Putnam
New York
Tax Exempt
Opportunities
Fund
SEMIANNUAL REPORT
March 31, 1998
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* Morningstar, an independent rating agency, awarded Putnam New York
Tax Exempt Opportunities Fund's class A shares its highest ranking of 5
stars for overall performance as of March 31, 1998, based on the fund's
average annual returns for the 3- and 5-year periods. Only 10% of the
1,525 tax-exempt funds rated receive 5 stars.
* "The ability to add value to income-oriented portfolios is
particularly important in this low interest-rate environment. Putnam is
meeting this challenge by structuring portfolios that generate attractive,
durable levels of income and solid total return. Our distinguished team of
credit analysts relentlessly searches for the undervalued opportunities
that lead to high yields and capital appreciation."
-- Jerome J. Jacobs, manager
Putnam New York Tax Exempt Opportunities Fund
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
15 Financial statements
Morningstar ratings reflect risk-adjusted performance through 3/31/98, and
are subject to change every month. Morningstar ratings are calculated from
a fund's 3-, 5-, and 10-year returns (with fee adjustments) in excess of
90-day Treasury bill returns and a risk factor that reflects performance
below 90-day Treasury bill returns. For 3- and 5-year performance, the
fund received 4 and 5 stars, respectively. There were 782 and 1,525
tax-exempt funds rated, respectively. 10% of the funds in an investment
category receive 5 stars; 22.5% receive 4 stars. Performance of other
share classes will vary. Past performance is not indicative of future
results.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
The financial troubles in Asia continued to dominate the capital markets
during the first half of Putnam New York Tax Exempt Opportunities Fund's
fiscal year, pushing aside worries that the continued strength in the U.S.
economy would have inflationary implications. The rush of funds to the safety
of the U.S. bond market did drive yields on most bonds, including municipals,
lower -- and their prices higher.
The Federal Reserve Board kept close watch on these events, as you might
expect. But in the end, the Fed remained on the sidelines, apparently content
that the economic engine was still sufficiently under control.
During the period, Jerome J. Jacobs was named your fund's manager, a position
he holds in addition to his responsibilities as chief investment officer of
the Tax-Exempt Fixed-Income Group. Before joining Putnam in 1996, Jerry was
with the Vanguard Group, Butcher & Singer, and the Commonwealth of
Pennsylvania. He has 18 years of investment experience.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
May 20, 1998
Report from the Fund Manager
Jerome J. Jacobs
The steady economic growth, minimal inflation, and historically low interest
rates of the past six months have created an investment environment that many
investors would call ideal. Low rates have propelled economic growth across
the nation, spurred employment, and strengthened the financial condition of
many municipalities. However, at the same time, the low rates have added
considerably to the challenge of building and sustaining high levels of
portfolio income.
Putnam New York Tax Exempt Opportunities Fund has risen to meet this
challenge, as we successfully structured the portfolio to generate a high,
durable level of tax-exempt income. For the six-month period ended March 31,
1998, your fund's class A shares generated a total return of 3.77% at net
asset value (-1.12% at public offering price). Results for class B and class
M shares, as well as performance details for longer periods can be found on
page 8.
* POSITIVE TRENDS CONTINUE TO SUPPORT TAX-EXEMPT MARKET
During your fund's reporting period, tax-exempt bonds benefited from many of
the positive trends that have existed over the past few years: steady economic
growth, benign inflation, and low interest rates. Municipal credits continued
to improve as the economy's performance boosted tax revenues and the federal
government generated the first budget surplus in nearly 30 years.
In New York, the biggest credit story over the past six months was the upgrade
of New York City general obligation bonds by Moody's, a premier rating
service. These bonds had been rated Baa prior to the move. Watchful investors
had recognized the city's improving financial operations over the past several
years and anticipated a rating boost. Investors also sought these bonds for
their generous yields. The combination of credit opportunity and high yields
created strong demand for New York City debt, making it one of the
top-performing sectors in the tax-exempt market in 1997.
* RELATIVE VALUE AND CALL PROTECTION ARE PORTFOLIO PRIORITIES
While these positive trends contributed to your fund's performance, we believe
the strategies we implemented to build durable levels of income, maximize
total return potential, and control interest rate risk had a more significant
effect. We structured the fund with bonds that offered attractive relative
value, taking advantage of opportunities created by supply and demand
imbalances and the structure of the yield curve. We also continued our
emphasis on improving call protection, investing in bonds with long call dates
to ensure that the portfolio could benefit from the bond's income for the
greatest period of time.
One method commonly used to determine attractive relative value is to monitor
the relationship between tax-exempt yields and U.S. Treasury yields.
Historically, Aaa-rated insured bonds provide approximately 84% of the yield
of U.S. Treasuries with similar maturities. During the early months of 1998,
however, supply in the municipal market rose by approximately 70% over the
prior year's levels. This drove the yields of municipal bonds higher -- and
their prices lower -- in comparison with their taxable counterparts. During
this period of heavy supply, the yields of Aaa-rated insured municipal bonds
rose to 90% of comparable U.S. Treasuries. These unusually affordable levels
are similar to those reached during the flat-tax worry of 1995 and 1996, which
proved to be both temporary and an attractive buying opportunity. Current
tax-exempt yields are especially attractive to residents of high-tax states,
such as New York, when one considers their high taxable equivalent yield.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Water and sewerage 16.4%
Health care 15.4%
Education 15.3%
Transportation 10.5%
Utilities 6.2%
Footnote reads:
*Based on net assets as of 3/31/98. Holdings will vary over time.
