Putnam
New York
Tax Exempt
Opportunities Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
11-30-99
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
The markets continued to provide their share of challenges and
opportunities as your fund closed its books on fiscal 1999. In the
following report, the fund's manager discusses performance for the period
and prospects for the months ahead.
This is the last letter to you and the other shareholders of Putnam New
York Tax Exempt Opportunities Fund that I will be signing. After more than
30 years as Chairman of the Trustees and President of the Putnam Funds,
the time has come for me to step aside.
In June, John Hill will become Chairman. John is currently an independent
Trustee and has served on the board for the past 14 years. In addition, my
son, George Putnam, III, will take on the role of President. I am
confident that the leadership of the funds will be in exceptionally strong
hands.
I will become Chairman Emeritus, remain a shareholder, and stay in close
touch with the funds. It has been my privilege to serve you.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
January 19, 2000
Report from the Fund Manager
David E. Hamlin
The 12 months ended November 30, 1999, may be remembered as one of the
most difficult periods for fixed-income investments. But shareholders of
Putnam New York Tax Exempt Opportunities Fund can take solace in the fact
that their municipal bond fund fared better than most. We minimized the
impact of rising interest rates and the resulting decline in bond prices
by investing in intermediate-term bonds and focusing on the lower credit
sectors (BBB-rated and below). As a result, total return for the 12 months
ended November 30, 1999, for all share classes at net asset value
outperformed the -3.76% average annual return for the 99 New York
municipal debt funds tracked by Lipper, Inc., an independent firm that
tracks mutual fund performance. See page 3 for complete ranking
information.
Total return for 12 months ended 11/30/99
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
- ------------------------------------------------------------------------
-2.33% -6.99% -3.08% -7.71% -3.14% -4.06% -2.64% -5.81%
- ------------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods and explanation of performance calculation
methods begin on page 6.
* FUND WELL POSITIONED FOR STEEPENING YIELD CURVE
The reporting period encompassed one of the most dramatic rises in
municipal bond yields on record, with interest rates on long-term
municipal bonds climbing approximately a full percentage point during the
period. This stunning increase, the result of inflation fears and three
moves by the Federal Reserve Board to raise interest rates, resulted in a
steeper municipal bond yield curve. From the outset, the fund's heavy
emphasis on bonds with intermediate maturities in the 8- to 15-year range
proved advantageous and helped protect the portfolio's value.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Education 15.3%
Utilities 14.5%
Transportation 12.8%
Health care 12.6%
Water and sewer 7.8%
Footnote reads:
*Based on net assets as of 11/30/99. Holdings will vary over time.
As the year progressed, falling bond prices and the steepening municipal
yield curve presented new opportunities. Longer maturity bonds offer
relatively higher yields than shorter maturity bonds to compensate
investors for uncertainty. Scouting for buys like a bargain basement
shopper, we scoured the universe of 20- to 30-year maturity municipal
bonds, buying during periods of price weakness. For example, we sold
prerefunded Puerto Rico general obligations, which are older securities
due to mature within a year, and purchased insured Anderson School bonds
within the New York State dormitory program, which will mature in 2019 and
yield 5.85%. While these holdings, along with others discussed in this
report, were viewed favorably at the end of the period, all are subject to
review and adjustment in accordance with the fund's investment strategy,
and may vary in the future.
The addition of long-term bonds to the portfolio effectively extended its
duration from 6.85 years to 8.15 years by period's end. We believe the
slightly longer duration holds the best opportunity for balancing the
fund's priority of high current income with price stability and
appreciation potential. A longer duration can mean a more volatile net
asset value if rates rise, but also one more likely to appreciate
substantially if rates decline. (Duration is a measure of the portfolio's
maturity structure and reflects the price sensitivity of holdings to
changes in interest rates.)
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
A -- 30.0%
Baa/BBB -- 11.1%
Ba/BB -- 9.8%
B -- 8.7%
Aaa/AAA -- 33.3%
Aa/AA -- 7.1%
Footnote reads:
*As a percentage of market value as of 11/30/99. A bond rated Baa/BBB or
higher is considered investment grade. All ratings reflect Moody's and
Standard & Poor's descriptions unless noted otherwise. Percentages may
include unrated bonds considered by Putnam Management to be of comparable
quality. Ratings will vary over time.
* LOWER-RATED BONDS ADD INCOME, SOFTEN MARKET VOLATILITY
Just as the yield spread between short- and long-maturity bonds varies
under different market conditions, so too does the gap vary between the
yields of lower-rated and higher-rated securities. For much of the year,
credit spreads were quite narrow, reflecting investors' confidence in the
economy and the fiscal health of lower-rated issuers. However, late in the
period, the credit gap widened, as investors sold lower-rated investments
and purchased higher-rated securities.
Putnam New York Tax Exempt Opportunities Fund ranked 28 out of 99 New York
municipal debt funds (top 28%) tracked by Lipper for the year ended
December 31, 1999.
Past performance is not indicative of future results. Lipper rankings are
based on total return performance, vary over time, and do not include the
effect of sales charges. For the 3- and 5-year periods ended 12/31/99, the
fund's class A shares ranked 50 out of 89 (top 56%) and 40 out of 75 (top 53%),
respectively. Performance of other share classes will vary.
Our research has shown that over the course of an interest rate cycle,
lower-rated municipal bonds tend to fluctuate to a lesser degree than
higher-quality bonds and can enhance the fund's share price stability. At
the same time, they are effective in boosting income potential. Often
these bonds are unrated by the rating agencies, creating a rare
opportunity to invest in a municipal security before it becomes a widely
followed issue. At Putnam, we do our own evaluation of every issue that
might be considered for the portfolio -- low-rated, high-rated, and those
not rated by the standard agencies. It takes meticulous, time-consuming
research to separate the potential wheat from the chaff, but Putnam's
extensive credit research capability allows us to make these selections
with confidence.
