Putnam
New York
Investment Grade
Municipal Trust
ANNUAL REPORT
April 30, 1998
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "Putnam's approach is to apply a rigorous, quantitatively-oriented,
consistent process to generate solid long-term returns. Each of our
strategies is designed to limit risk and is applied in a disciplined
manner."
-- Jerome J. Jacobs, manager
Putnam New York Investment Grade Municipal Trust
* "New York State is now nearing the completion of what is expected
to be three years of record financial performance. Fiscal 1997 finished
with a $1.4 billion surplus and the governor's proposed budget projects a
record fiscal 1998 surplus of $1.83 billion."
-- Moody's Investor Service,
Municipal Credit Research; February 27, 1998
CONTENTS
4 Report from Putnam Management
9 Fund performance summary
12 Portfolio holdings
15 Financial statements
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
The fragility of market rallies was clearly demonstrated once again as Putnam
New York Investment Grade Municipal Trust approached the end of fiscal 1998.
The suggestion that the Federal Reserve Board might be assuming a more
cautious stance on inflation was enough to stop the bond market's most recent
advance in its tracks.
One consequence of this turnabout was a slight erosion in total return for the
period. Jerome J. Jacobs, your fund's newly appointed manager, considers the
development merely a minor setback; he remains confident that the fundamentals
- -- strong demand, attractive value -- remain in place.
Besides serving as your fund's manager, Jerry is chief investment officer of
the Tax-Exempt Fixed-Income Group. Before joining Putnam in 1996, he was with
the Vanguard Group, Butcher & Singer, and the Commonwealth of Pennsylvania. He
has 18 years of investment experience.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
June 17, 1998
Report from the Fund Manager
Jerome J. Jacobs
Economic vigor and negligible inflation set the stage for New York municipal
bondholders to reap the rewards of healthier municipal balance sheets over the
past 12 months. The state's economic strength gave a boost to tax revenues,
improving creditworthiness at all municipal levels and putting New York
municipal bonds among the top-performing bonds in the tax-exempt market for
the period. Putnam New York Investment Grade Municipal Trust took full
advantage of this strength. For the 12 months ended April 30, 1998, its total
return was 9.64% at net asset value (12.12% at market price), outpacing the
Lehman Bros. Municipal Bond Index. For complete performance information,
please see pages 9 and 10 of this report.
As investors gained confidence that inflation would remain low despite the
eighth year of economic expansion, interest-rate movement stayed within a
relatively narrow range. Municipal creditworthiness flourished. Cash flows
improved as solid economic growth pushed tax revenues higher and outstanding
debt was refinanced at lower interest rates. In this environment, maintaining
an attractive, durable stream of income for the fund was our first priority
and we utilized a rigorous, disciplined management process to structure the
portfolio for attractive long-term returns.
*BONDS UPGRADED AS NEW YORK'S FISCAL AND ECONOMIC HEALTH IMPROVES
Many New York municipalities reaped the benefits of improved economic and
fiscal health this year as the major rating agencies upgraded their
outstanding debt. Among the most notable upgrades were the general obligation
bonds of New York's state-appropriated debt and New York City general
obligation bonds. As an asset class, New York City bonds generated some of the
highest returns of all tax-exempt bonds during the fund's reporting period.
Investors sought New York City debt for its yield and its potential for price
appreciation. Demand grew further as savvy investors monitored the city's
fiscal and economic progress and anticipated the bonds' improvement in credit
quality.
*STRATEGIES BUILD ATTRACTIVE, DURABLE LEVELS OF INCOME
The same low interest-rate environment that prompted credit improvement and
price appreciation in the tax-exempt market presented income-oriented
investors with an added challenge -- to achieve an attractive, durable level
of income. To meet this challenge, we implemented a series of strategies based
on relative value, yield curve positioning, and leveraging techniques, seeking
to generate the highest and most sustainable level of tax-exempt income while
building total return potential and limiting interest-rate risk. We selected
bonds with the longest call dates so that we could maximize the length of time
these bonds would generate income for the fund while minimizing the
possibility that they would be called by the issuer and refinanced with debt
carrying a lower interest rate.
