
securities subsequently increase while the values of its tax-
exempt securities decrease, the fund would incur losses on both
the Treasury security futures contracts written by it and the tax-
exempt securities held in its portfolio.

INDEX FUTURES CONTRACTS. An index futures contract is a contract
to buy or sell units of an index at a specified future date at a
price agreed upon when the contract is made. Entering into a
contract to buy units of an index is commonly referred to as
buying or purchasing a contract or holding a long position in
the index. Entering into a contract to sell units of an index is
commonly referred to as selling a contract or holding a short
position. A unit is the current value of the index. The fund
may enter into stock index futures contracts, debt index futures
contracts, or other index futures contracts appropriate to its
objective(s). The fund may also purchase and sell options on
index futures contracts.

For example, the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500") is composed of 500 selected common stocks, most
of which are listed on the New York Stock Exchange. The S&P 500
assigns relative weightings to the common stocks included in the
Index, and the value fluctuates with changes in the market values
of those common stocks. In the case of the S&P 500, contracts
are to buy or sell 500 units. Thus, if the value of the S&P 500
were $150, one contract would be worth $75,000 (500 units x
$150). The stock index futures contract specifies that no
delivery of the actual stocks making up the index will take
place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the
difference between the contract price and the actual level of the
stock index at the expiration of the contract. For example, if
the fund enters into a futures contract to buy 500 units of the
S&P 500 at a specified future date at a contract price of $150
and the S&P 500 is at $154 on that future date, the fund will
gain $2,000 (500 units x gain of $4). If the fund enters into a
futures contract to sell 500 units of the stock index at a
specified future date at a contract price of $150 and the S&P 500
is at $152 on that future date, the fund will lose $1,000 (500
units x loss of $2).

There are several risks in connection with the use by the fund of
index futures. One risk arises because of the imperfect
correlation between movements in the prices of the index futures
and movements in the prices of securities which are the subject
of the hedge. Putnam Management will, however, attempt to reduce
this risk by buying or selling, to the extent possible, futures
on indices the movements of which will, in its judgment, have a
significant correlation with movements in the prices of the
securities sought to be hedged.

Successful use of index futures by the fund is also subject to
Putnam Management's ability to predict movements in the direction
of the market. For example, it is possible that, where the fund
has sold futures to hedge its portfolio against a decline in the
market, the index on which the futures are written may advance
and the value of securities held in the fund's portfolio may
decline. If this occurred, the fund would lose money on the
futures and also experience a decline in value in its portfolio
securities. It is also possible that, if the fund has hedged
against the possibility of a decline in the market adversely
affecting securities held in its portfolio and securities prices
increase instead, the fund will lose part or all of the benefit
of the increased value of those securities it has hedged because
it will have offsetting losses in its futures positions. In
addition, in such situations, if the fund has insufficient cash,
it may have to sell securities to meet daily variation margin
requirements at a time when it is disadvantageous to do so.

In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between movements in the
index futures and the portion of the portfolio being hedged, the
prices of index futures may not correlate perfectly with
movements in the underlying index due to certain market
distortions. First, all participants in the futures market are
subject to margin deposit and maintenance requirements. Rather
than meeting additional margin deposit requirements, investors
may close futures contracts through offsetting transactions which
could distort the normal relationship between the index and
futures markets. Second, margin requirements in the futures
market are less onerous than margin requirements in the
securities market, and as a result the futures market may attract
more speculators than the securities market does. Increased
participation by speculators in the futures market may also cause
temporary price distortions. Due to the possibility of price
distortions in the futures market and also because of the
imperfect correlation between movements in the index and
movements in the prices of index futures, even a correct forecast
of general market trends by Putnam Management may still not
result in a profitable position over a short time period.

OPTIONS ON STOCK INDEX FUTURES. Options on index futures are
similar to options on securities except that options on index
futures give the purchaser the right, in return for the premium
paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during
the period of the option. Upon exercise of the option, the
delivery of the futures position by the writer of the option to
the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's futures margin account which
represents the amount by which the market price of the index
futures contract, at exercise, exceeds (in the case of a call) or
is less than (in the case of a put) the exercise price of the
option on the index future. If an option is exercised on the
last trading day prior to its expiration date, the settlement
will be made entirely in cash equal to the difference between the
exercise price of the option and the closing level of the index
on which the future is based on the expiration date. Purchasers
of options who fail to exercise their options prior to the
exercise date suffer a loss of the premium paid.

OPTIONS ON INDICES

As an alternative to purchasing call and put options on index
futures, the fund may purchase and sell call and put options on
the underlying indices themselves. Such options would be used in
a manner identical to the use of options on index futures.

INDEX WARRANTS

The fund may purchase put warrants and call warrants whose values
vary depending on the change in the value of one or more
specified securities indices ("index warrants"). Index warrants
are generally issued by banks or other financial institutions and
give the holder the right, at any time during the term of the
warrant, to receive upon exercise of the warrant a cash payment
from the issuer based on the value of the underlying index at the
time of exercise. In general, if the value of the underlying
index rises above the exercise price of the index warrant, the
holder of a call warrant will be entitled to receive a cash
payment from the issuer upon exercise based on the difference
between the value of the index and the exercise price of the
warrant; if the value of the underlying index falls, the holder
of a put warrant will be entitled to receive a cash payment from
the issuer upon exercise based on the difference between the
exercise price of the warrant and the value of the index. The
holder of a warrant would not be entitled to any payments from
the issuer at any time when, in the case of a call warrant, the
exercise price is greater than the value of the underlying index,
or, in the case of a put warrant, the exercise price is less than
the value of the underlying index. If the fund were not to
exercise an index warrant prior to its expiration, then the fund
would lose the amount of the purchase price paid by it for the
warrant.

The fund will normally use index warrants in a manner similar to
its use of options on securities indices. The risks of the
fund's use of index warrants are generally similar to those
relating to its use of index options. Unlike most index options,
however, index warrants are issued in limited amounts and are not
obligations of a regulated clearing agency, but are backed only
by the credit of the bank or other institution which issues the
warrant. Also, index warrants generally have longer terms than
index options. Although the fund will normally invest only in
exchange - listed warrants, index warrants are not likely to be
as liquid as certain index options backed by a recognized
clearing agency. In addition, the terms of index warrants may
limit the fund's ability to exercise the warrants at such time,
or in such quantities, as the fund would otherwise wish to do.

FOREIGN INVESTMENTS

The fund may invest in securities of foreign issuers. These
foreign investments involve certain special risks described
below.

Foreign securities are normally denominated and traded in foreign
currencies. As a result, the value of the fund's foreign
investments and the value of its shares may be affected favorably
or unfavorably by changes in currency exchange rates relative to
the U.S. dollar. There may be less information publicly
available about a foreign issuer than about a U.S. issuer, and
foreign issuers are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to
those in the United States. The securities of some foreign
issuers are less liquid and at times more volatile than
securities of comparable U.S. issuers. Foreign brokerage
commissions and other fees are also generally higher than in the
United States. Foreign settlement procedures and trade
regulations may involve certain risks (such as delay in payment
or delivery of securities or in the recovery of the fund's assets
held abroad) and expenses not present in the settlement of
investments in U.S. markets.

In addition, the fund's investments in foreign securities may be
subject to the risk of nationalization or expropriation of
assets, imposition of currency exchange controls, foreign
withholding taxes or restrictions on the repatriation of foreign
currency, confiscatory taxation, political or financial
instability and diplomatic developments which could affect the
value of the fund's investments in certain foreign countries.
Dividends or interest on, or proceeds from the sale of, foreign
securities may be subject to foreign withholding taxes, and
special U.S. tax considerations may apply.

Legal remedies available to investors in certain foreign
countries may be more limited than those available with respect
to investments in the United States or in other foreign
countries. The laws of some foreign countries may limit the
fund's ability to invest in securities of certain issuers
organized under the laws of those foreign countries.

The risks described above, including the risks of nationalization
or expropriation of assets, are typically increased in connection
with investments in "emerging markets." For example, political
and economic structures in these countries may be in their
infancy and developing rapidly, and such countries may be in
their infancy and developing rapidly, and such countries may lack
the social, political and economic stability characteristic of
more developed countries. Certain of these countries have in the
past failed to recognize private property rights and have at
times nationalized and expropriated the assets of private
companies. High rates of inflation or currency devaluations may
adversely affect the economies and securities markets of such
countries. Investments in emerging markets may be considered
speculative.

The currencies of certain emerging market countries have
experienced a steady devaluation relative to the U.S. dollar, and
continued devaluations may adversely affect the value of a fund's
assets denominated in such currencies. Many emerging market
companies have experienced substantial, and in some periods
extremely high, rates of inflation for many years, and continued
inflation may adversely affect the economies and securities
markets of such countries.

In addition, unanticipated political or social developments may
affect the value of the fund's investments in emerging markets
and the availability to the fund of additional investments in
these markets. The small size, limited trading volume and
relative inexperience of the securities markets in these
countries may make the fund's investments in securities traded in
emerging markets illiquid and more volatile than investments in
securities traded in more developed countries, and the fund may
be required to establish special custodial or other arrangements
before making investments in securities traded in emerging
markets. There may be little financial or accounting information
available with respect to issuers of emerging market securities,
and it may be difficult as a result to assess the value of
prospects of an investment in such securities.

Certain of the foregoing risks may also apply to some extent to
securities of U.S. issuers that are denominated in foreign
currencies or that are traded in foreign markets, or securities
of U.S. issuers having significant foreign operations.

FOREIGN CURRENCY TRANSACTIONS

Unless otherwise specified in the prospectus or Part I of this
SAI, the fund may engage without limit in currency exchange
transactions, including purchasing and selling foreign currency,
foreign currency options, foreign currency forward contracts and
foreign currency futures contracts and related options, to manage
its exposure to foreign currencies. In addition, the fund may
write covered call and put options on foreign currencies for the
purpose of increasing its current return.

Generally, the fund may engage in both "transaction hedging" and
"position hedging." The fund may also engage in foreign currency
transactions for non-hedging purposes, subject to applicable law.
When it engages in transaction hedging, the fund enters into
foreign currency transactions with respect to specific
receivables or payables, generally arising in connection with the
purchase or sale of portfolio securities. The fund will engage
in transaction hedging when it desires to "lock in" the U.S.
dollar price of a security it has agreed to purchase or sell, or
the U.S. dollar equivalent of a dividend or interest payment in a
foreign currency. By transaction hedging the fund will attempt
to protect itself against a possible loss resulting from an
adverse change in the relationship between the U.S. dollar and
the applicable foreign currency during the period between the
date on which the security is purchased or sold, or on which the
dividend or interest payment is earned, and the date on which
such payments are made or received.

The fund may purchase or sell a foreign currency on a spot (or
cash) basis at the prevailing spot rate in connection with the
settlement of transactions in portfolio securities denominated in
that foreign currency. If conditions warrant, for transaction
hedging purposes the fund may also enter into contracts to
purchase or sell foreign currencies at a future date ("forward
contracts") and purchase and sell foreign currency futures
contracts. A foreign currency forward contract is a negotiated
agreement to exchange currency at a future time at a rate or
rates that may be higher or lower than the spot rate. Foreign
currency futures contracts are standardized exchange-traded
contracts and have margin requirements. In addition, for
transaction hedging purposes the fund may also purchase or sell
exchange-listed and over-the-counter call and put options on
foreign currency futures contracts and on foreign currencies.
The fund may also enter into contracts to purchase or sell
foreign currencies at a future date ("forward contracts") and
purchase and sell foreign currency futures contracts.

For transaction hedging purposes the fund may also purchase
exchange - listed and over - the - counter call and put options
on foreign currency futures contracts and on foreign currencies.
A put option on a futures contract gives the fund the right to
assume a short position in the futures contract until the
expiration of the option. A put option on a currency gives the
fund the right to sell the currency at an exercise price until
the expiration of the option. A call option on a futures
contract gives the fund the right to assume a long position in
the futures contract until the expiration of the option. A call
option on a currency gives the fund the right to purchase the
currency at the exercise price until the expiration of the
option.

The fund may engage in position hedging to protect against a
decline in the value relative to the U.S. dollar of the
currencies in which its portfolio securities are denominated or
quoted (or an increase in the value of the currency in which the
securities the fund intends to buy are denominated, when the fund
holds cash or short-term investments). For position hedging
purposes, the fund may purchase or sell, on exchanges or in over-
the-counter markets, foreign currency futures contracts, foreign
currency forward contracts and options on foreign currency
futures contracts and on foreign currencies. In connection with
position hedging, the fund may also purchase or sell foreign
currency on a spot basis.

It is impossible to forecast with precision the market value of
portfolio securities at the expiration or maturity of a forward
or futures contract. Accordingly, it may be necessary for the
fund to purchase additional foreign currency on the spot market
(and bear the expense of such purchase) if the market value of
the security or securities being hedged is less than the amount
of foreign currency the fund is obligated to deliver and a
decision is made to sell the security or securities and make
delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency
received upon the sale of the portfolio security or securities if
the market value of such security or securities exceeds the
amount of foreign currency the fund is obligated to deliver.

Transaction and position hedging do not eliminate fluctuations in
the underlying prices of the securities which the fund owns or
intends to purchase or sell. They simply establish a rate of
exchange which one can achieve at some future point in time.
Additionally, although these techniques tend to minimize the risk
of loss due to a decline in the value of the hedged currency,
they tend to limit any potential gain which might result from the
increase in value of such currency. See "Risk factors in options
transactions" above.

The fund may seek to increase its current return or to offset
some of the costs of hedging against fluctuations in current
exchange rates by writing covered call options and covered put
options on foreign currencies. The fund receives a premium from
writing a call or put option, which increases the fund's current
return if the option expires unexercised or is closed out at a
net profit. The fund may terminate an option that it has written
prior to its expiration by entering into a closing purchase
transaction in which it purchases an option having the same terms
as the option written.

The fund's currency hedging transactions may call for the
delivery of one foreign currency in exchange for another foreign
currency and may at times not involve currencies in which its
portfolio securities are then denominated. Putnam Management
will engage in such "cross hedging" activities when it believes
that such transactions provide significant hedging opportunities
for the fund. Cross hedging transactions by the fund involve the
risk of imperfect correlation between changes in the values of
the currencies to which such transactions relate and changes in
the value of the currency or other asset or liability which is
the subject of the hedge.

The fund may also engage in non-hedging currency transactions.
For example, Putnam Management may believe that exposure to a
currency is in the fund's best interest but that securities
denominated in that currency are unattractive. In that case the
fund may purchase a currency forward contract or option in order
to increase its exposure to the currency. In accordance with SEC
regulations, the fund will segregate liquid assets in its
portfolio to cover forward contracts used for non-hedging
purposes.

The value of any currency, including U.S. dollars and foreign
currencies, may be affected by complex political and economic
factors applicable to the issuing country. In addition, the
exchange rates of foreign currencies (and therefore the values of
foreign currency options, forward contracts and futures
contracts) may be affected significantly, fixed, or supported
directly or indirectly by U.S. and foreign government actions.
Government intervention may increase risks involved in purchasing
or selling foreign currency options, forward contracts and
futures contracts, since exchange rates may not be free to
fluctuate in response to other market forces.

The value of a foreign currency option, forward contract or
futures contract reflects the value of an exchange rate, which in
turn reflects relative values of two currencies, the U.S. dollar
and the foreign currency in question. Because foreign currency
transactions occurring in the interbank market involve
substantially larger amounts than those that may be involved in
the exercise of foreign currency options, forward contracts and
futures contracts, investors may be disadvantaged by having to
deal in an odd-lot market for the underlying foreign currencies
in connection with options at prices that are less favorable than
for round lots. Foreign governmental restrictions or taxes could
result in adverse changes in the cost of acquiring or disposing
of foreign currencies.

There is no systematic reporting of last sale information for
foreign currencies and there is no regulatory requirement that
quotations available through dealers or other market sources be
firm or revised on a timely basis. Available quotation
information is generally representative of very large round-lot
transactions in the interbank market and thus may not reflect
exchange rates for smaller odd-lot transactions (less than $1
million) where rates may be less favorable. The interbank market
in foreign currencies is a global, around-the-clock market. To
the extent that options markets are closed while the markets for
the underlying currencies remain open, significant price and rate
movements may take place in the underlying markets that cannot be
reflected in the options markets.

The decision as to whether and to what extent the fund will
engage in foreign currency exchange transactions will depend on a
number of factors, including prevailing market conditions, the
composition of the fund's portfolio and the availability of
suitable transactions. Accordingly, there can be no assurance
that the fund will engage in foreign currency exchange
transactions at any given time or from time to time.

CURRENCY FORWARD AND FUTURES CONTRACTS. A forward foreign
currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number
of days from the date of the contract as agreed by the parties,
at a price set at the time of the contract. In the case of a
cancelable forward contract, the holder has the unilateral right
to cancel the contract at maturity by paying a specified fee.
The contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial
banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage
for trades. A foreign currency futures contract is a
standardized contract for the future delivery of a specified
amount of a foreign currency at a price set at the time of the
contract. Foreign currency futures contracts traded in the
United States are designed by and traded on exchanges regulated
by the CFTC, such as the New York Mercantile Exchange.

Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the
maturity date of a forward contract may be any fixed number of
days from the date of the contract agreed upon by the parties,
rather than a predetermined date in a given month. Forward
contracts may be in any amount agreed upon by the parties rather
than predetermined amounts. Also, forward foreign exchange
contracts are traded directly between currency traders so that no
intermediary is required. A forward contract generally requires
no margin or other deposit.

At the maturity of a forward or futures contract, the fund either
may accept or make delivery of the currency specified in the
contract, or at or prior to maturity enter into a closing
transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts
are usually effected with the currency trader who is a party to
the original forward contract. Closing transactions with respect
to futures contracts are effected on a commodities exchange; a
clearing corporation associated with the exchange assumes
responsibility for closing out such contracts.

Positions in the foreign currency futures contracts may be closed
out only on an exchange or board of trade which provides a
secondary market in such contracts. Although the fund intends to
purchase or sell foreign currency futures contracts only on
exchanges or boards of trade where there appears to be an active
secondary market, there is no assurance that a secondary market
on an exchange or board of trade will exist for any particular
contract or at any particular time. In such event, it may not be
possible to close a futures position and, in the event of adverse
price movements, the fund would continue to be required to make
daily cash payments of variation margin.

FOREIGN CURRENCY OPTIONS. In general, options on foreign
currencies operate similarly to options on securities and are
subject to many of the risks described above. Foreign currency
options are traded primarily in the over-the-counter market,
although options on foreign currencies are also listed on several
exchanges. Options are traded not only on the currencies of
individual nations, but also on the European Currency Unit
("ECU"). The ECU is composed of amounts of a number of
currencies, and is the official medium of exchange of the
European Community's European Monetary System.

The fund will only purchase or write foreign currency options
when Putnam Management believes that a liquid secondary market
exists for such options. There can be no assurance that a liquid
secondary market will exist for a particular option at any
specific time. Options on foreign currencies are affected by all
of those factors which influence foreign exchange rates and
investments generally.

SETTLEMENT PROCEDURES. Settlement procedures relating to the
fund's investments in foreign securities and to the fund's
foreign currency exchange transactions may be more complex than
settlements with respect to investments in debt or equity
securities of U.S. issuers, and may involve certain risks not
present in the fund's domestic investments. For example,
settlement of transactions involving foreign securities or
foreign currencies may occur within a foreign country, and the
fund may be required to accept or make delivery of the underlying
securities or currency in conformity with any applicable U.S. or
foreign restrictions or regulations, and may be required to pay
any fees, taxes or charges associated with such delivery. Such
investments may also involve the risk that an entity involved in
the settlement may not meet its obligations.

FOREIGN CURRENCY CONVERSION. Although foreign exchange dealers
do not charge a fee for currency conversion, they do realize a
profit based on the difference (the "spread") between prices at
which they are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency to the fund at one
rate, while offering a lesser rate of exchange should the fund
desire to resell that currency to the dealer.

RESTRICTED SECURITIES

The SEC Staff currently takes the view that any delegation by the
Trustees of the authority to determine that a restricted security
is readily marketable (as described in the investment
restrictions of the funds) must be pursuant to written procedures
established by the Trustees. It is the present intention of the
funds' Trustees that, if the Trustees decide to delegate such
determinations to Putnam Management or another person, they would
do so pursuant to written procedures, consistent with the Staff's
position. Should the Staff modify its position in the future,
the Trustees would consider what action would be appropriate in
light of the Staff's position at that time.

TAXES

TAXATION OF THE FUND. The fund intends to qualify each year as a
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). In order so to
qualify and to qualify for the special tax treatment accorded
regulated investment companies and their shareholders, the fund
must, among other things:

(a) Derive at least 90% of its gross income from dividends,
interest, payments with respect to certain securities loans, and
gains from the sale of stock, securities and foreign currencies,
or other income (including but not limited to gains from options,
futures, or forward contracts) derived with respect to its
business of investing in such stock, securities, or currencies;

(b) distribute with respect to each taxable year at least 90% of
the sum of its taxable net investment income, its net tax-exempt
income, and the excess, if any, of net short-term capital gains
over net long-term capital losses for such year; and

(c) diversify its holdings so that, at the end of each fiscal
quarter, (i) at least 50% of the market value of the fund's
assets is represented by cash and cash items, U.S. government
securities, securities of other regulated investment companies,
and other securities limited in respect of any one issuer to a
value not greater than 5% of the value of the fund's total assets
and to not more than 10% of the outstanding voting securities of
such issuer, and (ii) not more than 25% of the value of its
assets is invested in the securities (other than those of the
U.S. Government or other regulated investment companies) of any
one issuer or of two or more issuers which the fund controls and
which are engaged in the same, similar, or related trades or
businesses.

In addition, until the start of the fund's first tax year
beginning after August 5, 1997, the fund must derive less than
30% of its gross income from the sale or other disposition of
certain assets (including stock or securities and certain
options, futures contracts, forward contracts and foreign
currencies) held for less than three months in order to qualify
as a regulated investment company.

If the fund qualifies as a regulated investment company that is
accorded special tax treatment, the fund will not be subject to
federal income tax on income paid to its shareholders in the form
of dividends (including capital gain dividends).

If the fund failed to qualify as a regulated investment company
accorded special tax treatment in any taxable year, the fund
would be subject to tax on its taxable income at corporate rates,
and all distributions from earnings and profits, including any
distributions of net tax-exempt income and net long-term capital
gains, would be taxable to shareholders as ordinary income. In
addition, the fund could be required to recognize unrealized
gains, pay substantial taxes and interest and make substantial
distributions before requalifying as a regulated investment
company that is accorded special tax treatment.

If the fund fails to distribute in a calendar year substantially
all of its ordinary income for such year and substantially all of
its capital gain net income for the one-year period ending
October 31 (or later if the fund is permitted so to elect and so
elects), plus any retained amount from the prior year, the fund
will be subject to a 4% excise tax on the undistributed amounts.
A dividend paid to shareholders by the fund in January of a year
generally is deemed to have been paid by the fund on December 31
of the preceding year, if the dividend was declared and payable
to shareholders of record on a date in October, November or
December of that preceding year. The fund intends generally to
make distributions sufficient to avoid imposition of the 4%
excise tax.

FUND DISTRIBUTIONS. Distributions from the fund (other than
exempt-interest dividends, as discussed below) will be taxable to
shareholders as ordinary income to the extent derived from the
fund's investment income and net short-term gains. Pursuant to
the Taxpayer Relief Act of 1997, two different tax rates apply to
net capital gains (that is, the excess of net gains from capital
assets held more than one year over net losses from capital
assets held for not more than one year). One rate (generally
28%) applies to net gains on capital assets held for more than
one year but not more than 18 months (28% rate gains) and a
second, preferred rate (generally 20%) applies to the balance of
such net capital gains ("adjusted net capital gains").
Distributions of net capital gains will be treated in the hands
of shareholders as 28% rate gains to the extent designated by the
fund as deriving from net gains from assets held for more than
one year but not more than 18 months, and the balance will be
treated as adjusted net capital gains. Distributions of 28% rate
gains and adjusted net capital gains will be taxable to
shareholders as such, regardless of how long a shareholder has
held the shares in the fund.

EXEMPT - INTEREST DIVIDENDS. The fund will be qualified to pay
exempt - interest dividends to its shareholders only if, at the
close of each quarter of the fund's taxable year, at least 50% of
the total value of the fund's assets consists of obligations the
interest on which is exempt from federal income tax.
Distributions that the fund properly designates as exempt-
interest dividends are treated as interest excludable from
shareholders' gross income for federal income tax purposes but
may be taxable for federal alternative minimum tax purposes and
for state and local purposes. If the fund intends to be
qualified to pay exempt - interest dividends, the fund may be
limited in its ability to enter into taxable transactions
involving forward commitments, repurchase agreements, financial
futures and options contracts on financial futures, tax - exempt
bond indices and other assets.

Part or all of the interest on indebtedness, if any, incurred or
continued by a shareholder to purchase or carry shares of a fund
paying exempt-interest dividends is not deductible. The portion
of interest that is not deductible is equal to the total interest
paid or accrued on the indebtedness, multiplied by the percentage
of the fund's total distributions (not including distributions
from net long-term capital gains) paid to the shareholder that
are exempt-interest dividends. Under rules used by the Internal
Revenue Service for determining when borrowed funds are
considered used for the purpose of purchasing or carrying
particular assets, the purchase of shares may be considered to
have been made with borrowed funds even though such funds are not
directly traceable to the purchase of shares.

In general, exempt-interest dividends, if any, attributable to
interest received on certain private activity obligations and
certain industrial development bonds will not be tax-exempt to
any shareholders who are "substantial users" of the facilities
financed by such obligations or bonds or who are "related
persons" of such substantial users.

A fund which is qualified to pay exempt-interest dividends will
inform investors within 60 days of the fund's fiscal year-end of
the percentage of its income distributions designated as
tax-exempt. The percentage is applied uniformly to all
distributions made during the year. The percentage of income
designated as tax-exempt for any particular distribution may be
substantially different from the percentage of the fund's income
that was tax-exempt during the period covered by the
distribution.