We have found many attractive investment opportunities in the health-care
sector, which is undergoing great change. Several hospitals have fallen on
hard times but appear to be taking the proper steps to restore their
economic viability. New management, positive demographics, or lack of
strong competitors can lead to a dramatic turnaround. The bonds for
Southampton Hospital, which is located on prosperous Long Island, carry a
7.25% coupon and an internal Putnam rating of B-. We participated in a new
issuance of Albany Medical Center bonds, which mature in 2029 and offer a
6.00% coupon. We have assigned an internal rating of BB+ to these bonds.
St. Elizabeth Medical Center, located in Utica, is a small hospital that
is expected to benefit from a growing population. Its bonds, which are
designed to help the hospital adapt to the increased demand for medical
care, carry a Putnam rating of B+.
Assisted-living facilities are another important source of investment
opportunities within the health-care industry. Given the aging but still
active population of senior citizens in the United States, these complexes
are in high demand. Meadowview Project is being built next to an existing
skilled-nursing facility called Wartburg Senior Housing. These Meadowview
bonds as well as the Huntington New York Gurwin Senior Residences bonds,
which are financing the construction of a 160-unit elderly housing complex
on the campus of a geriatrics center in mid Long Island, offer coupons of
6.20% and 6.00%, respectively.
* A DISCIPLINED, PATIENT STRATEGY LOOKS TO BETTER DAYS
For New York City residents paying the highest combined federal, state,
and city income tax rate of 45.77%, the fund's 5.12% current dividend rate
at POP at the end of the period was the equivalent of a fully taxable
yield of 9.43%. Such levels of income are not even available on
lower-rated, higher-yielding bonds at present. With inflation still
remarkably low at 3% or less, this means that the after-tax,
after-inflation returns are the highest they have been in years.
Although the Fed raised interest rates in November for the third time
during the period, the increase was anticipated and the market reacted
favorably. Undoubtedly there will be some stumbling blocks ahead, and we
could see another interest-rate increase if the economy does not begin to
slow. However, we remain cautiously optimistic and are inclined to take
slightly more risk in the portfolio, gradually extending maturities as
opportunities arise. We understand that volatile markets are unsettling
for investors, but they do provide us with the opportunity to add yield,
find exceptional credits, and improve call protection, strategies that
have proven very rewarding for shareholders over time.
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 11/30/99, 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 a high level of
current income free from federal, state, and city personal income tax.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 11/30/99
Class A Class B Class C Class M
(inception dates) (11/7/90) (2/1/94) (7/26/99) (2/10/95)
NAV POP NAV CDSC NAV CDSC NAV POP
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year -2.33% -6.99% -3.08% -7.71% -3.14% -4.06% -2.64% -5.81%
- -----------------------------------------------------------------------------------------
5 years 37.64 31.05 33.26 31.26 32.18 32.18 35.31 30.96
Annual average 6.60 5.56 5.91 5.59 5.74 5.74 6.23 5.54
- -----------------------------------------------------------------------------------------
Life of fund 74.30 66.10 63.47 63.47 61.90 61.90 68.59 63.12
Annual average 6.32 5.76 5.57 5.57 5.46 5.46 5.93 5.55
- -----------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 11/30/99
Lehman Brothers
Municipal Consumer
Bond Index price index
- -----------------------------------------------------------------------
1 year -1.08% 2.68%
- -----------------------------------------------------------------------
5 years 43.85 12.49
Annual average 7.54 2.38
- -----------------------------------------------------------------------
Life of fund 87.41 26.14
Annual average 7.16 2.59
- -----------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. 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. For class C shares,
returns for periods prior to their inception are derived from the
historical performance of class A shares, adjusted to reflect both the
CDSC currently applicable to class C shares, which is 1% for the first
year and is eliminated thereafter, and the higher operating expenses
applicable to class C shares. All returns assume reinvestment of
distributions at NAV. 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.
[GRAPHIC OMITTED: worm chart GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 11/7/90
Lehman Bros.
Fund's class A Municipal Bond Consumer price
Date shares at POP Index index
11/7/90 9,529 10,000 10,000
11/30/91 10,560 11,248 10,322
11/30/92 11,496 12,376 10,637
11/30/93 12,499 13,748 10,921
11/30/94 12,067 13,028 11,213
11/30/95 14,194 15,492 11,506
11/30/96 14,952 16,403 11,880
11/30/97 15,996 17,581 12,097
11/30/98 17,006 18,946 12,285
11/30/99 $16,610 $18,741 $12,614
Footnote reads:
Past performance is no assurance of future results. At the end of the same
time period, a $10,000 investment in the fund's class B and class C shares
would have been valued at $16,347 and $16,190, respectively, and no
contingent deferred sales charges would apply; a $10,000 investment in the
fund's class M shares would have been valued at $16,859 ($16,312 at public
offering price).
<TABLE>
<CAPTION>
PRICE AND DISTRIBUTION INFORMATION 12 months ended 11/30/99
Class A Class B Class C Class M
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Distributions (number) 12 12 5 12
- --------------------------------------------------------------------------------------------------
Income $0.437920 $0.379548 $0.137434 $0.410212
- --------------------------------------------------------------------------------------------------
Capital gains1
Long-term 0.012300 0.012300 -- 0.012300
- --------------------------------------------------------------------------------------------------
Short-term 0.013000 0.013000 -- 0.013000
- --------------------------------------------------------------------------------------------------
Total $0.463220 $0.404848 $0.137434 $0.435512
- --------------------------------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
- --------------------------------------------------------------------------------------------------
11/30/98 $9.19 $9.65 $9.19 -- $9.18 $9.49
- --------------------------------------------------------------------------------------------------
7/26/99* -- -- -- $8.87 -- --
- --------------------------------------------------------------------------------------------------
11/30/99 8.52 8.94 8.51 8.52 8.51 8.80
- --------------------------------------------------------------------------------------------------
Current return (end of period)
- --------------------------------------------------------------------------------------------------
Current dividend rate2 5.37% 5.12% 4.72% 4.56% 5.07% 4.90%
- --------------------------------------------------------------------------------------------------
Taxable equivalent3(a) 9.55 9.09 8.39 8.11 9.01 8.72
- --------------------------------------------------------------------------------------------------
Taxable equivalent3(b) 9.90 9.43 8.70 8.41 9.35 9.04
- --------------------------------------------------------------------------------------------------
Current 30-day
SEC yield4 5.10 4.86 4.45 4.20 4.79 4.64
- --------------------------------------------------------------------------------------------------
Taxable equivalent3(a) 9.07 8.64 7.91 7.47 8.51 8.25
- --------------------------------------------------------------------------------------------------
Taxable equivalent3(b) 9.40 8.96 8.21 7.74 8.83 8.56
- --------------------------------------------------------------------------------------------------
*Inception of class C shares.