We continuously monitor the relative value of sectors and individual bonds by
analyzing yield relationships. This type of evaluation enables us to determine
when sectors and bonds are undervalued or overvalued and to identify
attractive buying or selling opportunities. During the past year, municipal
bonds became cheap relative to U.S. Treasuries based on historical factors --
a situation that, in our opinion, presented an attractive long-term buying
opportunity. Aaa-rated insured municipal bonds typically yield approximately
84% of U.S. Treasuries with similar maturities. Because the supply of
tax-exempt bonds increased dramatically in the first quarter of 1998,
Aaa-rated, insured municipal bond yields reached as high as 90% of their
taxable counterparts. The yield relationship between these two sectors is
similar to what we saw during the flat-tax scare just prior to the last
national election. You may recall that it proved to be both short lived and an
attractive buying opportunity.
[GRAPHIC OMITTED: HORIZONTAL BAR CHART OF TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Education 20.7%
Hospital/health care 18.1%
Transportation 14.0%
Housing 11.2%
Utilities 10.0%
Footnote reads:
* Based on net assets as of 4/30/98. Holdings will vary over time.
Within the attractively priced tax-exempt sector, we believe that New York
municipal bonds have been exceptionally cheap. The higher bond supply --
approximately a 70% increase over the first quarter of 1997 -- was intensified
in the New York sector, as municipalities within the state accelerated
financings early in 1998. In our opinion, issuers were simultaneously trying
to take advantage of an attractive interest-rate environment and to avoid
competing with a widely publicized Long Island Power Authority (LIPA) bond
issue in May -- at $3.4 billion, the largest tax-exempt bond issue on record.
Throughout the year, we positioned the fund to maximize income while
minimizing interest-rate risk. In the first half of the fund's fiscal year, we
sold bonds with lower coupons and with maturities that were greater than 20
years, reinvesting the proceeds into bonds with coupons in the 5% to 6% range
and maturities of approximately 15 to 20 years. As the year progressed, we
emphasized bonds with 10- to 15-year maturities. We believed these maturities
offered the greatest relative value in light of the relatively flat municipal
yield curve. When a flat yield curve exists, bonds with longer maturities
provide little to no yield advantage over bonds with shorter maturities, and
so investors in the longer-term bonds are not compensated for the additional
interest-rate risk they take on.
To maximize the fund's exposure to the intermediate part of the yield curve,
we also invested a small portion of net assets in inverse floating-rate
securities -- variable-rate bonds whose coupons move in the opposite direction
of short-term interest rates. This strategy enabled us to increase the fund's
yield and total return potential while controlling long-term interest-rate
risk.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
New York State Urban Development Corp.
Revenue bonds, 7 1/2s, 4/1/20
New York City
General obligation bonds, IFB, AMBAC, 8.02s, 9/1/11
New York State Dormitory Authority
Revenue bonds (Cornell University) Series A, 7 3/8s, 7/1/20
New York State Energy Research and Development Authority
Electric facilities revenue bonds (Consolidated Edison Co. of New York, Inc.)
Series A, 7 1/2s, 1/1/26
New York State Dormitory Authority
Revenue bonds, (Mental Health Services Facility), Series A, 5 3/4s, 2/15/27
New York State Medical Care Facilities Financing Agency
Revenue bonds (hospital and nursing home insured mortgage) Series D,
FHA insured, 6.6s 2/15/31
New York State Medical Care Facilities Financing Agency
Revenue bonds (hospital and nursing home insured mortgage) Series C, 6.65s,
8/15/32
New York State Medical Care Facilities Financing Agency
Revenue bonds (hospital and nursing home insured mortgage) Series C,
FHA insured, 6 3/8s, 8/15/29
New York State Dormitory Authority
Revenue bonds (State University Educational Facilities), Series A, 7 1/2s,
5/15/13
New York State Mortgage Agency
Revenue bonds (Homeownership Development Program), Series BB-2,
FHA Insured, 7.95s, 10/1/15
These holdings represent 40.9% of the fund's net assets as of 4/30/98.
Portfolio holdings will vary over time.