Over the semiannual period, our focus was on intermediate-term bonds -- those
with maturities in the 10- to 15-year range. We believed this sector provided
the best relative value, given the relatively flat municipal yield curve. When
a flat yield curve exists, bonds with longer maturities provide little to no
yield advantage over bonds with shorter maturities. Consequently, investors in
the longer-term bonds are not compensated for the additional risk they take
on. Yields rose somewhat as maturities extended to 15 years, but bonds with
longer maturities offered little incremental yield and considerably higher
interest-rate risk.
By investing a small portion of the fund's assets in structured derivative
securities -- specifically, inverse floaters -- we were able to increase the
fund's yield and total return potential, while controlling long-term
interest-rate risk. An inverse floater is a variable-rate bond whose coupon
moves in the opposite direction of short-term interest rates. The use of these
securities enabled us to maximize the fund's investment in intermediate-term
bonds, which we considered the most attractive part of the yield curve. As
with all other Putnam investments, these securities are carefully analyzed and
their performance is monitored constantly to manage the fund's risk exposure.
* POSITIVE TRENDS EXPECTED TO CONTINUE BUT RATE OUTLOOK IS CAUTIOUS
Over the next six months, we anticipate a continuation of many trends that
have rewarded tax-exempt investors over the past few years, including a
favorable economic climate and continued low inflation. We also expect
municipal bond supply to moderate from the heavy issuance that took place in
the early months of this year. This should also help support municipal bond
prices.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
Aaa 23.8%
Ba 10.7%
Baa 24.4%
B 5.1%
A 18.3%
Aa 17.7%
Footnote reads:
*As a percentage of market value as of 3/31/98. A bond rated Baa or higher is
considered investment grade. All ratings reflect Moody's descriptions unless
noted otherwise; percentages may include unrated bonds considered by Putnam
Management to be of comparable quality. Ratings will vary over time.
We are somewhat cautious, however, about the future direction of interest
rates. The Asian situation has had a dramatic impact on interest rates around
the world, keeping U.S. rates extraordinarily low. While interest rates may
move somewhat lower temporarily, we think that the odds favor higher rates
over time -- especially in light of the strength in the economy and the
historically low levels to which rates have fallen. In light of this outlook,
we expect to maintain a conservative interest-rate stance.
Our portfolio strategy will continue to emphasize generous, durable streams of
income while working to minimize interest-rate sensitivity. We intend to take
advantage of attractive relative value and strategies that will increase the
portfolio's total return and yield potential. In addition to the strategies
that were implemented during this reporting period, another ongoing focus is
the selection of credit-driven opportunities. We believe that securities that
are rated Ba and those that are not rated by the major rating agencies
represent an important opportunity. These situations require in-depth credit
analysis and can ultimately offer investors superb potential for income and
price appreciation. We will work to take advantage of these and other
opportunities over the remainder of fiscal 1998.
The views expressed here are exclusively those of Putnam Management. They are
not meant as investment advice. Although the described holdings were viewed
favorably as of 3/31/98, there is no guarantee the fund will continue to hold
these securities in the future.
Performance summary
This section provides information about your fund's performance, which
should always be considered in light of its investment strategy. Putnam
New York Tax Exempt Opportunities Fund is designed for investors seeking
high current income free from federal, New York state, and New York City
income taxes, consistent with capital preservation.
TOTAL RETURN FOR PERIODS ENDED 3/31/98
Class A Class B Class M
(inception date) (11/7/90) (2/1/94) (2/10/95)
NAV POP NAV CDSC NAV POP
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6 months 3.77% -1.12% 3.43% -1.57% 3.62% 0.19%
- ------------------------------------------------------------------------------
1 year 10.38 5.12 9.67 4.67 10.06 6.54
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5 years 36.66 30.16 32.00 30.00 34.14 29.83
Annual average 6.45 5.41 5.71 5.39 6.05 5.36
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Life of fund 72.29 64.19 63.37 63.37 67.32 61.90
Annual average 7.64 6.94 6.87 6.87 7.21 6.74
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COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 3/31/98
Lehman Bros.