1 Capital 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.
2 Income portion of most recent distribution, annualized and divided by NAV or POP at end of
period.
3 Assumes (a) maximum 43.74% combined federal income tax, New York state personal income tax rate
or (b) maximum 45.77% combined federal, New York state, and New York City tax rate. Results for
investors subject to lower tax rates would not be as advantageous.
4 Based only on investment income, calculated using SEC guidelines.
</TABLE>
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 12/31/99 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (11/7/90) (2/1/94) (7/26/99) (2/10/95)
NAV POP NAV CDSC NAV CDSC NAV POP
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year -4.07% -8.65% -4.59% -9.14% -4.91% -5.82% -4.26% -7.40%
- --------------------------------------------------------------------------------------------
5 years 33.01 26.72 28.75 26.75 27.71 27.71 30.72 26.43
Annual average 5.87 4.85 5.18 4.86 5.01 5.01 5.50 4.80
- --------------------------------------------------------------------------------------------
Life of fund 71.83 63.75 61.25 61.25 59.50 59.50 66.15 60.77
Annual average 6.09 5.54 5.36 5.36 5.23 5.23 5.71 5.33
- --------------------------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns may be more or less
than those shown. They do not take into account any adjustment for taxes payable on
reinvested distributions. Investment returns and principal value will fluctuate so that an
investor's shares when sold may be worth more or less than their original cost. See first
page of performance section for performance calculation method.
</TABLE>
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 C shares are not subject to an initial sales charge and are subject
to a contingent deferred sales charge only if the shares are redeemed
during the first year.
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 4.75% maximum 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 or class C shares and assumes redemption at the
end of the period. Your fund's class B 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. The CDSC for class C shares is 1% for one year
after purchase.
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 and may pose different risks than the fund.
Securities in the fund do not match those in the index and performance
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.
A guide to the financial statements
These sections of the report, preceded by the Report of independent
accountants, constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values as
of the last day of the reporting period. Holdings are organized by asset
type and industry sector, country, or state to show areas of concentration
and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are subtracted
from this total. The result is divided by the number of shares to
determine the net asset value per share, which is calculated separately
for each class of shares. (For funds with preferred shares, the amount
subtracted from total assets includes the net assets allocated to
remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss for
the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that remain
in the portfolio -- any change in unrealized gains or losses over the
period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number of
the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed here
may not match the sources listed in the Statement of operations because
the distributions are determined on a tax basis and may be paid in a
different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment results,
per-share distributions, expense ratios, net investment income ratios and
portfolio turnover in one summary table, reflecting the five most recent
reporting periods. In a semiannual report, the highlight table also
includes the current reporting period. For open-end funds, a separate
table is provided for each share class.
Report of independent accountants
For the fiscal year ended November 30, 1999
To the Trustees and Shareholders of
New York Tax Exempt Opportunities Fund
In our opinion, the accompanying statement of assets and liabilities,
including the fund's portfolio, except for bond ratings, and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial
position of New York Tax Exempt Opportunities Fund (the "fund") at
November 30, 1999, and the results of its operations, the changes in its
net assets and the financial highlights for the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the fund's management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements
in accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of investments owned at November
30, 1999 by correspondence with the custodian, provide a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 6, 2000
<TABLE>
<CAPTION>
The fund's portfolio
November 30, 1999
KEY TO ABBREVIATIONS
AMBAC -- AMBAC Indemnity Corporation
COP -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Company
FHA Insd. -- Federal Housing Administration Insured
FRB -- Floating Rate Bonds
G.O. Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- Municipal Bond Investors Assurance Corporation
U.S. Govt. Coll. -- U.S. Government Collateralized
MUNICIPAL BONDS AND NOTES (97.5%) (a)
PRINCIPAL AMOUNT RATING (RAT) VALUE
<S> <C> <C>
New York (95.2%)
- --------------------------------------------------------------------------------------------------------------------------
$ 1,460,000 Albany, Indl. Dev. Agcy. Fac. Rev. Bonds
(Albany Med. Ctr.), 6s, 5/1/29 (SEG) BB+/P $ 1,314,000
3,400,000 Battery Park, City Auth. Rev. Bonds, Ser. A,
AMBAC, 5 1/2s, 11/1/16 Aaa 3,332,000
2,000,000 Chautauqua Cnty., Indl. Dev. Agcy. Rev. Bonds
(Womans Christian Assn.), Ser. A,
6.4s, 11/15/29 B+/P 1,807,500
5,000,000 Erie Cnty., Indl. Dev. Life Care Cmnty. Rev. Bonds
(Episcopal Church Home), Ser. A, 6s, 2/1/28 B+/P 4,462,500
2,250,000 Essex Cnty., Indl. Dev. Agcy. Rev. Bonds
(Intl. Paper Co.), Ser. A, 6.15s, 4/1/21 A3 2,193,750
2,000,000 Huntington, Hsg. Auth. Sr. Hsg. Fac. Rev. Bonds
(Gurwin Jewish Sr. Residences), Ser. A,
6s, 5/1/29 B+/P 1,810,000
2,475,000 Ithaca, Hsg. Corp. Mtge. Rev. Bonds
(Eddygate Park Apts.), 9s, 6/1/06 BBB+/P 2,505,938
2,650,000 Jefferson Cnty., Indl. Dev. Agcy. Solid Waste Disp.