* CAUTIOUS RATE OUTLOOK WITH IMPROVED TECHNICALS
We expect many of the trends that have been positive for municipal bonds to
continue, including solid economic growth and low inflation. We also
anticipate a better balance between supply and demand. We believe that issues
that originally may have been targeted for later in 1998 were accelerated to
the year's first quarter. This could reduce supply during the summer months --
a time that historically is quiet for the market. These factors should help
support municipal bond prices.
In light of the strength of the economy and the historically low levels to
which interest rates have fallen, we remain cautious on the near-term
direction of interest rates. Although rates could move lower temporarily, we
think the odds favor higher rates over the longer term.
We will continue to emphasize a series of strategies that are designed to
build attractive, durable income streams and increase total return potential
while limiting interest-rate risk. Each of these strategies will be employed
through a disciplined, thorough, and consistent process. We believe this
rigorous approach should yield attractive income and solid returns to the
long-term investor.
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 4/30/98, there is no guarantee the fund will continue to hold
these securities in the future.
Performance summary
Performance should always be considered in light of a fund's investment
strategy. Putnam New York Investment Grade Municipal Trust is designed for
investors seeking high current income free from federal, state, and New
York City income tax, consistent with preservation of capital.
TOTAL RETURN FOR PERIODS ENDED 4/30/98
Lehman Bros. Consumer
Market Municipal Price
(common shares) NAV price Bond Index Index
- ------------------------------------------------------------------------------
1 year 9.64% 12.12% 9.30% 1.44%
- ------------------------------------------------------------------------------
5 years 33.81 26.86 37.14 12.85
Annual average 6.00 4.87 6.52 2.45
- ------------------------------------------------------------------------------
Life of fund (11/27/92) 42.27 29.51 32.79 12.82
Annual average 6.72 4.89 6.64 2.77
- ------------------------------------------------------------------------------
Performance data represent past results and do not reflect future
performance. They do not take into account any adjustment for taxes
payable on reinvested distributions. Investment returns, net asset value
and market price will fluctuate so that an investor's shares when sold may
be worth more or less than their original cost.
PRICE AND DISTRIBUTION INFORMATION
12 months ended 4/30/98
Distributions (common shares)
- ------------------------------------------------------------------------------
Number 12
- ------------------------------------------------------------------------------
Income $0.810
- ------------------------------------------------------------------------------
Capital gains1 --
- ------------------------------------------------------------------------------
Total $0.810
- ------------------------------------------------------------------------------
Preferred shares Series A (200 shares)
- ------------------------------------------------------------------------------
Income $1,752.60
- ------------------------------------------------------------------------------
Capital gains --
- ------------------------------------------------------------------------------
Total $1,752.60
- ------------------------------------------------------------------------------
Share value (common shares) NAV Market price
- ------------------------------------------------------------------------------
4/30/97 $13.49 $12.875
- ------------------------------------------------------------------------------
4/30/98 13.96 13.625
- ------------------------------------------------------------------------------
Current return (common shares) NAV Market price
- ------------------------------------------------------------------------------
End of period
- ------------------------------------------------------------------------------
Current dividend rate2 5.80% 5.94%
- ------------------------------------------------------------------------------
Taxable equivalent3 10.76 11.02
- ------------------------------------------------------------------------------
1Capital gains, if any, are taxable for federal and, in most cases, state
tax purposes. For some investors, investment income may also be subject to
the federal alternative minimum tax. Investment income may be subject to
state and local taxes.
2Income portion of most recent distribution, annualized and divided by NAV
or market price at end of period.
3Assumes maximum 46.08% combined federal, state and city tax rate. Results
for investors subject to lower tax rates would not be as advantageous.
TOTAL RETURN FOR PERIODS ENDED 3/31/98
(most recent calendar quarter)
Market
(common shares) NAV price
- ------------------------------------------------------------------------------
1 year 11.26% 18.33%
- ------------------------------------------------------------------------------
5 years 35.95 35.00
Annual average 6.33 6.19
- ------------------------------------------------------------------------------
Life of fund (11/27/92) 43.21 35.98
Annual average 6.96 5.92
- ------------------------------------------------------------------------------
Performance data represent past results and do not reflect future
performance. They do not take into account any adjustment for taxes
payable on reinvested distributions. Investment returns, net asset value,
and market price will fluctuate so that an investor's shares when sold may
be worth more or less than their original cost.
