Putnam
California
Investment Grade
Municipal Trust
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
10-31-00
[SCALE LOGO OMITTED]
FROM THE TRUSTEES
[GRAPHIC OMITTED: PHOTO OF JOHN A. HILL AND GEORGE PUTNAM III]
Dear Shareholder:
It is a pleasure to greet you in our new roles as Chairman of the
Trustees and President of the Funds. As you know, both of us have been
members of the Board of Trustees for a number of years -- years during
which the global securities markets, the mutual fund industry, and
Putnam itself have experienced tremendous growth and change.
As we look to the future, we are certain that the changes will be
breathtaking in their scope. What will not change is the Trustees'
dedication to serving the best interests of our shareholders.
We welcome the challenges that lie ahead and are confident that Putnam
and your Board will continue to face those challenges successfully as
they have for more than 60 years. We look forward to helping you meet
your financial objectives for many years to come.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
December 20, 2000
REPORT FROM FUND MANAGEMENT
Richard P. Wyke
This year, investors have been reminded of a basic principle of
investing: when the financial markets turn around, they move so fast
that those who are not already positioned in the recovering sector are
often too late to benefit. When the Nasdaq plunged in March, setting off
a long string of declines in other equity markets, bonds were suddenly
the place to be. The municipal bond market and especially the
California bond market, had already begun to anticipate the beginning
of a slowdown in the economy -- and delivering better performance to
investors who had maintained their positions, including investors in
Putnam California Investment Grade Municipal Trust.
Total return for 6 months ended 10/31/00
NAV Market price
-----------------------------------------------------------------------
6.60% 11.66%
-----------------------------------------------------------------------
Past performance is not indicative of future results. Performance
information for longer periods begins on page 5.
* INVESTMENT GRADE SECTOR PERFORMED WELL
For most of the past six months, we have begun to see positive total
returns as interest rates in the municipal market have fallen. The
investment grade and AAA/Aaa-rated sectors of the municipal market have
benefited the most. As a result, we witnessed a dramatic difference in
yield between the highest-rated and lowest-rated municipal bonds (known
as credit yield spread). As spreads have widened, your fund has
benefited because its portfolio comprises almost 94% investment-grade
bonds, including over 60% AAA/Aaa-rated bonds.
As investors have moved into the higher-quality municipal bonds, pushing
up their prices, the prices of lower-rated bonds have lagged. This price
drop created an unusual opportunity for us to invest in a greater number
of lower-rated (BBB/Baa) investment grade bonds at undervalued prices,
with the goal of increasing the fund's income level. However, it is
important to note that we are continuing to look for well-known bonds,
issues that have provided solid disclosure to potential investors. This
strategy will be especially beneficial if yield spreads begin to
narrow, as we believe they will. At this stage credit selection becomes
extremely important, and depends on the most meticulous research
efforts on the part of Putnam's analytical team.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Utilities 25.0%
Health care 22.8%
Education 12.5%
Entertainment 11.8%
Financial 9.5%
Footnote reads:
*Based on net assets as of 10/31/00. Holdings will vary over time.
Revenue bonds issued to support toll roads offer relatively high yields,
because of the inherent uncertainties surrounding construction and
traffic flows. During the past six months, one such holding, the toll
road bonds issued by the San Joaquin Hills Transportation Corridor --
have performed especially well in terms of income and price
appreciation. Known as the Eastern Foothills Toll Road in Orange County,
this highway has been open for over a year and revenues over the summer
were running well ahead of projections. The element of risk associated
with the construction phase has dissipated and the strength of this
issue now lies in the revenue stream that is seemingly off to a good
start. Additionally, California's robust economy is generating increased
truck traffic, which generates higher tolls than noncommercial traffic.
Standard & Poor's rates the Eastern Foothills Toll Road bonds Baa3. The
bonds bear a 5.75% coupon until they mature on January 15, 2040.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
AAA/Aaa -- 64.1%
AA/Aa -- 10.8%
A -- 5.0%
BBB/Baa -- 13.8%
BB/Ba -- 6.3%
Footnote reads:
*As a percentage of market value as of 10/31/00. A bond rated BBB/Baa or
higher is considered investment grade. All ratings reflect Moody's
descriptions unless noted otherwise; percentages may include unrated
bonds considered by Putnam Management to be of comparable quality.
Ratings will vary over time.