Rev. Bonds (Champion Intl. Corp.),
7.2s, 12/1/20 Baa1 2,812,313
1,360,000 Lockport, Hsg. Dev. Corp. Rev. Bonds
(Urban Pk. Towers), Ser. A, 6s, 10/1/18 Baa2 1,336,200
5,000,000 Long Island, Pwr. Auth. NY Elec. Syst. IFB, 7.596s,
12/1/24 (acquired 5/19/98, cost $5,435,000) (RES) A-/P 4,618,750
5,000,000 Long Island, Pwr. Auth. NY Elec. Syst., FRB,
Ser. 65, MBIA, 6.73s, 4/1/12 (acquired 11/3/98,
cost $5,422,100) (RES) AAA 4,818,750
2,500,000 Metropolitan Trans. Auth. Dedicated Tax Fund
Rev. Bonds, Ser. A, MBIA, 6 1/4s, 4/1/11 Aaa 2,709,375
1,000,000 Mount Vernon, Indl. Dev. Agcy. Fac. Rev. Bonds
(Wartburg Senior Hsg., Inc.-Meadowview),
6.2s, 6/1/29 B+/P 923,750
Nassau Cnty., G.O. Bonds, Ser. A
1,000,000 FGIC, 6s, 7/1/13 Aaa 1,055,000
2,300,000 FGIC, 6s, 7/1/11 Aaa 2,440,875
5,000,000 Niagara Falls NY City Schl. Dist. COP, 5 7/8s,
6/15/19 Baa3 4,825,000
NY City, G.O. Bonds
1,680,000 Ser. D, 8 1/4s, 8/1/11 Aaa 1,810,200
300,000 Ser. B, 8 1/4s, 6/1/05 A3 346,500
95,000 Ser. E, 7.6s, 2/1/05 A3 102,481
3,360,000 Ser. E, U.S. Govt. Coll., 7.6s, 2/1/05 A3 3,624,600
45,000 Ser. F, 7.6s, 2/1/05 A3 48,544
4,685,000 Ser. F, U.S. Govt. Coll., 7.6s, 2/1/05 A3 5,053,944
1,800,000 Ser. H, 6s, 8/1/17 A3 1,813,500
2,750,000 Ser. J, 6s, 8/1/17 A3 2,770,625
2,000,000 Ser. I, 5 7/8s, 3/15/14 A3 2,022,500
1,000,000 NY City, G.O. IFB, AMBAC, 8.02s, 9/1/11 Aaa 1,063,750
NY City, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
7,905,000 (Parking Corp.), 8 1/2s, 12/30/22 BB+/P 8,695,500
1,750,000 (The Lighthouse Inc.), 6 1/2s, 7/1/22 Aa2 1,868,125
NY City, Indl. Dev. Agcy. Rev. Bonds
5,000,000 (Visy Paper Inc.), 7.95s, 1/1/28 B/P 5,268,750
5,000,000 (Brooklyn Navy Yard Cogen. Partners),
6.2s, 10/1/22 Baa3 4,925,000
1,250,000 (Field Hotel Assoc.), 6s, 11/1/28 B/P 1,148,438
1,440,000 (Brooklyn Navy Yard Cogen. Partners),
5.65s, 10/1/28 Baa3 1,301,400
NY City, Indl. Dev. Agcy. Special Fac. Rev. Bonds
4,000,000 (American Airlines, Inc.), 6.9s, 8/1/24 Baa1 4,170,000
1,250,000 (British Airways), 5 1/4s, 12/1/32 A2 1,079,688
NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds
5,000,000 MBIA, 6.82s, 6/15/13 Aaa 4,887,500
5,000,000 FGIC, Ser. A, 4 3/4s, 6/15/31 Aaa 4,093,750
1,000,000 NY City, Transitional Fin. Auth. Rev. Bonds,
Ser. C, 5s, 5/1/26 AA 858,750
NY State Dorm. Auth. Rev. Bonds
170,000 (City U.), Ser. D, 8 3/4s, 7/1/03 A- 192,313
835,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 Baa1 894,494
5,000,000 (State U. Edl. Fac.), Ser. A, 7 1/2s, 5/15/13 A 5,937,500
1,605,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/30 Aa2 1,661,753
4,000,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/20 Aa2 4,141,440
485,000 (Wildwood School), 7.3s, 7/1/15 A 516,525
2,050,000 (Our Lady Of Mercy), FHA Insd., 6.3s, 8/1/32 Aaa 2,111,500
1,340,000 (Schls PG -- Issue 2), Ser. E, AMBAC,
5 3/4s, 7/1/19 AAA 1,328,275
2,650,000 (City U. Syst.), Ser. A, FGIC, 5 3/4s, 7/1/09 AAA 2,753,854
1,310,000 (Mental Hlth. Svcs. Fac.), Ser. B, MBIA,
5 3/4s, 7/1/09 Aaa 1,377,138
5,000,000 (Hlth. Facs.), Ser. I, 4 3/4s, 1/15/29 Aaa 4,106,250
4,000,000 (St. John's U.), MBIA, 4 3/4s, 7/1/28 Aaa 3,285,000
725,000 (State U. Edl. Fac.), Ser. B, zero% 5/15/09 A 440,438
NY State Energy Res. & Dev. Auth. Elec. Fac.
Rev. Bonds (Long Island Ltg. Co.)
530,000 Ser. A, 7.15s, 12/1/20 A- 561,800
1,470,000 Ser. A, 7.15s, 12/1/20, Prerefunded A- 1,582,088
1,185,000 Ser. A, 7.15s, 6/1/20 A1 1,256,100
420,000 Ser. A, 7.15s, 6/1/20, Prerefunded A- 452,025
160,000 Ser. B, 7.15s, 9/1/19 A- 169,600
70,000 Ser. B, 7.15s, 9/1/19, Prerefunded A- 75,338
NY State Energy Res. & Dev. Auth. Gas Fac. IFB
(Brooklyn Union Gas Co.)
2,000,000 Ser. B, 8.195s, 7/1/26 A2 2,285,000
3,500,000 8.503s, 4/1/20 A2 3,797,500
NY State Energy Res. & Dev. Auth.