Municipal Consumer
Bond Index Price Index
- ------------------------------------------------------------------------------
6 months 3.89% 0.62%
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1 year 10.72 1.38
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5 years 39.15 12.95
Annual average 6.83 2.47
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Life of fund 80.43 21.50
Annual average 8.29 2.66
- ------------------------------------------------------------------------------
Returns for class A and class M shares reflect the current maximum initial
sales charges of 4.75% and 3.25%, respectively. Class B share returns for
the 1-, 5-, and 10-year (where available) and life-of-fund periods reflect
the applicable contingent deferred sales charge (CDSC), which is 5% in the
first year, declines to 1% in the sixth year, and is eliminated
thereafter. Returns shown for class B and class M shares for periods prior
to their inception are derived from the historical performance of class A
shares, adjusted to reflect both the initial sales charge or CDSC, if any,
currently applicable to each class and, in the case of class B and class M
shares, the higher operating expenses applicable to such shares. All
returns assume reinvestment of distributions at NAV and represent past
performance; they do not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares when redeemed
may be worth more or less than their original cost.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 3/31/98
Class A Class B Class M
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Distributions (number) 6 6 6
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Income $0.269128 $0.206075 $0.222062
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Capital gains1
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Long-term 0.010000 0.010000 0.010000
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Short-term 0.023000 0.023000 0.023000
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Total $0.269128 $0.239075 $0.255062
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Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
9/30/97 $9.10 $9.55 $9.09 $9.08 $9.39
- ------------------------------------------------------------------------------
3/31/98 9.17 9.63 9.16 9.15 9.46
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Current return (end of period)
- ------------------------------------------------------------------------------
Current dividend rate2 5.19% 4.94% 4.54% 4.89% 4.73%
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Taxable equivalent3 8.59 8.18 7.52 8.1 7.83
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Current 30-day SEC yield4 4.96 4.72 4.33 4.66 4.51
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Taxable equivalent3 8.21 7.81 7.17 7.72 7.47
- ------------------------------------------------------------------------------
1Capital gains, if any, are taxable for federal and, in most cases, state
tax purposes. For some investors, investment income may also be subject to
the federal alternative minimum tax. Investment income may be subject to
state and local taxes.
2Income portion of most recent distribution, annualized and divided by NAV
or POP at end of period.
3Assumes maximum 39.6% combined federal and state tax rate. Results for
investors subject to lower tax rates would not be as advantageous.
4Based only on investment income, calculated using SEC guidelines.
TERMS AND DEFINITIONS
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the maximum 4.75% sales charge for class A
shares and 3.25% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B shares and assumes redemption at the end of the
period. Your fund's CDSC declines from a 5% maximum during the first year
to 1% during the sixth year. After the sixth year, the CDSC no longer
applies.
COMPARATIVE BENCHMARKS
Lehman Brothers Municipal Bond Index is an unmanaged list of long-term
fixed-rate investment-grade tax-exempt bonds representative of the
municipal bond market. The index does not take into account brokerage
commissions or other costs, may include bonds different from those in the
fund, and may pose different risks than the fund. Securities in the fund
do not match those in the indexes and performance of the fund will differ.
It is not possible to invest directly in an index.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
Portfolio of investments owned
March 31, 1998 (Unaudited)