* GROWING DEMAND FOR CALIFORNIA PAPER DESPITE LIGHT SUPPLY
Not only has there been strong demand for higher-quality municipal bonds
in recent months, but there also has been an exceptionally strong demand
for California tax-exempt paper. High demand for municipal bonds,
countered by a shrinking supply, has driven California bond prices to
higher levels and contributed to the positive total return performance
of your fund. Many analysts believe that the higher demand for
tax-exempt investments in California is coming from newly created
technology wealth. Evidence of the vast amount of new wealth can be seen
in the large state budget surplus, where revenues outpaced estimates by
almost $6 billion.
The California bond supply is light because state and local governments
are flush with revenues from a strong economy, holding down any impetus
to issue bonds. The result of this lopsided supply/demand relationship
has meant that California bonds, which also carry solid credit ratings,
have outperformed municipal bonds from other states. Currently, Moody's
and Standard & Poor's rate California general obligation bonds Aa2 and
AA respectively.
* OUTLOOK FOR IMPROVED PERFORMANCE
Recent economic reports indicated that the U.S economy is still healthy,
but growing more slowly than earlier in the year. The Fed did not raise
interest rates in November and the odds are good it will move to a
neutral bias if the equity markets remain volatile. Inflation seems to
be tame, projected to be in the 3% to 4% range. As performance improves
in the municipal bond market, the investments in your fund, especially
the bonds at the lower end of the investment-grade spectrum, offer the
opportunity for increased tax-exempt income and potential price
appreciation.
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 10/31/00, there is no guarantee the fund
will continue to hold these securities in the future.
A NOTE ABOUT DUPLICATE MAILINGS
In response to investors' requests, the SEC has modified mailing regulations
for semiannual and annual reports and prospectuses. Putnam is now able to
send a single copy of these materials to customers who share the same address.
This change will automatically apply to all shareholders except those who
notify us. If you would prefer to receive your own copy, please call Putnam at
1-800-225-1581.
PERFORMANCE SUMMARY
This section provides information about your fund's performance, which
should always be considered in light of its investment strategy. Putnam
California Investment Grade Municipal Trust is designed for investors
seeking high current income free from federal and California income tax,
consistent with preservation of capital.
TOTAL RETURN FOR PERIODS ENDED 10/31/00
Lehman Brothers
Market Municipal Consumer
(common shares) NAV price Bond Index price index
-------------------------------------------------------------------------------
6 months 6.60% 11.66% 5.72% 1.52%
-------------------------------------------------------------------------------
1 year 8.58 13.91 8.51 3.45
-------------------------------------------------------------------------------
5 years 32.86 45.97 32.05 13.14
Annual average 5.85 7.86 5.72 2.50
-------------------------------------------------------------------------------
Life of fund
(11/27/92) 74.22 62.08 62.60 22.46
Annual average 7.25 6.28 6.33 2.59
-------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 9/30/00(most recent calendar quarter)
NAV Market price
-------------------------------------------------------------------------------
6 months 4.94% 23.28%
-------------------------------------------------------------------------------
1 year 6.32 12.13
-------------------------------------------------------------------------------
5 years 35.42 54.40
Annual average 6.25 9.08
-------------------------------------------------------------------------------
Life of fund (11/27/92) 73.25 68.90
Annual average 7.26 6.91
-------------------------------------------------------------------------------
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.
PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 10/31/00
-------------------------------------------------------------------------------
Distributions (common shares)
-------------------------------------------------------------------------------
Number 6
-------------------------------------------------------------------------------
Income $0.435
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Capital gains1 --
-------------------------------------------------------------------------------
Total $0.435
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Preferred shares Series A (320 shares)
-------------------------------------------------------------------------------
Income $878.35
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Total $878.35
-------------------------------------------------------------------------------
Share value (common shares) NAV Market price
-------------------------------------------------------------------------------
4/30/00 $14.14 $13.438
-------------------------------------------------------------------------------
10/31/00 14.63 14.563
-------------------------------------------------------------------------------
Current return common shares (end of period)
-------------------------------------------------------------------------------
Current dividend rate2 5.94% 5.98%
-------------------------------------------------------------------------------
Taxable equivalent3 10.85 10.91
-------------------------------------------------------------------------------
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 Most recent distribution, excluding capital gains, annualized and
divided by NAV or POP at end of period.
3 Assumes maximum 45.22% federal and state tax rate. Results for
investors subject to lower tax rates would not be as advantageous.
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 share of the fund.
Market prices are set by transactions between buyers and sellers on the
New York 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. It assumes reinvestment of all distributions and
interest payments and does not take into account brokerage fees or
taxes. Securities in the fund do not match those in the index and
performance of the fund will differ. It is not possible to invest
directly in an index.