HEDGING TRANSACTIONS. If the fund engages in hedging
transactions, including hedging transactions in options, futures
contracts, and straddles, or other similar transactions, it will
be subject to special tax rules (including constructive sale,
mark-to-market, straddle, wash sale, and short sale rules), the
effect of which may be to accelerate income to the fund, defer
losses to the fund, cause adjustments in the holding periods of
the fund's securities, or convert short-term capital losses into
long-term capital losses. These rules could therefore affect the
amount, timing and character of distributions to shareholders.
The fund will endeavor to make any available elections pertaining
to such transactions in a manner believed to be in the best
interests of the fund.

Under the 30% of gross income test described above (see "Taxation
of the fund"), the fund will be restricted in selling assets held
or considered under Code rules to have been held for less than
three months, and in engaging in certain hedging transactions
(including hedging transactions in options and futures) that in
some circumstances could cause certain fund assets to be treated
as held for less than three months.

Certain of the fund's hedging activities (including its
transactions, if any, in foreign currencies or foreign currency-
denominated instruments) are likely to produce a difference
between its book income and its taxable income. If the fund's
book income exceeds its taxable income, the distribution (if any)
of such excess will be treated as (i) a dividend to the extent of
the fund's remaining earnings and profits (including earnings and
profits arising from tax-exempt income), (ii) thereafter as a
return of capital to the extent of the recipient's basis in the
shares, and (iii) thereafter as gain from the sale or exchange of
a capital asset. If the fund's book income is less than its
taxable income, the fund could be required to make distributions
exceeding book income to qualify as a regulated investment
company that is accorded special tax treatment.

RETURN OF CAPITAL DISTRIBUTIONS. If the fund makes a
distribution to you in excess of its current and accumulated
"earnings and profits" in any taxable year, the excess
distribution will be treated as a return of capital to the extent
of your tax basis in your shares, and thereafter as capital gain.
A return of capital is not taxable, but it reduces your tax basis
in your shares, thus reducing any loss or increasing any gain on
a subsequent taxable disposition by you of your shares.

SECURITIES ISSUED OR PURCHASED AT A DISCOUNT. The fund's
investment in securities issued at a discount and certain other
obligations will (and investments in securities purchased at a
discount may) require the fund to accrue and distribute income
not yet received. In order to generate sufficient cash to make
the requisite distributions, the fund may be required to sell
securities in its portfolio that it otherwise would have
continued to hold.

CAPITAL LOSS CARRYOVER. Distributions from capital gains are
made after applying any available capital loss carryovers. The
amounts and expiration dates of any capital loss carryovers
available to the fund are shown in Note 1 (Federal income taxes)
to the financial statements included in Part I of this SAI or
incorporated by reference into this SAI.

FOREIGN CURRENCY-DENOMINATED SECURITIES AND RELATED HEDGING
TRANSACTIONS. The fund's transactions in foreign currencies,
foreign currency-denominated debt securities and certain foreign
currency options, futures contracts and forward contracts (and
similar instruments) may give rise to ordinary income or loss to
the extent such income or loss results from fluctuations in the
value of the foreign currency concerned.

If more than 50% of the fund's assets at year end consists of the
securities of foreign corporations, the fund may elect to permit
shareholders to claim a credit or deduction on their income tax
returns for their pro rata portion of qualified taxes paid by the
fund to foreign countries in respect of foreign securities the
fund has held for at least the minimum period specified in the
Code. In such a case, shareholders will include in gross income
from foreign sources their pro rata shares of such taxes. A
shareholder's ability to claim a foreign tax credit or deduction
in respect of foreign taxes paid by the fund may be subject to
certain limitations imposed by the Code, as a result of which a
shareholder may not get a full credit or deduction for the amount
of such taxes. In particular, shareholders must hold their fund
shares (without protection from risk of loss) on the ex-dividend
date and for at least 15 additional days during the 30-day period
surrounding the ex-dividend date to be eligible to claim a
foreign tax credit with respect to a given dividend.
Shareholders who do not itemize on their federal income tax
returns may claim a credit (but no deduction) for such foreign
taxes.

Investment by the fund in "passive foreign investment companies"
could subject the fund to a U.S. federal income tax or other
charge on the proceeds from the sale of its investment in such a
company; however, this tax can be avoided by making an election
to mark such investments to market annually or to treat the
passive foreign investment company as a "qualified electing
fund."

A "passive foreign investment company" is any foreign
corporation: (i) 75 percent or more of the income of which for
the taxable year is passive income, or (ii) the average
percentage of the assets of which (generally by value, but by
adjusted tax basis in certain cases) that produce or are held for
the production of passive income is at least 50 percent.
Generally, passive income for this purpose means dividends,
interest (including income equivalent to interest), royalties,
rents, annuities, the excess of gains over losses from certain
property transactions and commodities transactions, and foreign
currency gains. Passive income for this purpose does not include
rents and royalties received by the foreign corporation from
active business and certain income received from related persons.

SALE OR REDEMPTION OF SHARES. The sale, exchange or redemption
of fund shares may give rise to a gain or loss. In general, any
gain realized upon a taxable disposition of shares will be
treated as 28% rate gain if the shares have been held for more
than 12 months but not more than 18 months, and as adjusted net
capital gains if the shares have been held for more than 18
months. Otherwise the gain on the sale, exchange or redemption
of fund shares will be treated as short-term capital gain. In
general, any loss realized upon a taxable disposition of shares
will be treated as long-term loss if the shares have been held
for more than 12 months, and otherwise as short-term capital
loss. However, if a shareholder sells shares at a loss within
six months of purchase, any loss will be disallowed for Federal
income tax purposes to the extent of any exempt-interest
dividends received on such shares. In addition, any loss (not
already disallowed as provided in the preceding sentence)
realized upon a taxable disposition of shares held for six months
or less will be treated as long-term, rather than short-term, to
the extent of any long-term capital gain distributions received
by the shareholder with respect to the shares. All or a portion
of any loss realized upon a taxable disposition of fund shares
will be disallowed if other shares of the same fund are purchased
within 30 days before or after the disposition. In such a case,
the basis of the newly purchased shares will be adjusted to
reflect the disallowed loss.

SHARES PURCHASED THROUGH TAX-QUALIFIED PLANS. Special tax rules
apply to investments though defined contribution plans and other
tax-qualified plans. Shareholders should consult their tax
adviser to determine the suitability of shares of a fund as an
investment through such plans and the precise effect of an
investment on their particular tax situation.

BACKUP WITHHOLDING. The fund generally is required to withhold
and remit to the U.S. Treasury 31% of the taxable dividends and
other distributions paid to any individual shareholder who fails
to furnish the fund with a correct taxpayer identification number
(TIN), who has under-reported dividends or interest income, or
who fails to certify to the fund that he or she is not subject to
such withholding.

MANAGEMENT

TRUSTEES NAME (AGE)

*+GEORGE PUTNAM (72), Chairman and President. Chairman and
Director of Putnam Management and Putnam Mutual Funds. Director,
Freeport Copper and Gold, Inc. (a mining and natural resource
company), Houghton Mifflin Company (a major publishing company)
and Marsh & McLennan Companies, Inc.

JOHN A. HILL (56), Vice Chairman. Chairman and Managing
Director, First Reserve Corporation (a registered investment
adviser investing in companies in the world-wide energy industry
on behalf of institutional investors). Director of Snyder Oil
Corporation, TransMontaigne Oil Company, Weatherford Enterra,
Inc. (an oil field service company) and various private companies
owned by First Reserve Corporation, such as James River Coal and
Anker Coal Corporation, and various First Reserve Funds, such as
American Gas & Oil Investors, Ltd., AmGO II, L.P., First Reserve
Secured Energy Assets Fund, L.P., First Reserve Fund V., L.P.,
First Reserve Fund VI, L.P., and First Reserve Fund VII, L.P.

+WILLIAM F. POUNDS (70), Vice Chairman. Professor Emeritus of
Management, Alfred P. Sloan School of Management, Massachusetts
Institute of Technology. Director of IDEXX Laboratories, Inc.,
Management Sciences for Health, Inc., and Sun Company, Inc.

JAMESON A. BAXTER (55), Trustee. President, Baxter Associates,
Inc. (a management and financial consulting firm). Director of
Avondale Federal Savings Bank, ASHTA Chemicals, Inc. and Banta
Corporation (printing and digital imaging). Chairman Emeritus of
the Board of Trustees, Mount Holyoke College.

+HANS H. ESTIN (70), Trustee. Chartered Financial Analyst and
Vice Chairman, North American Management Corp. (a registered
investment adviser).

RONALD J. JACKSON (54), Trustee. Former Chairman, President and
Chief Executive Officer of Fisher-Price, Inc.

*PAUL L. JOSKOW (51), Trustee. Professor of Economics and
Management, Massachusetts Institute of Technology. Director, New
England Electric System, State Farm Indemnity Company and
Whitehead Institute for Biomedical Research.

ELIZABETH T. KENNAN (60), Trustee. President Emeritus and
Professor, Mount Holyoke College. Director, Bell Atlantic (a
telecommunications company), the Kentucky Home Life Insurance
Companies, NYNEX Corporation, Northeast Utilities and Talbots.

*LAWRENCE J. LASSER (55), Trustee and Vice President. President,
Chief Executive Officer and Director of Putnam Investments, Inc.
and Putnam Investment Management, Inc. Director of Marsh &
McLennan Companies, Inc. and the United Way of Massachusetts Bay.

JOHN H. MULLIN, III (57), Trustee. Chairman and CEO of Ridgeway
Farm, Director of ACX Technologies, Inc. (a company engaged in
the manufacture of industrial ceramics and packaging products),
Alex. Brown Realty, Inc. and The Liberty Corporation (a company
engaged in the life insurance and broadcasting industries).

+ROBERT E. PATTERSON (53), Trustee. President and Trustee of
Cabot Industrial Trust (a publicly traded real estate investment
trust). Director of Brandywine Trust Company. Trustee of SEA
Education Association.

*DONALD S. PERKINS (71), Trustee. Director of various
corporations, including AON Corp. (an insurance company), Cummins
Engine Company, Inc. (an engine and power generator manufacturer
and assembler), Current Assets L.L.C. (a corporation providing
financial staffing services), LaSalle Street Fund, Inc. and
LaSalle U.S. Realty Income and Growth Fund, Inc. (real estate
investment trusts), Lucent Technologies Inc., Nanophase
Technologies Inc. (a producer of nano crystalline materials),
Ryerson Tull, Inc. (America's largest steel service corporation)
and Springs Industries, Inc. (a textile manufacturer.)

*GEORGE PUTNAM III (47), Trustee. President, New Generation
Research, Inc. (a publisher of financial advisory and other
research services relating to bankrupt and distressed companies)
and New Generation Advisers, Inc. (a registered investment
adviser). Director, Massachusetts Audubon Society and The Boston
Family Office, L.L.C. (a registered investment advisor).

*A.J.C. SMITH (64), Trustee. Chairman and Chief Executive
Officer, Marsh & McLennan Companies, Inc. Director, Trident
Corp.

W. THOMAS STEPHENS (56), Trustee. President and Chief Executive
Officer of MacMillan Bloedel Ltd. Director, Qwest Communications
(a fiber optics manufacturer) and New Century Energies (a public
utility company).

W. NICHOLAS THORNDIKE (65), Trustee. Director of various
corporations and charitable organizations, including Courier
Corporation, Data General Corporation, Bradley Real Estate, Inc.,
and Providence Journal Co.

OFFICERS NAME (AGE)

CHARLES E. PORTER (60), Executive Vice President. Managing
Director of Putnam Investments, Inc. and Putnam Management.

PATRICIA C. FLAHERTY (51), Vice President. Senior Vice President
of Putnam Investments, Inc. and Putnam Management.

WILLIAM N. SHIEBLER (56), Vice President. Director and Senior
Managing Director of Putnam Investments, Inc. President and
Director of Putnam Mutual Funds.

GORDON H. SILVER (51), Vice President. Director and Senior
Managing Director of Putnam Investments, Inc. and Putnam
Management.

IAN C. FERGUSON (41), Vice President. Senior Managing Director
of Putnam Management.

JOHN R. VERANI (59), Vice President. Senior Vice President of
Putnam Investments, Inc. and Putnam Management.

JOHN D. HUGHES (63), Senior Vice President and Treasurer.

BEVERLY MARCUS (54), Clerk and Assistant Treasurer.

*Trustees who are or may be deemed to be "interested persons" (as
defined in the Investment Company Act of 1940) of the fund,
Putnam Management or Putnam Mutual Funds.

Messrs. Putnam, Lasser and Smith are deemed "interested persons"
by virtue of their positions as officers or shareholders of the
fund, or directors of Putnam Management, Putnam Mutual Funds, or
Marsh & McLennan Companies, Inc., the parent company of Putnam
Management and Putnam Mutual Funds.

Mr. George Putnam, III, Mr. Putnam's son, is also an "interested
person" of the fund, Putnam Management, and Putnam Mutual Funds.
Mr. Perkins may be deemed to be an "interested person" of the
fund because of his service as a director of a certain publicly
held company that includes registered broker-dealer firms among
its subsidiaries. Neither the fund nor any of the other Putnam
funds currently engages in any transactions with such firms
except that certain of such firms act as dealers in the retail
sale of shares of certain Putnam funds in the ordinary course of
their business. Mr. Joskow is not currently an "interested
person" of the fund but could be deemed by the Securities and
Exchange Commission to be an "interested person" on account of
his prior consulting relationship with National Economic Research
Associates, Inc., a wholly-owned subsidiary of Marsh & McLennan
Companies, Inc., which was terminated as of August 31, 1998. The
remaining Trustees are not "interested persons."

+Members of the Executive Committee of the Trustees. The
Executive Committee meets between regular meetings of the
Trustees as may be required to review investment matters and
other affairs of the fund and may exercise all of the powers of
the Trustees.

-----------------

Certain other officers of Putnam Management are officers of the
fund. SEE "ADDITIONAL OFFICERS" IN PART I OF THIS SAI. The
mailing address of each of the officers and Trustees is One Post
Office Square, Boston, Massachusetts 02109.

Except as stated below, the principal occupations of the officers
and Trustees for the last five years have been with the employers
as shown above, although in some cases they have held different
positions with such employers. Prior to July, 1998, Mr. Joskow
was Chairman of the Department of Economics, Massachusetts
Institute of Technology, and prior to September, 1998, he was a
consultant to National Economic Research Associates, Inc. Prior
to June, 1995, Ms. Kennan was President of Mount Holyoke College.
Prior to 1996, Mr. Stephens was Chairman of the Board of
Directors, President and Chief Executive Officer of Johns
Manville Corporation. Prior to April, 1996, Mr. Ferguson was CEO
at Hong Kong Shanghai Banking Corporation. Prior to February,
1998, Mr. Patterson was Executive Vice President and Director of
Acquisitions of Cabot Partners Limited Partnership.

Each Trustee of the fund receives an annual fee and an additional
fee for each Trustees' 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 and for special services rendered
in that connection. All of the Trustees are Trustees of all the
Putnam funds and each receives fees for his or her services. FOR
DETAILS OF TRUSTEES' FEES PAID BY THE FUND AND INFORMATION
CONCERNING RETIREMENT GUIDELINES FOR THE TRUSTEES, SEE "CHARGES
AND EXPENSES" IN PART I OF THIS SAI.

The Agreement and Declaration of Trust of the fund provides that
the fund will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with litigation
in which they may be involved because of their offices with the
fund, except if it is determined in the manner specified in the
Agreement and Declaration of Trust that they have not acted in
good faith in the reasonable belief that their actions were in
the best interests of the fund or that such indemnification would
relieve any officer or Trustee of any liability to the fund or
its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties. The
fund, at its expense, provides liability insurance for the
benefit of its Trustees and officers.

PUTNAM MANAGEMENT AND ITS AFFILIATES

Putnam Management is one of America's oldest and largest money
management firms. Putnam Management's staff of experienced
portfolio managers and research analysts selects securities and
constantly supervises the fund's portfolio. By pooling an
investor's money with that of other investors, a greater variety
of securities can be purchased than would be the case
individually; the resulting diversification helps reduce
investment risk. Putnam Management has been managing mutual funds
since 1937. Today, the firm serves as the investment manager for
the funds in the Putnam Family, with nearly $182 billion in
assets in over 9 million shareholder accounts at December 31,
1997. An affiliate, The Putnam Advisory Company, Inc., manages
domestic and foreign institutional accounts and mutual funds,
including the accounts of many Fortune 500 companies. Another
affiliate, Putnam Fiduciary Trust Company, provides investment
advice to institutional clients under its banking and fiduciary
powers. At December 31, 1997, Putnam Management and its
affiliates managed over $235 billion in assets, including over
$19 billion in tax-exempt securities and over $57 billion in
retirement plan assets.

Putnam Management, Putnam Mutual Funds and Putnam Fiduciary Trust
Company are subsidiaries of Putnam Investments, Inc., a holding
company which is in turn wholly owned by Marsh & McLennan
Companies, Inc., a publicly-owned holding company whose principal
operating subsidiaries are international insurance and
reinsurance brokers, investment managers and management
consultants.

Trustees and officers of the fund who are also officers of Putnam
Management or its affiliates or who are stockholders of Marsh &
McLennan Companies, Inc. will benefit from the advisory fees,
sales commissions, distribution fees, custodian fees and transfer
agency fees paid or allowed by the fund.

THE MANAGEMENT CONTRACT

Under a Management Contract between the fund and Putnam
Management, subject to such policies as the Trustees may
determine, Putnam Management, at its expense, furnishes
continuously an investment program for the fund and makes
investment decisions on behalf of the fund. Subject to the
control of the Trustees, Putnam Management also manages,
supervises and conducts the other affairs and business of the
fund, furnishes office space and equipment, provides bookkeeping
and clerical services (including determination of the fund's net
asset value, but excluding shareholder accounting services) and
places all orders for the purchase and sale of the fund's
portfolio securities. Putnam Management may place fund portfolio
transactions with broker-dealers which furnish Putnam Management,
without cost to it, certain research, statistical and quotation
services of value to Putnam Management and its affiliates in
advising the fund and other clients. In so doing, Putnam
Management may cause the fund to pay greater brokerage
commissions than it might otherwise pay.

FOR DETAILS OF PUTNAM MANAGEMENT'S COMPENSATION UNDER THE
MANAGEMENT CONTRACT, SEE "CHARGES AND EXPENSES" IN PART I OF THIS
SAI. Putnam Management's compensation under the Management
Contract may be reduced in any year if the fund's expenses exceed
the limits on investment company expenses imposed by any statute
or regulatory authority of any jurisdiction in which shares of
the fund are qualified for offer or sale. The term "expenses" is
defined in the statutes or regulations of such jurisdictions, and
generally excludes brokerage commissions, taxes, interest,
extraordinary expenses and, if the fund has a distribution plan,
payments made under such plan.

Under the Management Contract, Putnam Management may reduce its
compensation to the extent that the fund's expenses exceed such
lower expense limitation as Putnam Management may, by notice to
the fund, declare to be effective. The expenses subject to this
limitation are exclusive of brokerage commissions, interest,
taxes, deferred organizational and extraordinary expenses and, if
the fund has a distribution plan, payments required under such
plan. For the purpose of determining any such limitation on
Putnam Management's compensation, expenses of the fund shall not
reflect the application of commissions or cash management credits
that may reduce designated fund expenses. THE TERMS OF ANY
EXPENSE LIMITATION FROM TIME TO TIME IN EFFECT ARE DESCRIBED IN
THE PROSPECTUS AND/OR PART I OF THIS SAI.

In addition to the fee paid to Putnam Management, the fund
reimburses Putnam Management for the compensation and related
expenses of certain officers of the fund and their assistants who
provide certain administrative services for the fund and the
other Putnam funds, each of which bears an allocated share of the
foregoing costs. The aggregate amount of all such payments and
reimbursements is determined annually by the Trustees.

THE AMOUNT OF THIS REIMBURSEMENT FOR THE FUND'S MOST RECENT
FISCAL YEAR IS INCLUDED IN "CHARGES AND EXPENSES" IN PART I OF
THIS SAI. Putnam Management pays all other salaries of officers
of the fund. The fund pays all expenses not assumed by Putnam
Management including, without limitation, auditing, legal,
custodial, investor servicing and shareholder reporting expenses.
The fund pays the cost of typesetting for its prospectuses and
the cost of printing and mailing any prospectuses sent to its
shareholders. Putnam Mutual Funds pays the cost of printing and
distributing all other prospectuses.

The Management Contract provides that Putnam Management shall not
be subject to any liability to the fund or to any shareholder of
the fund for any act or omission in the course of or connected
with rendering services to the fund in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
its duties on the part of Putnam Management.

The Management Contract may be terminated without penalty by vote
of the Trustees or the shareholders of the fund, or by Putnam
Management, on 30 days' written notice. It may be amended only
by a vote of the shareholders of the fund. The Management
Contract also terminates without payment of any penalty in the
event of its assignment. The Management Contract provides that
it will continue in effect only so long as such continuance is
approved at least annually by vote of either the Trustees or the
shareholders, and, in either case, by a majority of the Trustees
who are not "interested persons" of Putnam Management or the
fund. In each of the foregoing cases, the vote of the
shareholders is the affirmative vote of a "majority of the
outstanding voting securities" as defined in the Investment
Company Act of 1940.

PERSONAL INVESTMENTS BY EMPLOYEES OF PUTNAM MANAGEMENT

Employees of Putnam Management are permitted to engage in
personal securities transactions, subject to requirements and
restrictions set forth in Putnam Management's Code of Ethics.
The Code of Ethics contains provisions and requirements designed
to identify and address certain conflicts of interest between
personal investment activities and the interests of investment
advisory clients such as the funds. Among other things, the Code
of Ethics, consistent with standards recommended by the
Investment Company Institute's Advisory Group on Personal
Investing, prohibits certain types of transactions absent prior
approval, imposes time periods during which personal transactions
may not be made in certain securities, and requires the
submission of duplicate broker confirmations and quarterly
reporting of securities transactions. Additional restrictions
apply to portfolio managers, traders, research analysts and
others involved in the investment advisory process. Exceptions
to these and other provisions of the Code of Ethics may be
granted in particular circumstances after review by appropriate
personnel.

PORTFOLIO TRANSACTIONS

INVESTMENT DECISIONS. Investment decisions for the fund and for
the other investment advisory clients of Putnam Management and
its affiliates are made with a view to achieving their respective
investment objectives. Investment decisions are the product of
many factors in addition to basic suitability for the particular
client involved. Thus, a particular security may be bought or
sold for certain clients even though it could have been bought or
sold for other clients at the same time. Likewise, a particular
security may be bought for one or more clients when one or more
other clients are selling the security. In some instances, one
client may sell a particular security to another client. It also
sometimes happens that two or more clients simultaneously
purchase or sell the same security, in which event each day's
transactions in such security are, insofar as possible, averaged
as to price and allocated between such clients in a manner which
in Putnam Management's opinion is equitable to each and in
accordance with the amount being purchased or sold by each.
There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on
other clients.

BROKERAGE AND RESEARCH SERVICES. Transactions on U.S. stock
exchanges, commodities markets and futures markets and other
agency transactions involve the payment by the fund of negotiated
brokerage commissions. Such commissions vary among different
brokers. A particular broker may charge different commissions
according to such factors as the difficulty and size of the
transaction. Transactions in foreign investments often involve
the payment of fixed brokerage commissions, which may be higher
than those in the United States. There is generally no stated
commission in the case of securities traded in the over-the-
counter markets, but the price paid by the fund usually includes
an undisclosed dealer commission or mark-up. In underwritten
offerings, the price paid by the fund includes a disclosed, fixed
commission or discount retained by the underwriter or dealer. It
is anticipated that most purchases and sales of securities by
funds investing primarily in tax-exempt securities and certain
other fixed-income securities will be with the issuer or with
underwriters of or dealers in those securities, acting as
principal. Accordingly, those funds would not ordinarily pay
significant brokerage commissions with respect to securities
transactions. SEE "CHARGES AND EXPENSES" IN PART I OF THIS SAI
FOR INFORMATION CONCERNING COMMISSIONS PAID BY THE FUND.

It has for many years been a common practice in the investment
advisory business for advisers of investment companies and other
institutional investors to receive brokerage and research
services (as defined in the Securities Exchange Act of 1934, as
amended (the "1934 Act")) from broker-dealers that execute
portfolio transactions for the clients of such advisers and from
third parties with which such broker-dealers have arrangements.
Consistent with this practice, Putnam Management receives
brokerage and research services and other similar services from
many broker-dealers with which Putnam Management places the
fund's portfolio transactions and from third parties with which
these broker-dealers have arrangements. These services include
such matters as general economic and market reviews, industry and
company reviews, evaluations of investments, recommendations as
to the purchase and sale of investments, newspapers, magazines,
pricing services, quotation services, news services and personal
computers utilized by Putnam Management's managers and analysts.
Where the services referred to above are not used exclusively by
Putnam Management for research purposes, Putnam Management, based
upon its own allocations of expected use, bears that portion of
the cost of these services which directly relates to their non-
research use. Some of these services are of value to Putnam
Management and its affiliates in advising various of their
clients (including the fund), although not all of these services
are necessarily useful and of value in managing the fund. The
management fee paid by the fund is not reduced because Putnam
Management and its affiliates receive these services even though
Putnam Management might otherwise be required to purchase some of
these services for cash.

Putnam Management places all orders for the purchase and sale of
portfolio investments for the fund and buys and sells investments
for the fund through a substantial number of brokers and dealers.
In so doing, Putnam Management uses its best efforts to obtain
for the fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage
commissions as described below. In seeking the most favorable
price and execution, Putnam Management, having in mind the fund's
best interests, considers all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security or other
investment, the amount of the commission, the timing of the
transaction taking into account market prices and trends, the
reputation, experience and financial stability of the
broker-dealer involved and the quality of service rendered by the
broker-dealer in other transactions.

As permitted by Section 28(e) of the 1934 Act, and by the
Management Contract, Putnam Management may cause the fund to pay
a broker-dealer which provides "brokerage and research services"
(as defined in the 1934 Act) to Putnam Management an amount of
disclosed commission for effecting securities transactions on
stock exchanges and other transactions for the fund on an agency
basis in excess of the commission which another broker-dealer
would have charged for effecting that transaction. Putnam
Management's authority to cause the fund to pay any such greater
commissions is also subject to such policies as the Trustees may
adopt from time to time. Putnam Management does not currently
intend to cause the fund to make such payments. It is the
position of the staff of the Securities and Exchange Commission
that Section 28(e) does not apply to the payment of such greater
commissions in "principal" transactions. Accordingly Putnam
Management will use its best effort to obtain the most favorable
price and execution available with respect to such transactions,
as described above.