Key to Abbreviations
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Financial Guaranty Insurance Company
FHA Insd. -- Federal Housing Administration Insured
G.O. Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- Municipal Bond Investors Assurance Corporation
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (97.3%) *
PRINICPAL AMOUNT RATINGS** VALUE
New York (94.1%)
<S> <C> <C> <C>
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$ 3,400,000 Battery Park, City Auth. Rev. Bonds,
Ser. A, AMBAC, 5 1/2s, 11/1/16 Aaa $ 3,540,250
5,000,000 Erie Cnty., Indl. Dev. Life Care Cmnty. Rev. Bonds
(Episcopal Church Home), Ser. A, 6s, 2/1/28 B+ 4,987,500
2,250,000 Essex Cnty., Indl. Dev. Agcy. Rev. Bonds
(Intl. Paper Co.), Ser. A, 6.15s, 4/1/21 A 2,430,000
2,585,000 Ithaca, Hsg. Corp. Mtge. Rev. Bonds
(Eddygate Park Apts.), 9s, 6/1/06 Bbb 2,690,390
2,650,000 Jefferson Cnty., Indl. Dev. Agcy. Solid Waste Disp.
Rev. Bonds (Champion Intl. Corp.), 7.2s, 12/1/20 Baa 2,961,375
1,360,000 Lockport, Hsg. Dev. Corp. Rev. Bonds
(Urban Pk. Towers), Ser. A, 6s, 10/1/18 Baa 1,405,900
2,500,000 Metropolitan Trans. Auth. Dedicated Tax Fund
Rev. Bonds, Ser. A, MBIA, 6 1/4s, 4/1/11 Aaa 2,843,750
2,300,000 Nassau Cnty., G.O. Bonds, Ser. A, FGIC, 6s, 7/1/11 Aaa 2,573,125
1,000,000 Nassau Cnty., G.O. Bonds, Ser. A, FGIC, 6s, 7/1/13 Aaa 1,117,500
NY City, G.O. Bonds
1,310,000 Ser. D, 8 1/4s, 8/1/11 A3 1,480,300
370,000 Ser. D, 8 1/4s, 8/1/11 (Prerefunded) Aaa 422,263
300,000 Ser. B, 8 1/4s, 6/1/05 A3 365,625
3,455,000 Ser. E, 7.6s, 2/1/05 A3 3,873,919
4,730,000 Ser. F, 7.6s, 2/1/05 A3 5,303,513
1,800,000 Ser. H, 6s, 8/1/17 A3 1,923,750
2,750,000 Ser. J, 6s, 8/1/17 A3 2,939,063
2,000,000 Ser. I, 5 7/8s, 3/15/14 A3 2,112,500
1,500,000 Ser. B, 5 1/4s, 8/1/20 A3 1,490,625
1,000,000 NY City, IFB, AMBAC, 8.21s, 9/1/11 Aaa 1,145,000
NY City, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
8,125,000 (Parking Corp.), 8 1/2s, 12/30/22 BB+/P 9,485,933
1,750,000 (The Lighthouse Inc.), 6 1/2s, 7/1/22 Aa 1,870,313
NY City, Indl. Dev. Agcy. Rev. Bonds
5,000,000 (Visy Paper Inc.), 7.95s, 1/1/28 BB-/P 5,862,500
4,000,000 (Paper Inc.), 7.8s, 1/1/16 BB-/P 4,680,000
5,000,000 (Brooklyn Navy Yard Cogen. Partners),
6.2s, 10/1/22 Baa 5,518,750
2,940,000 (Brooklyn Navy Yard Cogen. Partners),
5.65s, 10/1/28 Baa 2,976,750
4,000,000 NY City, Indl. Dev. Agcy. Special Fac. Rev. Bonds
(American Airlines, Inc.), 6.9s, 8/1/24 Baa 4,470,000
NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds
5,000,000 MBIA, 6.82s, 6/15/13 Aaa 5,431,250
4,250,000 Ser. B, MBIA, 5 1/2s, 6/15/27 Aaa 4,388,125
NY State Dorm. Rev. Bonds
1,310,000 (Mental Hlth. Svcs.), Ser. B, MBIA, 5 3/4s, 7/1/09 Aaa 1,437,725
3,300,000 5s, 2/15/18 A 3,163,875
210,000 NY State Env. Facs. Poll. Ctrl. Rev. Bonds,
7s, 6/15/12 Aa 231,525
6,975,000 NY State Env. Facs. Poll. Ctrl. Rev. Bonds,
Prerefunded, 7s, 6/15/12 Aaa 7,698,656
NY State Dorm. Auth. Rev. Bonds
170,000 (City U.), Ser. D, 8 3/4s, 7/1/03 A 203,788
5,250,000 (City U.), Ser. D, 8.2s, 7/1/12 Baa 5,405,348
7,225,000 (City U.), Ser. C, 8 1/8s, 7/1/08 Baa 7,435,464
2,750,000 (Long Island Med. Ctr.), Ser. A, FHA Insd.,
7 3/4s, 8/15/27 AAA 2,811,875
835,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 A 940,419
5,000,000 (State U. Edl. Fac.), Ser. A, 7 1/2s, 5/15/13 Baa 6,400,000
1,605,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/30 Aa 1,747,444
6,000,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/20 Aa 6,532,500
500,000 (Wildwood School), 7.3s, 7/1/15 A 556,250
2,050,000 (Our Lady Of Mercy), 6.3s, 8/1/32 AA 2,201,188
725,000 (State U. Edl. Fac.), Ser. B, 5/15/09 Baa 431,375
NY State Energy Res. & Dev. Auth. Elec. Fac.
Rev. Bonds (Long Island Ltg. Co.), Ser. A
2,000,000 7.15s, 12/1/20 Ba 2,190,000
1,605,000 7.15s, 6/1/20 Ba 1,757,475
3,500,000 NY State Energy Res. & Dev. Auth. Gas IFB
(Brooklyn Union Gas Co.), 8.893s, 4/1/20 A 4,348,750
NY State Energy Res. & Dev. Auth. Poll. Control
Rev. Bonds (Hudson Gas)
1,000,000 Ser. A, FGIC, 7 3/8s, 10/1/14 Aaa 1,076,250
1,700,000 Ser. B, FGIC, 7 3/8s, 10/1/14 # Aaa 1,829,625
NY State Energy Res. & Dev. Auth. Rev. Bonds
1,250,000 (Cons. Edison Co. of NY), Ser. C, 7 1/4s,
11/1/24 A 1,285,713
230,000 Ser. B, 7.15s, 9/1/19 Ba 251,850
1,750,000 NY State Energy Research & Dev. Auth. Poll.
Control Rev. Bonds (Niagara Mohawk
Pwr. Corp.), Ser. A, FGIC, 7.2s, 7/1/29 Aaa 2,021,250
2,000,000 NY State Energy Research & Dev. Auth.
