(logo)
Putnam
Managed
High Yield
Trust
Semiannual
Report
November 30, 1993
(artwork)
For investors seeking high current income with a secondary
objective of capital growth
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Semiannual Report
6 Report of Independent Accountants
7 Portfolio of investments owned
12 Financial statements
19 Fund performance supplement
<PAGE>
How your
fund performed
For period ended November 30, 1993
Total return* Fund First Boston
NAV Market price High Yield Index
Life-of-fund
(since 6/25/93**) 4.98% -7.97% 5.66%
Share data NAV Market price
June 25, 1993 $14.01 $15.000
November 30, 1993 $14.25 $13.375
Distributions Investment
6/25/93-11/30/93 Number income Total
November 30, 1993 4 $0.44 $0.44
Current returns
at the end of the period NAV Market price
Current dividend rate 9.26% 9.87%
*Performance data represent past results. Investment return, net
asset value and market price will fluctuate so an investor's
shares, when sold, may be worth more or less than their original
cost.
**Commencement of operations.
<PAGE>
Terms you need to know
Total return is the change in value of an investment from the
beginning to the end of a period, assuming the reinvestment of
all distributions. It may be shown at net asset value or at
market price.
Net asset value (NAV) is the value of all your fund's assets,
minus any liabilities, divided by the number of outstanding
shares, not reflecting any sales charge.
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.
Current dividend rate is calculated by annualizing the income
portion of the fund's most recent distribution and dividing by
the NAV or market price on the last day of the period.
Please see the fund performance supplement on page 19 for
additional information about performance comparisons.
<PAGE>
From the
Chairman
(photograph of George Putnam)
(C) Karsh, Ottawa
George Putnam
Chairman
of the Trustees
Dear Shareholder:
The results of Putnam Managed High Yield Trust's first semiannual
period, from the June 25, 1993, inception date through November
30, 1993, shows the fund's ability to deliver attractive
performance. In the five-month period, the fund posted a total
return of nearly 5% at net asset value. Additionally, the fund's
dividend rate of 9.26%, also at net asset value, is certainly
appealing in today's low interest rate environment.
As Fund Manager Jennifer Leichter explains in the Report from
Putnam Management that follows, the current economic environment
of slow growth and low inflation, combined with investors' demand
for higher yields, has been quite favorable for your fund's
holdings, despite a market correction that occurred just after
the fund began operations. Furthermore, the strength and depth of
Putnam's high-yield management team enabled the fund to take
advantage of many significant investment opportunities that were
often not available to, or discovered by, individual investors or
most other institutional managers.
We are optimistic that these positive market conditions will
extend into fiscal 1994, and that your fund will continue to
benefit.
Respectfully yours,
George Putnam
January 19, 1994
<PAGE>
Report from
Putnam Management
Putnam Managed High Yield Trust began operations on June 25,
1993, with the investment objective of seeking high current
income. Capital growth is a secondary objective of the fund when
consistent with seeking high current income. In its first five
months, the fund has easily met its income objective -- its
dividend rate of 9.26% at net asset value as of November 30,
1993, is particularly attractive in today's low interest rate
environment. This high level of income, combined with a rise of
$0.24 in the fund's net asset value, led to the fund's 4.98%
return at net asset value for the period -- a positive step
toward the fund's secondary objective.
Supply and demand drive the market As you know, the fund pursues
its objective primarily through investments in higher-yielding,
lower-rated corporate bonds. The fund began operations at a time
when this sector of the fixed-income market was experiencing a
dramatic rise in prices, brought on by investors seeking an
income advantage in the face of historically low interest rates.
Along with growing demand, however, supply also began to rise.
Issuers of higher-yielding, lower-rated bonds capitalized on the
demand for even the slightest yield advantage, leading to a flood
of new issues. Fear of an oversupply, combined with a downturn in
the stock market, finally led to a drop in prices in the fall.
These fears proved unfounded, however, and the market -- along
with the fund -- soon rebounded from the correction.
Broad industry focus Although we believed many of the early new
issues were overpriced, the market correction did result in more
compelling values. When we did identify timely buying
opportunities, the expertise and capabilities of our research
staff were invaluable in pinpointing the industries and specific
issues that best enhanced the overall portfolio composition.