The Management Contract provides that commissions, fees,
brokerage or similar payments received by Putnam Management or an
affiliate in connection with the purchase and sale of portfolio
investments of the fund, less any direct expenses approved by the
Trustees, shall be recaptured by the fund through a reduction of
the fee payable by the fund under the Management Contract.
Putnam Management seeks to recapture for the fund soliciting
dealer fees on the tender of the fund's portfolio securities in
tender or exchange offers. Any such fees which may be recaptured
are likely to be minor in amount.

Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. and subject to seeking the most
favorable price and execution available and such other policies
as the Trustees may determine, Putnam Management may consider
sales of shares of the fund (and, if permitted by law, of the
other Putnam funds) as a factor in the selection of
broker-dealers to execute portfolio transactions for the fund.

PRINCIPAL UNDERWRITER

Putnam Mutual Funds is the principal underwriter of shares of the
fund and the other continuously offered Putnam funds. Putnam
Mutual Funds is not obligated to sell any specific amount of
shares of the fund and will purchase shares for resale only
against orders for shares. SEE "CHARGES AND EXPENSES" IN PART I
OF THIS SAI FOR INFORMATION ON SALES CHARGES AND OTHER PAYMENTS
RECEIVED BY PUTNAM MUTUAL FUNDS.

INVESTOR SERVICING AGENT AND CUSTODIAN

Putnam Investor Services, a division of Putnam Fiduciary Trust
Company ("PFTC"), is the fund's investor servicing agent
(transfer, plan and dividend disbursing agent), for which it
receives fees which are paid monthly by the fund as an expense of
all its shareholders. The fee paid to Putnam Investor Services
is determined on the basis of the number of shareholder accounts,
the number of transactions and the assets of the fund. Putnam
Investor Services won the DALBAR Quality Tested Service Seal in
1990, 1991, 1992, 1993, 1994, 1995 and 1997. Over 10,000 tests
of 38 separate shareholder service components demonstrated that
Putnam Investor Services tied for highest scores, with two other
mutual fund companies, in all categories.

PFTC is the custodian of the fund's assets. In carrying out its
duties under its custodian contract, PFTC may employ one or more
subcustodians whose responsibilities include safeguarding and
controlling the fund's cash and securities, handling the receipt
and delivery of securities and collecting interest and dividends
on the fund's investments. PFTC and any subcustodians employed
by it have a lien on the securities of the fund (to the extent
permitted by the fund's investment restrictions) to secure
charges and any advances made by such subcustodians at the end of
any day for the purpose of paying for securities purchased by the
fund. The fund expects that such advances will exist only in
unusual circumstances. Neither PFTC nor any subcustodian
determines the investment policies of the fund or decides which
securities the fund will buy or sell. PFTC pays the fees and
other charges of any subcustodians employed by it. The fund may
from time to time pay custodial expenses in full or in part
through the placement by Putnam Management of the fund's
portfolio transactions with the subcustodians or with a third-
party broker having an agreement with the subcustodians. The
fund pays PFTC an annual fee based on the fund's assets,
securities transactions and securities holdings and reimburses
PFTC for certain out-of-pocket expenses incurred by it or any
subcustodian employed by it in performing custodial services.

SEE "CHARGES AND EXPENSES" IN PART I OF THIS SAI FOR INFORMATION
ON FEES AND REIMBURSEMENTS FOR INVESTOR SERVICING AND CUSTODY
RECEIVED BY PFTC. THE FEES MAY BE REDUCED BY CREDITS ALLOWED BY
PFTC.

DETERMINATION OF NET ASSET VALUE

The fund determines the net asset value per share of each class
of shares once each day the New York Stock Exchange (the
"Exchange") is open. Currently, the Exchange is closed
Saturdays, Sundays and the following holidays: New Year's Day,
Rev. Dr. Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, the Fourth of July, Labor Day, Thanksgiving
and Christmas. The fund determines net asset value as of the
close of regular trading on the Exchange, currently 4:00 p.m.
However, equity options held by the fund are priced as of the
close of trading at 4:10 p.m., and futures contracts on U.S.
government and other fixed-income securities and index options
held by the fund are priced as of their close of trading at 4:15
p.m.

Securities for which market quotations are readily available are
valued at prices which, in the opinion of Putnam Management, most
nearly represent the market values of such securities.
Currently, such prices are determined using the last reported
sale price or, if no sales are reported (as in the case of some
securities traded over-the-counter), the last reported bid price,
except that certain securities are valued at the mean between the
last reported bid and asked prices. Short-term investments
having remaining maturities of 60 days or less are valued at
amortized cost, which approximates market value. All other
securities and assets are valued at their fair value following
procedures approved by the Trustees. Liabilities are deducted
from the total, and the resulting amount is divided by the number
of shares of the class outstanding.

Reliable market quotations are not considered to be readily
available for long-term corporate bonds and notes, certain
preferred stocks, tax-exempt securities, and certain foreign
securities. These investments are valued at fair value on the
basis of valuations furnished by pricing services, which
determine valuations for normal, institutional-size trading units
of such securities using methods based on market transactions for
comparable securities and various relationships between
securities which are generally recognized by institutional
traders.

If any securities held by the fund are restricted as to resale,
Putnam Management determines their fair value following
procedures approved by the Trustees. The fair value of such
securities is generally determined as the amount which the fund
could reasonably expect to realize from an orderly disposition of
such securities over a reasonable period of time. The valuation
procedures applied in any specific instance are likely to vary
from case to case. However, consideration is generally given to
the financial position of the issuer and other fundamental
analytical data relating to the investment and to the nature of
the restrictions on disposition of the securities (including any
registration expenses that might be borne by the fund in
connection with such disposition). In addition, specific factors
are also generally considered, such as the cost of the
investment, the market value of any unrestricted securities of
the same class, the size of the holding, the prices of any recent
transactions or offers with respect to such securities and any
available analysts' reports regarding the issuer.

Generally, trading in certain securities (such as foreign
securities) is substantially completed each day at various times
prior to the close of the Exchange. The values of these
securities used in determining the net asset value of the fund's
shares are computed as of such times. Also, because of the
amount of time required to collect and process trading
information as to large numbers of securities issues, the values
of certain securities (such as convertible bonds, U.S. government
securities, and tax-exempt securities) are determined based on
market quotations collected earlier in the day at the latest
practicable time prior to the close of the Exchange.
Occasionally, events affecting the value of such securities may
occur between such times and the close of the Exchange which will
not be reflected in the computation of the fund's net asset
value. If events materially affecting the value of such
securities occur during such period, then these securities will
be valued at their fair value following procedures approved by
the Trustees. In addition, securities held by some of the funds
may be traded in foreign markets that are open for business on
days that a fund is not, and the trading of such securities on
those days may have an impact on the value of a shareholder's
investment at a time when the shareholder cannot buy and sell
shares of the fund.

Money market funds generally value their portfolio securities at
amortized cost according to Rule 2a-7 under the Investment
Company Act of 1940.

HOW TO BUY SHARES

GENERAL

The prospectus contains a general description of how investors
may buy shares of the fund and states whether the fund offers
more than one class of shares. This SAI contains additional
information which may be of interest to investors.

Class A shares and class M shares are generally sold with a sales
charge payable at the time of purchase (except for class A shares
and class M shares of money market funds). As used in this SAI
and unless the context requires otherwise, the term "class A
shares" includes shares of funds that offer only one class of
shares. The prospectus contains a table of applicable sales
charges. For information about how to purchase class A or class
M shares of a Putnam fund at net asset value through an employer-
sponsored retirement plan, please consult your employer. Certain
purchases of class A shares and class M shares may be exempt from
a sales charge or, in the case of class A shares, may be subject
to a contingent deferred sales charge ("CDSC"). See "General--
Sales without sales charges or contingent deferred sales
charges," "Additional Information About Class A and Class M
shares," and "Contingent Deferred Sales Charges--Class A shares."

Class B shares and class C shares are sold subject to a CDSC
payable upon redemption within a specified period after purchase.
The prospectus contains a table of applicable CDSCs.

Class B shares will automatically convert into class A shares at
the end of the month eight years after the purchase date. Class
B shares acquired by exchanging class B shares of another Putnam
fund will convert into class A shares based on the time of the
initial purchase. Class B shares acquired through reinvestment
of distributions will convert into Class A shares based on the
date of the initial purchase to which such shares relate. For
this purpose, class B shares acquired through reinvestment of
distributions will be attributed to particular purchases of class
B shares in accordance with such procedures as the Trustees may
determine from time to time. The conversion of class B shares to
class A shares is subject to the condition that such conversions
will not constitute taxable events for Federal tax purposes.

Class Y shares, which are not subject to sales charges or a CDSC,
are available only to certain defined contribution plans. See
the prospectus that offers class Y shares for more information.
Certain purchase programs described below are not available to
defined contribution plans. Consult your employer for
information on how to purchase shares through your plan.

The fund is currently making a continuous offering of its shares.
The fund receives the entire net asset value of shares sold. The
fund will accept unconditional orders for shares to be executed
at the public offering price based on the net asset value per
share next determined after the order is placed. In the case of
class A shares and class M shares, the public offering price is
the net asset value plus the applicable sales charge, if any. No
sales charge is included in the public offering price of other
classes of shares. In the case of orders for purchase of shares
placed through dealers, the public offering price will be based
on the net asset value determined on the day the order is placed,
but only if the dealer receives the order before the close of
regular trading on the Exchange. If the dealer receives the
order after the close of the Exchange, the price will be based on
the net asset value next determined. If funds for the purchase
of shares are sent directly to Putnam Investor Services, they
will be invested at the public offering price based on the net
asset value next determined after receipt. Payment for shares of
the fund must be in U.S. dollars; if made by check, the check
must be drawn on a U.S. bank.

Initial and subsequent purchases must satisfy the minimums stated
in the prospectus, except that (i) individual investments under
certain employee benefit plans or Tax Qualified Retirement Plans
may be lower, (ii) persons who are already shareholders may make
additional purchases of $50 or more by sending funds directly to
Putnam Investor Services (see "Your investing account" below),
and (iii) for investors participating in systematic investment
plans and military allotment plans, the initial and subsequent
purchases must be $25 or more. Information about these plans is
available from investment dealers or from Putnam Mutual Funds.

As a convenience to investors, shares may be purchased through a
systematic investment plan. Pre-authorized monthly bank drafts
for a fixed amount (at least $25) are used to purchase fund
shares at the applicable public offering price next determined
after Putnam Mutual Funds receives the proceeds from the draft.
A shareholder may choose any day of the month and, if a given
month (for example, February) does not contain that particular
date, or if the date falls on a weekend or holiday, the draft
will be processed on the next business day. Further information
and application forms are available from investment dealers or
from Putnam Mutual Funds.

Except for funds that declare a distribution daily, distributions
to be reinvested are reinvested without a sales charge in shares
of the same class as of the ex-dividend date using the net asset
value determined on that date, and are credited to a
shareholder's account on the payment date. Dividends for Putnam
money market funds are credited to a shareholder's account on the
payment date. Distributions for all other funds that declare a
distribution daily are reinvested without a sales charge as of
the last day of the period for which distributions are paid using
the net asset value determined on that date, and are credited to
a shareholder's account on the payment date.

PAYMENT IN SECURITIES. In addition to cash, the fund may accept
securities as payment for fund shares at the applicable net asset
value. Generally, the fund will only consider accepting
securities to increase its holdings in a portfolio security, or
if Putnam Management determines that the offered securities are a
suitable investment for the fund and in a sufficient amount for
efficient management.

While no minimum has been established, it is expected that the
fund would not accept securities with a value of less than
$100,000 per issue as payment for shares. The fund may reject in
whole or in part any or all offers to pay for purchases of fund
shares with securities, may require partial payment in cash for
such purchases to provide funds for applicable sales charges, and
may discontinue accepting securities as payment for fund shares
at any time without notice. The fund will value accepted
securities in the manner described in the section "Determination
of Net Asset Value" for valuing shares of the fund. The fund
will only accept securities which are delivered in proper form.
The fund will not accept options or restricted securities as
payment for shares. The acceptance of securities by certain
funds in exchange for fund shares is subject to additional
requirements. For federal income tax purposes, a purchase of
fund shares with securities will be treated as a sale or exchange
of such securities on which the investor will realize a taxable
gain or loss. The processing of a purchase of fund shares with
securities involves certain delays while the fund considers the
suitability of such securities and while other requirements are
satisfied. For information regarding procedures for payment in
securities, contact Putnam Mutual Funds. Investors should not
send securities to the fund except when authorized to do so and
in accordance with specific instructions received from Putnam
Mutual Funds.

SALES WITHOUT SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES.
The fund may sell shares without a sales charge or CDSC to:

(i) current and retired Trustees of the fund; officers of
the fund; directors and current and retired U.S. full-time
employees of Putnam Management, Putnam Mutual Funds, their
parent corporations and certain corporate affiliates;
family members of and employee benefit plans for the
foregoing; and partnerships, trusts or other entities in
which any of the foregoing has a substantial interest;

(ii) employer-sponsored retirement plans, for the
repurchase of shares in connection with repayment of plan
loans made to plan participants (if the sum loaned was
obtained by redeeming shares of a Putnam fund sold with a
sales charge) (not offered by tax-exempt funds);

(iii) clients of administrators of tax-qualified employer-
sponsored retirement plans which have entered into
agreements with Putnam Mutual Funds (not offered by tax-
exempt funds);

(iv) registered representatives and other employees of
broker-dealers having sales agreements with Putnam Mutual
Funds; employees of financial institutions having sales
agreements with Putnam Mutual Funds or otherwise having an
arrangement with any such broker-dealer or financial
institution with respect to sales of fund shares; and
their spouses and children under age 21 (Putnam Mutual
Funds is regarded as the dealer of record for all such
accounts);

(v) investors meeting certain requirements who sold shares
of certain Putnam closed-end funds pursuant to a tender
offer by such closed-end fund;

(vi) a trust department of any financial institution
purchasing shares of the fund in its capacity as trustee
of any trust, if the value of the shares of the fund and
other Putnam funds purchased or held by all such trusts
exceeds $1 million in the aggregate; and

(vii) "wrap accounts" maintained for clients of broker-
dealers, financial institutions or financial
intermediaries who have entered into agreements with
Putnam Mutual Funds with respect to such accounts, which
in all cases shall be subject to a wrap fee economically
comparable to a sales charge. Fund shares offered
pursuant to this waiver may not be advertised as "no
load", or otherwise offered for sales at NAV without a
wrap fee.

In addition, the fund may issue its shares at net asset value
without an initial sales charge or a CDSC in connection with the
acquisition of substantially all of the securities owned by other
investment companies or personal holding companies, and the CDSC
will be waived on redemptions of shares arising out of death or
post-purchase disability or in connection with certain
withdrawals from IRA or other retirement plans. Up to 12% of the
value of shares subject to a systematic withdrawal plan may also
be redeemed each year without a CDSC. The fund may sell class M
shares at net asset value to members of qualified groups. See
"Group purchases of class A and class M shares" below. Class A
shares are available without an initial sales charge to eligible
employer-sponsored retirement plans, as described below.

PAYMENTS TO DEALERS. Putnam Mutual Funds may, at its expense,
pay concessions in addition to the payments disclosed in the
prospectus to dealers which satisfy certain criteria established
from time to time by Putnam Mutual Funds relating to increasing
net sales of shares of the Putnam funds over prior periods, and
certain other factors.

ADDITIONAL INFORMATION ABOUT CLASS A AND CLASS M SHARES

The underwriter's commission is the sales charge shown in the
prospectus less any applicable dealer discount. Putnam Mutual
Funds will give dealers ten days' notice of any changes in the
dealer discount. Putnam Mutual Funds retains the entire sales
charge on any retail sales made by it.

Putnam Mutual Funds offers several plans by which an investor may
obtain reduced sales charges on purchases of class A shares and
class M shares. The variations in sales charges reflect the
varying efforts required to sell shares to separate categories of
purchasers. These plans may be altered or discontinued at any
time.

COMBINED PURCHASE PRIVILEGE. The following persons may qualify
for the sales charge reductions or eliminations shown in the
prospectus by combining into a single transaction the purchase of
class A shares or class M shares with other purchases of any
class of shares:

(i) an individual, or a "company" as defined in Section
2(a)(8) of the Investment Company Act of 1940 (which
includes corporations which are corporate affiliates of
each other);

(ii) an individual, his or her spouse and their children
under twenty-one, purchasing for his, her or their own
account;

(iii) a trustee or other fiduciary purchasing for a single
trust estate or single fiduciary account (including a
pension, profit-sharing, or other employee benefit trust
created pursuant to a plan qualified under Section 401 of
the Internal Revenue Code of 1986, as amended (the
"Code"));

(iv) tax-exempt organizations qualifying under Section
501(c)(3) of the Internal Revenue Code (not including tax-
exempt organizations qualifying under Section 403(b)(7) (a
"403(b) plan") of the Code; and

(v) employee benefit plans of a single employer or of
affiliated employers, other than 403(b) plans.

A combined purchase currently may also include shares of any
class of other continuously offered Putnam funds (other than
money market funds) purchased at the same time through a single
investment dealer, if the dealer places the order for such shares
directly with Putnam Mutual Funds.

CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION). A
purchaser of class A shares or class M shares may qualify for a
cumulative quantity discount by combining a current purchase (or
combined purchases as described above) with certain other shares
of any class of Putnam funds already owned. The applicable sales
charge is based on the total of:

(i) the investor's current purchase; and

(ii) the maximum public offering price (at the close of
business on the previous day) of:

(a) all shares held by the investor in all of the
Putnam funds (except money market funds); and

(b) any shares of money market funds acquired by
exchange from other Putnam funds; and

(iii) the maximum public offering price of all shares
described in paragraph (ii) owned by another shareholder
eligible to participate with the investor in a "combined
purchase" (see above).

To qualify for the combined purchase privilege or to obtain the
cumulative quantity discount on a purchase through an investment
dealer, when each purchase is made the investor or dealer must
provide Putnam Mutual Funds with sufficient information to verify
that the purchase qualifies for the privilege or discount. The
shareholder must furnish this information to Putnam Investor
Services when making direct cash investments.

STATEMENT OF INTENTION. Investors may also obtain the reduced
sales charges for class A shares or class M shares shown in the
prospectus for investments of a particular amount by means of a
written Statement of Intention, which expresses the investor's
intention to invest that amount (including certain "credits," as
described below) within a period of 13 months in shares of any
class of the fund or any other continuously offered Putnam fund
(excluding money market funds). Each purchase of class A shares
or class M shares under a Statement of Intention will be made at
the public offering price applicable at the time of such purchase
to a single transaction of the total dollar amount indicated in
the Statement of Intention. A Statement of Intention may include
purchases of shares made not more than 90 days prior to the date
that an investor signs a Statement; however, the 13-month period
during which the Statement of Intention is in effect will begin
on the date of the earliest purchase to be included.

An investor may receive a credit toward the amount indicated in
the Statement of Intention equal to the maximum public offering
price as of the close of business on the previous day of all
shares he or she owns on the date of the Statement of Intention
which are eligible for purchase under a Statement of Intention
(plus any shares of money market funds acquired by exchange of
such eligible shares). Investors do not receive credit for
shares purchased by the reinvestment of distributions. Investors
qualifying for the "combined purchase privilege" (see above) may
purchase shares under a single Statement of Intention.

The Statement of Intention is not a binding obligation upon the
investor to purchase the full amount indicated. The minimum
initial investment under a Statement of Intention is 5% of such
amount, and must be invested immediately. Class A shares or
class M shares purchased with the first 5% of such amount will be
held in escrow to secure payment of the higher sales charge
applicable to the shares actually purchased if the full amount
indicated is not purchased. When the full amount indicated has
been purchased, the escrow will be released. If an investor
desires to redeem escrowed shares before the full amount has been
purchased, the shares will be released from escrow only if the
investor pays the sales charge that, without regard to the
Statement of Intention, would apply to the total investment made
to date.

To the extent that an investor purchases more than the dollar
amount indicated on the Statement of Intention and qualifies for
a further reduced sales charge, the sales charge will be adjusted
for the entire amount purchased at the end of the 13-month
period, upon recovery from the investor's dealer of its portion
of the sales charge adjustment. Once received from the dealer,
which may take a period of time or may never occur, the sales
charge adjustment will be used to purchase additional shares at
the then current offering price applicable to the actual amount
of the aggregate purchases. These additional shares will not be
considered as part of the total investment for the purpose of
determining the applicable sales charge pursuant to the Statement
of Intention. No sales charge adjustment will be made unless and
until the investor's dealer returns any excess commissions
previously received.

To the extent that an investor purchases less than the dollar
amount indicated on the Statement of Intention within the 13-
month period, the sales charge will be adjusted upward for the
entire amount purchased at the end of the 13-month period. This
adjustment will be made by redeeming shares from the account to
cover the additional sales charge, the proceeds of which will be
paid to the investor's dealer and Putnam Mutual Funds in
accordance with the prospectus. If the account exceeds an amount
that would otherwise qualify for a reduced sales charge, that
reduced sales charge will be applied.

Statements of Intention are not available for certain employee
benefit plans.

Statement of Intention forms may be obtained from Putnam Mutual
Funds or from investment dealers. Interested investors should
read the Statement of Intention carefully.

GROUP PURCHASES OF CLASS A AND CLASS M SHARES. Members of
qualified groups may purchase class A shares of the fund at a
group sales charge rate of 4.50% of the public offering price
(4.71% of the net amount invested). The dealer discount on such
sales is 3.75% of the offering price. Members of qualified
groups may also purchase class M shares at net asset value.

To receive the class A or class M group rate, group members must
purchase shares through a single investment dealer designated by
the group. The designated dealer must transmit each member's
initial purchase to Putnam Mutual Funds, together with payment
and completed application forms. After the initial purchase, a
member may send funds for the purchase of shares directly to
Putnam Investor Services. Purchases of shares are made at the
public offering price based on the net asset value next
determined after Putnam Mutual Funds or Putnam Investor Services
receives payment for the shares. The minimum investment
requirements described above apply to purchases by any group
member. Only shares purchased under the class A group discount
are included in calculating the purchased amount for the purposes
of these requirements.

Qualified groups include the employees of a corporation or a sole
proprietorship, members and employees of a partnership or
association, or other organized groups of persons (the members of
which may include other qualified groups) provided that: (i) the
group has at least 25 members of which, with respect to the class
A discount only, at least 10 members participate in the initial
purchase; (ii) the group has been in existence for at least six
months; (iii) the group has some purpose in addition to the
purchase of investment company shares at a reduced sales charge;
(iv) the group's sole organizational nexus or connection is not
that the members are credit card holders of a company, policy
holders of an insurance company, customers of a bank or broker-
dealer, clients of an investment adviser or security holders of a
company; (v) with respect to the class A discount only, the group
agrees to provide its designated investment dealer access to the
group's membership by means of written communication or direct
presentation to the membership at a meeting on not less
frequently than an annual basis; (vi) the group or its investment
dealer will provide annual certification in form satisfactory to
Putnam Investor Services that the group then has at least 25
members and, with respect to the class A discount only, that at
least ten members participated in group purchases during the
immediately preceding 12 calendar months; and (vii) the group or
its investment dealer will provide periodic certification in form
satisfactory to Putnam Investor Services as to the eligibility of
the purchasing members of the group.

Members of a qualified group include: (i) any group which meets
the requirements stated above and which is a constituent member
of a qualified group; (ii) any individual purchasing for his or
her own account who is carried on the records of the group or on
the records of any constituent member of the group as being a
good standing employee, partner, member or person of like status
of the group or constituent member; or (iii) any fiduciary
purchasing shares for the account of a member of a qualified
group or a member's beneficiary. For example, a qualified group
could consist of a trade association which would have as its
members individuals, sole proprietors, partnerships and
corporations. The members of the group would then consist of the
individuals, the sole proprietors and their employees, the
members of the partnerships and their employees, and the
corporations and their employees, as well as the trustees of
employee benefit trusts acquiring class A shares for the benefit
of any of the foregoing.

A member of a qualified group may, depending upon the value of
class A shares of the fund owned or proposed to be purchased by
the member, be entitled to purchase class A shares of the fund at
non-group sales charge rates shown in the prospectus which may be
lower than the group sales charge rate, if the member qualifies
as a person entitled to reduced non-group sales charges. Such a
group member will be entitled to purchase at the lower rate if,
at the time of purchase, the member or his or her investment
dealer furnishes sufficient information for Putnam Mutual Funds
or Putnam Investor Services to verify that the purchase qualifies
for the lower rate.

Interested groups should contact their investment dealer or
Putnam Mutual Funds. The fund reserves the right to revise the
terms of or to suspend or discontinue group sales at any time.

QUALIFIED BENEFIT PLANS; INDIVIDUAL ACCOUNT PLANS. The terms
"class A qualified benefit plan" and "class M qualified benefit
plan" mean any employer-sponsored plan or arrangement, whether or
not tax-qualified, for which Putnam Fiduciary Trust Company or
its affiliates provide recordkeeping or other services in
connection with the purchase of class A shares or class M shares,
respectively. The term "affiliated employer" means employers who
are affiliated with each other within the meaning of Section
2(a)(3)(C) of the Investment Company Act of 1940. The term
"individual account plan" means any employee benefit plan whereby
(i) class A shares are purchased through payroll deductions or
otherwise by a fiduciary or other person for the account of
participants who are employees (or their spouses) of an employer,
or of affiliated employers, and (ii) a separate investing account
is maintained in the name of such fiduciary or other person for
the account of each participant in the plan.

The table of sales charges in the prospectus applies to sales to
employer-sponsored retirement plans that are not class A
qualified benefit plans, except that the fund may sell class A
shares at net asset value to employee benefit plans, including
individual account plans, of employers or of affiliated employers
which have at least 750 employees to whom such plan is made
available, in connection with a payroll deduction system of plan
funding (or other system acceptable to Putnam Investor Services)
by which contributions or account information for plan
participation are transmitted to Putnam Investor Services by
methods acceptable to Putnam Investor Services. The fund may
also sell class A shares at net asset value to employer-sponsored
retirement plans that initially invest at least $1 million in the
fund or that have at least 200 eligible employees. In addition,
the fund may sell class M shares at net asset value to class M
qualified benefit plans.