Gas Fac. IFB (Brooklyn Union Gas Co.),
Ser. B, 9.944s, 7/1/26 A 2,562,500
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
16,200,000 (State Wtr. Revolving Fund),
Ser. A, 7 1/2s, 6/15/12 Aa 17,678,250
1,000,000 Ser. B, 7 1/2s, 3/15/11 Aa 1,053,180
2,720,000 (State Wtr. Revolving Fund),
Ser. A, 5 7/8s, 6/15/14 Aa 2,910,400
50,000 NY State Hsg. Fin. Agcy. Rev Bonds,
Ser. A, 7 1/4s, 9/15/12 Baa 55,375
450,000 NY State Hsg. Fin. Agcy. Rev. Bonds, Prerefunded,
Ser. A, 7 1/4s, 9/15/12 Aaa 507,938
2,500,000 NY State Hsg. Fin. Agcy. Rev. Bonds,
Ser. C, 5 1/2s, 9/15/22 Baa 2,525,000
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
600,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. B, FHA Insd., 8 7/8s, 8/15/27 AA 613,860
120,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/08 Baa 132,000
275,000 (Mental Hlth. Svcs. Fac.), Prerefunded
Ser. B, 7 7/8s, 8/15/08 Aaa 303,875
40,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 A 41,999
30,000 (Mental Hlth. Svcs. Fac.), Prerefunded
Ser. A, 7.8s, 2/15/19 Aaa 31,632
2,000,000 (Mental Hlth. Svcs. Fac.), MBIA, 7.6s, 2/15/29 Aaa 2,097,640
145,000 (Mental Hlth. Svcs. Fac.), Prerefunded
Ser. A, 7 1/2s, 2/15/21 Aaa 160,769
85,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 A 93,819
510,000 (Mental Hlth.), Prerefunded Ser. D, 7.4s, 2/15/18 Aaa 576,300
205,000 (Mental Hlth.), Ser. D, 7.4s, 2/15/18 Baa 227,806
5,750,000 (North Shore U. Hosp.), MBIA, 7.2s, 11/1/20 Aaa 6,253,125
200,000 (Bronx, Lebanon & the Jamaica Hosps.),
Ser. A, 7.1s, 2/15/27 Baa 202,222
700,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. D, FHA Insd., 6.6s, 2/15/31 AAA 756,000
4,300,000 NY State Thruway Auth. Hwy. & Bridge Trust Fund
Rev. Bonds, Ser. B, FGIC, 6s, 4/1/14 Aaa 4,762,250
NY State Urban Dev. Corp. Rev. Bonds
1,685,000 (Clarkson Ctr.), 5 1/2s, 1/1/20 Baa 1,746,081
3,345,000 (Clarkson Ctr.), 5 1/2s, 1/1/15 Baa 3,474,619
2,000,000 (Syracuse U.), 5 1/2s, 1/1/15 Baa 2,077,500
5,000,000 (Ctr. for Indl. Innovation), 5 1/2s, 1/1/13 Baa 5,281,250
5,755,000 Port Auth NY & NJ Special Oblig. Rev. Bonds
(Continental/Eastern Laguardia), 9 1/8s,
12/1/15 B 6,467,181
175,000 Port Auth. NY & NJ Cons. Rev. Bonds,
Ser. 78, 6 1/2s, 10/15/08 AA 190,094
2,000,000 Port Auth. NY & NJ Rev. Bonds,
Ser. 83, 6 3/8s, 10/15/17 AA 2,157,500
1,435,000 Valley Hlth. Dev. Corp. Mtge. Rev. Bonds
(Valley Hlth.), FHA, 11.3s, 2/1/23 Aa 1,720,206
--------------
218,908,685
Puerto Rico (3.2%)
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4,700,000 Cmnwlth. of PR, Hwy. & Trans. Auth. IFB,
Ser. W, 6.67s, 7/1/08 A 5,199,375
1,000,000 Cmnwlth. of PR, Hwy. & Trans. Auth. Rev. Bonds,
Ser. Y, 6 1/4s, 7/1/13 A 1,151,250
1,000,000 PR Indl. & Env. Poll. Control Fac. Fin. Auth.
Rev. Bonds, 7.6s, 5/1/14 Aa 1,067,300
--------------
7,417,925
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Total Investments (cost $218,938,937) *** $ 226,326,610
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* Percentages indicated are based on net assets of $232,708,701.
** The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings
available at March 31, 1998 for the securities listed. Ratings are generally ascribed to
securities at the time of issuance. While the agencies may from time to time revise such
ratings, they undertake no obligation to do so, and the ratings do not necessarily represent
what the agencies would ascribe to these securities at March 31, 1998. Securities rated by
Putnam are indicated by "/P" and are not publicly rated.
*** The aggregate identified cost on a tax basis is $218,938,937, resulting in gross unrealized
appreciation and depreciation of $10,054,152 and $2,666,479, respectively, or net unrealized
appreciation of $7,387,673.
# A portion of this security was pledged and segregated with the custodian to cover margin
requirements for futures contracts at March 31, 1998.
The rates shown on IFB, which are securities paying interest rates that vary inversely to
changes in the market interest rates are the current interest rates at March 31, 1998.
The fund had the following industry group concentrations greater than 10% at March 31, 1998
as a percentage of net assets):
Water & Sewer 16.4%
Healthcare 15.4
Education 15.3
Transportation 10.5
<CAPTION>
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Futures Contracts Outstanding at March 31, 1998 (Unaudited)
Aggregate Face Expiration Unrealized
Total Value Value Date Appreciation
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Muni Bond Index (long) $19,232,500 $19,084,031 Jun 98 $148,469
U.S. Treasury (short) 15,151,500 15,198,773 Jun 98 47,273
- -------------------------------------------------------------------------------------------
$195,742
- -------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
March 31, 1998 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $218,938,937) (Note 1) $226,326,610
- ---------------------------------------------------------------------------------------------------
Cash 2,641,826
- ---------------------------------------------------------------------------------------------------
Interest and other receivables 3,934,138
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 808,525
- ---------------------------------------------------------------------------------------------------
Receivable for variation margin 3,805
- ---------------------------------------------------------------------------------------------------
Total assets 233,714,904
Liabilities
- ---------------------------------------------------------------------------------------------------
Distributions payable to shareholders 292,264
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 173,073
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 341,454
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 24,985
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 9,151
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,635
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 130,038
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 33,603
- ---------------------------------------------------------------------------------------------------
Total liabilities 1,006,203
- ---------------------------------------------------------------------------------------------------
Net assets $232,708,701
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $223,800,488
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 192,043
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment (Note 1) 1,132,755
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 7,583,415
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $232,708,701
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($167,481,322 divided by 18,266,703 shares) $9.17
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $9.17)* $9.63
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($62,856,176 divided by 6,861,714 shares)*** $9.16
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($2,371,203 divided by 259,075 shares) $9.15
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $9.15)** $9.46
- ---------------------------------------------------------------------------------------------------
* On single retail sales of less than $25,000. On sales of $25,000 or more and on group sales
the offering price is reduced.