Poll. Control Rev. Bonds
1,750,000 (Niagra Mohawk Pwr. Corp.), Ser. A,
FGIC, 7.2s, 7/1/29 Aaa 1,929,375
1,000,000 (Lilco Project), Ser. B, 5.15s, 3/1/16 A- 902,500
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
1,000,000 Ser. B, 7 1/2s, 3/15/11 Aa2 1,019,770
210,000 7s, 6/15/12 Aaa 221,813
2,720,000 (State Wtr. Revolving Fund), Ser. A,
5 7/8s, 6/15/14 Aa2 2,784,600
5,000,000 NY State Env. Fac. Corp. Poll. Ctrl Rev. Bonds,
7s, 6/15/12 Aaa 5,300,000
NY State Hsg. Fin. Agcy. Rev. Bonds, Ser. A,
50,000 7 1/4s, 9/15/12 A- 53,188
450,000 7 1/4s, 9/15/12, Prerefunded Aaa 486,000
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
120,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/08 A3 125,048
275,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/08,
Prerefunded Aaa 287,823
40,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 A3 40,626
85,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 A3 88,613
145,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21,
Prerefunded Aaa 153,338
205,000 (Mental Hlth. Svcs. Fac.), Ser. D, 7.4s, 2/15/18 A 217,556
510,000 (Mental Hlth. Svcs. Fac.), Ser. D, 7.4s, 2/15/18,
Prerefunded A 550,800
5,750,000 (North Shore U. Hosp.), MBIA, 7.2s, 11/1/20 Aaa 6,029,508
350,000 Ser. D, FHA Insd., 6.6s, 2/15/31 AAA 364,438
350,000 Ser. D, FHA Insd., 6.6s, 2/15/31, Prerefunded AAA 378,000
4,300,000 NY State Thruway Auth. Hwy. & Bridge Trust Fund
Rev. Bonds, Ser. B, FGIC, 6s, 4/1/14 Aaa 4,611,750
NY State Urban Dev. Corp. Rev. Bonds
1,685,000 (Clarkson Ctr.), 5 1/2s, 1/1/20 A- 1,604,963
3,345,000 (Clarkson Ctr.), 5 1/2s, 1/1/15 A- 3,269,738
2,000,000 (Syracuse U.), 5 1/2s, 1/1/15 A- 1,955,000
5,000,000 (Ctr. for Indl. Innovation), 5 1/2s, 1/1/13 A- 4,993,750
1,000,000 (Correctional Fac.-SVC. Contracts), Ser. A,
5s, 1/1/28 A 845,000
1,000,000 Oneida Cnty, Indl. Dev. Agcy. Rev. Bonds
(St. Elizabeth Med.), Ser. A, 5 7/8s, 12/1/29 B+/P 872,500
1,000,000 Onondaga Cnty., Indl. Dev. Agcy. Rev. Bonds
(Solvay Paperboard LLC), 7s, 11/1/30 B/P 963,750
Port Auth. NY & NJ Rev. Bonds
1,100,000 (Kennedy Intl. Arpt.), 6 3/4s, 10/1/19 BB/P 1,130,250
1,000,000 (Kennedy Intl. Arpt.), 6 3/4s, 10/1/11 BB/P 1,055,000
175,000 Cons., Ser. 78, 6 1/2s, 10/15/08 AA- 182,656
2,000,000 Cons., Ser. 83, 6 3/8s, 10/15/17 AA- 2,077,500
4,000,000 FGIC, 5 1/4s, 1/1/14 Aaa 3,895,000
3,350,000 MBIA, 4 3/4s, 1/1/24 Aaa 2,805,625
5,755,000 Port Auth. NY & NJ Special Oblig. Rev. Bonds
(Continental/Eastern Laguardia), 9 1/8s, 12/1/15 Ba2 6,065,540
Suffolk Cnty., Indl. Dev. Agcy. Rev. Bonds
500,000 (Southampton Hosp.), Ser. A, 7 1/4s, 1/1/30 B-/P 484,375
2,000,000 (Nissequogue Cogen. Partners Fac.),
5 1/2s, 1/1/23 BB+/P 1,762,500
1,420,000 Valley Hlth. Dev. Corp. Mtge. Rev. Bonds,
FHA, 11.3s, 2/1/23 A 1,609,306
--------------
199,962,376
Puerto Rico (2.3%)
- --------------------------------------------------------------------------------------------------------------------------
4,700,000 Cmnwlth. of PR, Hwy. & Trans. Auth. IFB,
Ser. W, 6.367s, 7/1/08 A 4,905,625
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $211,481,332) (b) $ 204,868,001
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $210,160,218.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings available at
November 30, 1999 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 November 30, 1999. Securities
rated by Putnam are indicated by "/P" and are not publicly rated. Ratings are not covered by the Report of
independent accountants.
(b) The aggregate identified cost on a tax basis is $211,481,332, resulting in gross unrealized appreciation and
depreciation of $3,303,247 and $9,916,578, respectively, or net unrealized depreciation of $6,613,331.
(RES) Restricted, excluding 144A securities, as to public resale. The total market value of restricted securities held at
November 30, 1999 was $9,437,500 or 4.5% of net assets.
(SEG) A portion of this security was pledged and segregated with the custodian to cover margin requirements for futures
contracts at November 30, 1999.
The rates shown on FRB's are the current interest rates shown at November 30, 1999, which are subject to change based
on the terms of the security.
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 November 30, 1999.