An employer-sponsored retirement plan participating in a "multi-
fund" program approved by Putnam Mutual Funds may include amounts
invested in the other mutual funds participating in such program
for purposes of determining whether the plan may purchase class A
shares at net asset value based on the size of the purchase as
described in the prospectus. These investments will also be
included for purposes of the discount privileges and programs
described above.

Additional information about qualified benefit plans and
individual account plans is available from investment dealers or
from Putnam Mutual Funds.

CONTINGENT DEFERRED SALES CHARGES; COMMISSIONS

CLASS A SHARES. Except as described below, a CDSC of 0.75%
(1.00% in the case of plans for which Putnam Mutual Funds and its
affiliates do not act as trustee or record-keeper) of the total
amount redeemed is imposed on redemptions of shares purchased by
class A qualified benefit plans if, within two years of a plan's
initial purchase of class A shares, it redeems 90% or more of its
cumulative purchases. Thereafter, such plan is no longer liable
for any CDSC. The two-year CDSC applicable to class A qualified
benefit plans for which Putnam Mutual Funds or its affiliates
serve as trustee or recordkeeper ("full service plans") is 0.50%
of the total amount redeemed, for full service plans that
initially invest at least $5 million but less than $10 million in
Putnam funds and other investments managed by Putnam Management
or its affiliates ("Putnam Assets"), and is 0.25% of the total
amount redeemed for full service plans that initially invest at
least $10 million but less than $20 million in Putnam Assets.
Class A qualified benefit plans that initially invest at least
$20 million in Putnam Assets, or whose dealer of record has, with
Putnam Mutual Funds' approval, waived its commission or agreed to
refund its commission to Putnam Mutual Funds in the event a CDSC
would otherwise be applicable, are not subject to any CDSC.

Similarly, class A shares purchased at net asset value by any
investor other than a class A qualified benefit plan, including
purchases pursuant to any Combined Purchase Privilege, Right of
Accumulation or Statement of Intention, are subject to a CDSC of
1.00% or 0.50%, respectively, if redeemed within the first or
second year after purchase, unless the dealer of record waived
its commission with Putnam Mutual Funds' approval. The class A
CDSC is imposed on the lower of the cost and the current net
asset value of the shares redeemed.

Except as described below for sales to class A qualified benefit
plans, Putnam Mutual Funds pays investment dealers of record
commissions on sales of class A shares of $1 million or more and
sales to employer-sponsored benefit plans that have at least 200
eligible employees and that are not class A qualified benefit
plans based on cumulative purchases of such shares, including
purchases pursuant to any Combined Purchase Privilege, Right of
Accumulation or Statement of Intention, during the one-year
period beginning with the date of the initial purchase at net
asset value. Each subsequent one-year measuring period for these
purposes will begin with the first net asset value purchase
following the end of the prior period. Such commissions are paid
at the rate of 1.00% of the amount under $3 million, 0.50% of the
next $47 million and 0.25% thereafter.

On sales at net asset value to a class A qualified benefit plan,
Putnam Mutual Funds pays commissions to the dealer of record at
the time of the sale on net monthly purchases at the following
rates: 1.00% of the first $1 million, 0.75% of the next $1
million, 0.50% of the next $3 million, 0.20% of the next $5
million, 0.15% of the next $10 million, 0.10% of the next $10
million and 0.05% thereafter, except that commissions on sales to
class A qualified benefit plans initially investing less than $20
million in Putnam funds and other investments managed by Putnam
Management or its affiliates pursuant to a proposal made by
Putnam Mutual Funds on or before April 15, 1997 are based on
cumulative purchases over a one-year measuring period at the rate
of 1.00% of the first $2 million, 0.80% of the next $1 million,
and 0.50% thereafter. On sales at net asset value to all other
class A qualified benefit plans receiving proposals from Putnam
Mutual Funds on or before April 15, 1997, Putnam Mutual Funds
pays commissions on the initial investment and on subsequent net
quarterly sales (gross sales minus gross redemptions during the
quarter) at the rate of 0.15%. Money market fund shares are
excluded from all commission calculations, except for determining
the amount initially invested by a qualified benefit plan.
Commissions on sales at net asset value to such plans are subject
to Putnam Mutual Funds' right to reclaim such commissions if the
shares are redeemed within two years.

Different CDSC and commission rates may apply to shares purchased
prior to December 1, 1995.

ALL SHARES. Investors who set up an Automatic Cash Withdrawal
Plan ("ACWP") for a share account (see "Plans available to
shareholders -- Automatic Cash Withdrawal Plan") may withdraw
through the ACWP up to 12% of the net asset value of the account
(calculated as set forth below) each year without incurring any
CDSC. Shares not subject to a CDSC (such as shares representing
reinvestment of distributions) will be redeemed first and will
count toward the 12% limitation. If there are insufficient
shares not subject to a CDSC, shares subject to the lowest CDSC
liability will be redeemed next until the 12% limit is reached.
The 12% figure is calculated on a pro rata basis at the time of
the first payment made pursuant to an ACWP and recalculated
thereafter on a pro rata basis at the time of each ACWP payment.
Therefore, shareholders who have chosen an ACWP based on a
percentage of the net asset value of their account of up to 12%
will be able to receive ACWP payments without incurring a CDSC.
However, shareholders who have chosen a specific dollar amount
(for example, $100 per month from a fund that pays income
distributions monthly) for their periodic ACWP payment should be
aware that the amount of that payment not subject to a CDSC may
vary over time depending on the net asset value of their account.
For example, if the net asset value of the account is $10,000 at
the time of payment, the shareholder will receive $100 free of
the CDSC (12% of $10,000 divided by 12 monthly payments).
However, if at the time of the next payment the net asset value
of the account has fallen to $9,400, the shareholder will receive
$94 free of any CDSC (12% of $9,400 divided by 12 monthly
payments) and $6 subject to the lowest applicable CDSC. This
ACWP privilege may be revised or terminated at any time.

No CDSC is imposed on shares of any class subject to a CDSC
("CDSC Shares") to the extent that the CDSC Shares redeemed (i)
are no longer subject to the holding period therefor, (ii)
resulted from reinvestment of distributions on CDSC Shares, or
(iii) were exchanged for shares of another Putnam fund, provided
that the shares acquired in such exchange or subsequent exchanges
(including shares of a Putnam money market fund) will continue to
remain subject to the CDSC, if applicable, until the applicable
holding period expires. In determining whether the CDSC applies
to each redemption of CDSC Shares, CDSC Shares not subject to a
CDSC are redeemed first.

The fund will waive any CDSC on redemptions, in the case of
individual, joint or Uniform Transfers to Minors Act accounts, in
the event of death or post-purchase disability of a shareholder,
for the purpose of paying benefits pursuant to tax-qualified
retirement plans ("Benefit Payments"), or, in the case of living
trust accounts, in the event of the death or post-purchase
disability of the settlor of the trust). Benefit payments
currently include, without limitation, (1) distributions from an
IRA due to death or disability, (2) a return of excess
contributions to an IRA or 401(k) plan, and (3) distributions
from retirement plans qualified under Section 401(a) of the Code
or from a 403(b) plan due to death, disability, retirement or
separation from service. These waivers may be changed at any
time. Additional waivers may apply to IRA accounts opened prior
to February 1, 1994.

DISTRIBUTION PLANS

If the fund or a class of shares of the fund has adopted a
distribution plan, the prospectus describes the principal
features of the plan. This SAI contains additional information
which may be of interest to investors.

Continuance of a plan is subject to annual approval by a vote of
the Trustees, including a majority of the Trustees who are not
interested persons of the fund and who have no direct or indirect
interest in the plan or related arrangements (the "Qualified
Trustees"), cast in person at a meeting called for that purpose.
All material amendments to a plan must be likewise approved by
the Trustees and the Qualified Trustees. No plan may be amended
in order to increase materially the costs which the fund may bear
for distribution pursuant to such plan without also being
approved by a majority of the outstanding voting securities of
the fund or the relevant class of the fund, as the case may be.
A plan terminates automatically in the event of its assignment
and may be terminated without penalty, at any time, by a vote of
a majority of the Qualified Trustees or by a vote of a majority
of the outstanding voting securities of the fund or the relevant
class of the fund, as the case may be.

Putnam Mutual Funds pays service fees to qualifying dealers at
the rates set forth in the Prospectus, except with respect to
shares held by class A qualified benefit plans. Putnam Mutual
Funds pays service fees to the dealer of record for plans for
which Putnam Fiduciary Trust or its affiliates serve as trustee
and recordkeeper at the following annual rates (expressed as a
percentage of the average net asset value (as defined below) of
the plan's class A shares): 0.25% of the first $5 million, 0.20%
of the next $5 million, 0.15% of the next $10 million, 0.10% of
the next $30 million, and 0.05% thereafter. For class A
qualified benefit plans for which Putnam Fiduciary Trust Company
or its affiliates provide some services but do not act as trustee
and recordkeeper, Putnam Mutual Funds will pay service fees to
the dealer of record of up to 0.25% of average net assets,
depending on the level of service provided by Putnam Fiduciary
Trust Company or its affiliates, by the dealer of record, and by
third parties. Service fees are paid quarterly to the dealer of
record for that quarter.

Financial institutions receiving payments from Putnam Mutual
Funds as described above may be required to comply with various
state and federal regulatory requirements, including among others
those regulating the activities of securities brokers or dealers.

Except as otherwise agreed between Putnam Mutual Funds and a
dealer, for purposes of determining the amounts payable to
dealers for shareholder accounts for which such dealers are
designated as the dealer of record, "average net asset value"
means the product of (i) the average daily share balance in such
account(s) and (ii) the average daily net asset value of the
relevant class of shares over the quarter.

INVESTOR SERVICES

SHAREHOLDER INFORMATION

Each time shareholders buy or sell shares, they will receive a
statement confirming the transaction and listing their current
share balance. (Under certain investment plans, a statement may
only be sent quarterly.) Shareholders will receive a statement
confirming reinvestment of distributions in additional fund
shares (or in shares of other Putnam funds for Dividends Plus
accounts) promptly following the quarter in which the
reinvestment occurs. To help shareholders take full advantage of
their Putnam investment, they will receive a Welcome Kit and a
periodic publication covering many topics of interest to
investors. The fund also sends annual and semiannual reports
that keep shareholders informed about its portfolio and
performance, and year-end tax information to simplify their
recordkeeping. Easy-to-read, free booklets on special subjects
such as the Exchange Privilege and IRAs are available from Putnam
Investor Services. Shareholders may call Putnam Investor
Services toll-free weekdays at 1-800-225-1581 between 8:30 a.m.
and 7:00 p.m. Boston time for more information, including account
balances.

YOUR INVESTING ACCOUNT

The following information provides more detail concerning the
operation of a Putnam Investing Account. For further information
or assistance, investors should consult Putnam Investor Services.
Shareholders who purchase shares through a defined contribution
plan should note that not all of the services or features
described below may be available to them, and they should contact
their employer for details.

A shareholder may reinvest a cash distribution without a front-
end sales charge or without the reinvested shares being subject
to a CDSC, as the case may be, by delivering to Putnam Investor
Services the uncashed distribution check, endorsed to the order
of the fund. Putnam Investor Services must receive the properly
endorsed check within 1 year after the date of the check.

The Investing Account also provides a way to accumulate shares of
the fund. In most cases, after an initial investment of $500, a
shareholder may send checks to Putnam Investor Services for $50
or more, made payable to the fund, to purchase additional shares
at the applicable public offering price next determined after
Putnam Investor Services receives the check. Checks must be
drawn on a U.S. bank and must be payable in U.S. dollars.

Putnam Investor Services acts as the shareholder's agent whenever
it receives instructions to carry out a transaction on the
shareholder's account. Upon receipt of instructions that shares
are to be purchased for a shareholder's account, shares will be
purchased through the investment dealer designated by the
shareholder. Shareholders may change investment dealers at any
time by written notice to Putnam Investor Services, provided the
new dealer has a sales agreement with Putnam Mutual Funds.

Shares credited to an account are transferable upon written
instructions in good order to Putnam Investor Services and may be
sold to the fund as described under "How to sell shares" in the
prospectus. Money market funds and certain other funds will not
issue share certificates. A shareholder may send to Putnam
Investor Services any certificates which have been previously
issued for safekeeping at no charge to the shareholder.

Putnam Mutual Funds, at its expense, may provide certain
additional reports and administrative material to qualifying
institutional investors with fiduciary responsibilities to assist
these investors in discharging their responsibilities.
Institutions seeking further information about this service
should contact Putnam Mutual Funds, which may modify or terminate
this service at any time.

Putnam Investor Services may make special services available to
shareholders with investments exceeding $1,000,000. Contact
Putnam Investor Services for details.

The fund pays Putnam Investor Services' fees for maintaining
Investing Accounts.

REINSTATEMENT PRIVILEGE

An investor who has redeemed shares of the fund may reinvest
(within 1 year) the proceeds of such sale in shares of the same
class of the fund, or may be able to reinvest (within 1 year) the
proceeds in shares of the same class of one of the other
continuously offered Putnam funds (through the Exchange Privilege
described in the prospectus), including, in the case of shares
subject to a CDSC, the amount of CDSC charged on the redemption.
Any such reinvestment would be at the net asset value of the
shares of the fund(s) the investor selects, next determined after
Putnam Mutual Funds receives a Reinstatement Authorization. The
time that the previous investment was held will be included in
determining any applicable CDSC due upon redemptions and, in the
case of class B shares, the eight-year period for conversion to
class A shares. Shareholders will receive from Putnam Mutual
Funds the amount of any CDSC paid at the time of redemption as
part of the reinstated investment, which may be treated as
capital gains to the shareholder for tax purposes. Exercise of
the Reinstatement Privilege does not alter the federal income tax
treatment of any capital gains realized on a sale of fund shares,
but to the extent that any shares are sold at a loss and the
proceeds are reinvested in shares of the fund, some or all of the
loss may be disallowed as a deduction. Consult your tax adviser.
Investors who desire to exercise the Reinstatement Privilege
should contact their investment dealer or Putnam Investor
Services.

EXCHANGE PRIVILEGE

Except as otherwise set forth in this section, by calling Putnam
Investor Services, investors may exchange shares valued up to
$500,000 between accounts with identical registrations, provided
that no certificates are outstanding for such shares and no
address change has been made within the preceding 15 days.
During periods of unusual market changes and shareholder
activity, shareholders may experience delays in contacting Putnam
Investor Services by telephone to exercise the Telephone Exchange
Privilege.

Putnam Investor Services also makes exchanges promptly after
receiving a properly completed Exchange Authorization Form and,
if issued, share certificates. If the shareholder is a
corporation, partnership, agent, or surviving joint owner, Putnam
Investor Services will require additional documentation of a
customary nature. Because an exchange of shares involves the
redemption of fund shares and reinvestment of the proceeds in
shares of another Putnam fund, completion of an exchange may be
delayed under unusual circumstances if the fund were to suspend
redemptions or postpone payment for the fund shares being
exchanged, in accordance with federal securities laws. Exchange
Authorization Forms and prospectuses of the other Putnam funds
are available from Putnam Mutual Funds or investment dealers
having sales contracts with Putnam Mutual Funds. The prospectus
of each fund describes its investment objective(s) and policies,
and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
Shares of certain Putnam funds are not available to residents of
all states. The fund reserves the right to change or suspend the
Exchange Privilege at any time. Shareholders would be notified
of any change or suspension. Additional information is available
from Putnam Investor Services.

Shareholders of other Putnam funds may also exchange their shares
at net asset value for shares of the fund, as set forth in the
current prospectus of each fund.

For federal income tax purposes, an exchange is a sale on which
the investor generally will realize a capital gain or loss
depending on whether the net asset value at the time of the
exchange is more or less than the investor's basis. The Exchange
Privilege may be revised or terminated at any time. Shareholders
would be notified of any such change or suspension.

DIVIDENDS PLUS

Shareholders may invest the fund's distributions of net
investment income or distributions combining net investment
income and short-term capital gains in shares of the same class
of another continuously offered Putnam fund (the "receiving
fund") using the net asset value per share of the receiving fund
determined on the date the fund's distribution is payable. No
sales charge or CDSC will apply to the purchased shares unless
the fund paying the distribution is a money market fund. The
prospectus of each fund describes its investment objective(s) and
policies, and shareholders should obtain a prospectus and
consider these objective(s) and policies carefully before
investing their distributions in the receiving fund. Shares of
certain Putnam funds are not available to residents of all
states.

The minimum account size requirement for the receiving fund will
not apply if the current value of your account in the fund paying
the distribution is more than $5,000.

Shareholders of other Putnam funds (except for money market
funds, whose shareholders must pay a sales charge or become
subject to a CDSC) may also use their distributions to purchase
shares of the fund at net asset value.

For federal tax purposes, distributions from the fund which are
reinvested in another fund are treated as paid by the fund to the
shareholder and invested by the shareholder in the receiving fund
and thus, to the extent comprised of taxable income and deemed
paid to a taxable shareholder, are taxable.

The Dividends PLUS program may be revised or terminated at any
time.

PLANS AVAILABLE TO SHAREHOLDERS

The plans described below are fully voluntary and may be
terminated at any time without the imposition by the fund or
Putnam Investor Services of any penalty. All plans provide for
automatic reinvestment of all distributions in additional shares
of the fund at net asset value. The fund, Putnam Mutual Funds or
Putnam Investor Services may modify or cease offering these plans
at any time.

AUTOMATIC CASH WITHDRAWAL PLAN ("ACWP"). An investor who owns or
buys shares of the fund valued at $10,000 or more at the current
public offering price may open an ACWP plan and have a designated
sum of money ($50 or more) paid monthly, quarterly, semi-annually
or annually to the investor or another person. (Payments from
the fund can be combined with payments from other Putnam funds
into a single check through a designated payment plan.) Shares
are deposited in a plan account, and all distributions are
reinvested in additional shares of the fund at net asset value
(except where the plan is utilized in connection with a
charitable remainder trust). Shares in a plan account are then
redeemed at net asset value to make each withdrawal payment.
Payment will be made to any person the investor designates;
however, if shares are registered in the name of a trustee or
other fiduciary, payment will be made only to the fiduciary,
except in the case of a profit-sharing or pension plan where
payment will be made to a designee. As withdrawal payments may
include a return of principal, they cannot be considered a
guaranteed annuity or actual yield of income to the investor.
The redemption of shares in connection with a plan generally will
result in a gain or loss for tax purposes. Some or all of the
losses realized upon redemption may be disallowed pursuant to the
so-called wash sale rules if shares of the same fund from which
shares were redeemed are purchased (including through the
reinvestment of fund distributions) within a period beginning 30
days before, and ending 30 days after, such redemption. In such
a case, the basis of the replacement shares will be increased to
reflect the disallowed loss. Continued withdrawals in excess of
income will reduce and possibly exhaust invested principal,
especially in the event of a market decline. The maintenance of
a plan concurrently with purchases of additional shares of the
fund would be disadvantageous to the investor because of the
sales charge payable on such purchases. For this reason, the
minimum investment accepted while a plan is in effect is $1,000,
and an investor may not maintain a plan for the accumulation of
shares of the fund (other than through reinvestment of
distributions) and a plan at the same time. The cost of
administering these plans for the benefit of those shareholders
participating in them is borne by the fund as an expense of all
shareholders. The fund, Putnam Mutual Funds or Putnam Investor
Services may terminate or change the terms of the plan at any
time. A plan will be terminated if communications mailed to the
shareholder are returned as undeliverable.

Investors should consider carefully with their own financial
advisers whether the plan and the specified amounts to be
withdrawn are appropriate in their circumstances. The fund and
Putnam Investor Services make no recommendations or
representations in this regard.

TAX QUALIFIED RETIREMENT PLANS; 403(B) AND SEP PLANS. (NOT
OFFERED BY FUNDS INVESTING PRIMARILY IN TAX-EXEMPT SECURITIES.)
Investors may purchase shares of the fund through the following
Tax Qualified Retirement Plans, available to qualified
individuals or organizations:

Standard and variable profit-sharing (including 401(k))
and money purchase pension plans; and

Individual Retirement Account Plans (IRAs).

Each of these Plans has been qualified as a prototype plan by the
Internal Revenue Service. Putnam Investor Services will furnish
services under each plan at a specified annual cost. Putnam
Fiduciary Trust Company serves as trustee under each of these
Plans.

Forms and further information on these Plans are available from
investment dealers or from Putnam Mutual Funds. In addition,
specialized professional plan administration services are
available on an optional basis; contact Putnam Defined
Contribution Plan Services at 1-800-225-2465, extension 8600.

A 403(b) Retirement Plan is available for employees of public
school systems and organizations which meet the requirements of
Section 501(c)(3) of the Internal Revenue Code. Forms and
further information on the 403(b) Plan are also available from
investment dealers or from Putnam Mutual Funds. Shares of the
fund may also be used in simplified employee pension (SEP) plans.
For further information on the Putnam prototype SEP plan, contact
an investment dealer or Putnam Mutual Funds.

Consultation with a competent financial and tax adviser regarding
these Plans and consideration of the suitability of fund shares
as an investment under the Employee Retirement Income Security
Act of 1974, or otherwise, is recommended.

SIGNATURE GUARANTEES

Redemption requests for shares having a net asset value of
$100,000 or more must be signed by the registered owners or their
legal representatives and must be guaranteed by a bank,
broker/dealer, municipal securities dealer or broker, government
securities dealer or broker, credit union, national securities
exchange, registered securities association, clearing agency,
savings association or trust company, provided such institution
is acceptable under and conforms with Putnam Fiduciary Trust
Company's signature guarantee procedures. A copy of such
procedures is available upon request. If you want your
redemption proceeds sent to an address other than your address as
it appears on Putnam's records, you must provide a signature
guarantee. Putnam Investor Services usually requires additional
documentation for the sale of shares by a corporation,
partnership, agent or fiduciary, or a surviving joint owner.
Contact Putnam Investor Services for details.

SUSPENSION OF REDEMPTIONS

The fund may not suspend shareholders' right of redemption, or
postpone payment for more than seven days, unless the New York
Stock Exchange is closed for other than customary weekends or
holidays, or if permitted by the rules of the Securities and
Exchange Commission during periods when trading on the Exchange
is restricted or during any emergency which makes it
impracticable for the fund to dispose of its securities or to
determine fairly the value of its net assets, or during any other
period permitted by order of the Commission for protection of
investors.

SHAREHOLDER LIABILITY

Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of
the fund. However, the Agreement and Declaration of Trust
disclaims shareholder liability for acts or obligations of the
fund and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by
the fund or the Trustees. The Agreement and Declaration of Trust
provides for indemnification out of fund property for all loss
and expense of any shareholder held personally liable for the
obligations of the fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the fund would be unable to
meet its obligations. The likelihood of such circumstances is
remote.

STANDARD PERFORMANCE MEASURES

Yield and total return data for the fund may from time to time be
presented in Part I of this SAI and in advertisements. In the
case of funds with more than one class of shares, all performance
information is calculated separately for each class. The data is
calculated as follows.

Total return for one-, five- and ten-year periods (or for such
shorter periods as the fund has been in operation or shares of
the relevant class have been outstanding) is determined by
calculating the actual dollar amount of investment return on a
$1,000 investment in the fund made at the beginning of the
period, at the maximum public offering price for class A shares
and class M shares and net asset value for other classes of
shares, and then calculating the annual compounded rate of return
which would produce that amount. Total return for a period of
one year is equal to the actual return of the fund during that
period. Total return calculations assume deduction of the fund's
maximum sales charge or CDSC, if applicable, and reinvestment of
all fund distributions at net asset value on their respective
reinvestment dates.

The fund's yield is presented for a specified thirty-day period
(the "base period"). Yield is based on the amount determined by
(i) calculating the aggregate amount of dividends and interest
earned by the fund during the base period less expenses for that
period, and (ii) dividing that amount by the product of (A) the
average daily number of shares of the fund outstanding during the
base period and entitled to receive dividends and (B) the per
share maximum public offering price for class A shares or class M
shares, as appropriate, and net asset value for other classes of
shares on the last day of the base period. The result is
annualized on a compounding basis to determine the yield. For
this calculation, interest earned on debt obligations held by the
fund is generally calculated using the yield to maturity (or
first expected call date) of such obligations based on their
market values (or, in the case of receivables-backed securities
such as the Government National Mortgage Association ("GNMAs"),
based on cost). Dividends on equity securities are accrued daily
at their stated dividend rates. The amount of expenses used in
determining the fund's yield includes, in addition to expenses
actually accrued by the fund, an estimate of the amount of
expenses that the fund would have incurred if brokerage
commissions had not been used to reduce such expenses.

If the fund is a money market fund, yield is computed by
determining the percentage net change, excluding capital changes,
in the value of an investment in one share over the seven-day
period for which yield is presented (the "base period"), and
multiplying the net change by 365/7 (or approximately 52 weeks).
Effective yield represents a compounding of the yield by adding 1
to the number representing the percentage change in value of the
investment during the base period, raising that sum to a power
equal to 365/7, and subtracting 1 from the result.

If the fund is a tax-exempt fund, the tax-equivalent yield during
the base period may be presented for shareholders in one or more
stated tax brackets. Tax-equivalent yield is calculated by
adjusting the tax-exempt yield by a factor designed to show the
approximate yield that a taxable investment would have to earn to
produce an after-tax yield equal, for that shareholder, to the
tax-exempt yield. The tax-equivalent yield will differ for
shareholders in other tax brackets.

At times, Putnam Management may reduce its compensation or assume
expenses of the fund in order to reduce the fund's expenses. The
per share amount of any such fee reduction or assumption of
expenses during the fund's past ten fiscal years (or for the life
of the fund, if shorter) is set forth in the footnotes to the
table in the section entitled "Financial highlights" in the
prospectus. Any such fee reduction or assumption of expenses
would increase the fund's yield and total return for periods
including the period of the fee reduction or assumption of
expenses.

All data are based on past performance and do not predict future
results.

COMPARISON OF PORTFOLIO PERFORMANCE

Independent statistical agencies measure the fund's investment
performance and publish comparative information showing how the
fund, and other investment companies, performed in specified time
periods. Three agencies whose reports are commonly used for such
comparisons are set forth below. From time to time, the fund may
distribute these comparisons to its shareholders or to potential
investors. THE AGENCIES LISTED BELOW MEASURE PERFORMANCE BASED
ON THEIR OWN CRITERIA RATHER THAN ON THE STANDARDIZED PERFORMANCE
MEASURES DESCRIBED IN THE PRECEDING SECTION.