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.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities and the net assets allocated to remarketed preferred shares,
divided by the number of outstanding common shares.
Market price is the current trading price of one common share of the fund.
Market prices are set by transactions between buyers and sellers on the
American Stock Exchange.
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, taxes or other costs, may include bonds different from those
in the fund, and may pose different risks than the fund. The index assumes
reinvestment of all distributions and interest payments. 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.
Report of independent accountants
To the Trustees and Shareholders of
Putnam New York Investment Grade Municipal Trust
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments owned (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 Putnam New York Investment Grade Municipal Trust (the "fund") at
April 30, 1998, 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 April 30, 1998
by correspondence with the custodian and brokers, provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 10, 1998
<TABLE>
<CAPTION>
Portfolio of investments owned
April 30, 1998
Key to Abbreviations
AMBAC - AMBAC Indemnity Corporation
FGIC - Financial Guaranty Insurance Company
FHA Insd. - Federal Housing Administration Insured
FSA - Financial Security Assurance
G.O. Bonds - General Obligation Bonds
IFB - Inverse Floating Rate Bonds
MUNICIPAL BONDS AND NOTES (98.3%) (a)
PRINCIPAL AMOUNT RATINGS(RAT) VALUE
New York (89.2%)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
$ 905,000 Ithaca, Hsg. Corp. Mtge. Rev. Bonds (Eddygate
Park Apts.), 9s, 6/1/06 BBB/P $ 941,453
500,000 Metropolitan Trans. Auth. Svcs. Contract
Rev. Bonds (Trans. Fac.), Ser. O, 5 3/4s, 7/1/13 Baa 529,375
NY City, G.O. Bonds
1,385,000 Ser. A, 8s, 8/15/19 AAA 1,559,856
235,000 Ser. B, 6 3/4s, 10/1/17 A 254,975
525,000 Ser. I, 6 1/4s, 4/15/17 A 566,344
115,000 Ser. D, 6s, 2/15/25 A 119,744
1,000,000 Ser. F, 5 7/8s, 8/1/24 A 1,035,000
1,155,000 Ser. F, 5 3/4s, 2/1/19 A 1,179,544
2,000,000 NY City, G.O. Bonds, IFB, AMBAC, 8.02s,
9/1/11 (SEG) AAA 2,265,000
NY City, Indl. Dev. Agcy. Special Fac.
Rev. Bonds (American Airlines, Inc.)
1,400,000 8s, 7/1/20 Baa 1,455,664
1,525,000 6.9s, 8/1/24 Baa 1,694,656
1,300,000 NY State Dorm. Auth. IFB (Cornell U.),
10.374s, 7/1/30 (aquired 1/6/93
cost $1,533,675) (RES) AA 1,512,875
NY State Dorm. Auth. Rev. Bonds
1,500,000 (City U.), Ser. C, 8 1/8s, 7/1/08 Baa 1,538,400
1,500,000 (State U. Edl. Fac.), Ser. A, 7 1/2s, 5/15/13 A 1,869,375
2,000,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/20 Aa 2,160,000
2,000,000 (Mental Hlth. Svcs. Fac.), Ser. A, 5 3/4s, 2/15/27 Baa 2,047,500
1,190,000 (City U. Syst. Construction), Ser. 1, 5 1/4s, 7/1/17 Baa 1,166,200
2,000,000 NY State Energy Res. & Dev. Auth. Elec. Fac.