Consumer price index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
A GUIDE TO THE FINANCIAL STATEMENTS
These sections of the report 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.
<TABLE>
<CAPTION>
THE FUND'S PORTFOLIO
October 31, 2000 (Unaudited)
KEY TO ABBREVIATIONS
AMBAC -- AMBAC Indemnity Corporation
COP -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GNMA Coll. -- Government National Mortgage Association Collateralized
G.O. Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- Municipal Bond Investors Assurance Corporation
VRDN -- Variable Rate Demand Notes
MUNICIPAL BONDS AND NOTES (98.8%) (a)
PRINCIPAL AMOUNT RATING (RAT) VALUE
<S> <C> <C> <C>
California (98.8%)
-------------------------------------------------------------------------------------------------------------------
ABAG Fin. Auth. COP
$ 2,000,000 (American Baptist Homes), Ser. A, 6.2s, 10/1/27 BBB $ 1,865,000
1,000,000 (Odd Fellows Home), 6s, 8/15/24 AA 1,031,250
2,000,000 Alameda, Recreational Fac. Imps. COP, MBIA,
5 3/4s, 12/1/21 Aaa 2,057,500
4,200,000 Anaheim, Pub. Fin. Auth. Lease Rev. Bonds
(Pub. Impts.), Ser. C, FSA, 6s, 9/1/16 Aaa 4,646,250
3,000,000 Berkeley, Hlth. Fac. Rev. Bonds (Alta Bates
Med. Ctr.), Ser. A, 6.55s, 12/1/22 A2 3,202,500
1,000,000 CA Cmnty. Dev. Auth. Rev. Bonds (United Airlines),
Ser. A, 5.7s, 10/1/33 Baa3 918,750
2,600,000 CA Edl. Fac. Auth. Rev. Bonds (U. of San Francisco),
6.4s, 10/1/17 Aaa 2,762,500
CA Hlth. Fac. Auth. Rev. Bonds
3,000,000 (Henry Mayo Newhall), Ser. A, 8s, 10/1/18 AA 3,007,890
1,500,000 (Sinai Med. Ctr.), Ser. A, 6 1/4s, 12/1/34 A2 1,533,750
1,600,000 (Sutter Health), Ser. A, 5 3/8s, 8/15/30 AAA 1,560,000
2,065,000 CA Hsg. Fin. Agcy. Rev. Bonds (Multi-Fam. Hsg. III),
Ser. B, MBIA, 5 1/2s, 8/1/39 AAA 1,938,519
2,000,000 CA State Dept. Wtr. Resources IFB (Central Valley),
10.122s, 12/1/12 (acquired 11/27/92,
cost 2,198,104) (RES) Aa2 2,835,000
2,000,000 CA State G.O. Bonds, 5 3/4s, 12/1/29 AA 2,055,000
2,000,000 CA State Pub. Wks. Board Lease Rev. Bonds
(Dept. of Corrections Monterey Cnty. Sole),
Ser. A, 7s, 11/1/19 Aaa 2,242,500
1,250,000 CA Statewide Cmnty. Dev. Auth. COP
(The Internext Group), 5 3/8s, 4/1/30 BBB 1,075,000
1,500,000 CA Statewide Cmty. Dev. Auth Rev. Bonds
(United Airlines, Inc.), 5 5/8s, 10/1/34 Baa3 1,368,750
Central CA Joint Pwr. Hlth. Fin. Auth. COP
(Cmnty. Hospitals of Central CA)
1,000,000 6s, 2/1/30 A- 992,500
1,000,000 6s, 2/1/20 A- 998,750
1,750,000 Delano, COP (Delano Regl. Med. Ctr.), 5.6s,
1/1/26 BBB- 1,441,563
1,500,000 Duarte, COP, Ser. A, 5 1/4s, 4/1/31 Baa2 1,290,000
1,500,000 Foothill/Eastern Corridor Agcy. CA Toll Road Rev.
Bonds, 5 3/4s, 1/15/40 Baa3 1,462,500
600,000 Indio, Multi-Fam. Rev. Bonds VRDN (Carreon),
Ser. A, 3.95s, 8/1/26 A-1+ 600,000
3,120,000 Los Angeles, Multi-Fam. Rev. Bonds
(Mission Plaza Apts.), Ser. A, GNMA Coll.,
7.8s, 1/20/35 AAA 3,435,900
1,500,000 Metropolitan Wtr. Dist. Rev. Bonds (Southern
CA Waterwks.), Ser. B, MBIA, 4 3/4s, 7/1/21 Aaa 1,366,875
Northern CA Pwr. Agcy. Multi. Cap. Fac. IFB, MBIA
2,830,000 6.538s, 8/1/25 Aaa 3,074,088
2,370,000 6.538s, 8/1/25 Prerefunded Aaa 2,630,700
1,000,000 Orange Cnty., Pub. Fin. Auth. Waste Mgt. Syst.