The fund had the following industry group concentrations greater than 10% at November 30, 1999 (as a percentage of
net assets):
Education 15.3%
Utilities 14.5
Transportation 12.8
Health care 12.6
The fund had the following insurance concentration greater than 10% at November 30, 1999 (as a percentage of net
assets):
MBIA 12.3%
- -------------------------------------------------------------------------------
Futures Contracts Outstanding at November 30, 1999
Aggregate Face Expiration Unrealized
Total Market Value Date Depreciation
- -------------------------------------------------------------------------------
Municipal Index (long) $1,870,000 $1,883,263 Dec-99 $(13,263)
Municipal Index (long) 842,063 842,433 Mar-00 (370)
- -------------------------------------------------------------------------------
$(13,633)
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
November 30, 1999
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $211,481,332) (Note 1) $204,868,001
- -----------------------------------------------------------------------------------------------
Cash 1,533,619
- -----------------------------------------------------------------------------------------------
Interest and other receivables 4,456,537
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 115,000
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 101,262
- -----------------------------------------------------------------------------------------------
Receivable for variation margin 10,502
- -----------------------------------------------------------------------------------------------
Total assets 211,084,921
Liabilities
- -----------------------------------------------------------------------------------------------
Distributions payable to shareholders 237,385
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 283,150
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 266,285
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 12,762
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 13,287
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,105
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 95,923
- -----------------------------------------------------------------------------------------------
Other accrued expenses 14,806
- -----------------------------------------------------------------------------------------------
Total liabilities 924,703
- -----------------------------------------------------------------------------------------------
Net assets $210,160,218
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $217,844,940
- -----------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 322,694
- -----------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on investments (Note 1) (1,380,452)
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (6,626,964)
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $210,160,218
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($142,298,768 divided by 16,704,457 shares) $8.52
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $8.52)* $8.94
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($65,167,518 divided by 7,656,415 shares)*** $8.51
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($246,719 divided by 28,959 shares)*** $8.52
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($2,447,213 divided by 287,688 shares) $8.51
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $8.51)** $8.80
- -----------------------------------------------------------------------------------------------
* On single retail sales of less than $25,000. On sales of $25,000 or more and on group
sales, the offering price is reduced.
** On single retail sales of less than $50,000. On sales of $50,000 or more and on group
sales, the offering price is reduced.
*** Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended November 30, 1999
<S> <C>
Tax exempt interest income: $ 13,722,219
- -----------------------------------------------------------------------------------------------
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 1,271,129
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 261,195
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 12,339
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 6,493
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 312,382
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 584,575
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 381
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 12,262
- -----------------------------------------------------------------------------------------------
Reports to shareholders 26,497
- -----------------------------------------------------------------------------------------------
Registration fees 3,267
- -----------------------------------------------------------------------------------------------
Auditing 33,426
- -----------------------------------------------------------------------------------------------
Legal 11,421
- -----------------------------------------------------------------------------------------------
Postage 13,964
- -----------------------------------------------------------------------------------------------
Other 27,326
- -----------------------------------------------------------------------------------------------
Total expenses 2,576,657
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (44,232)
- -----------------------------------------------------------------------------------------------
Net expenses 2,532,425
- -----------------------------------------------------------------------------------------------
Net investment income 11,189,794
- -----------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (319,838)
- -----------------------------------------------------------------------------------------------
Net realized gain on futures contracts (Note 1) 216,110
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of investments and futures during the year (16,900,497)
- -----------------------------------------------------------------------------------------------
Net loss on investments (17,004,225)
- -----------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (5,814,431)
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended Two months ended Year ended
November 30 November 30 September 30
1999 1998** 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
- -----------------------------------------------------------------------------------------------------------------------
Operations:
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $11,189,794 $1,797,711 $11,144,106
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (103,728) 302,049 (816,399)
- -----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) of investments (16,900,497) (2,149,643) 5,970,419
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (5,814,431) (49,883) 16,298,126
- -----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- -----------------------------------------------------------------------------------------------------------------------
From net investment income
Class A (7,664,985) (1,336,326) (8,443,590)
- -----------------------------------------------------------------------------------------------------------------------
Class B (2,901,984) (472,302) (2,752,969)
- -----------------------------------------------------------------------------------------------------------------------
Class C (1,637) -- --
- -----------------------------------------------------------------------------------------------------------------------
Class M (112,531) (18,496) (114,274)
- -----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (345,787) -- (596,654)
- -----------------------------------------------------------------------------------------------------------------------
Class B (148,896) -- (211,900)
- -----------------------------------------------------------------------------------------------------------------------
Class M (5,390) -- (8,554)
- -----------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments
Class A (99,254) -- --
- -----------------------------------------------------------------------------------------------------------------------
Class B (42,739) -- --
- -----------------------------------------------------------------------------------------------------------------------
Class M (1,548) -- --
- -----------------------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share
transactions (Note 4) (10,586,921) 751,694 10,240,092
- -----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (27,726,103) (1,125,313) 14,410,277
Net assets
- -----------------------------------------------------------------------------------------------------------------------
Beginning of year 237,886,321 239,011,634 224,601,357
- -----------------------------------------------------------------------------------------------------------------------
End of year (including undistributed
net investment income of $322,694
and distributions in excess of net
investment income of $131,660
and $67,872, respectively) $210,160,218 $237,886,321 $239,011,634
- -----------------------------------------------------------------------------------------------------------------------
** The fiscal year end was advanced from September 30 to November 30.
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
- --------------------------------------------------------------------------------------------------------------------------------
Two months
Per-share Year ended ended
operating performance Nov. 30 Nov. 30+ Year ended September 30
- --------------------------------------------------------------------------------------------------------------------------------
1999 1998 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.19 $9.27 $9.10 $8.87 $8.80
- --------------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income .46 .07 .46 .49 .49
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.66) (.08) .21 .23 .07
- --------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.20) (.01) .67 .72 .56
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.44) (.07) (.47) (.49) (.49)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.02) -- (.03) -- --
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments (.01) -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (.47) (.07) (.50) (.49) (.49)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.52 $9.19 $9.27 $9.10 $8.87
- --------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (2.33) (0.07)* 7.55 8.33 6.48
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $142,299 $166,816 $168,032 $165,993 $172,170
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .93 .17* 1.00 .96 1.00
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 5.13 .79* 5.00 5.42 5.53
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 9.36 9.22* 42.76 117.00 270.34
- --------------------------------------------------------------------------------------------------------------------------------
+ The fiscal year end has advanced from September 30 to November 30.
++ Commencement of operations.
* Not annualized.
(a) Total 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 A (continued)
- --------------------------------------------------------------------------------------------------------------------------------
Year
Per-share ended
operating performance September 30
- --------------------------------------------------------------------------------------------------------------------------------
1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value,
beginning of period $8.48
- --------------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income .52
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .32
- --------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .84
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.52)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments --
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (.52)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.80
- --------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 10.27
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $175,210
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.01
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 6.12
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 120.38
- --------------------------------------------------------------------------------------------------------------------------------
+ The fiscal year end has advanced from September 30 to November 30.