** On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales
the offering price is reduced.
*** Redemption price per share is equal to net asset value less any applicable contingent deferred.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended March 31, 1998 (Unaudited)
<S> <C>
Tax exempt interest income: $7,018,735
- --------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 682,165
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 157,407
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 5,199
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,233
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 165,650
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 252,297
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 5,922
- --------------------------------------------------------------------------------------------------
Reports to shareholders 6,964
- --------------------------------------------------------------------------------------------------
Registration fees 2,412
- --------------------------------------------------------------------------------------------------
Auditing 15,630
- --------------------------------------------------------------------------------------------------
Legal 10,190
- --------------------------------------------------------------------------------------------------
Postage 3,080
- --------------------------------------------------------------------------------------------------
Other 6,150
- --------------------------------------------------------------------------------------------------
Total expenses 1,316,299
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (40,488)
- --------------------------------------------------------------------------------------------------
Net expenses 1,275,811
- --------------------------------------------------------------------------------------------------
Net investment income 5,742,924
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 1,420,768
- --------------------------------------------------------------------------------------------------
Net realized loss on futures contracts (Note 1) (144,359)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures during the period 1,130,658
- --------------------------------------------------------------------------------------------------
Net gain on investments 2,407,067
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $8,149,991
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
March 31 September 30
1998* 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $ 5,742,924 $ 11,292,366
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 1,276,409 1,415,869
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,130,658 4,286,563
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 8,149,991 16,994,798
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income
- ----------------------------------------------------------------------------------------------------------------------
Class A (4,285,770) (8,947,477)
- ----------------------------------------------------------------------------------------------------------------------
Class B (1,337,983) (2,314,259)
- ----------------------------------------------------------------------------------------------------------------------
Class M (57,602) (91,884)
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
- ----------------------------------------------------------------------------------------------------------------------
Class A (596,654) --
- ----------------------------------------------------------------------------------------------------------------------
Class B (211,900) --
- ----------------------------------------------------------------------------------------------------------------------
Class M (8,554) --
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 6,455,816 3,502,893
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 8,107,344 9,144,071
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 224,601,357 215,457,286
- ----------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $192,043 and $130,474, respectively) $232,708,701 $224,601,357
- ----------------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share March 31
operating performance (Unaudited) Year ended September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.10 $8.87 $8.80 $8.48 $9.12 $8.86
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .24 .49 .49 .52 .54 .57
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .10 .23 .07 .32 (.62) .27
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .34 .72 .56 .84 (.08) .84
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.24) (.49) (.49) (.52) (.54) (.57)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- -- -- -- (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.03) -- -- -- (.02) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.27) (.49) (.49) (.52) (.56) (.58)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.17 $9.10 $8.87 $8.80 $8.48 $9.12
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 3.77 * 8.33 6.48 10.27 (.89) 9.80
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $167,481 $165,993 $172,170 $175,210 $175,741 $170,533
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .49 * .96 1.00 1.01 .98 1.02
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.61 * 5.42 5.53 6.12 6.22 6.32
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 18.47 * 117.00 270.34 120.38 13.85 17.68
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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 September 30, 1995 and
thereafter, includes amounts paid through expense offset arrangements. Prior period ratios
exclude these amounts (Note 2).
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share March 31 February 1, 1994+
operating performance (Unaudited) Year ended September 30 to September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.09 $8.86 $8.79 $8.48 $9.07
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .21 .43 .43 .47 .32
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .10 .23 .07 .31 (.60)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .31 .66 .50 .78 (.28)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.21) (.43) (.43) (.47) (.31)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.03) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.24) (.43) (.43) (.47) (.31)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.16 $9.09 $8.86 $8.79 $8.48
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 3.43 * 7.63 5.78 9.46 (3.06)*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $62,856 $56,244 $41,795 $24,259 $8,622
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .82 * 1.61 1.66 1.65 1.05 *
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.28 * 4.76 4.83 5.28 3.39 *
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 18.47 * 117.00 270.34 120.38 13.85
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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 September 30, 1995 and
thereafter, includes amounts paid through expense offset arrangements. Prior period ratios
exclude these amounts (Note 2).
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share March 31 February 10, 1995+
operating performance (Unaudited) Year ended September 30 to September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $9.08 $8.86 $8.79 $8.51
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .23 .46 .47 .31
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .09 .22 .06 .29
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .32 .68 .53 .60
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.22) (.46) (.46) (.32)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.03) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.25) (.46) (.46) (.32)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.15 $9.08 $8.86 $8.79
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 3.62 * 7.89 6.15 7.11 *
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,371 $2,365 $1,492 $299
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .64 * 1.26 1.30 .83 *
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.46 * 5.09 5.03 3.21 *
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 18.47 * 117.00 270.34 120.38
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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 September 30, 1995 and
thereafter, includes amounts paid through expense offset arrangements. Prior period ratios
exclude these amounts (Note 2).