Bonds from companies in industries such as recreation, cable
television, retailing, insurance, and finance made significant
contributions to the fund's total return.
The current period of economic recovery has been unlike other
post-recessionary climates. Today, companies are more
cost-conscious, technology plays an expanded role in production
and the domestic economy has experienced a stronger influence
from abroad. These structural changes have given rise to
inconsistent performance among different industry sectors. In
response, we have maintained a broadly diversified portfolio,
with holdings spread among a wide range of industries and
issuers. We plan to continue this level of diversification,
focusing investment selections on less actively traded bonds
issued by companies with solid cash flows and other attractive
fundamentals.
<PAGE>
Exploring special opportunities One of the fund's most attractive
features is its flexibility to invest in private placements, bond
issues that are arranged directly between the issuer and key
investors. Such issues accounted for an estimated $40-$45 billion
worth of high-yield securities in 1993 and Putnam's position as
one of the largest and strongest high-yield management teams
helped us take advantage of opportunities that were not always
offered to most other institutional investors. Such securities
accounted for slightly more than 19% of the fund's holdings at
the end of the fiscal period.
Positive outlook for 1994 As the fund begins the second half of
fiscal 1994, many companies are operating with excess capacity,
consumers are generally not accepting any corporate attempts to
raise prices and global demand for goods is weak. These factors
keep the threat of inflation at bay. Low inflation, supported by
moderate economic growth, bodes well for the high-yield bond
market. Continued strong demand for yield adds the potential for
further price appreciation within the sector, although the income
stream of the bonds also plays a large role in the total return
of these securities.
Given our still-positive outlook on the high-yield market, it
remains our mission to identify those opportunities that will
best meet the fund's objectives. With research as our guiding
principle, we look forward to building a successful track record
for Putnam Managed High Yield Trust.
(Bar chart)
Top industry sectors (Based on percentage of net assets as of
11/30/93)
Recreation ..............................12.6%
Broadcasting ......................7.0%
Cable Television ................5.7%
Chemicals ...........4.5%
<PAGE>
Putnam
Managed
High Yield
Trust
Semiannual
Report
For the period June 25, 1993 (commencement of operations)
to November 30, 1993
Report of Independent Accountants
To the Trustees and Shareholders of
Putnam Managed High Yield Trust
In our opinion, the accompanying statement of assets and
liabilities, including the portfolio of investments owned 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 Managed High Yield
Trust (the "Fund") at November 30, 1993, and the results of its
operations, the changes in its net assets and the financial
highlights for the period 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 audit. We conducted our audit 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 audit, which included confirmation of
investments owned at November 30, 1993 by correspondence with the
custodian and brokers and the application of alternative auditing
procedures where confirmations from brokers were not received,
provides a reasonable basis for the opinion expressed above.
Price Waterhouse
Boston, Massachusetts
January 18, 1994
<PAGE>
Portfolio of
investments owned
November 30, 1993
Corporate Bonds and Notes (97.6%)(a)
Principal Amount Value
Recreation (12.6%)
$1,500,000 American Casinos Inc. 1st mtge.
deb. 12 1/2s, 1998 (acquired
7/9/93, cost $1,597,500)(b) $1,590,000
550,000 Arizona Charlies Corp. sub.
deb. 12s, 2000(c) 547,250
800,000 Bally's Casino Inc. sr. disc.
notes zero %, 1998(c) 504,000
150,000 Belle Casinos Inc. sr. sub.
notes 12s, 2000(c) 149,250
400,000 Capitol Queen Corp. sr. sub.
deb. 12s, 2000(c) 352,000
350,000 Casino America Corp. sr. notes
11 1/2s, 2001 357,875
1,400,000 Casino Magic Finance Corp. 1st
mtge. deb. 11 1/2s, 2001(c) 1,386,000
800,000 Elsinore Corp. Unit sub. deb.