Rev. Bonds, AMBAC, 5 3/4s, 12/1/10 Aaa 1,080,000
3,250,000 Rancho, Wtr. Dist. Fin. Auth. IFB, AMBAC,
9.524s, 8/17/21 Aaa 3,501,063
5,000,000 Sacramento, Muni. Util. Dist. Elec. Rev. Bonds,
FGIC, 6.3s, 8/15/18 Aaa 5,187,500
4,750,000 Santa Clara Cnty. Fin. Auth. Lease Rev. Bonds
(VMC Fac. Replacement), Ser. A, AMBAC,
6 7/8s, 11/15/14 (SEG) Aaa 5,308,125
750,000 Tustin CA Unified School Dst Cfd (Cmnty. Facs.
Dist. No 97-1), 6 1/4s, 9/1/21 BBB+/P 754,688
3,000,000 U. of CA Hosp. Rev. Bonds (U. of CA, Med. Ctr.),
AMBAC, 5 3/4s, 7/1/15 Aaa 3,127,500
5,000,000 Vallejo, COP (Marine World Foundation),
7s, 2/1/17 BBB-/P 5,193,750
3,345,000 Victor, Elementry School Dist. COP
(School Construction Refinancing), MBIA,
6.45s, 5/1/18 Aaa 3,859,292
West Contra Costa U. School Dist. COP
1,860,000 7 1/8s, 1/1/24 Baa3 1,955,325
1,015,000 6 7/8s, 1/1/09 Baa3 1,096,200
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $78,718,323) (b) $ 82,456,478
-------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $83,453,549.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to
be the most recent ratings available at October 31, 2000 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 October 31, 2000. Securities rated by Putnam are indicated
by "/P" and are not publicly rated.
(b) The aggregate identified cost on a tax basis is $78,718,323,
resulting in gross unrealized appreciation and depreciation of
$5,281,548 and $1,543,393, respectively, or net unrealized appreciation
of $3,738,155.
(RES) Restricted, excluding 144A securities, as to public resale. The
total market value of restricted securities held at October 31, 2000 was
$2,835,000 or 3.4% of net assets.
(SEG) A portion of this security was pledged and segregated with the
custodian to cover margin requirements for futures contracts at October
31, 2000.
The rates shown on IFB, which are securities paying interest rates
that vary inversely to changes in the market interest rates, and VRDN's
are the current interest rates at October 31, 2000.
The fund had the following industry group concentrations greater
than 10% at October 31, 2000 (as a percentage of net assets):
Utilities 25.0%
Health care 22.8
Education 12.5
Entertainment 11.8
The fund had the following insurance concentrations greater than
10% at October 31, 2000 (as a percentage of net assets):
MBIA 17.9%
AMBAC 15.6
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Futures Contracts Outstanding at October 31, 2000 (Unaudited)
Aggregate Face Expiration Unrealized
Total Value Value Date Appreciation
------------------------------------------------------------------------------
Municipal Bond
Index (Long) $3,584,250 $3,568,833 Dec-00 $15,417
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000 (Unaudited)
<S> <C>
Assets
-------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $78,718,323) (Note 1) $82,456,478
-------------------------------------------------------------------------------------------
Cash 277,946
-------------------------------------------------------------------------------------------
Interest receivable 1,267,702
-------------------------------------------------------------------------------------------
Total assets 84,002,126
Liabilities
-------------------------------------------------------------------------------------------
Payable for variation margin 12,375
-------------------------------------------------------------------------------------------
Distributions payable to shareholders 333,984
-------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 150,491
-------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 12,615
-------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 10,939
-------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,274
-------------------------------------------------------------------------------------------
Other accrued expenses 26,899
-------------------------------------------------------------------------------------------
Total liabilities 548,577
-------------------------------------------------------------------------------------------
Net assets $83,453,549
Represented by
-------------------------------------------------------------------------------------------
Series A remarketed preferred shares (320 shares issued and
outstanding at $50,000 per share) (Note 4) $16,000,000
-------------------------------------------------------------------------------------------
Paid-in capital -- common shares (unlimited shares authorized) (Note 1) $64,109,972
-------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 127,341
-------------------------------------------------------------------------------------------
Accumulated net realized loss on investment (Note 1) (537,336)
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 3,753,572
-------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $83,453,549
Computation of net asset value
-------------------------------------------------------------------------------------------
Series A remarketed preferred shares $16,000,000
-------------------------------------------------------------------------------------------
Cumulative undeclared dividends on remarketed preferred shares 29,151
-------------------------------------------------------------------------------------------
Net assets allocated to remarketed preferred shares --
liquidation preference $16,029,151
-------------------------------------------------------------------------------------------
Net assets available to common shares $67,424,398
-------------------------------------------------------------------------------------------
Net asset value per common share ($67,424,398 divided by 4,607,092 shares) $14.63
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six months ended October 31, 2000 (Unaudited)
<S> <C>
Tax exempt interest income: $2,602,313
-------------------------------------------------------------------------------------------
Expenses:
-------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 295,981
-------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 35,444
-------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 3,484
-------------------------------------------------------------------------------------------
Administrative services (Note 2) 1,883
-------------------------------------------------------------------------------------------
Auditing 31,015
-------------------------------------------------------------------------------------------
Preferred share remarketing agent fees 18,667
-------------------------------------------------------------------------------------------
Other 17,943
-------------------------------------------------------------------------------------------
Total expenses 404,417
-------------------------------------------------------------------------------------------
Expense reduction (Note 2) (14,022)
-------------------------------------------------------------------------------------------
Net expenses 390,395
-------------------------------------------------------------------------------------------
Net investment income 2,211,918
-------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 33,363
-------------------------------------------------------------------------------------------
Net realized gain on futures contracts (Note 1) 297,154
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures during the period 2,030,096
-------------------------------------------------------------------------------------------
Net gain on investments 2,360,613
-------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $4,572,531
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six months ended Year ended
October 31 April 30
2000* 2000
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
--------------------------------------------------------------------------------------------------
Operations:
--------------------------------------------------------------------------------------------------
Net investment income $2,211,918 $4,442,138
--------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 330,517 (631,887)
--------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments 2,030,096 (5,385,758)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 4,572,531 (1,575,507)
Distributions to remarketed preferred shareholders:
--------------------------------------------------------------------------------------------------
From net investment income (281,072) (603,132)
--------------------------------------------------------------------------------------------------
From net realized gains on investments -- (3,619)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations applicable to common shareholders
(excluding cumulative undeclared dividends on
remarketed preferred shares of $29,151 and
$5,260, respectively) 4,291,459 (2,182,258)
--------------------------------------------------------------------------------------------------
Distributions to common shareholders:
--------------------------------------------------------------------------------------------------
From net investment income (2,003,963) (4,007,772)
--------------------------------------------------------------------------------------------------
From net realized gains -- (25,800)
--------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 2,287,496 (6,215,830)
Net assets
--------------------------------------------------------------------------------------------------
Beginning of period 81,166,053 87,381,883
--------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $127,341 and $200,458, respectively) $83,453,549 $81,166,053
--------------------------------------------------------------------------------------------------
Number of fund shares
--------------------------------------------------------------------------------------------------
Common shares outstanding at beginning and end of period 4,607,092 4,607,092
--------------------------------------------------------------------------------------------------
Remarketed preferred shares outstanding at beginning
and end of period 320 320
--------------------------------------------------------------------------------------------------
*Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
---------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share October 31
operating performance (Unaudited) Year ended April 30
---------------------------------------------------------------------------------------------------------------
2000 2000 1999 1998 1997 1996
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period (common shares) $14.14 $15.49 $15.37 $14.80 $14.55 $14.16
---------------------------------------------------------------------------------------------------------------
Investment operations:
---------------------------------------------------------------------------------------------------------------
Net investment income .48 .96 .98 1.01 1.06 1.04
---------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .52 (1.30) .18 .61 .24 .41
---------------------------------------------------------------------------------------------------------------
Total from investment operations 1.00 (.34) 1.16 1.62 1.30 1.45
---------------------------------------------------------------------------------------------------------------
Less distributions:
---------------------------------------------------------------------------------------------------------------
From net investment income
---------------------------------------------------------------------------------------------------------------
To preferred shareholders (.07) (.13) (.11) (.12) (.12) (.13)
---------------------------------------------------------------------------------------------------------------
To common shareholders (.44) (.87) (.87) (.85) (.91) (.93)
---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
---------------------------------------------------------------------------------------------------------------