++ Commencement of operations.
* Not annualized.
(a) Total 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
- --------------------------------------------------------------------------------------------------------------------------------
Two months
Per-share Year ended ended
operating performance Nov. 30 Nov. 30+ Year ended September 30
- --------------------------------------------------------------------------------------------------------------------------------
1999 1998 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.19 $9.26 $9.09 $8.86 $8.79
- --------------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income .40 .06 .40 .43 .43
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.67) (.07) .21 .23 .07
- --------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.27) (.01) .61 .66 .50
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.38) (.06) (.41) (.43) (.43)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.02) -- (.03) -- --
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments (.01) -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (.41) (.06) (.44) (.43) (.43)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.51 $9.19 $9.26 $9.09 $8.86
- --------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (3.08) (0.07)* 6.86 7.63 5.78
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $65,168 $68,513 $68,547 $56,244 $41,795
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.58 .28* 1.65 1.61 1.66
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.48 .68* 4.36 4.76 4.83
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 9.36 9.22* 42.76 117.00 270.34
- --------------------------------------------------------------------------------------------------------------------------------
+ The fiscal year end has advanced from September 30 to November 30.
++ Commencement of operations.
* Not annualized.
(a) Total 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 (continued)
- --------------------------------------------------------------------------------------------------------------------------------
Year
Per-share ended
operating performance September 30
- --------------------------------------------------------------------------------------------------------------------------------
1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value,
beginning of period $8.48
- --------------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income .47
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .31
- --------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .78
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.47)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments --
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (.47)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.79
- --------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 9.46
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $24,259
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.65
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 5.28
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 120.38
- --------------------------------------------------------------------------------------------------------------------------------
+ The fiscal year end has advanced from September 30 to November 30.
++ Commencement of operations.
* Not annualized.
(a) Total 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 C
- --------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share July 26, 1999++
operating performance to November 30
- --------------------------------------------------------------------------------------------------------------------------------
1999
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value,
beginning of period $8.87
- --------------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income .14
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.35)
- --------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.21)
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.14)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments --
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (.14)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.52
- --------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (2.39)*
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $247
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .61*
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 1.64*
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 9.36
- --------------------------------------------------------------------------------------------------------------------------------
+ The fiscal year end has advanced from September 30 to November 30.
++ Commencement of operations.
* Not annualized.
(a) Total 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
- --------------------------------------------------------------------------------------------------------------------------------
Two months For the period
Per-share Year ended ended Feb. 10, 1995++
operating performance Nov. 30 Nov. 30+ Year ended September 30 to Sept. 30
- --------------------------------------------------------------------------------------------------------------------------------
1999 1998 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.18 $9.25 $9.08 $8.86 $8.79 $8.51
- --------------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income .43 .07 .43 .46 .47 .31
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.66) (.07) .21 .22 .06 .29
- --------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.23) -- .64 .68 .53 .60
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.41) (.07) (.44) (.46) (.46) (.32)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.02) -- (.03) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments (.01) -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (.44) (.07) (.47) (.46) (.46) (.32)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.51 $9.18 $9.25 $9.08 $8.86 $8.79
- --------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (2.64) (0.01)* 7.23 7.89 6.15 7.11*
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,447 $2,558 $2,433 $2,365 $1,492 $299
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.23 .22* 1.30 1.26 1.30 .83*
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.84 .74* 4.71 5.09 5.03 3.21*
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 9.36 9.22* 42.76 117.00 270.34 120.38
- --------------------------------------------------------------------------------------------------------------------------------
+ The fiscal year end has advanced from September 30 to November 30.
++ Commencement of operations.
* Not annualized.
(a) Total 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
November 30, 1999
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 is consistent with preservation of
capital.
The fund offers class A, class B, class C and class M shares. The fund
began offering class C shares on July 26, 1999. 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 C shares
have a higher ongoing distribution fee than class B shares and have a one
year 1.00% contingent deferred sales charge and do not convert to class A
shares. Class M shares are sold with a maximum front-end sales charge of
3.25% and pay an ongoing distribution fee that is higher than class A but
lower than class B and class C 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
of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period.
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. Restricted
securities are stated at fair value following procedures approved by the
Trustees. Such valuations and procedures are reviewed periodically by the
Trustees.
B) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis.
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 year ended
November 30, 1999, 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 Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
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. These
differences include temporary and permanent differences of post-October
loss deferrals, dividends payable, unrealized gains and losses on certain
futures contracts, and straddle loss deferrals. 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. For the year ended November 30, 1999, the fund reclassified
$54,302 to increase distributions in excess of net investment income and
$52,368 to increase paid-in-capital, with a decrease to accumulated net
realized loss on investments of $1,934. The calculation of net investment
income per share in the financial highlights table excludes these
adjustments.
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. The premium in excess of the call
price, if any, is amortized to the call date; thereafter, the remaining
excess premium is amortized to maturity. Discounts on zero coupon bonds
and original issue discount bonds 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.
On June 4, 1999, the Trustees approved a management fee schedule that
became effective on July 1, 1999, based upon the lesser of (i) an annual
rate of 0.50% of the average net asset value of the fund or (ii) the
initial tiers mentioned above.
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 year ended November 30, 1999, fund expenses were reduced by
$44,232 under expense offset arrangements with PFTC and brokerage service
arrangements. 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.
Each Trustee of the fund receives an annual Trustee fee, of which $602 has
been allocated to the fund, and an additional fee for each Trustee's
meeting attended. 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
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 a 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, class C 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%,
1.00% and 1.00% of the average net assets attributable to class A, class
B, class C and class M shares, respectively. The Trustees have approved
payment by the fund to an annual rate of 0.20%, 0.85%, 1.00% and 0.50% of
the average net assets attributable to class A, class B, class C and class
M shares, respectively.
For the year ended November 30, 1999, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $15,250 and $587 from the sale of
class A and class M shares, respectively, and $179,765 and no monies in
contingent deferred sales charges from redemptions of class B and class C
shares, respectively. A deferred sales charge of up to 1% is assessed on
certain redemptions of class A shares. For the year ended November 30,
1999, Putnam Mutual Funds Corp., acting as underwriter received $5,654 on
class A redemptions.