LIPPER ANALYTICAL SERVICES, INC. distributes mutual fund
rankings monthly. The rankings are based on total return
performance calculated by Lipper, generally reflecting
changes in net asset value adjusted for reinvestment of
capital gains and income dividends. They do not reflect
deduction of any sales charges. Lipper rankings cover a
variety of performance periods, including year-to-date, 1-
year, 5-year, and 10-year performance. Lipper classifies
mutual funds by investment objective and asset category.

MORNINGSTAR, INC. distributes mutual fund ratings twice a
month. The ratings are divided into five groups:
highest, above average, neutral, below average and lowest.
They represent a fund's historical risk/reward ratio
relative to other funds in its broad investment class as
determined by Morningstar, Inc. Morningstar ratings cover
a variety of performance periods, including 1-year, 3-
year, 5-year, 10-year and overall performance. The
performance factor for the overall rating is a weighted-
average assessment of the fund's 1-year, 3-year, 5-year,
and 10-year total return performance (if available)
reflecting deduction of expenses and sales charges.
Performance is adjusted using quantitative techniques to
reflect the risk profile of the fund. The ratings are
derived from a purely quantitative system that does not
utilize the subjective criteria customarily employed by
rating agencies such as Standard & Poor's and Moody's
Investor Service, Inc.

CDA/WIESENBERGER'S MANAGEMENT RESULTS publishes mutual
fund rankings and is distributed monthly. The rankings
are based entirely on total return calculated by
Weisenberger for periods such as year-to-date, 1-year, 3-
year, 5-year and 10-year. Mutual funds are ranked in
general categories (e.g., international bond,
international equity, municipal bond, and maximum capital
gain). Weisenberger rankings do not reflect deduction of
sales charges or fees.

Independent publications may also evaluate the fund's
performance. The fund may from time to time refer to results
published in various periodicals, including Barrons, Financial
World, Forbes, Fortune, Investor's Business Daily, Kiplinger's
Personal Finance Magazine, Money, U.S. News and World Report and
The Wall Street Journal.

Independent, unmanaged indexes, such as those listed below, may
be used to present a comparative benchmark of fund performance.
The performance figures of an index reflect changes in market
prices, reinvestment of all dividend and interest payments and,
where applicable, deduction of foreign withholding taxes, and do
not take into account brokerage commissions or other costs.
Because the fund is a managed portfolio, the securities it owns
will not match those in an index. Securities in an index may
change from time to time.

THE CONSUMER PRICE INDEX, prepared by the U.S. Bureau of
Labor Statistics, is a commonly used measure of the rate
of inflation. The index shows the average change in the
cost of selected consumer goods and services and does not
represent a return on an investment vehicle.

THE DOW JONES INDUSTRIAL AVERAGE is an index of 30 common
stocks frequently used as a general measure of stock
market performance.

THE DOW JONES UTILITIES AVERAGE is an index of 15 utility
stocks frequently used as a general measure of stock
market performance.

CS FIRST BOSTON HIGH YIELD INDEX is a market-weighted
index including publicly traded bonds having a rating
below BBB by Standard & Poor's and Baa by Moody's.

THE LEHMAN BROTHERS AGGREGATE BOND INDEX is an index
composed of securities from The Lehman Brothers
Government/Corporate Bond Index, The Lehman Brothers
Mortgage-Backed Securities Index and The Lehman Brothers
Asset-Backed Securities Index and is frequently used as a
broad market measure for fixed-income securities.

THE LEHMAN BROTHERS ASSET-BACKED SECURITIES INDEX is an
index composed of credit card, auto, and home equity
loans. Included in the index are pass-through, bullet
(noncallable), and controlled amortization structured debt
securities; no subordinated debt is included. All
securities have an average life of at least one year.

THE LEHMAN BROTHERS CORPORATE BOND INDEX is an index of
publicly issued, fixed-rate, non-convertible
investment-grade domestic corporate debt securities
frequently used as a general measure of the performance of
fixed-income securities.

THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX is an
index of publicly issued U.S. Treasury obligations, debt
obligations of U.S. government agencies (excluding
mortgage-backed securities), fixed-rate, non-convertible,
investment-grade corporate debt securities and U.S.
dollar-denominated, SEC-registered non-convertible debt
issued by foreign governmental entities or international
agencies used as a general measure of the performance of
fixed-income securities.

THE LEHMAN BROTHERS INTERMEDIATE TREASURY BOND INDEX is an
index of publicly issued U.S. Treasury obligations with
maturities of up to ten years and is used as a general
gauge of the market for intermediate-term fixed-income
securities.

THE LEHMAN BROTHERS LONG-TERM TREASURY BOND INDEX is an
index of publicly issued U.S. Treasury obligations
(excluding flower bonds and foreign-targeted issues) that
are U.S. dollar-denominated and have maturities of 10
years or greater.

THE LEHMAN BROTHERS MORTGAGE-BACKED SECURITIES INDEX
includes 15- and 30-year fixed rate securities backed by
mortgage pools of the Government National Mortgage
Association, Federal Home Loan Mortgage Corporation, and
Federal National Mortgage Association.

THE LEHMAN BROTHERS MUNICIPAL BOND INDEX is an index of
approximately 20,000 investment-grade, fixed-rate tax-
exempt bonds.

THE LEHMAN BROTHERS TREASURY BOND INDEX is an index of
publicly issued U.S. Treasury obligations (excluding
flower bonds and foreign-targeted issues) that are U.S.
dollar denominated, have a minimum of one year to
maturity, and are issued in amounts over $100 million.

THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX is an
index of approximately 1,482 equity securities listed on
the stock exchanges of the United States, Europe, Canada,
Australia, New Zealand and the Far East, with all values
expressed in U.S. dollars.

THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS
INDEX is an index of approximately 1,011 securities
representing 26 emerging markets, with all values
expressed in U.S. dollars.

THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS
FREE INDEX is an index of approximately 1,003 securities
available to non-domestic investors representing 26
emerging markets, with all values expressed in U.S.
dollars.

THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX is an
index of approximately 1,045 equity securities issued by
companies located in 18 countries and listed on the stock
exchanges of Europe, Australia, and the Far East. All
values are expressed in U.S. dollars.

THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE INDEX is
an index of approximately 627 equity securities issued by
companies located in one of 13 European countries, with
all values expressed in U.S. dollars.

THE MORGAN STANLEY CAPITAL INTERNATIONAL PACIFIC INDEX is
an index of approximately 418 equity securities issued by
companies located in 5 countries and listed on the
exchanges of Australia, New Zealand, Japan, Hong Kong,
Singapore/Malaysia. All values are expressed in U.S.
dollars.

THE NASDAQ INDUSTRIAL AVERAGE is an index of stocks traded
in The Nasdaq Stock Market, Inc. National Market System.

THE RUSSELL 1000 INDEX is composed of the 1,000 largest
companies in the Russell 3000 Index, representing
approximately 89% of the Russell 3000 total market
capitalization. The Russell 3000 Index is composed of the
3,000 largest U.S. companies ranked by total market
capitalization, representing approximately 98% of the U.S.
investable equity market.

THE RUSSELL 2000 INDEX is composed of the 2,000 smallest
companies in the Russell 3000 Index, representing
approximately 11% of the Russell 3000 total market
capitalization.

THE RUSSELL 2000 GROWTH INDEX is composed of securities
with greater-than-average growth orientation within the
Russell 2000 Index. Each security's growth orientation is
determined by a composite score of the security's price-to-
book ratio and forecasted growth rate. Growth stocks tend
to have higher price-to-book ratios and forecasted growth
rates than value stocks. This index is composed of
approximately 1,310 companies from the Russell 2000 Index,
representing approximately 50% of the total market
capitalization of the Russell 2000 Index.

THE RUSSELL MIDCAP INDEX is composed of the 800 smallest
companies in the Russell 1000 Index, representing
approximately 35% of the Russell 1000 total market
capitalization.

THE RUSSELL MIDCAP GROWTH INDEX is composed of securities
with greater-than-average growth orientation within the
Russell Midcap Index. Each security's growth orientation
is determined by a composite score of the security's price-
to-book ratio and forecasted growth rate. Growth stocks
tend to have higher price-to-book ratios and forecasted
growth rates than value stocks. This index is composed of
approximately 450 companies from the Russell 1000 Growth
Index, representing 20% of the total market capitalization
of the Russell 1000 Growth Index

THE SALOMON BROTHERS LONG-TERM HIGH-GRADE CORPORATE BOND
INDEX is an index of publicly traded corporate bonds
having a rating of at least AA by Standard & Poor's or Aa
by Moody's and is frequently used as a general measure of
the performance of fixed-income securities.

THE SALOMON BROTHERS LONG-TERM TREASURY INDEX is an index
of U.S. government securities with maturities greater than
10 years.

THE SALOMON BROTHERS WORLD GOVERNMENT BOND INDEX is an
index that tracks the performance of the 14 government
bond markets of Australia, Austria, Belgium Canada,
Denmark, France, Germany, Italy, Japan, Netherlands,
Spain, Sweden, United Kingdom and the United States.
Country eligibility is determined by market capitalization
and investability criteria.

THE SALOMON BROTHERS WORLD GOVERNMENT BOND INDEX (non
$U.S.) is an index of foreign government bonds calculated
to provide a measure of performance in the government bond
markets outside of the United States.

STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX is an
index of common stocks frequently used as a general
measure of stock market performance.

STANDARD & POOR'S 40 UTILITIES INDEX is an index of 40
utility stocks.

STANDARD & POOR'S/BARRA VALUE INDEX is an index
constructed by ranking the securities in the Standard &
Poor's 500 Composite Stock Price Index by price-to-book
ratio and including the securities with the lowest price-
to-book ratios that represent approximately half of the
market capitalization of the Standard & Poor's 500
Composite Stock Price Index.

In addition, Putnam Mutual Funds may distribute to shareholders
or prospective investors illustrations of the benefits of
reinvesting tax-exempt or tax-deferred distributions over
specified time periods, which may include comparisons to fully
taxable distributions. These illustrations use hypothetical
rates of tax-advantaged and taxable returns and are not intended
to indicate the past or future performance of any fund.

DEFINITIONS

"Putnam Management" - Putnam Investment
Management, Inc., the fund's
investment manager.

"Putnam Mutual Funds" - Putnam Mutual Funds Corp.,
the fund's principal
underwriter.

"Putnam Fiduciary Trust - Putnam Fiduciary Trust
Company,
Company" the fund's custodian.

"Putnam Investor Services" - Putnam Investor Services, a
division of Putnam Fiduciary
Trust Company, the fund's
investor servicing agent.

PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND

FORM N-1A
PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBIT S

(a) Index to Financial Statements and Supporting
Schedule s:
(1) Financial Statements for Putnam New
York Tax Exempt Income Fund and
Putnam New York Tax Exempt Money
Market Fu nd:
Statement of assets and liabilities
-- November 30, 1997 ( a).
Statement of operations -- year
ended November 30, 1997 (
a).
Statement of changes in net assets
-- years ended November 30, 1997
and November 30, 1996 ( a).
Financial highlights (a)(
b).
Notes to financial statements
( a).

Financial Statements for Putnam New
York Tax Exempt Opportunities
Fu nd:

Statement of assets and liabilities
-September 30, 1998 (a).
Statement of operations -- year
ended September 30, 1998
(a).
Statement of changes in net assets
-- years ended September 30,
1998 and September 30,
1997 (a).
Financial highlights (a)(b).
Notes to financial statements (a).

(2) Supporting Schedules :

Schedule I -- Portfolio of
investments owned for Putnam New
York Tax Exempt Income Fund and
Putnam New York Tax Exempt Money
Market Fund -November 30, 1997
(a) .

Schedule I -- Portfolio of
investments owned for Putnam New
York Tax Exempt Opportunities Fund
-- September 30, 1998 (a).

Schedules II through IX omitted
because the required matter is not
present.

- - - -------------------

(a) Incorporated by reference into
Parts A and B .
(b) Included in Part A.

(b) Exhibit s:

1a. Agreement and Declaration of
Trust, as amended and restated
May 6, 1994 for Putnam New York
Tax Exempt Income Fund -
Incorporated by reference to Post-
Effective Amendment No. 18 to the
Registrant's Registration
Stateme nt.
1b. Agreement and Declaration of
Trust, as amended through March
20, 1991 for Putnam New
York Tax Exempt Opportunities Fund -
Incorporated by reference to the Registrant's
Post-Effective Amendment No. 1 to the
Registrant's Registration Statem ent.
1c. Agreement and Declaration of Trust, as
amended and restated July 13, 1992, for Putnam
New York Tax Exempt Money Market Fund --
Incorporated by reference to PostEffective
Amendment No. 6 to the Registrant's
Registration State ment.
2a. By-Laws, as amended through April 8, 1994 for
Putnam New York Tax Exempt Income Fund
-- Incorporated by reference to PostEffective
Amendment No. 18 to the Registrant's
Registration
Stat ement.
2b. By-Laws, as amended through February 1, 1994
for Putnam New York Tax Exempt Opportunities
Fund -- Incorporated by reference to Post
Effective Amendment No. 5 to the Registrant's
Registration Sta tement.
2c. By-Laws, as amended through January 20, 1996
for Putnam New York Tax Exempt Money Market
Fund -- Incorporated by reference to Post
Effective Amendment No. 9 to the Registrant's
Registration St atement.
3. Not ap plicable.
4h.Portions of Agreement and
Declaration of Trust relating to Shareholders'
Rights for Putnam New York Tax Exempt Income
Fund -- Incorporated by reference to Post-
Effective Amendment No. 18 to the
Registrant's Registration Statement.
4a. Portions of Agreement and Declaration of
Trust Relating to Shareholders' Rights for
Putnam New York Tax Exempt Opportunities Fund
-- Incorporated by reference to PostEffective
Amendment No. 4 to the Registrant's
Registration Statement .
4b. Portions of Agreement and Declaration of
Trust Relating to Shareholders' Rights for
Putnam New York Tax Exempt Money Market Fund -
- Incorporated by reference to PostEffective
Amendment No. 8 to the Registrant's
Registration Statemen t.
4c. Portions of By-Laws Relating to Shareholders'
Rights for Putnam New York Tax Exempt Income
Fund -- Incorporated by reference to Post
Effective Amendment No. 18 to the Registrant's
Registration Stateme nt.
4d. Portions of By-Laws Relating to Shareholders'
Rights for Putnam New York Tax Exempt
Opportunities Fund -- Incorporated by
reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statem
ent.
4e. Portions of By-Laws Relating to Shareholders'
Rights for Putnam New York Tax Exempt Money
Market Fund -- Incorporated by reference to
Post-Effective Amendment No. 9 to the
Registrant's Registration State ment.
5a. Management Contract dated July 11, 1991 for
Putnam New York Tax Exempt Income Fund -
Incorporated by reference to Post-Effective
Amendment No. 12 to the Registrant's
Registration Stat ement.
5b. Management Contract dated January 20, 1997
for Putnam New York Tax Exempt Income Fund -
Incorporated by reference to Post-Effective
Amendment No. 18 to the Registrant's
Registration Sta tement.
5c. Management Contract dated March 5, 1992, as
amended January 5, 1995 for Putnam New York
Tax Exempt Opportunities Fund -- Incorporated
by reference to Post-Effective Amendment No. 6
to the Registrant's Registration St
atement.
5d. Management Contract dated January 20, 1997
for Putnam New York Tax Exempt Money Market
Fund -- Incorporated by reference to Post
Effective Amendment No. 10 to the Registrant's
Registration S tatement.
6a. Distributor's Contract dated May 6, 1994 for
Putnam New York Tax Exempt Income Fund -
Incorporated by reference to Post-Effective
Amendment No. 16 to the Registrant's
Registration Statement.
6b. Distributor's Contract dated May 6, 1994
Putnam New York Tax Exempt Opportunities Fund
-- Incorporated by reference to PostEffective
Amendment No. 5 to the Registrant's
Registratio n Statement.
6c. Distributor's Contract dated May 6, 1994 for
Putnam New York Tax Exempt Money Market Fund -
- Incorporated by reference to PostEffective
Amendment No. 9 to the Registrant's
Registrati on Statement.
6d. Form of Specimen Dealer Sales Contract for
Putnam New York Tax Exempt Income Fund -
Incorporated by reference to Post-Effective
Amendment No. 16 to the Registrant's
Registrat ion Statement.
6e. Form of Specimen Dealer Sales Contract for
Putnam New York Tax Exempt Opportunities Fund
-- Incorporated by reference to PostEffective
Amendment No. 5 to the Registrant's
Registra tion Statement.
6f. Form of Specimen Dealer Sales Contract for
Putnam New York Tax Exempt Money Market Fund -
- Incorporated by reference to PostEffective
Amendment No. 9 to the Registrant's
Registr ation Statement.
6g. Form of Specimen Financial Institution Sales
Contract for Putnam New York Tax Exempt Income
Fund -- Incorporated by reference to Post-
Effective Amendment No. 16 to the Registrant's
Regist ration Statement.
6h. Form of Specimen Financial Institution Sales
Contract for Putnam New York Tax Exempt
Opportunities Fund -- Incorporated by
reference to Post-Effective Amendment No. 5 to
the Registrant's Regis tration
Statement.
6i. Form of Specimen Financial Institution Sales
Contract for Putnam New York Tax Exempt Money
Market Fund -- Incorporated by reference to
Post-Effective Amendment No. 9 to the
Registrant's Regi stration
Statemen t.
7. Not applicable.
8a. Custodian Agreement with Putnam Fiduciary
Trust Company dated May 3, 1991, as amended
July 13, 1992 for Putnam New York Tax Exempt
Income Fund -- Incorporated by reference to
Post-Effective Amendment No. 16 to the
Registrant's Re gistration Statement.
8b. Custodian Agreement with Putnam Fiduciary
Trust Company dated May 3, 1991, as amended
July 13, 1992 for Putnam New York Tax Exempt
Opportunities Fund -- Incorporated by
reference to Post-Effective Amendment No. 4 to
the Registrant's R egistration
Statement.
8c. Custodian Agreement with Putnam Fiduciary
Trust Company dated May 3, 1991, as amended
July 13, 1992 for Putnam New York Tax Exempt
Money Market Fund -- Incorporated by reference
to Post-Effective Amendment No. 8 to the
Registrant's Registration Statement.
9a. Investor Servicing Agreement dated June 3,
1991 for Putnam New York Tax Exempt Income
Trust -- Incorporated by reference to Post
Effective Amendment No. 16 to the
Registrant' s Registration Statement.
9b. Investor Servicing Agreement with Putnam
Fiduciary Trust Company dated June 3, 1991 for
Putnam New York Tax Exempt Opportunities Fund
-- Incorporated by reference to PostEffective
Amendment No. 2 to the Registrant 's
Registration Statement.
9c. Investor Servicing Agreement with Putnam
Fiduciary Trust Company dated June 3, 1991 for
Putnam New York Tax Exempt Money Market Fund -
- Incorporated by reference to PostEffective
Amendment No. 5 to the Registran t's
Registration St atement.
10. Not ap plicable.
11. Not applicable.
12a. Investment Letter from Putnam Investment
Management, Inc. with respect to the Class A
shares of Putnam New York Tax Exempt Income
Fund -- Incorporated by reference to the
Registrant's Pre-Effective Amendment No. 1 to
the Regist rant's Registration
Statement.
12b. Investment Letter from Putnam Investment
Management, Inc. with respect to the Class B
shares of Putnam New York Tax Exempt Income
Fund -- Incorporated by reference to Post
Effective Amendment No. 13 to the Regis
trant's Registration Statement.
12c. Investment Letter from Putnam Investment
Management, Inc. with respect to the Class A
shares of Putnam New York Intermediate Tax
Exempt Fund -- Incorporated by reference to
Post-Effective Amendment No. 16 to the
Regi strant's Registration Statement.
12d. Investment Letter from Putnam Investment
Management, Inc. with respect to the Class B
shares of Putnam New York Intermediate Tax
Exempt Fund -- Incorporated by reference to
Post-Effective Amendment No. 16 to the
Reg istrant's Registration Statement.
12e. Investment Letter from Putnam Investments,
Inc. with respect to Putnam New York Tax
Exempt Opportunities Fund for Class A shares -
- Incorporated by reference to the
Registrant's Pre-Effective Amendment No. 1 to
the Re gistrant's Registration
Statement.
12f. Inves tment Letter from Putnam
Investments,
Inc. with respect to the Registrant for Class
B shares for Putnam New York Tax Exempt
Opportunities Fund -- Incorporated by
reference to the Post-Effective Amendment No.
4 to the R egistrant's Registration
Statement.
12g. Investment Letter from Putnam Investment
Management, Inc. with respect to Putnam New
York Tax Exempt Money Market Fund -
Incorporated by reference to the
Registr ant's Initial Regis
tration Statement.
13. Not applicable.
14a. Class A Distribution Plan dated April 8, 1994
for Putnam New York Tax Exempt Income Fund -
Incorporated by reference to Post-Effective
Amendment No. 16 to t he Registrant's
Registration Statement.
14b. Class B Distribution Plan dated April 8, 1994
for Putnam New York Tax Exempt Income Fund -
Incorporated by reference to Post-Effective
Amendment No. 16 to the Registrant's
Registration Statement.
14c. Class M Distribution Plan for Putnam New York
Tax Exempt Income Fund -- Incorporated by
reference to Post-Effective Amendment No. 16
t o the Registrant's Registration
Statement.
14d. Class A Distribution Plan and Agreement dated
February 1, 1994 for Putnam New York Tax
Exempt Opportunities Fund -- Incorporated by
reference to Post-Effective Amendment No. 4
to the Registrant's Registration
Statement.
14e. Class B Distribution Plan and Agreement dated
February 1, 1994 for Putnam New York Tax
Exempt Opportunities Fund -- Incorporated by
reference to Post-Effective Amendment No.
4 to the Registrant's Registration
Statement.
14f. Class M Distribution Plan and Agreement and
Putnam New York Tax Exempt Opportunities Fund
- Incorporated by reference to Post-Effective
Amendment No . 5 to the Registrant's
Registration Statement.
14g. Distribution Plan, as adopted September 11,
1987, and as amended January 1, 1990, for
Putnam New York Tax Exempt Money Market Fund -
- Incorporated by reference to PostEffective
Amendment N o. 3 to the Registrant's
Registration Statement.
14h. Form of Specimen Dealer Service Agreement for
Putnam New York Tax Exempt Income Fund -
Incorporated by reference to Post-Effective
Amendment N o. 16 to the Registrant's
Registration Statement.
14i. Form of Specimen Dealer Service Agreement for
Putnam New York Tax Exempt Opportunities Fund
-- Incorporated by reference to Post-
Effective Amendmen t No. 5 to the
Registrant's Registration Statement.
14j. Form of Specimen Dealer Service Agreement for
Putnam New York Tax Exempt Money Market Fund -
- Incorporated by reference to PostEffective
Amendme nt No. 5 to the Registrant's
Registration Statement.
14k. Form of Specimen Financial Institution Service
Agreement for Putnam New York Tax Exempt
Income Fund -- Incorporated by reference to
Post-Effective Amendme nt No. 16 to the
Registrant's Registration Statement.
14l. Form of Specimen Financial Institution Service
Agreement for Putnam New York Tax Exempt
Opportunities Fund -- Incorporated by
reference to Post-Effective Amend ment
No. 3 to the Registrant's Registration
Statement.
14m. Form of Specimen Financial Institution Service
Agreement for Putnam New York Tax Exempt Money
Market Fund -- Incorporated by reference to
Post-Effective Amen dment No. 8 to the
Registrant's Registration Statement.
15a. Schedules for computation of performance
quotati ons for Putnam New York Tax
Exempt Income Fund -- Exhibit 1.
15b. Schedules for computation of performance
quotations for P utnam New York Tax
Exempt Opportunities Fund -- Exhibit 2.
15c. Schedules for computation of performance
quotations f or Putnam New York Tax
Exempt Money Market Fund -- Exhibit 3.
16a. Financial Data Schedule for Putn am
New York Tax Exempt Income Fund Class A
shares - Incorporated by reference to Post-
Effective Amendment No. 19 to the
Registrant's Registration Statement.
16b. Financial Data Schedule for Put nam
New York Tax Exempt Income Fund Class B
shares -- Incorporated by reference to Post-
Effective Amendment No. 19 to the
Registrant's Registration Statement.
16c. Financial Data Schedule for Pu tnam
New York Tax Exempt Income Fund Class M
shares -- Incorporated by reference to Post-
Effective Amendment No. 19 to the
Registrant's Registration Statement.
16d. Financial Data Schedule for Putnam Ne w
York Tax Exempt Opportunities Fund Class A
shares -- Exhibit 4.
16e. Financial Data Schedule for Putnam N ew
York Tax Exempt Opportunities Fund Class B
shares -- Exhibit 5.
16f. Financial Data Schedule for Putnam New
York Tax Exempt Opportunities Fund Class M
shares -- Exhibit 6.
16g. Financial Data Sc hedule for Putnam New
York Tax Exempt Money Market Fund -
Incorporated by reference to Post-Effective
Amendment No. 11 to the Registrant's
Registration Statement.
17a. Rule 18f-3(d) Plan for Putnam New York Tax
Exempt Income Fund -- Incorporated by reference
to Post-Effective Amendment No. 11 to the
Registrant's Registration Statement.
17b. Rule 18f-3(d) Plan for Putnam New York Tax
Exempt Opportunities Fund -- Incorporated by
reference to Post-E ffective Amendment
No. 9 to the Registrant's Registration
Statement.
17c. Rule 18f-3(d) Plan for Putnam New York Tax
Exempt Money Market Fund -- Incorporated by
reference to Post-Effective Amendment No. 11
to the Registrant's Registration Statement.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMM ON
CONTROL WITH REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of December 30, 1997 for the Income and Money
Market fund and as of October 31, 1998 for the Opportunities
fund, the number of record holders of each class of
securities of the Registrants is as follows:
Number of record holders ------
---------------------------Class A
Class B
Clas s M
------- ------- -- --
- - - --
Income Fund 39,047 6 ,838 59
Opportunities Fund 3,934 1,648 54
Money Market Fund 2,298 N/A N/A

ITEM 27. INDEMNIFICA TION

The information required by this item is incorporated
by reference from each of the Registrants' initial Registration
Statements on Form N-1A under the Investment Company Act of 1940
(File Nos. 811-3741 for Putnam New York Tax Exempt Income Fund,
811-6176 for Putnam New York Tax Exempt Opportunities Fund and 811-
5335 for Putnam New York Tax Exempt Money Market Fu nd).
<PAGE>

09/18/98 C-6
S:\FUNDS\REFERENC\USREDPTC.DOCThis redlined draft, generated by
CompareRite (TM) - The Instant Redliner, shows the differences
between -
original document : S:\FUNDS\REFERENC\
and revised document: S:\FUNDS\REFERENC\US918PTC.DOC

CompareRite found 154 change(s) in the text

Deletions appear as a Bold-Underline
Additions appear as Bold-Underline text
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT
ADVISE R

Except as set forth below, the directors and officers of the
REGISTRANT'S investment adviser have been engaged during
the past two fiscal years in no business, vocation or employment
of a substantial nature other than as directors or officers of
the investment adviser or certain of its corporate affiliates.
Certain officers of the investment adviser serve as officers of
some or all of the Putnam funds. The address of the investment
adviser, its corporate affiliates and the Putnam Funds is
ONE Post Office Square, Boston, Massachusetts 02109.