Rev. Bonds (Cons. Edison Co. of NY, Inc.),
Ser. A, 7 1/2s, 1/1/26 A 2,120,000
1,000,000 NY State Energy Res. & Dev. Auth. Poll. Control
Rev. Bonds (Niagara Mohawk Pwr. Corp.),
Ser. A, FGIC, 7.2s, 7/1/29 Aaa 1,143,750
1,600,000 NY State Env. Fac. Corp. Poll. Control
Rev. Bonds (State Wtr. Revolving Fund),
Ser. A, 7 1/2s, 6/15/12 Aa 1,738,000
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
1,725,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B,
FHA Insd., 8s, 2/15/28 AAA 1,778,579
360,000 (Mental Hlth.), Ser. D, 7.4s, 2/15/18 Baa 397,800
940,000 (Mental Hlth.), Ser. D, Prerefunded, 7.4s, 2/15/18 A 1,052,800
1,800,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. C, 6.65s, 8/15/32 A 1,932,750
1,800,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. D, FHA Insd., 6.6s, 2/15/31 AAA 1,935,000
1,800,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. C, FHA Insd., 6 3/8s, 8/15/29 AAA 1,912,500
1,800,000 NY State Mtge. Agcy. Rev. Bonds
(Homeownership Dev. Program),
Ser. BB-2, FHA Insd., 7.95s, 10/1/15 AAA 1,831,914
2,075,000 NY State Urban Dev. Corp. Rev. Bonds,
7 1/2s, 4/1/20 AAA 2,292,875
1,000,000 Onondaga Cnty., Indl. Dev. Agcy. Rev. Bonds
(Bristol-Meyers Squibb Co.), 5 3/4s, 3/1/24 AAA 1,072,500
1,400,000 Port Auth. NY & NJ Cons. IFB, 9.5129s, 8/1/26
(acquired 7/19/93 cost $1,687,700) (RES) AA 1,604,750
1,500,000 Port Auth. NY & NJ Cons. Rev. Bonds,
Ser. 93rd, 6 1/8s, 6/1/94 A 1,680,000
--------------
44,389,179
Puerto Rico (9.1%)
- -------------------------------------------------------------------------------------------------------------
1,500,000 PR Elec. Pwr. Auth. IFB, FSA, 8.208s, 7/1/23 AAA 1,723,125
1,104,181 PR Hsg. Fin. Corp. Rev. Bonds (Bayamon
Hsg. Dev.), FHA Insd., 7 1/2s, 7/1/21 BBB/P 1,294,652
1,365,000 PR Pub. Bldg. Auth. Gtd. Ed. & Hlth. Fac.
Rev. Bonds, Ser. L, 6 7/8s, 7/1/21 AAA 1,516,856
--------------
4,534,633
- -------------------------------------------------------------------------------------------------------------
Total Investments (cost $47,439,162) (b) $ 48,923,812
- -------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $49,766,206.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings available
at April 30, 1998 for the securities listed. Ratings are generally ascribed to securities at the
time of issuance. While the agencies may from time to time revise such ratings, they undertake no
obligation to do so, and the ratings do not necessarily represent what the agencies would ascribe to
these securities at April 30, 1998. Securities rated by Putnam are indicated by "/P" and are not
publicly rated. Ratings are not covered by the Report of independent accountants.
The table below shows the percentage of the fund's investment on April 30, 1998 in securities assigned to
various rating categories by Moody's and Standard and Poor's and in unrated securities determined by
Putnam Management to be of comparable quality.
Unrated securities
Rated securities as a of comparable quality,
percentage of fund's as a percentage of fund's
Rating net assets net assets
AAA/Aaa 38.2% --%
AA/Aa 14.1 --
A/A 23.7 --
BBB/Baa 17.8 4.5
------ ------
93.8% 4.5%
Ratings are not covered by the Report of independent accountants.
(b) The aggregate identified cost on a tax basis is $47,439,162, resulting in gross unrealized appreciation
and depreciation of $1,966,363 and $481,713, respectively, or net unrealized appreciation of $1,484,650.
(SEG) A portion of this security was pledged and segregated with the custodian to cover margin requirements for
futures contracts at April 30, 1998.
(RES) Restricted, excluding 144A securities, as to public resale. The total market value of restricted securities
held at April 30, 1998 was $3,117,625 or 6.3% of net assets.
The rates shown on IFBs, which are securities paying interest rates that vary inversely to changes in the
market interest rates, are the current interest rates at April 30, 1998.