Note 3
Purchases and sales of securities
During the year ended November 30, 1999, cost of purchases and proceeds
from sales of investment securities other than short-term investments
aggregated $20,870,521 and $30,598,592, respectively. There were no
purchases and sales of U.S. government obligations.
Note 4
Capital shares
At November 30, 1999, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Year ended November 30, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 2,013,661 $ 17,941,676
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 395,646 3,525,717
- -----------------------------------------------------------------------------
2,409,307 21,467,393
Shares
repurchased (3,849,127) (34,234,400)
- -----------------------------------------------------------------------------
Net decrease (1,439,820) $(12,767,007)
- -----------------------------------------------------------------------------
Two months ended November 30, 1998
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 299,089 $ 2,761,011
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 76,729 706,204
- -----------------------------------------------------------------------------
375,818 3,467,215
Shares
repurchased (364,706) (3,362,686)
- -----------------------------------------------------------------------------
Net increase 11,112 $ 104,529
- -----------------------------------------------------------------------------
Year ended September 30, 1998
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 2,468,511 $ 22,614,893
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 515,561 4,727,728
- -----------------------------------------------------------------------------
2,984,072 27,342,621
Shares
repurchased (3,088,923) (28,287,931)
- -----------------------------------------------------------------------------
Net decrease (104,851) $ (945,310)
- -----------------------------------------------------------------------------
Year ended November 30, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 1,328,071 $11,869,134
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 207,323 1,842,898
- -----------------------------------------------------------------------------
1,535,394 13,712,032
Shares
repurchased (1,337,573) (11,857,962)
- -----------------------------------------------------------------------------
Net increase 197,821 $ 1,854,070
- -----------------------------------------------------------------------------
Two months ended November 30, 1998
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 224,952 $ 2,070,741
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 30,723 282,609
- -----------------------------------------------------------------------------
255,675 2,353,350
Shares
repurchased (200,886) (1,849,493)
- -----------------------------------------------------------------------------
Net increase 54,789 $ 503,857
- -----------------------------------------------------------------------------
Year ended September 30, 1998
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 2,125,903 $19,476,818
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 197,745 1,812,031
- -----------------------------------------------------------------------------
2,323,648 21,288,849
Shares
repurchased (1,105,098) (10,128,591)
- -----------------------------------------------------------------------------
Net increase 1,218,550 $11,160,258
- -----------------------------------------------------------------------------
For the period July 26, 1999
(commencement of operations)
to November 30, 1999
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 28,934 $ 248,242
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 25 213
- -----------------------------------------------------------------------------
28,959 248,455
Shares
repurchased -- --
- -----------------------------------------------------------------------------
Net increase 28,959 $ 248,455
- -----------------------------------------------------------------------------
Year ended November 30, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 81,851 $711,159
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 10,249 91,346
- -----------------------------------------------------------------------------
92,100 802,505
Shares
repurchased (83,097) (724,944)
- -----------------------------------------------------------------------------
Net increase 9,003 $ 77,561
- -----------------------------------------------------------------------------
Two months ended November 30, 1998
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 14,780 $135,344
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,556 14,294
- -----------------------------------------------------------------------------
16,336 149,638
Shares
repurchased (689) (6,330)
- -----------------------------------------------------------------------------
Net increase 15,647 $143,308
- -----------------------------------------------------------------------------
Year ended September 30, 1998
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 43,991 $402,844
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 9,902 90,644
- -----------------------------------------------------------------------------
53,893 493,488
Shares
repurchased (51,170) (468,344)
- -----------------------------------------------------------------------------
Net increase 2,723 $ 25,144
- -----------------------------------------------------------------------------
Federal tax information
(Unaudited)
The fund has designated 100% of dividends paid from net investment income
during the fiscal year as tax exempt for Federal income tax purposes.
The Form 1099 you receive in January 2000 will show the tax status of all
distributions paid to your account in calendar 1999.
Our commitment to quality service
* CHOOSE AWARD-WINNING SERVICE
Putnam Investments has won the DALBAR Service Award 8 times in the past 9
years. In 1997 and 1998, Putnam was the only company to win all three
DALBAR awards: for service to investors, to financial advisors, and to
variable annuity contract holders.*
* HELP YOUR INVESTMENTS GROW
Set up a systematic program for investing with as little as $25 a month
from a Putnam money market fund or from your checking or savings account.+
* SWITCH FUNDS EASILY
Within the same class of shares, you can move money from one account to
another without a service charge. (This privilege is subject to change or
termination.)
* ACCESS YOUR MONEY QUICKLY
You can get checks sent regularly or redeem shares any business day at the
then-current net asset value, which may be more or less than the original
cost of the shares.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a helpful
Putnam representative. To learn more about Putnam, visit our Web site.
www.putnaminv.com
To make an additional investment in this or any other Putnam fund, contact
your financial advisor or call our toll-free number.
1-800-225-1581
* DALBAR, Inc., an independent research firm, presents the awards to financial
services firms that provide consistently excellent service.
+ Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market.
The Putnam family of funds
The following is a complete list of Putnam's open-end mutual funds. 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.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund [DBL. DAGGER]
Capital Opportunities Fund
Europe Growth Fund
Global Equity 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
Research Fund
Tax Smart Equity Fund
Vista Fund
Voyager Fund
Voyager Fund II
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
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government
Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund *
U.S. Government Income Trust
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 [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey,
New York, Ohio and Pennsylvania
State tax-free money market funds [SECTION MARK]**
California, New York
ASSET ALLOCATION 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
[DBL. DAGGER] Closed to new investors. Some exceptions may apply. Contact
Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at www.putnaminv.com.
Fund information
WEB SITE
www.putnaminv.com
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
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
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
Brett C. Browchuk
Vice President
Stephen Oristaglio
Vice President
Jerome J. Jacobs
Vice President
David E. Hamlin
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
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' Web site: 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.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
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For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
AN052-57711 854/228/759 1/00