NAME NON-PUTNAM BUSINESS AND OTHER
CONNECTIONS

Michael J. Abata Prior to May, 1997, Assistant
ASSISTANT VICE PRESIDENT Vice President, Alliance Capital
Management Corp., 1345
Avenue of the Americas, New York,
NY 10020

BLAKE ANDERSON TRUSTEE, SALEM FEMALE CHARITABLE
MANAGING DIRECTOR SOCIETY, SALEM MA 01970

Barry R. Allen Prior to December, 1997,
VICE PRESENT Analyst/Director of Research,
Harbor Capital
Management, 125 High St., Boston,
MA 02110

Jennifer Antill Prior to November, 1996,
MANAGING DIRECTOR Director, IAI International/Hill
Samuel Investment
Advisors, 10 Fleet Place, London,
England

Nikesh Arora Prior to April, 1997, Chief
VICE PRESIDENT Financial Officer,
Fidelity Investments, 82
Devonshire St., Boston, MA 02110

Michael Arends Prior to MAY,
Senior Vice President 1997, MANAGING Director,
EQUITIES, PHOENIX DUFF & PHELPS,
56 PROSPECT ST., HARTFORD, CT
06101 ; Board Member,
DONALD L. ARENDS, INC.,
100 JORIE BLVD., OAKBROOK, ILL
60523

STEVEN E. ASHER TREASURER, THE HARVARD
Senior Vice President INDEPENDENT, INC. 501(C) (3)
CHARITABLE ORGANIZATION, CANADY
HALL, HARVARD YARD, CAMBRIDGE, MA
02138

MICHAEL J. ATKIN PRIOR TO JULY, 1997, DIRECTOR OF
SENIOR VICE PRESIDENT LATIN AMERICA INSTITUTE OF
INTERNATIONAL FINANCE, 2000
PENNSYLVANIA AVENUE, WASHINGTON,
D.C. 20006

JEFFREY B. AUGUSTINE PRIOR TO JANUARY, 1998, VICE
SENIOR VICE PRESIDENT PRESIDENT, INVESTMENT CONSULTING,
INVESTOR TOOLS, INC., 100 BRIDGE
ST. PLAZA, YORKVILLE, IL 60560

ROWLAND T. BANKES PRIOR TO JULY, 1997, SENIOR FIXED-
VICE PRESIDENT INCOME TRADER, JENNISON, JENNISON
ASSOCIATES CAPITAL CORP., ONE
FINANCIAL CENTER, BOSTON, MA
02110

ROBERT R. BECK DIRECTOR, CHARLES BRIDGE
SENIOR VICE PRESIDENT PUBLISHING, 85 MAIN ST.,
WATERTOWN, MA 02172; BOARD OF
OVERSEERS, BETH ISRAEL DEACONESS
MEDICAL CENTER, 330 BROOKLINE
AVE., BOSTON, MA 02215

CARL D. BELL PRIOR TO JANUARY, 1998,
VICE PRESIDENT PRINCIPAL, SMITH BREEDON
ASSOCIATION, 100 EUROPA DRIVE,
SUITE 200, CHAPEL HILL, NC 27514

GEOFFREY C. BLAISDELL PRIOR TO OCTOBER, 1997, VICE
SENIOR VICE PRESIDENT PRESIDENT, BLACKROCK FINANCIAL,
345 PARK AVENUE, NEW YORK, NY
10010

JEFFREY M. BRAY PRIOR TO OCTOBER, 1997, ANALYST,
VICE PRESIDENT LEHMAN BROTHERS, 3 WORLD
FINANCIAL CENTER, NEW YORK, NY
10285

DAVID J. BUCKLE PRIOR TO MARCH, 1998, VICE
VICE PRESIDENT PRESIDENT, J.P. MORGAN INVESTMENT
MANAGEMENT, 28 KING ST., LONDON,
ENGLAND SWI YXA

RONALD J. BUKOVAC PRIOR TO OCTOBER, 1997, SENIOR
VICE PRESIDENT MANAGER, VALUATION, PRICE
WATERHOUSE, 200 E. RANDOLPH
DRIVE, CHICAGO, IL 60601

ROBERT W. BURKE MEMBER-EXECUTIVE COMMITTEE, THE
SENIOR MANAGING DIRECTOR RIDGE CLUB, COUNTRY CLUB ROAD,
SANDWICH, MA 02563; MEMBER-
ADVISORY BOARD, CATHEDRAL HIGH
SCHOOL, 74 UNION PARK ST., SO.
BOSTON, MA 02118

JACK P. CHANG PRIOR TO JULY, 1997, VICE
VICE PRESIDENT PRESIDENT, COLUMBIA MANAGEMENT
COMPANY, 1300 S.W. 6TH AVE.,
PORTLAND, OR 97207

MARY CLAIRE CHASE PRIOR TO JANUARY, 1997, DIRECTOR
VICE PRESIDENT OF STAFF DEVELOPMENT, ARTHUR D.
LITTLE CO., 25 ACORN PARK,
CAMBRIDGE, MA 02140

C. BETH COTNER DIRECTOR, THE LYRIC STAGE
SENIOR VICE PRESIDENT THEATER, 140 CLARENDON ST.,
BOSTON, MA 02116

KEVIN M. CRONIN PRIOR TO FEBRUARY, 1997, VICE
MANAGING DIRECTOR PRESIDENT AND PORTFOLIO MANAGER,
MFS INVESTMENT MANAGEMENT, 500
BOYLSTON ST., BOSTON, MA 02117

JOHN R.S. CUTLER MEMBER, BURST MEDIA, L.L.C., 10
ASSISTANT VICE PRESIDENT NEW ENGLAND EXECUTIVE PARK,
BURLINGTON, MA 01803

KENNETH DALY PRESIDENT, ANDOVER RIVER RD. TMA,
MANAGING DIRECTOR RIVER ROAD TRANSPORTATION
MANAGEMENT ASSOCIATION, 7
SHATTUCK RD., ANDOVER, MA 01810

MICHAEL W. DAVIS PRIOR TO AUGUST, 1997,
VICE PRESIDENT TECHNICAL FINANCE CONSULTANT,
BANK OF AMERICA MORTGAGE, 50
CALIFORNIA ST., SAN FRANCISCO, CA
94111

JOHN C. DELANO PRIOR TO JULY, 1998, SENIOR
ASSISTANT VICE PRESIDENT FOREIGN EXCHANGE TRADER,
NATIONSBANK, 233 SO. WACKER
DRIVE, CHICAGO, IL 60606

EDWIN M. DENSON PRIOR TO NOVEMBER, 1997, VICE
VICE PRESIDENT PRESIDENT AND SENIOR ECONOMIST
PRIMARK DECISION ECONOMICS, 260
FRANKLIN ST., BOSTON, MA 02110

RALPH C. DERBYSHIRE PRIOR TO NOVEMBER, 1997, PARTNER,
SENIOR VICE PRESIDENT PALMER & DODGE, ONE BEACON
STREET, BOSTON, MA 02108; BOARD
MEMBER, MSPCC, 399 BOYLSTON ST.,
BOSTON, MA; BOARD MEMBER,
WINCHESTER AFTER SCHOOL PROGRAM,
SKILLINGS RD., WINCHESTER, MA

MICHAEL G. DOLAN CHAIRMAN-FINANCE COUNCIL, ST.
ASSISTANT VICE PRESIDENT MARY'S PARISH, 44 MYRTLE ST.,
MELROSE, MA 02176; MEMBER,
SCHOOL ADVISORY BOARD, ST. MARY'S
SCHOOL, 44 MYRTLE ST., MELROSE,
MA 02176

MARK E. DOW PRIOR TO NOVEMBER, 1997,
VICE PRESIDENT ECONOMIST, INTERNATIONAL MONETARY
FUND, WASHINGTON, DC

EMILY DURBIN BOARD OF DIRECTORS, FAMILY
VICE PRESIDENT SERVICE, INC., LAWRENCE, MA 01840

KARNIG H. DURGARIAN BOARD MEMBER, EBRI, SUITE 600,
MANAGING DIRECTOR 2121 K ST., N.W., WASHINGTON, DC
20037-1896. TRUSTEE, AMERICAN
ASSEMBLY, 122 C. ST., N.W., SUITE
350, WASHINGTON, DC 20001

NATHAN EIGERMAN TRUSTEE, FLOWER HILL TRUST, 298
VICE PRESIDENT MARLBOROUGH ST., #4, BOSTON, MA
02116

IRENE M. ESTEVES PRIOR TO JANUARY, 1997, VICE
MANAGING DIRECTOR PRESIDENT, MILLER BREWING CO.,
3939 WEST HIGHLAND BLVD.,
MILWAUKEE, WI 53210. BOARD OF
DIRECTOR MEMBER, AMERICAN
MANAGEMENT ASSOCIATION FINANCE
COUNCIL, 1601 BROADWAY, NEW YORK,
NY; BOARD OF DIRECTOR MEMBER,
FIRST NIGHT BOSTON, 20 PARK
PLAZA, SUITE 927, BOSTON, MA;
BOARD OF DIRECTOR MEMBER, SC
JOHNSON COMMERCIALMARKETS, 8310
16TH ST., STUTEVANT, WI 53177;
BOARD OF DIRECTOR MEMBER,
MASSACHUSETTS TAXPAYERS
FOUNDATION, 24 PROVINCE ST.,
BOSTON, MA; BOARD OF DIRECTOR
MEMBER, MRS. BAIRDS BAKERIES, 515
JONES ST., SUITE 200, FORT WORTH,
TEXAS 76102

IAN FERGUSON TRUSTEE, PARK SCHOOL, 171 GODDARD
SENIOR MANAGING DIRECTOR AVENUE, BROOKLINE, MA 02146

EDWARD R. FINCH PRIOR TO DECEMBER, 1997, MANAGING
VICE PRESIDENT DIRECTOR, M.A. WEATHERBIE & CO.,
265 FRANKLIN ST., BOSTON, MA
02110

KATE FLEISHER PRIOR TO JANUARY, 1998, DIRECTOR
VICE PRESIDENT OF HUMAN RESOURCES, LAURA ASHLEY,
6 ST., JAMES AVE. SUITE 410,
BOSTON, MA 02116

J. PETER GRANT TRUSTEE, THE DOVER CHURCH, DOVER,
SENIOR VICE PRESIDENT MA 02030

PATRICE GRAVIERE PRIOR TO MARCH, 1998, REGIONAL
SENIOR VICE PRESIDENT DIRECTOR FOR LATIN AMERICA, MFS
INTERNATIONAL, LTD, BUENOS AIRES,
BRAZIL

PAUL E. HAAGENSEN DIRECTOR, HAAGENSEN RESEARCH
SENIOR VICE PRESIDENT FOUNDATION, 630 WEST 168TH ST.,
NEW YORK, NY 10032

JAMES B. HAINES PRIOR TO FEBRUARY, 1997,
ASSISTANT VICE PRESIDENT ASSOCIATE, BENEFIT DEPARTMENT,
ROPES & GRAY, ONE INTERNATIONAL
PLACE, BOSTON, MA 02110

MARY S. HAPIJ PRIOR TO MARCH, 1997, RESEARCH
VICE PRESIDENT LIBERTY MANAGER, PIONEERING
MANAGEMENT CORP., 60 STATE
STREET, BOSTON, MA 02109

NIGEL P. HART PRIOR TO OCTOBER, 1997, SENIOR
VICE PRESIDENT VICE PRESIDENT AND PORTFOLIO
MANAGER, INVESTMENT ADVISERS,
3700 FIRST BANK PLACE,
MINNEAPOLIS, MN 55402

DEBORAH R. HEALEY CORPORATOR, NEW ENGLAND BAPTIST
SENIOR VICE PRESIDENT HOSPITAL, 125 PARKER HILL AVE.,
BOSTON, MA 02120; DIRECTOR, NEB
ENTERPRISES, 125 PARKET HILL
AVE., BOSTON, MA 02120

MARIANNE P. ISGUR PRIOR TO MARCH, 1998, EXECUTIVE
ASSISTANT VICE PRESIDENT RECRUITER, PROFESSIONS, 2 VILLA
RD., SO. HAMILTON, MA 01982;
PRESIDENT, EQUINE VENTURES, LTD.,
25 FELLOWS RD., IPSWICH, MA 01932

JEFFREY KAUFMAN PRIOR TO JULY, 1998, VICE
SENIOR VICE PRESIDENT PRESIDENT AND PORTFOLIO MANAGER,
MFS INVESTMNT MANAGEMENT, 500
BOYLSTON ST., BOSTON, MA 02116

IRA C. KALUS-BYSTRICKY PRIOR TO MARCH, 1998, CONSULTANT,
VICE PRESIDENT ARTHUR D. LITTLE, 25 ACORN PARK,
CAMBRIDGE, MA 02114

MARY E. KEARNEY TRUSTEE, MASSACHUSETTS EYE AND
MANAGING DIRECTOR EAR INFIRMARY, 243 CHARLES ST.,
BOSTON, MA 02114

KEVIN J. KELEHER PRIOR TO AUGUST, 1998, SUPPORT
ASSISTANT VICE PRESIDENT MANAGER, DIGITAL EQUIPMENT CO.,
111 POWDER MILL RD., MAYNARD, MA
01754

CATHERINE KENNEDY PRIOR TO SEPTEMBER, 1997,
VICE PRESIDENT PRINCIPAL, MORGAN STANLEY, 1585
BROADWAY, NEW YORK, NY 10036

JEFFREY K. KERRIGAN PRIOR TO JUNE, 1997, VICE
ASSISTANT VICE PRESIDENT PRESIDENT, FLEET INVESTMENTS, 75
STATE St., Boston, MA 02109

DAVID R. KING Prior to JUNE, 1997, Vice
VICE PRESIDENT President, FLEET INVESTMENTS, 75
STATE ST., BOSTON, MA 02109

WILLIAM P. KING PRIOR TO NOVEMBER, 1997,
VICE PRESIDENT PORTFOLIO MANAGER, TSA GLOBAL
ASSET MANAGEMENT, 700 SOUTH
FLOWER ST., LOS ANGELES, CA
90017

DEBORAH F. KUENSTNER PRIOR TO MARCH, 1997, SENIOR
MANAGING DIRECTOR PORTFOLIO MANAGER, DUPONT PENSION
FUND INVESTMENT, 1 RIGHT PARKWAY,
WILMINGTON, DE 19850; DIRECTOR,
BOARD OF PENSIONS, PRESBYTERIAN
CHURCH, 1001 MARKET ST.,
PHILADELPHIA, PA

THOMAS J. KUREY PRIOR TO AUGUST, 1997, VICE
VICE PRESIDENT PRESIDENT, EVERGREEN SECURITIES,
77 W. WACKER, Chicago, IL
60601

LINDA LANE MEMBER, AMERICAN SOCIETY FOR
ASSISTANT VICE PRESIDENT TRAINING & DEVELOPMENT, 27 GLEN
STREET, SUITE 4, STOUGHTON, MA
02072

KENNETH W. LANG Prior to April, 1997, VICE
VICE PRESIDENT PRESIDENT, MONTGOMERY SECURITIES,
600 MONTGOMERY ST., SAN
FRANCISCO, CA 94111

COLEMAN N. LANNUM, III PRIOR TO JUNE, 1997, DIRECTOR-
SENIOR VICE PRESIDENT INVESTOR RELATIONS, MALLINCKRODT,
INC., 7733 FORSYTH BLVD., ST.
LOUIS, MO 63105

LEONARD LAPORTA, JR. PRIOR TO MARCH, 1998, ASSISTANT
VICE PRESIDENT VICE PRESIDENT, STATE STREET
GLOBAL ADVISORS, TWO
INTERNATIONAL PLACE, BOSTON, MA
02110; BOARD OF OVERSEERS', USS
CONSTITUTION MUSEUM, CHARLESTON,
MA

LAWRENCE J. LASSER DIRECTOR, MARSH & MCLENNAN
PRESIDENT, DIRECTOR AND CHIEF COMPANIES, INC., 1221 AVENUE OF
EXECUTIVE THE AMERICAS, NEW YORK, NY
10020; BOARD OF GOVERNORS AND
EXECUTIVE COMMITTEE, INVESTMENT
COMPANY INSTITUTE, 1401 H. ST.,
N.W. SUITE 1200, WASHINGTON, DC
20005; BOARD OF OVERSEERS, MUSEUM
OF FINE ARTS, 465 HUNTINGTON,
AVE., BOSTON, MA 02115; TRUSTEE,
BETH ISRAEL DEACONESS MEDICAL
CENTER, 330 BROOKLINE AVE.,
BOSTON, MA; MEMBER OF THE COUNCIL
ON FOREIGN RELATIONS, 58 EAST
68TH ST., NEW YORK, NY 10021;
MEMBER OF THE BOARD OF DIRECTORS
OF THE UNITED WAY OF
MASSACHUSETTS BAY, 245 SUMMER
ST., SUITE 1401, BOSTON, MA
02110; TRUSTEE OF THE VINEYARD
OPEN LAND FOUNDATION, RFD BOX
319X, VINEYARD HAVEN, MA 02568.

JOAN M. LEARY PRIOR TO JANUARY, 1997, SENIOR
VICE PRESIDENT TAX MANAGER, KMPG, 99 HIGH
STREET, BOSTON, MA 02110

CRAIG S. LEWIS PRIOR TO JANUARY, 1998, ANALYST,
VICE PRESIDENT KEYSTONE INVESTMENTS, 200
BERKELEY STREET, BOSTON, MA
02101

GEIRULV LODE PRIOR TO JULY, 1997, VICE
VICE PRESIDENT PRESIDENT, CHANCELLOR LGT, ASSET
MANAGEMENT, 1166 AVENUE OF THE
AMERICAS, NEW YORK, NY 10036

ELIZABETH M. MACELWEE PRIOR TO JANUARY, 1998,
SENIOR VICE PRESIDENT PRINCIPAL, MORGAN STANLEY, 1155
BROADWAY, NEW YORK, NY 10036

DIANA R. MADONNA PRIOR TO JANUARY, 1997,
ASSISTANT VICE PRESIDENT LIBRARIAN, LIPPER ANALYTICAL
SERVICES, INC., 1380 LAWRENCE
ST., DENVER, CO 80204

SARA MALAK PRIOR TO OCTOBER, 1997,
VICE PRESIDENT CONSULTANT, THE BOSTON
CONSULTANT, EXCHANGE PLACE,
BOSTON, MA 02109

BRUCE D. MARTIN PRIOR TO APRIL, 1997, VICE
VICE PRESIDENT PRESIDENT, EATON VANCE, 29
BOSTON, MA 02110

KEVIN MALONEY INSTITUTIONAL DIRECTOR, FINANCIAL
MANAGING DIRECTOR MANAGEMENT ASSOCIATION,
UNIVERSITY OF SOUTH FLORIDA,
COLLEGE OF BUSINESS
ADMINISTRATION, SUITE 3331,
TAMPA, FL 33620

SCOTT M. MAXWELL PRIOR TO MARCH, 1997, CHIEF
MANAGING DIRECTOR FINANCIAL OFFICER-EQUITY
DIVISION, LEHMAN BROTHERS, 3
WORLD FINANCIAL CENTER, NEW YORK,
NY 10285

BRIDGET MCCAVOY PRIOR TO OCTOBER, 1997, SENIOR
ASSISTANT VICE PRESIDENT RECRUITER, BANKBOSTON, 100
FEDERAL ST., BOSTON, MA 02110;
PRIOR TO OCTOBER, 1996. EXECUTIVE
RECRUITER, HI HUNT & CO., 99
SUMMER ST., BOSTON, MA 02110

WILLIAM MCGUE BOARD MEMBER, SACRED HEART
MANAGING DIRECTOR ELEMENTARY SCHOOL, 75 COMMERCIAL
ST.,WEYMOUTH, MA 02188; BOARD OF
DIRECTORS MEMBER AND TREASURER,
WHITTEMORE SHORES CONDOMINIUM
ASSOCIATION, BRIDGEWATER, NH
03222

PAUL K. MICHAUD PRIOR TO DECEMBER, 1997,
VICE PRESIDENT ASSISTANT VICE PRESIDENT, UNION
BANK OF SWITZERLAND,
BAHNHOFSTRASSE 45, 8021 ZURICH,
SWITZERLAND

CAROL H. MILLER BOARD MEMBER, THE ROBBINS-DE
ASSISTANT VICE PRESIDENT BEAUMONT FOUNDATION, C/O SULLIVAN
& WORCESTER, ONE POST OFFICE
SQUARE, BOSTON, MA 02109; BOARD
MEMBER, BURKE MTN. ACADEMY, EAST
BURKE, VT; BOARD MEMBER, THE
LYRIC STAGE THEATER, 140
CLARENDON ST., BOSTON, MA 02116;
BOARD MEMBER, THE BOSTON MODERN
ORCHESTRA PROJECT, P.O. BOX
39134, CAMBRIDGE, MA 02139

CHRISTOPHER G. MILLER PRIOR TO JANUARY, 1998, Portfolio
VICE PRESIDENT Manager, ANALYTIC TSA
GLOBAL ASSET MANAGEMENT, 700 SO.
FLOWER ST., LOS ANGELES, CA 90017

WILLIAM H. MILLER PRIOR TO OCTOBER, 1997, VICE
SENIOR VICE PRESIDENT PRESIDENT AND ASSET PORTFOLIO
MANAGER, DELAWARE MANAGEMENT, ONE
COMMERCE SQUARE, PHILADELPHIA, PA

JEANNE L. MOCKARD TRUSTEE, THE BRYN MAWR SCHOOL,
SENIOR VICE PRESIDENT 109, W. MELROSE AVENUE,
BALTIMORE, MA 21210

GERARD I. MOORE PRIOR TO AUGUST, 1997, VICE
VICE PRESIDENT PRESIDENT/EQUITY RESEARCH, BOSTON
COMPANY ASSET MANAGEMENT, ONE
BOSTON PLACE, BOSTON, MA 02109

KELLY A. MORGAN PRIOR TO SEPTEMBER, 1996, SENIOR
SENIOR VICE PRESIDENT VICE PRESIDENT AND INTERNATIONAL
PORTFOLIO MANAGER, ALLIANCE
CAPITAL MANAGEMENT, 1345 AVENUE
OF THE AMERICAS, NEW YORK, NY
10020

DONALD E. MULLIN CORPORATE REPRESENTATIVE AND
SENIOR VICE PRESIDENT BOARD MEMBER, DELTA DENTAL PLAN
OF MASSACHUSETTS, 10 PRESIDENTS
LANDING, P.O. BOX 94104, MEDFORD,
MA 02155

GAYLE M. O'CONNELL PRIOR TO MARCH, 1997, ASSISTANT
ASSISTANT VICE PRESIDENT DIRECTOR OF HUMAN RESOURCES, ITT
SHERATON CORPORATION, 60 STATE
ST., BOSTON, MA 02109

STEPHEN S. OLER PRIOR TO JUNE, 1997, VICE
SENIOR VICE PRESIDENT PRESIDENT, TEMPLETON INVESTMENT
COUNSEL, 500 E. BROWARD BLVD.,
FT. LAUDERDALE, FL 33394

KERRY M. OWENS PRIOR TO JULY, 1998, MARKETING
ASSISTANT VICE PRESIDENT MANAGER, ABN AMRO, 199
BISHOPSGATE, LONDON, ENGLAND,
EC2M 3TY; PRIOR TO APRIL, 1997,
ASSISTANT MANAGER, CITIBANK, 336
STRAND, LONDON, ENGLAND, WC2

KIMBERLY A.M. PAGE PRIOR TO FEBRUARY, 1998, SENIOR
ASSISTANT VICE PRESIDENT CONSULTANT, ANDERSEN CONSULTING,
100 WILLIAMS ST., WELLESLEY, MA
02181

MARGERY C. PARKER PRIOR TO DECEMBER, 1997, VICE
SENIOR VICE PRESIDENT PRESIDENT AND PORTFOLIO MANAGER,
KEYSTONE INVESTMENTS 200 BERKELEY
STREET, BOSTON, MA 02101

CARMEL PETERS PRIOR TO APRIL, 1997, MANAGING
SENIOR VICE PRESIDENT DIRECTOR/CHIEF INVESTMENT ASIA
PACIFIC, WHELLOCK NATWEST
INVESTMENT MANAGEMENT, LTD,
NATWEST TOWER, TIMES SQUARE,
CAUSEWAY BAY, HONG KONG, CHINA

WILLIAM PERRY PRIOR TO SEPTEMBER, 1997, SENIOR
VICE PRESIDENT TRADER, FIDELITY MANAGEMENT &
RESEARCH, 82 DEVONSHIRE ST.,
BOSTON, MA 02110

KEITH PLAPINGER CHAIRMAN AND TRUSTEE, ADVENT
VICE PRESIDENT SCHOOL, 17 BRIMMER ST., BOSTON,
MA 02108

CHARLES E. PORTER TRUSTEE, ANATOLIA COLLEGE, 130
EXECUTIVE VICE PRESIDENT BOWDOIN ST., SUITE 1201, BOSTON,
MA 02108; GOVERNOR, HANDEL &
HAYDEN SOCIETY, HORTICULTURE
HALL, 300 MASSACHUSETTS AVE.,
BOSTON, MA 0215