The fund had the following industry group concentrations greater than 10% at April 30, 1998
(as a percentage of net assets):
Education 20.7%
Health care 18.1
Transportation 14.0
Housing 11.2
Utilities 10.0
The fund had the following insurance concentration greater than 10% at April 30, 1998 (as a percentage of
net assets):
FHA Insd. 17.6%
- ------------------------------------------------------------------------
Futures Contracts Outstanding at April 30, 1998
Total Aggregate Expiration Unrealized
Market Value Face Value Date Appreciation
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Municipal Bonds
Index (long) $1,937,000 $1,932,000 Jun-98 $5,000
- ------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
April 30, 1998
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $47,439,162) (Note 1) $48,923,812
- ---------------------------------------------------------------------------------------------------
Cash 69,482
- ---------------------------------------------------------------------------------------------------
Interest receivable 819,634
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 267,294
- ---------------------------------------------------------------------------------------------------
Receivable for variation margin 21,500
- ---------------------------------------------------------------------------------------------------
Total assets 50,101,722
Liabilities
- ---------------------------------------------------------------------------------------------------
Distributions payable to shareholders 192,158
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 84,827
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 6,454
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 7,339
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 44,738
- ---------------------------------------------------------------------------------------------------
Total liabilities 335,516
- ---------------------------------------------------------------------------------------------------
Net assets $49,766,206
Represented by
- ---------------------------------------------------------------------------------------------------
Series A remarketed preferred shares (200 shares issued and
outstanding at $50,000 per share) (Note 4) 10,000,000
- ---------------------------------------------------------------------------------------------------
Paid-in capital -- common shares (unlimited shares authorized) (Note 1) 39,510,376
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 141,734
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (1,375,554)
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,489,650
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $49,766,206
Net assets available to:
- ---------------------------------------------------------------------------------------------------
Series A remarketed preferred shares $10,000,000
- ---------------------------------------------------------------------------------------------------
Cumulative undeclared dividends on remarketed preferred shares 19,562
- ---------------------------------------------------------------------------------------------------
Net assets allocated to remarketed preferred shares -- liquidation preference $10,019,562
- ---------------------------------------------------------------------------------------------------
Net assets available to common shares $39,746,644
- ---------------------------------------------------------------------------------------------------
Net assset value per common share
($39,746,644 divided by 2,847,092 shares) $13.96
- ---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended April 30, 1998
<S> <C>
Tax exempt interest income: $3,213,904
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 347,046
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 52,454
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 9,683
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,876
- --------------------------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 1,352
- --------------------------------------------------------------------------------------------------
Reports to shareholders 13,049
- --------------------------------------------------------------------------------------------------
Auditing 51,656
- --------------------------------------------------------------------------------------------------
Legal 9,403
- --------------------------------------------------------------------------------------------------
Postage 4,968
- --------------------------------------------------------------------------------------------------
Exchange listing fees 4,000
- --------------------------------------------------------------------------------------------------
Preferred share remarketing agent fees 20,694
- --------------------------------------------------------------------------------------------------
Other 5,736
- --------------------------------------------------------------------------------------------------
Total expenses 523,917
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (11,076)
- --------------------------------------------------------------------------------------------------
Net expenses 512,841
- --------------------------------------------------------------------------------------------------
Net investment income 2,701,063
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 31,143
- --------------------------------------------------------------------------------------------------
Net realized loss on futures contracts (Note 1) (59,775)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures contracts during the year 1,316,409
- --------------------------------------------------------------------------------------------------
Net gain on investments 1,287,777
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $3,988,840
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended April 30
--------------------------------
1998 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $ 2,701,063 $ 2,691,983
- ----------------------------------------------------------------------------------------------------------------------
Net realized loss on investments (28,632) (372,632)
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,316,409 171,843
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 3,988,840 2,491,194
- ----------------------------------------------------------------------------------------------------------------------
Distributions to remarketed preferred shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income (350,520) (334,279)
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations
applicable to common shareholders (excluding
cumulative undeclared dividends on remarketed