</TABLE>
Notes to financial statements
March 31, 1998 (Unaudited)
Note 1
Significant accounting policies
Putnam New York Tax Exempt Opportunities Fund (the "fund") is registered under
the Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The fund seeks as high a level of current
income exempt from federal income tax and New York State and City personal
income taxes by investing in a portfolio of New York tax-exempt securities
which Putnam Investment Management, Inc. ("Putnam Management"), the fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc. believes does
not involve undue risk to income or principal.
The fund offers class A, class B and class M shares. Class A shares are sold
with a maximum front-end sales charge of 4.75%. Class B shares, which convert
to class A shares after approximately eight years, do not pay a front-end
sales charge, but pay a higher ongoing distribution fee than class A shares,
and are subject to a contingent deferred sales charge, if those shares are
redeemed within six years of purchase. Class M shares are sold with a maximum
front-end sales charge of 3.25% and pay an ongoing distribution fee that is
lower than class B shares and higher than class A shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
the distribution fees applicable to such class). Each class votes as a class
only with respect to its own distribution plan or other matters on which a
class vote is required by law or determined by the Trustees. Shares of each
class would receive their pro-rata share of the net assets of the fund, if the
fund were liquidated. In addition, the Trustees declare separate dividends on
each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally accepted
accounting principles and requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities. Actual
results could differ from those estimates.
A) Security valuation Tax-exempt bonds and notes are stated on the basis of
valuations provided by a pricing service, approved by the Trustees, which uses
information with respect to transactions in bonds, quotations from bond
dealers, market transactions in comparable securities and various
relationships between securities in determining value.
B) Security transactions and related investment income Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Interest income is recorded on the accrual basis.
C) Futures and options contracts The fund may use futures and options
contracts to hedge against changes in the values of securities the fund owns
or expects to purchase. The fund may also write options on securities it owns
or in which it may invest to increase its current returns.
The potential risk to the fund is that the change in value of futures and
options contracts may not correspond to the change in value of the hedged
instruments. In addition, losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparty to the contract is unable to perform. When
the contract is closed, the fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. Realized gains and losses on purchased
options are included in realized gains and losses on investment securities.
Futures contracts are valued at the quoted daily settlement prices established
by the exchange on which they trade. Exchange traded options are valued at the
last sale price, or if no sales are reported, the last bid price for purchased
options and the last ask price for written options. Options traded
over-the-counter are valued using prices supplied by dealers.
D) Line of credit The fund has entered into a committed line of credit with
certain banks. This line of credit agreement includes restrictions that the
fund maintain an asset coverage ratio of at least 300% and borrowings must not
exceed prospectus limitations. For the six months ended March 31, 1998, the
fund had no borrowings against the line of credit.
E) Federal taxes It is the policy of the fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies. It is also
the intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986, as amended. Therefore, no provision has been made for federal taxes
on income, capital gains or unrealized appreciation on securities held nor for
excise tax on income and capital gains.
F) Distributions to shareholders Income dividends are recorded daily by the
fund and are distributed monthly. Capital gain distributions, if any, are
recorded on the ex-dividend date and paid at least annually. The amount and
character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the fund's capital
accounts to reflect income and gains available for distribution (or available
capital loss carryovers) under income tax regulations.
G) Amortization of bond premium and accretion of bond discount Any premium
resulting from the purchase of securities in excess of maturity value is
amortized on a yield-to-maturity basis. Discounts on zero coupon bonds and
original issue discount are accreted according to the yield to maturity basis.
Note 2
Management fee, administrative services and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund. Such
fee is based on the following annual rates: 0.60% of the first $500 million of
average net assets, 0.50% of the next $500 million, 0.45% of the next $500
million, 0.40% of the next $5 billion, 0.375% of the next $5 billion, 0.355%
of the next $5 billion, 0.34% of the next $5 billion and 0.33% thereafter.
The fund reimburses Putnam Management an allocated amount for the compensation
and related expenses of certain officers of the fund and their staff who
provide administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam Fiduciary
Trust Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services, a division
of PFTC.
For the six months ended March 31, 1998, fund expenses were reduced by $40,488
under expense offset arrangements with PFTC. Investor servicing and custodian
fees reported in the Statement of operations exclude these credits. The fund
could have invested a portion of the assets utilized in connection with the
expense offset arrangements in an income producing asset if it had not entered
into such arrangements.
The Internal Revenue Service is currently examining the treatment of expense
offset arrangements in existence since 1994 for another Putnam tax-exempt
income fund. Should a determination be made that such amounts should be
treated as taxable income, it may give rise to a liability on the part of the
fund and require the fund to report these amounts as taxable income in the
future. The outcome of this matter cannot currently be predicted.