GEORGE PUTNAM CHAIRMAN AND DIRECTOR, PUTNAM
CHAIRMAN AND DIRECTOR MUTUAL FUNDS CORP.; DIRECTOR, THE
BOSTON COMPANY, INC., ONE BOSTON
PLACE, BOSTON, MA 02108;
DIRECTOR, BOSTON SAFE DEPOSIT AND
TRUST COMPANY, ONE BOSTON PLACE,
BOSTON, MA 02108; DIRECTOR,
FREEPORT-MCMORAN, INC., 200 PARK
AVENUE, NEW YORK, NY 10166;
DIRECTOR, GENERAL MILLS, INC.,
9200 WAYZATA BOULEVARD,
MINNEAPOLIS, MN 55440; DIRECTOR,
HOUGHTON MIFFLIN COMPANY, ONE
BEACON STREET, BOSTON, MA 02108;
DIRECTOR, MARSH & MCLENNAN
COMPANIES, INC., 1221 AVENUE OF
THE AMERICAS, NEW YORK, NY
10020; DIRECTOR, ROCKEFELLER
GROUP, INC., 1230 AVENUE OF THE
AMERICAS, NEW YORK, NY 10020;
TRUSTEE, MASSACHUSETTS GENERAL
HOSPITAL, FRUIT STREET, BOSTON,
MA 02114; MCLEAN HOSPITAL 115
MILL ST., BELMONT,MA 02178; THE
COLONIAL WILLIAMSBURG FOUNDATION,
POST OFFICE BOX 1776,
WILLIAMSBURG, VA 23187; THE
MUSEUM OF FINE ARTS, 465
HUNTINGTON AVENUE, BOSTON, MA
02115; WGBH FOUNDATION, 125
WESTERN AVENUE,BOSTON, MA 02134;
THE NATURE CONSERVANCY, POST
OFFICE SQUARE BUILDING, 79 MILK
ST., SUITE 300, BOSTON, MA 02109;
TRUSTEE, THE JACKSON LABORATORY,
600 MAIN ST., BAR HARBOR, ME 04

ROBERT A. PIEPENBURG PRIOR TO DECEMBER, 1997,
VICE PRESIDENT ASSISTANT VICE PRESIDENT,
BANKBOSTON CORP./BOSTON SECURITY,
100 FEDERAL ST., BOSTON, MA
02106

ELIZABETH PRICE PRIOR TO JANUARY, 1998,
ASSISTANT VICE PRESIDENT INVESTMENT ANALYST, SCHRODER
INVESTMENT MANAGEMENT LIMITED, 33
GUTTER LANE, LONDON, EC2V 8AS,
ENGLAND

EDWARD QIAN PRIOR TO FEBRUARY, 1998, BACK BAY
VICE PRESIDENT ADVISORS, 399 BOYLSTON ST.,
BOSTON, MA 02116; PROR TO
SEPTEMBER, 1996, POST-DOCTORATE
RESEARCH, MASSACHUSETTS INSTITUTE
OF TECHNOLOGY, 77 MASSACHUSETTS
AVENUE, CAMBRIDGE, MA 02109

KEITH QUINTON DIRECTOR, ELEAZAR, INC., WEST
SENIOR VICE PRESIDENT WHEELOCK ST., HANOVER, NH 03755

THOMAS V. REILLY TRUSTEE, KNOX COLLEGE, 2 EAST
MANAGING DIRECTOR SOUTH ST., GALESBURG, IL 61401

MARC J. RITENHOUSE PRIOR TO JANUARY, 1998, DIRECTOR
VICE PRESIDENT OF FINANCE, FIDELITY INVESTMENTS,
INC., 82 DEVONSHIRE ST., BOSTON,
MA 02109

OLIVER RUDIGOZ PRIOR TO APRIL, 1998, PORTFOLIO
VICE PRESIDENT MANAGER, PARIBAS ASSET
Management, #3 Rue D'Antin,
Paris, France, 75002

Michael V. Salm Prior to November, 1997, Mortgage
VICE PRESIDENT Analyst, Blackrock Financial
345 Park Ave., New York,
NY 10010

Robert J. Schoen Prior to June, 1997, Sole
ASSISTANT VICE PRESIDENT Proprietor, Schoen Timing
Strategies, 315 E. 21st
, New York, NY 10010

Justin M. Scott Director, DSI PROPRIETIES
MANAGING DIRECTOR (Neja) Ltd., Epping Rd., Reydon,
Essex CM19 5RD

Max S. Senter General Partner, M.S. Senter &
SENIOR VICE PRESIDENT Sons Partnership, 4900
Fayetteville Rd., Raleigh,
NC 27611

Edward Shadek, Jr. Prior to March, 1997, Portfolio
VICE PRESIDENT Manager, Newhold Asset
Management, 950 Haverford Rd.,
Bryn Mawr, PA 19010

Raj Ken Sharma Prior to January, 1998, Vice
VICE PRESIDENT President and Portfolio Manager,
Fleet Financial, 75 State
Street, Boston, MA 02106

GORDON H. SILVER Trustee, Wang Center for
MANAGING DIRECTOR the Performing Arts, 270 Tremont
St., BOSTON, MA 02116

DAVID M. SILK MEMBER OF BOARD OF DIRECTORS,
SENIOR VICE PRESIDENT JOBS FOR BAY STATE GRADUATES, 451
ANDOVER ST., SUITE 305, NORTH
ANDOVER, MA 01845

Steven Spiegel Director, Ultra DIAMOND
SENIOR MANAGING DIRECTOR AND GOLD OUTLET., 29 East Madison
St., SUITE 1800, Chicago, IL
60602; DIRECTOR, FACES NEW YORK
UNIVERSITY MEDICAL CENTER, 550
FIRST AVENUE, NEW YORK, NY
10016; Trustee, Babson
College, One College Drive,
Wellesley, MA 02157;

Christopher A. Spurlock Prior to May, 1997, Sales Trader,
VICE PRESIDENT J.P. Morgan, 60 Wall St.,
New York, NY

Michael P. Stack Prior to November, 1997, Senior
SENIOR VICE PRESIDENT Vice President and Portfolio
Manager, Independence
Investment Associates, 53 State
St., Boston, MA 02109

Casey STRUMPFT Prior to January, 1997, Director,
SENIOR VICE PRESIDENT Blue Cross and Blue SHIRELD,
100 Summer St., Boston,
MA 02110

Prior to February, 1998, Vice
President, Corporate Research
Robert E. Sweeney Smith Barney, One New
VICE PRESIDENT York Plaza, New York, NY 10004

Judith H. Swirbalus Prior to January, 1998, Alex,
VICE PRESIDENT Brown & Sons, One South St.,
Baltimore, MD 21202

JOHN C. TALANIAN MEMBER OF BOARD OF DIRECTORS, THE
MANAGING DIRECTOR JAPAN SOCIETY OF BOSTON, ONE MILK
STREET, BOSSTON, MA 02109

Robert J. Toner Prior to September, 1998,
ASSISTANT VICE PRESIDENT Associate, Goodwin Procter &
Hoar, LLP, Exchange
Place, Boston, MA 02109

John R. Tonkin Prior to January, 1998, Analyst,
ASSISTANT VICE PRESIDENT Credit Suisse First Boston
Celtic Towers, The
Terrace Wellington, New
Zealand

Prior to September, 1997,
Staffing Lead, Cisco Systems, 250
Scott G. Vierra APOLIO Drive, Chelmsford,
VICE PRESIDENT MA 01824

David L. Waldman Prior to June, 1997, Senior
MANAGING DIRECTOR Portfolio Manager, Lazard Feres
Asset Management, 30
Rockefeller Center, New York, NY
10112

Paul C. Warren Prior to May, 1997, Director, IDS
SENIOR VICE PRESIDENT Fund Management, LT, One
Pacific Place, SQUENSWAY,
Hong Kong, China

DIERDRE WEST-SMITH TRUSTEE, ST. JAMES CONDO
ASSISTANT VICE PRESIDENT ASSOCIATION, 66 ST. JAMES ST.,
ROXBURY, MA 02119

Eric Wetlaufer PRESIDENT AND MEMBER OF
Managing Director BOARD OF DIRECTORS, THE BOSTON
SECURITY ANALYSTS SOCIETY, INC.,
100 BOYLSTON ST., SUITE 1050,
Boston, MA 02110

EDWARD F. WHALEN MEMBER OF THE BOARD OF DIRECTORS,
SENIOR VICE PRESIDENT HOCKOMOCK AREA YMCA, 300 ELMWOOD
ST., NORTH ATTLEBORO, MA 02760

Burton Wilson Prior to March, 1997, Associate
VICE PRESIDENT Investments Banking,
Robertson Stephens & Co.,
555 California St., Suite 2600,
San Francisco, CA 94104

RICHARD P. WYKE DIRECTOR, SALEM YMCA, ONE
Senior Vice President SEWALL ST., SALEM, MA 01970

Scott D. Zaleski Prior to May, 1997, Investment
ASSISTANT VICE PRESIDENT Officer, State Street Bank &
Trust, 1776 Heritage Dr.,
Quincy, MA 02171; Prior to
September, 1996, Investment
Associate Fidelity Investments,
82 Devonshire St., Boston, MA
02109

Michael P. Zeller Prior to July, 1997, Sales
VICE PRESIDENT MANGER, NYNEX Information
Resources, 35 Village
R., Middleton, MA 01949

ITEM 29. PRINCIPAL UNDERWRITER

(a) Putnam Mutual Funds Corp. is the principal underwriter for
each of the following investment companies, including the
Registrant:

Putnam American Government Income Fund, Putnam Arizona Tax Exempt
Income Fund, Putnam Asia Pacific Growth Fund, Putnam Asset
Allocation Funds, Putnam Balanced Retirement Fund, Putnam
California Tax Exempt Income Fund, Putnam California Tax Exempt
Money Market Fund, Putnam Capital OPPORTUNITITES Fund,
Putnam Convertible Income-Growth Trust, Putnam Diversified Equity
Trust, Putnam Diversified Income Trust, Putnam Equity
Income Fund, Putnam Europe Growth Fund, Putnam Florida
Tax Exempt Income Fund, Putnam Funds Trust, The George Putnam
Fund of Boston, Putnam Global Governmental Income Trust, Putnam
Global Growth Fund, Putnam Global Natural Resources Fund, The
Putnam Fund for Growth and Income, Putnam Growth and Income Fund
II, Putnam Health Sciences Trust, Putnam High Yield Trust, Putnam
High Yield Advantage Fund, Putnam High QUALITY BOND FUND,
Putnam Income Fund, Putnam Intermediate U.S. Government Income
Fund, PUTNAM INTERNATIONAL GROWTH FUND, Putnam Investment Funds,
Putnam Investors Fund, Putnam Massachusetts Tax Exempt Income
Fund, Putnam Michigan Tax Exempt Income Fund, Putnam Minnesota
Tax Exempt Income Fund, Putnam Money Market Fund, Putnam
Municipal Income Fund, Putnam New Jersey Tax Exempt Income Fund,
Putnam New Opportunities Fund, Putnam New York Tax Exempt Income
Fund, Putnam New York Tax Exempt Money Market Fund, Putnam New
York Tax Exempt Opportunities Fund, Putnam Ohio Tax Exempt Income
Fund, Putnam OTC & Emerging Growth Fund, Putnam Pennsylvania Tax
Exempt Income Fund, Putnam Preferred Income Fund, PUTNAM
STRATEGIC INCOME FUND, Putnam Tax Exempt Income Fund, Putnam Tax
Exempt Money Market Fund, Putnam Tax-Free Income Trust, Putnam
U.S. Government Income Trust, Putnam Utilities Growth and Income
Fund, Putnam Variable Trust, Putnam Vista Fund, Putnam Voyager
Fund, Putnam Voyager Fund II.

(b) The directors and officers of the Registrant's principal
underwriter are listed below. The principal business address of
each person is One Post Office Square, Boston, MA 02109:

Name Positions and Positions and
Offices Offices
with Underwriter with Registrant
Aaron,Jeff F. Asst. Vice None
President
Adduci,John V. Vice President None
Albanese,Frank Vice President None
Alberts,Richard W. Asst. Vice None
President
Alden,Donald F. Vice President None
Alders,Christopher A. Senior Vice None
President
Alpaugh,Christopher S. Vice President None
Amisano,Paulette C. Vice President None
Andrews,Margaret Vice None
President
Arends,Michael K. Senior Vice None
President
Asher,Steven E. Senior Vice None
President
Avery,Scott A. Senior Vice None
President
Aymond,Christian E. Senior Vice None
President
Aymond,Colin C. Vice President None
Battit,Suzanne J Vice President None
Beatty,Steven M. Senior Vice None
President
Bent,John J. Vice President None
Beringer,Thomas VICE President None
C.
Berka,Sharon A. Senior Vice None
President
Boneparth,John F. Managing Director None
Bonfilio Jr.,Peter J. Asst. Vice None
President
Bouchard,Keith R. Senior Vice None
President
Bradford Jr.,Linwood Senior Vice None
E. President
Brennan,Mary Ann Asst. Vice None
President
Bresnahan,Leslee R. Senior Vice None
President
Brockelman,James D. Senior Vice None
President
Brookman,Joel S. Vice President None
Brown,Timothy K. Senior Vice None
President
Buckner,Gail D. Senior Vice None
President
Burke,Robert W. Sr Managing None
Director
Cabana,Susan D. Vice President None
Callahan,Thomas C. Asst. Vice None
President
Capone,Robert G. Senior Vice None
President
Cartwright,Patricia A. Asst. Vice None
President
Casey,David M. Vice President None
Castle Jr.,James R. Vice PRESIDENT NONE
CHAPMAN,THOMAS E. VICE President None
Chase,Mary Claire Vice President None
Chrostowski,Louis F. Senior Vice None
President
Church,Daniel J. Vice President None
Clark,Richard B. Senior Vice None
President
Clermont,Mary Asst. Vice None
President
Clinton,John C. Asst. Vice None
President
Collman,Kathleen M. Sr Managing None
Director
Commane,Karen L. Asst. Vice None
President
Coneeny,Mark L. Senior Vice None
President
Connelly, Senior Vice None
Donald A. President
Connolly,Karen E. Asst. Vice None
President
Conyers,Barry M. Vice President None
Corbett,Dennis Vice President None
Corvinus,F. Nicholas Senior Vice None
President
Cosmer,Thomas A. Senior Vice NONE
PRESIDENT
COTTO,STEPHEN P ASST. VICE None
President
Cristo,Chad H. Vice President None
Cropper,Joy Bacher Asst. Vice None
President
Crowley,Colleen J. Asst. Vice None
President
Curran,Peter J. Senior Vice None
President
Dahill,Jessica E. Vice President None
Daly,Kenneth L. Managing Director None
Dane,Edward H. Senior Vice None
President
Daylor,Donna M. Vice President None
Days,Nancy M. Asst. Vice None
President
De Oliveira- Asst. Vice None
Smith,Pamela President
Deluse,Laura R. Asst. Vice None
President
DeMont,Lisa M. Vice President None
Dennehy,Teresa F. Vice PRESIDENT NONE
DERBYSHIRE,RALPH C SENIOR VICE NONE
PRESIDENT
DEVIN,RENATE S. SENIOR VICE None
President
DiRe,Lisa M. Asst. Vice None
President
DiStasio,Karen E. Vice President None
Dolan,Michael G. Vice President None
Donaldson,Scott M. Vice President None
Duffy,Deirdre E. Senior Vice None
President
Durbin,Emily J. Vice PRESIDENT NONE
DURKEE,CHRISTINE ASST. VICE None
President
Edlin,David B. Managing Director None
Eisenkraft,Gail A. Managing Director None
English,James M. Senior Vice None
President
Esposito,Vincent Managing NONE
DIRECTOR
FARRELL,DEBORAH S. SENIOR VICE None
President
Feldman,Susan H. Senior Vice None
President
Fisher,C. Nancy Managing Director None
Fishman,Mitchell B. Senior Vice None
President
Fiumara,Joseph C. Vice President None
Flaherty,Patricia C. Senior Vice None
President
Fleisher,Kate Vice NONE
PRESIDENT
FOLEY,TIMOTHY P. VICE PRESIDENT NONE
FROST,KAREN T. SENIOR Vice None
President
Fullerton,Brian J. Senior Vice None
President
Gates,Judy S. Senior Vice None
President
Gennaco,Joseph P. Senior Vice NONE
PRESIDENT
GIBBS,STEPHEN C. VICE President None
Gindel,Caroline E. Asst. Vice None
President
Goodfellow,Mark D. Vice President None
Goodman,Robert Managing Director None
Gould,Carol J. Asst. Vice NONE
PRESIDENT
]GRACE,Anthony J. Asst. Vice None
President
Grace,Linda K. Vice PRESIDENT NONE
GREENWOOD,DANIEL W. VICE President None
Grossberg,Jill Asst. Vice None
President
Grove,Denise Vice President None
Guay,Timothy R. Asst. Vice None
President
Gubala,Jeffrey P. Vice President None
Guerin,Donnalee Asst. Vice None
President
Guerra,Salvatore F. Vice PRESIDENT NONE
HAINES,JAMES B. ASST. VICE None
President
Hall,Debra L. Vice President None
Halloran,James E. Vice President None
Halloran,Thomas W. Senior Vice None
President
Harbeck,John D. Vice President None
Harrington,Bruce D. Vice President None
Hartigan,Craig W. Vice President None
Hartley,Deborah M. Asst. Vice None
President
Hawkins III,Howard W. Vice President None
Hayes-Castro,Deanna R. Vice None
President
Hedstrom,Gayle A. Asst. Vice None
President
Heffernan,Paul P. Senior Vice None
President
Heimanson,Susan M. Senior Vice None
President
Holly Sr.,Jeremiah K. Vice President None
Holmes,Maureen A. Asst. Vice None
President
Hooley,Daniel F Jr. Asst. Vice None
President
Hoyt,Paula J. Asst. Vice None
President
Hurley,William J. Managing Director NONE
& CFO
HUTCHINS,ROBERT B. VICE PRESIDENT NONE
ISGUR,Marianne P. Asst. Vice None
President
Jacobsen,Dwight D. Managing NONE
DIRECTOR
JORDAN,Stephen R. Asst. Vice None
President
Kapinos,Peter J. Vice President None
Kay,Karen R. Senior Vice NONE
PRESIDENT
KELEHER,KEVIN J. ASST. VICE None
President
Kelley,Brian J. Vice President None
Kelly,A.Siobhan Asst. Vice None
President
Kennedy,Alicia C. Asst. Vice None
President
King,David L. MANAGING DIRECTOR NONE
KING,DAVID R. VICE PRESIDENT NONE
KINOSHITA,TAKASHI VICE President None
Kinsman,Anne Senior Vice None
President
Kirk,Deborah H. Senior Vice None
President
Koontz,Jill A. Senior Vice None
President
Kreutzberg,Howard H. Senior Vice None
President
Krieger,Marjorie B. Vice President None
Lacascia, VICE PRESIDENT NONE
CHARLES M.
LANDERS,BRUCE M. VICE President None
Lane,Linda Asst. Vice None
President
LaPierre,Christopher W Asst. Vice None
President
Lathrop,James D. Senior Vice None
President
Lawlor,Stephanie T. Asst. Vice None
President
Leary,Joan M. Vice President None
Ledbetter,Charles C. Vice President None
Leipsitz,Margaret Asst. Vice None
President
Lemire,Kevin Vice President None
Leonardo,Christine A. Vice President None
Levy,Eric S. Senior Vice NONE
PRESIDENT
LEVY,NORMAN S. VICE President None
Lewandowski Jr.,Edward Vice President None
V.
Lewandowski,Edward V. Senior Vice None
President
Li,Mei Asst. Vice None
President
Lieberman,Samuel L. Vice President None
Lifsitz,David M. Vice President None
Lilien,David R. Vice President None
Linehan,Ann-Marie Asst. Vice None
President
Litant,Lisa M. Asst. Vice None
President
Lockwood,Maura A. Senior Vice None
President
Lomba,Rufino R. Senior Vice None
President
Long,Gregory T. Vice President None
Lucey,Kevin J Vice President None
Lucey,Robert DIRECTOR NONE
F.
LUCEY, THOMAS PRESIDENT AND NONE
DIRECTOR
LYONS,Robert F. Asst. Vice None
President
Malatos,Ann Vice President None
Mallin,Bonnie J. Senior VICE NONE
PRESIDENT
MALOOF,RENEE L. ASST. Vice None
President
Mancini,Dana Asst. Vice NONE
PRESIDENT
MANNING,GEORGE J. VICE President None
Manthorne,Heather M. Asst. Vice None
President
Maravel,Alexi A. Asst. Vice None
President
Marius,Frederick S. Vice President None
McAvoy,Bridget Asst. Vice None
President
McCafferty,Karen A. Vice President None
McCarthy,Anne B. Asst. Vice None
President
McConville,Paul D. Senior Vice None
President
McCracken,Brian Asst. Vice None
President
McCutcheon,Bruce A Senior Vice None
President
McDermott,Daniel E. Asst. Vice None
President
McKenna,Mark J. Senior Vice None
President
McNamara,Laura Vice President None
McNamee,Mary G. Asst. VICE NONE
PRESIDENT
MEAGHER,DOROTHY B. ASST. Vice None
President
Metelmann,Claye A. Vice President None
Milgroom,Eric D. Asst. Vice None
President
Miller,Bart D. Senior Vice None
President
Miller, Managing Director None
Jeffrey M.
Mills,Ronald K. Vice President None
Minsk,Judith Asst. Vice None
President
Mintzer,Matthew P. Senior Vice None
President
Monahan,Kimberly A. Vice President None
Moody,Paul R. Vice PRESIDENT NONE
MOONIN,SARA R. ASST. VICE None
President
Moret,Mitchell L. Senior Vice None
President
Mosher,Barry L. Asst. Vice None
President
Mullen,Donald E. Senior Vice None
President
Murphy JR.,KENNETH W. ASST. VICE NONE
PRESIDENT
MURPHY,Paul G. Vice President None
Murray,Brendan R. Vice President None
Nadherny,Robert Senior Vice None
President
Natale,Ellen E. Asst. VICE NONE
PRESIDENT
NAUEN,KIMBERLY PAGE ASST. Vice None
President
Neary,Ellen R. Vice President None
Nelson,Alexander L. Managing Director None
Newell,Amy Jane Vice President None
Nickodemus,John P. Senior Vice None
President
Nickse,Gail A. Asst. Vice None
President
O'Brien,Lois C. Vice President None
O'Brien,Nancy E. Vice President None
O'Connell,Gayle M. Asst. Vice None
President
Onofrio,Ellen Asst. Vice NONE
PRESIDENT
OWENS,KERRY M. ASST. Vice None
President
Palmer,Patrick J. Vice President None
Palombo,Joseph R. Managing NONE
DIRECTOR
PANESSA,BRIAN VICE PRESIDENT NONE
PAPES,Scott A. Vice President None
Parr,Cynthia O. Vice President None
Pelletier,Dale M. Vice President None
Peterson,Jennifer H. Asst. Vice None
President
Peterson, VICE PRESIDENT NONE
KATHRYN L.
PETRALIA,RANDOLPH S. SENIOR VICE None
President
Phoenix,John G. Senior Vice None
President
Phoenix,Joseph Senior Vice None
President
Plapinger,Keith Senior Vice NONE
PRESIDENT
POWERS,BRIAN S. ASST. Vice None
President
Present,Howard B. Senior Vice None
President
Pulkrabek,Scott M. Vice President None
Putnam,George Director Chairman and

PRESIDENT
REZABEK,Joseph L. Asst. Vice None
President
Riley,Megan G. Asst. Vice None
President
Ritenhouse,Marc J. Vice President None
Rodammer,Kris Vice President None
Rogers,Deborah A. Vice President None
Rothman,Debra V. Vice President None
Rowe,Robert B. Vice None
President
Ruys de Perez,Charles Senior Vice None
A. President
Ryan,Carolyn M. Asst. Vice None
President
Ryan,Deborah A. Vice None
President
Saunders,Catherine A. Senior Vice None
President
Saunders,Robbin L. Vice President None
Saur,Karl W. Vice President None
Scanlon,Michael M. Vice President None
Schaefer,Jennifer L. Asst. Vice None
President
Schofield,Shannon D. Vice President None
Schroeder,Paul R. Asst. Vice None
President
Schultz,Mitchell D. Managing Director None
Scordato,Christine A. Senior Vice None
President
Scott,Joseph W. Asst. Vice None
President
Segers,Elizabeth R. Senior Vice None
President
Shamburg,John B. Vice President None
Sharpless,Kathy G. Managing NONE
DIRECTOR
SHIEBLER,WILLIAM N. DIRECTOR VICE PRESIDENT
SHORT,JONATHAN D. SENIOR VICE NONE
PRESIDENT
SILVER,GORDON H. SENIOR Managing Vice President
Director
Skistimas Jr,John J. Vice President None
Smith,Stuart C. Asst. Vice None
President
Southard,Peter J. Vice President None
Spiegel,Steven Sr Managing None
Director
Stack,Michael P. Senior Vice None
President
Stanojev,Nicholas T. Senior Vice NONE
PRESIDENT
STARR,LOREN M. MANAGING DIRECTOR NONE
STEINBERG,Lauren B. Asst. Vice None
President
Stern,Derek A. Asst. Vice None
President
Stickney,Paul R. Senior Vice None
President
Strumpf,Casey Senior Vice None
President
Sullivan,Brian L. Senior Vice None
President
Sullivan,Donna G Vice President None
Sullivan,Elaine M. Senior Vice None
President
Sullivan,Guy Managing Director None
Sullivan,Kevin J. Senior Vice None
President
Sullivan,Maryann Asst. Vice None
President
Sutherland,George C. Vice NONE
PRESIDENT
SWEENEY,JANET C. SENIOR VICE NONE
PRESIDENT
TALANIAN,JOHN C. MANAGING DIRECTOR NONE
TANNER,B Iris Vice President None
Tavares,April M. Asst. Vice None
President
Taylor,David S. Vice President None
Telling,John R. Senior Vice None
President
Tercha,Cynthia Vice President None
Thomas,Tracy ASST. Vice None
E. President
Tibbetts,Richard B. Managing Director None
Tirado,Patrice M. Vice PRESIDENT NONE
TONER,ROBERT J. ASST. VICE None
President
Tosi,Janet E. Vice President None
Troped,Bonnie L. Senior Vice None
President
Trowbridge,Wendy S. Asst. Vice None
President
Twigg,Christine M. Asst. Vice None
President
Vander Linde,Douglas Senior Vice None
J. President
Verani,John R. Senior Vice Vice President
President
Vierra,Scott G. Vice None
President
Waters,Mitchell J. Vice None
President
West-Smith,Deirdre Asst. Vice NONE
PRESIDENT
WHALEN,Brian Vice President None
Whalen,Edward F. Senior Vice None
President
Whitaker,J. Greg Vice President None
White,J. Bennett Vice None
President
Wolfson,Jane Senior Vice None
President
Woloshin,Benjamin I. Senior Vice None
President
Woolverton,William H. Managing Director None
Zeller,Michael P. Vice President None
Zografos,Laura J. Vice President None
Zukowski,Virginia A. Senior Vice None
President

ITEM 30. LOCATION OF ACCOUNTS AND REC ORDS

Persons maintaining physical possession of accounts,
books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are Registrants' Clerk, Beverly Marcus;
Registrants' investment adviser, Putnam Investment Management,
Inc.; Registrants' principal underwriter, Putnam Mutual Funds
Corp.; Registrants' custodian, Putnam Fiduciary Trust Company
("PFTC"); and Registrants' transfer and dividend disbursing agent,
Putnam Investor Services, a division of PFTC. The address of the
Clerk, investment adviser, principal underwriter, custodian and
transfer and dividend disbursing agent is One Post Office Square,
Boston, Massachusetts 02 109.
ITEM 31. MANAGEMENT SERV ICES

N one.