preferred shares of $19,562 and $20,245, respectively) 3,638,320 2,156,915
- ----------------------------------------------------------------------------------------------------------------------
Distributions to common shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income (2,305,843) (2,305,855)
- ----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 1,332,477 (148,940)
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of year 48,433,729 48,582,669
- ----------------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $141,734 and $95,353, respectively) $ 49,766,206 $ 48,433,729
Number of fund shares
- ----------------------------------------------------------------------------------------------------------------------
Common shares outstanding at beginning and end of year 2,847,092 2,847,092
- ----------------------------------------------------------------------------------------------------------------------
Remarketed preferred shares outstanding at beginning
and end of year 200 200
- ----------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended April 30
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period
(common shares) $13.49 $13.54 $13.50 $13.86 $14.57
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Investment operations
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Net investment income .95 .95 .98 1.06 1.05
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Net realized and unrealized
gain (loss) on investments .45 (.07) .07 (.26) (.53)
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Total from
investment operations 1.40 .88 1.05 .80 .52
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Less distributions from:
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Net investment income:
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To preferred shareholders (.12) (.12) (.13) (.13) (.13)
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To common shareholders (.81) (.81) (.88) (.94) (.93)
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Net realized gain
on investments:
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To preferred shareholders -- -- -- (.01) (.02)
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To common shareholders -- -- -- (.08) (.15)
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Total distributions (.93) (.93) (1.01) (1.16) (1.23)
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Net asset value, end of period
(common shares) $13.96 $13.49 $13.54 $13.50 $13.86
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Market value, end of period
(common shares) $13.625 $12.875 $13.000 $13.625 $13.500
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Ratios and supplemental data
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Total investment return at market value
(common shares) (%)(a) 12.12 5.34 1.78 9.09 (3.25)
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Net assets, end of period
(total fund) (in thousands) $49,766 $48,434 $48,583 $48,443 $49,480
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Ratio of expenses to
average net assets (%)(b)(c) 1.31 1.44 1.34 1.35 1.23
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Ratio of net investment income
to average net assets (%)(b) 5.90 6.10 6.19 6.87 6.23
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Portfolio turnover rate (%) 18.22 49.71 84.87 8.55 15.18
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(a) Total investment return assumes dividend reinvestment.
(b) Ratios reflect net assets available to common shares only; net investment income ratio also reflects
reduction for distributions to preferred shareholders.
(c) The ratio of expenses to average net assets for the year ended April 30, 1996 and thereafter,
includes amounts paid through expense offset arrangements. Prior period ratios
exclude these amounts. (Note 2)
</TABLE>
Notes to financial statements
April 30, 1998
Note 1
Significant accounting policies
Putnam New York Investment Grade Municipal Trust (the "fund") is registered
under the Investment Company Act of 1940, as amended, as a non-diversified,
closed-end management investment company. The fund's investment objective is
to seek high a current income exempt from federal income tax and New York
State and City personal income tax. The fund intends to achieve its objective
by investing in investment grade municipal securities constituting a portfolio
that Putnam Investment Management, Inc., ("Putnam Management") the fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc., believes to be
consistent with preservation of capital.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally accepted
accounting principles and requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities. Actual
results could differ from those estimates.
A) Security valuation Tax-exempt bonds and notes are stated on the basis of
valuations provided by a pricing service, approved by the Trustees, which uses
information with respect to transactions in bonds, quotations from bond
dealers, market transactions in comparable securities and various
relationships between securities in determining value. The fair value of
restricted securities is determined by Putnam Management following procedures
approved by the Trustees, and 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). 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) 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.
At April 30, 1998, the fund had a capital loss carryover of approximately
$1,276,826 available to offset future capital gains, if any. The amount of the
carryover and the expiration dates are:
Loss Carryover Expiration Date
------------------ ------------------
$785,019 April 30, 2004
491,807 April 30, 2005
E) Distributions to shareholders Distributions to common and preferred
shareholders are recorded by the fund on the ex-dividend date. Dividends on
remarketed preferred shares become payable when, as and if declared by the
Trustees. Each dividend period for the remarketed preferred shares is
generally a 28 day period. The applicable dividend rate for the remarketed
preferred shares on April 30, 1998 was 3.40%. 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
losses on wash sale transactions, organization costs, dividends payable,
unrealized gains and losses on certain futures contracts, market discount 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
April 30, 1998, the fund reclassified $1,681 to increase undistributed net
investment income and $1,397 to increase paid-in-capital, with an increase to
accumulated net realized loss of $3,078. The calculation of net investment
income per share in the financial highlights table excludes these adjustments.