Each Trustee of the fund receives an annual Trustee fee, of which $490 has
been allocated to the fund, and an additional fee for each Trustee's meeting
attended. Trustees who are not interested persons of Putnam Management and who
serve on committees of the Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan") which
allows the Trustees to defer the receipt of all or a portion of Trustees Fees
payable on or after July 1, 1995. The deferred fees remain in the fund and are
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan
(the "Pension Plan") covering all Trustees of the fund who have served as
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments
Inc., for services provided and expenses incurred by it in distributing shares
of the fund. The Plans provide for payments by the fund to Putnam Mutual Funds
Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets
attributable to class A, class B and class M shares, respectively. The
Trustees currently limit payment by the fund to an annual rate of 0.20%, 0.85%
and 0.50% of the average net assets attributable to class A, class B and class
M shares, respectively.
For the six months ended March 31, 1998, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $15,994 and $164 from the sale of
class A and class M shares, respectively and $77,711 in contingent deferred
sales charges from redemptions of class B shares. A deferred sales charge of
up to 1% is assessed on certain redemptions of class A shares. For the six
months ended March 31, 1998, Putnam Mutual Funds Corp., acting as underwriter
received no monies on class A redemptions.
Note 3
Purchase and sales of securities
During the six months ended March 31, 1998, purchases and sales of investment
securities other than short-term investments aggregated $45,243,932 and
$41,284,761, respectively. There were no purchases and sales of U.S.
government obligations. In determining the net gain or loss on securities
sold, the cost of securities has been determined on the identified cost basis.
Note 4
Capital shares
At March 31, 1998, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
March 31, 1998
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 1,227,368 $11,220,795
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 279,451 2,560,214
- ------------------------------------------------------------
1,506,819 13,781,009
Shares
repurchased (1,478,132) (13,505,677)
- ------------------------------------------------------------
Net increase 28,687 $ 275,332
- ------------------------------------------------------------
Year ended
September 30, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 3,620,335 $32,317,239
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 503,552 4,502,230
- ------------------------------------------------------------
4,123,887 36,819,469
Shares
repurchased (5,295,872) (47,255,173)
- ------------------------------------------------------------
Net decrease (1,171,985) $(10,435,704)
- ------------------------------------------------------------
Six months ended
March 31, 1998
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 1,011,901 $ 9,261,921
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 103,681 949,253
- ------------------------------------------------------------
1,115,582 10,211,174
Shares
repurchased (439,123) (4,019,249)
- ------------------------------------------------------------
Net increase 676,459 $ 6,191,925
- ------------------------------------------------------------
Year ended
September 30, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 2,266,604 $20,236,321
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 153,804 1,375,031
- ------------------------------------------------------------
2,420,408 21,611,352
Shares
repurchased (951,628) (8,500,966)
- ------------------------------------------------------------
Net increase 1,468,780 $13,110,386
- ------------------------------------------------------------
Six months ended
March 31, 1998
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 7,372 $ 67,225
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 5,352 48,950
- ------------------------------------------------------------
12,724 116,175
Shares
repurchased (13,964) (127,616)
- ------------------------------------------------------------
Net decrease (1,240) $(11,441)
- ------------------------------------------------------------
Year ended
September 30, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 126,540 $1,138,814
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 6,506 58,176
- ------------------------------------------------------------
133,046 1,196,990
Shares
repurchased (41,167) (368,779)
- ------------------------------------------------------------
Net increase 91,879 $ 828,211
- ------------------------------------------------------------
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Opportunities Fund [DBL. DAGGER]
OTC & Emerging Growth Fund
Vista Fund
Voyager Fund
Voyager Fund II
PUTNAM GROWTH
AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Strategic Income Fund *
High Quality Bond Fund [DAGGER]
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Total Return Fund
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Money Market Fund **
Intermediate U.S. Government
Income Fund
Preferred Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund**
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTIONMARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota,
New Jersey, New York, Ohio and Pennsylvania
State tax-free money market funds [SECTIONMARK]
California, New York
LIFESTAGESM FUNDS
Putnam Asset Allocation Funds-three investment portfolios that spread
your money across a variety of stocks, bonds, and money market investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* Formerly Putnam Diversified Income Trust II
[DAGGER] Formerly Putnam Federal Income Trust
[DBL. DAGGER] Closed to new investors. Some exceptions may apply.
Contact Putnam for details.
[SECTIONMARK] Not available in all states.
**An investment in a money market fund is neither insured nor guaranteed
by the U.S. government. These funds are managed to maintain a price of
$1.00 per share, although there is no assurance that this price will be
maintained in the future.
Please call your financial advisor or Putnam at 1-800-225-1581 to
obtain a prospectus for any Putnam fund. It contains more complete
information, including charges and expenses. Please read it carefully
before you invest or send money.
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
William J. Curtin
Vice President
Blake E. Anderson
Vice President
Jerome J. Jacobs
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New York Tax
Exempt Opportunities Fund. It may also be used as sales literature when
preceded or accompanied by the current prospectus, which gives details of
sales charges, investment objectives, and operating policies of the fund, and
the most recent copy of Putnam's Quarterly Performance Summary. For more
information or to request a prospectus, call toll free: 1-800-225-1581. You
can also learn more at Putnam Investments' website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed or
endorsed by, any financial institution; are not insured by the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board, or any other agency;
and involve risk, including the possible loss of the principal amount
invested.
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PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
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Bulk Rate
U.S. Postage
PAID
Putnam
Investments
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SA052-42039 854/228/759 5/98