To preferred shareholders -- --(d) (.01) (.01) --(d) --
---------------------------------------------------------------------------------------------------------------
To common shareholders -- (.01) (.05) (.07) (.02) --
---------------------------------------------------------------------------------------------------------------
Total distributions (.51) (1.01) (1.04) (1.05) (1.05) (1.06)
---------------------------------------------------------------------------------------------------------------
Net asset value, end of period
(common shares) $14.63 $14.14 $15.49 $15.37 $14.80 $14.55
---------------------------------------------------------------------------------------------------------------
Market price, end of period
(common shares) $14.56 $13.44 $15.56 $15.25 $15.00 $14.38
---------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
---------------------------------------------------------------------------------------------------------------
Total return at market
value (common shares)(%)(a) 11.66* (8.02) 8.11 7.71 11.02 12.68
---------------------------------------------------------------------------------------------------------------
Net assets, end of period
(total fund)(in thousands) $83,454 $81,166 $87,382 $86,818 $84,205 $83,064
---------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b)(c) .59* 1.21 1.22 1.19 1.23 1.26
---------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%)(b) 2.86* 5.72 5.52 5.80 6.28 6.11
---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 2.62* 17.48 13.87 25.26 35.98 125.01
---------------------------------------------------------------------------------------------------------------
(a) Total return assumes dividend reinvestment.
(b) Ratio reflects net assets available to common shares only; net
investment income ratio also reflects reduction for dividend payments to
preferred shareholders.
(c) Includes amounts paid through expense offset arrangements (Note 2).
(d) Distributions amounted to less than $0.01 per share.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
October 31, 2000 (Unaudited)
Note 1
Significant accounting policies
Putnam California 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 current income exempt from federal
income tax and California personal income tax. The fund intends to
achieve its objective by investing in investment grade municipal
securities constituting a portfolio 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 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) Federal taxes It is the policy of the fund to distribute all of its
taxable 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.
E) Distributions to shareholders Distributions to common and preferred
shareholders from net investment income are recorded by the fund on the
ex-dividend date. Capital gains, if any, are recorded on the ex-dividend
date and paid at least annually. 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 October 31, 2000 was 3.5%. The amount and character of income
and gains to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting
principles. Reclassifications are made to the fund's capital accounts to
reflect income and gains available for distribution (or available
capital loss carryovers) under income tax regulations.
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.
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 0.70% 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 six months ended October 31, 2000, fund expenses were reduced by
$14,022 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 $412
has been allocated to the fund, and an additional fee for each Trustees
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.
Note 3
Purchases and sales of securities
During the six months ended October 31, 2000, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $2,706,790 and $2,122,990, respectively. There
were no purchases and sales of U.S. government obligations.
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 October 31, 2000, no such
restrictions have been placed on the fund.
RESULTS OF OCTOBER 5, 2000 SHAREHOLDER MEETING
(Unaudited)
A meeting of shareholders of the fund was held on October 5, 2000. At
the meeting, each of the nominees for Trustees was elected, as follows:
Common Shares
Votes
Votes for withheld
Jameson Adkins Baxter 4,330,090 41,961
Hans H. Estin 4,328,648 43,403
R.J. Jackson 4,329,090 42,961
Paul L. Joskow 4,330,890 41,161
Elizabeth T. Kennan 4,326,990 45,061
Lawrence J. Lasser 4,330,890 41,161
John H. Mullin III 4,329,090 42,961
George Putnam, III 4,330,190 41,861
A.J.C. Smith 4,328,548 43,503
W. Thomas Stephens 4,330,890 41,161
W. Nicholas Thorndike 4,330,348 41,703
Preferred Shares
Votes
Votes for withheld
John A. Hill 320 0
Robert E. Patterson 320 0
A proposal to ratify the selection of PricewaterhouseCoopers LLP as the
independent auditors of your fund was approved as follows:
4,319,227 votes for, and 10,428 votes against, with 42,396 abstentions.
All tabulations are rounded to nearest whole number.
FUND INFORMATION
WEB SITE
www.putnaminvestments.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Retail Management, Inc.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
John A. Hill, 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, III
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
Richard P. Wyke
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Richard G. Leibovitch
Vice President
John R. Verani
Vice President
Call 1-800-225-1581 weekdays from 9 a.m. to 5 p.m. Eastern Time, or
visit our Web site (www.putnaminvestments.com) any time for up-to-date
information about the fund's NAV.
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PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
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For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminvestments.com
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