F) Determination of net asset value Net asset value of the common shares is
determined by dividing the value of all assets of the fund, less all
liabilities and the liquidation preference of any outstanding remarketed
preferred shares, by the total number of common shares outstanding.
G) Amortization of bond premium and accretion of bond discount Any premium
resulting from the purchase of securities in excess of maturity value is
amortized on a yield-to-maturity basis. Discounts on original issue discount
bonds are accreted according to the yield-to-maturity basis.
H) Unamortized organization expenses Expenses incurred by the fund in
connection with its organization, its registration with the Securities and
Exchange Commission and with various states and the initial public offering of
its shares were $11,494. The expenses have been fully amortized over a
five-year period as of October 5, 1997.
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: 0.70% of the first $500 million of
weekly average net assets, 0.60% of the next $500 million, 0.55% of the next
$500 million, and 0.50% thereafter.
If dividends payable on remarketed preferred shares during any dividend
payment period plus any expenses attributable to remarketed preferred shares
for that period exceed the fund's gross income attributable to the proceeds of
the remarketed preferred shares during that period, then the fee payable to
Putnam Management for that period will be reduced by the amount of the excess
(but not more than .70% of the liquidation preference of the remarketed
preferred shares outstanding during the period).
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 April 30, 1998, fund expenses were reduced by $11,076 under
expense offset arrangements with PFTC. Investor servicing and custodian fees
reported in the Statement of operations exclude these credits. The fund could
have invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if it had not entered into
such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $390 has
been allocated to the fund, and an additional fee for each Trustee's meeting
attended. Trustees who are not interested persons of Putnam Management and who
serve on committees of the Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan") which
allows the Trustees to defer the receipt of all or a portion of Trustees Fees
payable on or after July 1, 1995. The deferred fees remain in the fund and are
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan
(the "Pension Plan") covering all Trustees of the fund who have served as
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of Trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
Note 3
Purchase and sales of securities
During the year ended April 30, 1998, purchases and sales of investment
securities other than short-term investments aggregated $8,919,998 and
$8,968,318, respectively. There were no purchases and sales of U.S. government
obligations. In determining the net gain or loss on securities sold, the cost
of securities has been determined on the identified cost basis.
Note 4
Remarketed preferred shares
The Series A shares are redeemable at the option of the fund on any dividend
payment date at a redemption price of $50,000 per share, plus an amount equal
to any dividends accumulated on a daily basis but unpaid through the
redemption date (whether or not such dividends have been declared) and, in
certain circumstances, a call premium.
It is anticipated that dividends paid to holders of remarketed preferred
shares will be considered tax-exempt dividends under the Internal Revenue Code
of 1986. To the extent that the fund earns taxable income and capital gains by
the conclusion of a fiscal year, it will be required to apportion to the
holders of the remarketed preferred shares throughout that year additional
dividends as necessary to result in an after-tax equivalent to the applicable
dividend rate for the period.
Under the Investment Company Act of 1940, the fund is required to maintain
asset coverage of at least 200% with respect to the remarketed preferred
shares as of the last business day of each month in which any such shares are
outstanding. Additionally, the fund is required to meet more stringent asset
coverage requirements under terms of the remarketed preferred shares and the
shares' rating agencies. Should these requirements not be met, or should
dividends accrued on the remarketed preferred shares not be paid, the fund may
be restricted in its ability to declare dividends to common shareholders or
may be required to redeem certain of the remarketed preferred shares. At April
30, 1998, no such restrictions have been placed on the fund.
Federal tax information
(Unaudited)
The fund has designated 100% of dividends paid from net investment income
during the fiscal year as exempt for Federal income tax purposes.
The Form 1099 you receive in January 1999 will show the tax status of all
distributions paid to your account in calendar 1998.
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT
ACCOUNTANTS
Price Waterhouse LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
William J. Curtin
Vice President
Blake E. Anderson
Vice President
Jerome J. Jacobs
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
Call 1-800-225-1581 weekdays from 9 a.m. to 5 p.m. Eastern Time, or visit our
website (www.putnaminv.com) any time for up-to-date information about the
fund's NAV.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
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Putnam
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