PUTNAM BALANCED GOVERNMENT FUND
PROSPECTUS SUPPLEMENT DATED JANUARY 10, 1994
TO THE PROSPECTUS DATED OCTOBER 1, 1993
IT IS THE FUND'S CURRENT POLICY TO QUALIFY AS AN ELIGIBLE
INVESTMENT FOR FEDERAL CREDIT UNIONS. Accordingly, the Fund will
limit its investments in collateralized mortgage obligations,
stripped mortgage-backed securities, zero coupon securities,
repurchase agreements and forward commitments in accordance with
the provisions of the Federal Credit Union Act. This policy is a
non-fundamental investment policy and may be changed by the
Fund's Trustees without shareholder approval.