ITEM 32. UNDERTAK INGS

Each Registrant undertakes to furnish to each person to
whom a prospectus of the Registrant is delivered a copy of the
Registrant's latest annual report to shareholders, upon request
and without cha rge.
CONSENT OF INDEPENDENT ACCOUNT ANTS

We consent to the incorporation by reference in the Prospectuses
and Statement of Additional Information constituting parts of Post-
Effective Amendments No. 9 to the Registration Statement of
Putnam New York Tax Exempt Opportunities Fund on Form N-1A[/R]
(File No. 33-37001) of our report dated November 12, 1998, on our
audit, of the financial statements and financial highlights of the
Fund, which report it included in the Annual Report for[/R] Putnam
New York Tax Exempt Opportunities Fund, for the year ended
September 30, 1998, which is[/R] incorporated by reference
in the Registration Statement .

We also consent to the references to our firm under the
caption "Independent Accountants and Financial Statements"
in the Statement of Additional Information and under the
heading "Financial Highlights" in such Prospectus.

PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
November 30 , 1998
--------------------------

NOTICE

A copy of the Agreement and Declarations of Trust of each
of Putnam New York Tax Exempt Income Fund, Putnam New York Tax
Exempt Opportunities Fund and Putnam New York Tax Exempt Money
Market Fund are on file with the Secretary of State of The
Commonwealth of Massachusetts and notice is hereby given that this
instrument is executed on behalf of each Registrant by an officer
of each Registrant as an officer and not individually and the
obligations of or arising out of this instrument are not binding
upon any of the Trustees, officers or shareholders individually
but are binding only upon the assets and property of the relevant
fund.
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940 each Registrant certifies
that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, and
The Commonwealth of Massachusetts, on the 30th day of
November
PUTNAM NEW YORK TAX
EXEMPT OPPORTUNITIES FUND
By: Gordon H. Silver, Vice
Presiden t

Pursuant to the requirements of the Securities Act of
1933, this Amendment to the Registration Statement of
Putnam New York Tax Exempt Opportunities has been signed
below by the following persons in the capacities and on the dates
indicated:

SIGNATURE TITL E
George Putnam President and Chairman of the Board;
Principal Executive Officer;
Trust ee

John D. Hughes Senior Vice President; Treasurer and
Principal Financial Offi cer
Paul G. Bucuvalas Assistant Treasurer and Principal
Accounting Off icer

Jameson A. Baxter Tr ustee

Hans H. Estin T rustee

John A. Hill Trustee

Ronald J. Jackson Trustee

Paul J. Josko w Trustee

Elizabeth T. Kenn an Trustee
Lawrence J. Las ser Trustee
John H. Mullin , III Trustee

Robert E. Patt erson Trustee

Donald S. P erkins Trustee

William F . Pounds Trustee

George Pu tnam, III Trustee

A. J.C. Smith Trustee

W. Thom as Stephens Trustee

W. Nichol as Thorndike Truste e
By: Gordon H. Silve r,
as Attorney-in-Fact
November 30, 1998

PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND CROSS

REFERENCE SHEET

(AS REQUIRED BY RULE 481(A))

PART A

N-1A ITEM NO. LOCATION

1. Cover Page........................... Cover page

2. Synopsis............................. Expenses summary

3. Condensed Financial
Information......
Financial highlights;
How performance is
shown
4. General Description of
Registrant....
Objectives; How the
funds pursue their
objectives;
Organization and
history

5. Management of the
Fund...............
Expenses summary; How
the funds are managed;
About Putnam
Investments, Inc.

5A. Management's Discussion of Fund
Performance....................... (Contained in each
annual report of the
Registrants)

6. Capital Stock and
Other Securities..................... Cover page;
Organization and
history; How the fund
makes distributions to
shareholders; tax
information

7. Purchase of Securities
Being Offered........................ How to buy shares;
Distribution plans; How
to sell shares; How to
exchange shares; How a
fund values its shares

8. Redemption or
Repurchase............
. How to buy
shares, How to sell

shares; How to exchange

shares; Organization

and history

9. Pending Legal Proceedings............ Not applicable

PART B

N-1A ITEM NO. LOCATION

10. Cover Page.......................... Cover page 11. Table

of Contents................... Cover page

12. General Information
and History.....
Organization and
history (Part A)

13. Investment Objectives
and Policies.. How the
funds pursue their
objectives (Part A);
Investment
restrictions;
Miscellaneous
investment practices

14. Management of the
Registrant........
Management (Trustees;
Trustee fees;
Officers); Additional
officers

15. Control Persons and
Principal Holders of Securities..... Management (Trustees;
Officers); Charges and
expenses (Share
ownership)

16. Investment Advisory and
Other Services...................... Organization and
history (Part A);
Management (Trustees;
Officers; The
management contract;
Principal underwriter;
Investor servicing
agent and custodian);
Charges and expenses;
Distribution plans;
Independent accountants
and financial
statements

17. Brokerage
Allocation............
.... Management
(Portfolio
transactions); Charges
and expenses

18. Capital Stock and
Other Securities.................... Organization and
history (Part A); How
the fund makes
distributions to
shareholders; tax
information (Part A);
Suspension of
redemptions

19. Purchase, Redemption and Pricing
of Securities Being Offered......... How to buy shares
(Part A); How to sell
shares (Part A); How to
exchange shares (Part
A); How to buy shares;
Determination of net
asset value; Suspension
of redemptions

20. Tax
Status................
.......... How a
fund makes distributions
to shareholders; tax
information (Part A);
Taxes

21. Underwriters..........
..............
Management (Principal
underwriter); Charges
and expenses

22. Calculation of
Performance Data.....
How performance is shown
(Part A); Investment
performance; Standard
performance measures

23. Financial
Statements............
.... Independent
accountants and
financial statements

Part C

Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of the Registration
Statement.

This Post-Effective Amendment relates solely to the Putnam New
York Tax Exempt Opportunities Fund. Information contained in the
Registrant's Registration Statement relating to any other
registrant is neither amended nor superseded hereby.

SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS

Fund name: - NEW YORK TAX EXEMPT INCOME CLASS A SHARES
Fiscal period ending: September 30, 1998
Inception date (if less than 10 years of performance): September 2,
1983

TOTAL RETURN

Formula - Average Annual Total Return: ERV = P(1+T) n

N = Number of Time Periods 1 Year 5 Years 10
Years*

P = Initial Investment $1000 $1000
$1000

ERV = Ending Redeemable Value $1023 $1218
$2007

T = Average Annual Total Return 2.27% 4.01%
7.22%*

*Life of fund, if less than 10 years

YIELD

Formula:

Interest + Dividends - Expenses
2 (---------------- +1)(6) -1
POP x Average shares

Interest and Dividends $6,599,843

Expenses $1,113,916

Reimbursement $0

Average shares 181,456,509

NAV $9.12

Sales Charge 4.75%

POP $9.57

Yield at POP 3.82%

TAX - EXEMPT EQUIVALENT YIELD

Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1 - (Highest Individual Tax Rate)

3.82% 3.82%
_____ = --- = 7.08%
1-46.08% .5392%

Fund name: NEW YORK TAX EXEMPT INCOME - CLASS B SHARES
Fiscal period ending: September 30, 1998
Inception date (if less than 10 years of performance): February 4,
1993

TOTAL RETURN

Formula - Average Annual Total Return: ERV = P(1+T) n

N = Number of Time Periods 1 Year 5 Years 10
Years*

P = Initial Investment $1000 $1000
$1000

ERV = Ending Redeemable Value $1017 $1218
$1948

T = Average Annual Total Return 1.69% 4.02%
6.89%*

*Life of fund, if less than 10 years

YIELD

Formula:

Interest + Dividends - Expenses
2 (---------------- +1)(6) -1
POP x Average shares

Interest and Dividends $920,677

Expenses $278,063

Reimbursement $0

Average shares 25,363,124

NAV $9.10

Maximum Contingent Deferred
Sales Charge 5.00%

Yield at NAV 3.36%

TAX - EXEMPT EQUIVALENT YIELD

Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1 - (Highest Individual Tax Rate)

3.36% 3.36%
_____ = --- =6.23%
1-46.08% .5392%

Fund name: NEW YORK TAX EXEMPT INCOME - CLASS M SHARES
Fiscal period ending: September 30, 1998
Inception date (if less than 10 years of performance): February 10,
1995

TOTAL RETURN

Formula - Average Annual Total Return: ERV = P(1+T) n

N = Number of Time Periods 1 Year 5 Years 10
Years*

P = Initial Investment $1000 $1000
$1000

ERV = Ending Redeemable Value $1036 $1216
$1956

T = Average Annual Total Return 3.61% 3.99%
6.94%*

*Life of fund, if less than 10 years

YIELD

Formula:

Interest + Dividends - Expenses
2 (---------------- +1)(6) -1
POP x Average shares

Interest and Dividends $9,376

Expenses $2,158

Reimbursement $0

Average shares 257,193

NAV $9.12

Sales Charge 3.25%

POP $9.43

Yield at POP 3.59%

TAX - EXEMPT EQUIVALENT YIELD

Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1 - (Highest Individual Tax Rate)

3.59% 3.59%
_____ = --- =6.66%
1-46.08% .5392%

SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS

Fund name: NY TAX EXEMPT OPPORTUNITIES - CLASS A SHARES
Fiscal period ending: September 30, 1998
Inception date (if less than 10 years of performance): November 7,
1990

TOTAL RETURN

Formula - Average Annual Total Return: ERV = P(1+T) n

N = Number of Time Periods 1 Year 5 Years 10
Years*

P = Initial Investment $1000 $1000
$1000

ERV = Ending Redeemable Value $1025 $1292
$1702

T = Average Annual Total Return 2.48% 5.26%
6.96%*

*Life of fund, if less than 10 years

YIELD

Formula:

Interest + Dividends - Expenses
2 (---------------- +1)(6) -1
POP x Average shares

Interest and Dividends $ 679,264

Expenses $ 140,480

Reimbursement $ 0

Average shares 18,096,799

NAV $ 9.27

Sales Charge 4.75%

POP $ 9.73

Yield at POP 3.70%

TAX - EXEMPT EQUIVALENT YIELD

Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1 - (Highest Individual Tax Rate)

3.70% 3.70%
_____ = --- = 6.86%
1-46.08% .5392%

Fund name: NY TAX EXEMPT OPPORTUNITIES FUND - CLASS B SHARES
Fiscal period ending: September 30, 1998
Inception date (if less than 10 years of performance): February 1,
1994

TOTAL RETURN

Formula - Average Annual Total Return: ERV = P(1+T) n

N = Number of Time Periods 1 Year 5 Years 10
Years*

P = Initial Investment $1000 $1000
$1000

ERV = Ending Redeemable Value $1019 $1290
$1688

T = Average Annual Total Return 1.86% 5.22%
6.85%*

*Life of fund, if less than 10 years

YIELD

Formula:

Interest + Dividends - Expenses
2 (---------------- +1)(6) -1
POP x Average shares

Interest and Dividends $ 274,742

Expenses $ 92,067

Reimbursement $ 0

Average shares 7,326,723

NAV $ 9.26

Maximum Contingent Deferred
Sales Charge 5.00%

Yield at NAV 3.25%

TAX - EXEMPT EQUIVALENT YIELD

Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1 - (Highest Individual Tax Rate)

3.25% 3.25%
_____ = --- = 6.03%
1-46.08% .5392%

Fund name: NY TAX EXEMPT OPPORTUNITIES FUND - CLASS M SHARES
Fiscal period ending: September 30, 1998
Inception date (if less than 10 years of performance): February 10,
1995

TOTAL RETURN

Formula - Average Annual Total Return: ERV = P(1+T) n

N = Number of Time Periods 1 Year 5 Years 10
Years*

P = Initial Investment $1000 $1000
$1000

ERV = Ending Redeemable Value $1037 $1287
$1675

T = Average Annual Total Return 3.69% 5.17%
6.75%*

*Life of fund, if less than 10 years

YIELD

Formula:

Interest + Dividends - Expenses
2 (---------------- +1)(6) -1
POP x Average shares

Interest and Dividends $ 9,810

Expenses $ 2,608

Reimbursement $ 0

Average shares 261,811

NAV $ 9.25

Sales Charge 3.25%

POP $ 9.56

Yield at POP 3.48%

TAX - EXEMPT EQUIVALENT YIELD

Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1 - (Highest Individual Tax Rate)

3.48% 3.48%
_____ = --- = 6.45%
1-46.08% .5392%

SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS

Fund name: NY Tax Exempt Money Market Fund
Fiscal periods ending: September 30, 1998
Inception date (if less than 10 years of performance): October 26,
1987

7 DAY YIELD FORMULA - DIVIDENDS DECLARED FOR LAST 7 DAYS / 7 *365

TOTAL DIVIDENDS DECLARED
PER SHARE FOR LAST 7 DAYS:

7 DAY YIELD = 2.88%

CALCULATION OF 7 DAY EFFECTIVE YIELD

7 DAY YIELD 52.142857
( 1 + -_________________________) - 1
(100 * 52.142587)

7 DAY EFFECTIVE YIELD = 2.92%

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
Putnam New York Tax Exempt Opportunities Fund
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> CLASS A

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 223,600,873
<INVESTMENTS-AT-VALUE> 236,866,274
<RECEIVABLES> 8,329,790
<ASSETS-OTHER> 207,825
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 245,403,889
<PAYABLE-FOR-SECURITIES> 5,126,201
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,266,054
<TOTAL-LIABILITIES> 6,392,255
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 227,593,424
<SHARES-COMMON-STOCK> 18,133,165
<SHARES-COMMON-PRIOR> 18,238,016
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (67,872)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (937,094)
<ACCUM-APPREC-OR-DEPREC> 12,423,176
<NET-ASSETS> 239,011,634
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 13,787,911
<OTHER-INCOME> 0
<EXPENSES-NET> 2,643,805
<NET-INVESTMENT-INCOME> 11,144,106
<REALIZED-GAINS-CURRENT> (816,399)
<APPREC-INCREASE-CURRENT> 5,970,419
<NET-CHANGE-FROM-OPS> 16,298,126
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (8,433,590)
<DISTRIBUTIONS-OF-GAINS> (596,654)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,468,511
<NUMBER-OF-SHARES-REDEEMED> (3,088,923)
<SHARES-REINVESTED> 515,561
<NET-CHANGE-IN-ASSETS> 14,410,277
<ACCUMULATED-NII-PRIOR> 130,474
<ACCUMULATED-GAINS-PRIOR> 673,454
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,386,191
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,714,352
<AVERAGE-NET-ASSETS> 166,199,795
<PER-SHARE-NAV-BEGIN> 9.10
<PER-SHARE-NII> .46
<PER-SHARE-GAIN-APPREC> .21
<PER-SHARE-DIVIDEND> (.47)
<PER-SHARE-DISTRIBUTIONS> (.03)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.27
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
Putnam New York Tax Exempt Opportunities Fund
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> CLASS B

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 223,600,873
<INVESTMENTS-AT-VALUE> 236,866,274
<RECEIVABLES> 8,329,790
<ASSETS-OTHER> 207,825
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 245,403,889
<PAYABLE-FOR-SECURITIES> 5,126,201
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,266,054
<TOTAL-LIABILITIES> 6,392,255
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 227,593,424
<SHARES-COMMON-STOCK> 7,403,805
<SHARES-COMMON-PRIOR> 6,185,255
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (67,872)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (937,094)
<ACCUM-APPREC-OR-DEPREC> 12,423,176
<NET-ASSETS> 239,011,634
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 13,787,911
<OTHER-INCOME> 0
<EXPENSES-NET> 2,643,805
<NET-INVESTMENT-INCOME> 11,144,106
<REALIZED-GAINS-CURRENT> (816,399)
<APPREC-INCREASE-CURRENT> 5,970,419
<NET-CHANGE-FROM-OPS> 16,298,126
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,752,969)
<DISTRIBUTIONS-OF-GAINS> (211,900)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,125,903
<NUMBER-OF-SHARES-REDEEMED> (1,105,098)
<SHARES-REINVESTED> 197,745
<NET-CHANGE-IN-ASSETS> 14,410,277
<ACCUMULATED-NII-PRIOR> 130,474
<ACCUMULATED-GAINS-PRIOR> 673,454
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,386,191
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,714,352
<AVERAGE-NET-ASSETS> 62,433,906
<PER-SHARE-NAV-BEGIN> 9.09
<PER-SHARE-NII> .40
<PER-SHARE-GAIN-APPREC> .21
<PER-SHARE-DIVIDEND> (.41)
<PER-SHARE-DISTRIBUTIONS> (.03)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.26
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

ARTICLE> 6
<LEGEND>
Putnam New York Tax Exempt Opportunities Fund
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> CLASS M

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 213,913,359
<INVESTMENTS-AT-VALUE> 220,532,770
<RECEIVABLES> 4,873,080
<ASSETS-OTHER> 603,101
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 226,008,951
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,407,594
<TOTAL-LIABILITIES> 1,407,594
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 217,344,672
<SHARES-COMMON-STOCK> 260,315
<SHARES-COMMON-PRIOR> 168,436
<ACCUMULATED-NII-CURRENT> 130,474
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 673,454
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,452,757
<NET-ASSETS> 224,601,357
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 13,560,856
<OTHER-INCOME> 0
<EXPENSES-NET> 2,268,490
<NET-INVESTMENT-INCOME> 11,292,366
<REALIZED-GAINS-CURRENT> 1,415,869
<APPREC-INCREASE-CURRENT> 4,286,563
<NET-CHANGE-FROM-OPS> 16,994,798
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (91,884)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 126,540
<NUMBER-OF-SHARES-REDEEMED> (41,167)
<SHARES-REINVESTED> 6,506
<NET-CHANGE-IN-ASSETS> 9,144,071
<ACCUMULATED-NII-PRIOR> 161,060
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (711,747)
<GROSS-ADVISORY-FEES> 1,286,589
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,383,288
<AVERAGE-NET-ASSETS> 1,793,765
<PER-SHARE-NAV-BEGIN> 8.86
<PER-SHARE-NII> .46
<PER-SHARE-GAIN-APPREC> .22
<PER-SHARE-DIVIDEND> (.46)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.08
<EXPENSE-RATIO> 1.26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM Putnam New York Tax Exempt Income Fund Class A QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. </LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 1,917,902,977
<INVESTMENTS-AT-VALUE> 2,085,173,014
<RECEIVABLES> 54,100,244
<ASSETS-OTHER> 213,887
<OTHER-ITEMS-ASSETS> 15,054
<TOTAL-ASSETS> 2,139,502,199
<PAYABLE-FOR-SECURITIES> 27,892,104
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,290,310
<TOTAL-LIABILITIES> 37,182,414
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,987,680,827
<SHARES-COMMON-STOCK> 210,172,016
<SHARES-COMMON-PRIOR> 224,393,540
<ACCUMULATED-NII-CURRENT> 2,766,182
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (55,035,593)
<ACCUM-APPREC-OR-DEPREC> 166,908,369
<NET-ASSETS> 2,102,319,785
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 132,345,693
<OTHER-INCOME> 0
<EXPENSES-NET> 17,562,498
<NET-INVESTMENT-INCOME> 114,783,195
<REALIZED-GAINS-CURRENT> 28,864,977
<APPREC-INCREASE-CURRENT> (44,401,444)
<NET-CHANGE-FROM-OPS> 99,246,728
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (104,395,042)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 49,874,885
<NUMBER-OF-SHARES-REDEEMED> (71,315,173)
<SHARES-REINVESTED> 6,955,843
<NET-CHANGE-IN-ASSETS> (126,904,478)
<ACCUMULATED-NII-PRIOR> 1,213,628
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (81,776,593)
<GROSS-ADVISORY-FEES> 10,240,984
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,680,204
<AVERAGE-NET-ASSETS> 1,904,242
<PER-SHARE-NAV-BEGIN> 8.97
<PER-SHARE-NII> .48
<PER-SHARE-GAIN-APPREC> (.06)
<PER-SHARE-DIVIDEND> (.48)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.91
<EXPENSE-RATIO> .81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM Putnam New York Tax Exempt Income Fund Class B QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. </LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1966
<INVESTMENTS-AT-COST> 1,917,902,977 <INVESTMENTS-AT-VALUE> 2,085,173,014 <RECEIVABLES> 54,10
0,244
<ASSETS-OTHER> 213,887
<OTHER-ITEMS-ASSETS> 15,054
<TOTAL-ASSETS> 2,139,502,199 <PAYABLE-FOR-SECURITIES> 27,892,104
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,290,310
<TOTAL-LIABILITIES> 37,182,414
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,987,680,827 <SHARES-COMMON-STOCK> 25,557,648
<SHARES-COMMON-PRIOR> 24,080,694
<ACCUMULATED-NII-CURRENT> 2,766,182
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (55,035,593) <ACCUM-APPREC-OR-DEPREC> 166,908,369
<NET-ASSETS> 2,102,319,785 <DIVIDEND-INCOME> 0
<INTEREST-INCOME> 132,345,693
<OTHER-INCOME> 0
<EXPENSES-NET> 17,562,498
<NET-INVESTMENT-INCOME> 114,783,195
<REALIZED-GAINS-CURRENT> 28,864,977
<APPREC-INCREASE-CURRENT> (44,401,444) <NET-CHANGE-FROM-OPS> 99,246,728
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (10,533,538) <DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,772,161
<NUMBER-OF-SHARES-REDEEMED> (4,269,501)
<SHARES-REINVESTED> 780,326
<NET-CHANGE-IN-ASSETS> (126,904,478) <ACCUMULATED-NII-PRIOR> 1,213,628
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (81,776,593) <GROSS-ADVISORY-FEES> 10,240,984
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,680,204
<AVERAGE-NET-ASSETS> 218,364,124
<PER-SHARE-NAV-BEGIN> 8.95
<PER-SHARE-NII> .42
<PER-SHARE-GAIN-APPREC> (.05)
<PER-SHARE-DIVIDEND> (.42)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.90
<EXPENSE-RATIO> 1.46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM Putnam New York Tax Exempt Income Fund Class M QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. </LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1996 <PERIOD-END> NOV-30-1996 <INVESTMENTS-AT-COST
>
1,917,902,977 <INVESTMENTS-AT-VALUE> 2,085,173,014 <RECEIVABLES> 54,100,244
<ASSETS-OTHER> 213,887
<OTHER-ITEMS-ASSETS> 15,054
<TOTAL-ASSETS> 2,139,502,199 <PAYABLE-FOR-SECURITIES> 27,892,104
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,290,310
<TOTAL-LIABILITIES> 37,182,414
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,987,680,827 <SHARES-COMMON-STOCK> 142,064
<SHARES-COMMON-PRIOR> 65,568
<ACCUMULATED-NII-CURRENT> 2,766,182
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (55,035,593) <ACCUM-APPREC-OR-DEPREC> 166,908,369 <NET-ASSETS>
2,102,319,785 <DIVIDEND-INCOME> 0
<INTEREST-INCOME> 132,345,693 <OTHER-INCOME> 0
<EXPENSES-NET> 17,562,498
<NET-INVESTMENT-INCOME> 114,783,195 <REALIZED-GAINS-CURRENT> 28,864,977
<APPREC-INCREASE-CURRENT> (44,401,444) <NET-CHANGE-FROM-OPS> 99,246,728
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (49,718)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 89,297
<NUMBER-OF-SHARES-REDEEMED> (17,785)
<SHARES-REINVESTED> 4,984
<NET-CHANGE-IN-ASSETS> (126,904,478) <ACCUMULATED-NII-PRIOR> 1,213,628
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (81,776,593) <GROSS-ADVISORY-FEES> 10,240,984
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,680,204
<AVERAGE-NET-ASSETS> 965,411
<PER-SHARE-NAV-BEGIN> 8.97
<PER-SHARE-NII> .45
<PER-SHARE-GAIN-APPREC> (.06)
<PER-SHARE-DIVIDEND> (.45)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.91
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
PUTNAM NEW YORK TAX EXEMPT MONEY MARKET FUND
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> CLASS A

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 44,010,796
<INVESTMENTS-AT-VALUE> 44,010,796
<RECEIVABLES> 339,857
<ASSETS-OTHER> 9,127
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 44,359,780
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 258,936
<TOTAL-LIABILITIES> 258,936
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 44,100,844
<SHARES-COMMON-STOCK> 44,100,844
<SHARES-COMMON-PRIOR> 39,455,739
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 44,100,844
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,508,983
<OTHER-INCOME> 0
<EXPENSES-NET> 270,668
<NET-INVESTMENT-INCOME> 1,238,315
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,238,315
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,238,315)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 189,482,229
<NUMBER-OF-SHARES-REDEEMED> (185,971,502)
<SHARES-REINVESTED> 1,134,378
<NET-CHANGE-IN-ASSETS> 4,654,105
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 190,795
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 352,013
<AVERAGE-NET-ASSETS> 42,397,006
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .0287
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.0287)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>