12 1/2s, 2000(c) 792,000
1,000,000 Golden Nugget Finance Corp. 1st
mtge. deb. 10 5/8s, 2003 965,000
1,500,000 Grand Casino Resorts Inc.
notes 12 1/2s, 2000 1,616,250
164,000 Louisiana Casino Cruise Corp.
sr. sub. 11 1/2s, 1998(c) 165,230
300,000 Presidential Riverboat Casinos
sr. sub. notes 11 3/4s, 2001(c) 291,000
1,500,000 Sam Houston Race Park sr. secd.
notes 11 3/4s, 1999(c) 1,507,500
250,000 Treasure Bay Gaming 1st. mtge.
notes 12 1/4s, 2000(c) 255,000
1,518,000 Trump Castle Funding sr. sub.
units 9 1/2s, 1998(d) 1,252,350
1,750,000 Trump Taj Mahal sub. deb. Ser.
A, 11.35s, 1999(d) 1,754,375
13,485,080
Broadcasting (7.0%)
1,000,000 Continental Broadcasting sr. sub.
notes 10 5/8s, 2003 1,025,000
1,000,000 Granite Broadcasting Corp. sr.
sub. deb. 12 3/4s, 2002 1,030,000
500,000 New City Broadcasting Corp. sr.
sub. notes 11 3/8s, 2003 511,250
<PAGE>
1,500,000 Outlet Broadcasting, Inc. sr.
sub. notes 10 7/8s, 2003 1,526,250
3,000,000 Panamsat L.P. sr. sub. notes
stepped-coupon zero %
(11 3/8s, 8/1/98), 2003(e) 1,920,000
1,500,000 SPI Holdings Inc. sr. sub. ext.
reset notes 11 1/2s, 2002 1,522,500
7,535,000
Cable Television (5.7%)
500,000 Cablevision Industries Corp. sub.
deb. 9 1/4s, 2008 510,000
1,100,000 Continental Cablevision, Inc. sr.
deb. 9 1/2s, 2013 1,210,000
2,000,000 Insight Communications Co. sr.
sub. notes stepped-coupon 8 1/4s
(11 1/4s, 3/1/96), 2000(e) 1,965,000
1,250,000 Jones Intercable, Inc. deb.
10 1/2s, 2008 1,350,000
1,000,000 Summit Communications Group, Inc.
sr. sub. deb.
10 1/2s, 2005 1,072,500
6,107,500
Chemicals (4.5%)
1,000,000 Agricultural Minerals & Chemicals
Corp. sr. notes 10 3/4s, 2003 1,032,500
1,500,000 Arcadian Partners L.P. sr. notes
10 3/4s, 2005 1,569,375
1,000,000 G-I Holdings Inc. sr. notes
zero %, 1998(c) 617,500
2,500,000 UCC Investors Holding, Inc. sub.
notes stepped-coupon
zero % (10 1/2s, 5/1/98), 2005(e) 1,625,000
4,844,375
Metals and Mining (4.5%)
1,500,000 Haynes International, Inc. Ser. B,
sr. notes 11 1/4s, 1998 1,522,500
2,000,000 Horsehead Industries, Inc. sub.
notes 14s, 1999 1,820,000
1,500,000 Kaiser Aluminum & Chemical Corp.
sr. sub. notes
12 3/4s, 2003 1,473,750
4,816,250
Retail (3.9%)
250,000 Brylane L.P. Inc. sr. sub. notes
10s, 2003(c) 255,938<PAGE>
2,500,000 Finlay Enterprises Inc. sr. disc.
deb. stepped-coupon zero %
(12s, 5/1/98), 2005(e) 1,550,000
2,000,000 Loehmann's Holdings Inc. sr. sub.
notes 10 1/2s, 1997(c) 1,860,000
500,000 Parisian Inc. sr. sub. notes 9
7/8s, 2003 497,500
4,163,438
Health Care (3.5%)
165,000 Abbey Healthcare Group Inc. sr.
sub. notes 9 1/2s, 2002 168,300
2,700,000 EPIC Holdings Inc. sr. notes
stepped-coupon zero %
(12s, 3/15/97), 2002(e) 1,957,500
1,500,000 Ornda Healthcorp sr. sub. notes 12
1/4s, 2002 1,680,000
3,805,800
Building Products (3.5%)
1,000,000 American Standard, Inc. sub.
deb. 12 3/4s, 2003 1,035,000
2,500,000 American Standard, Inc. sr.
sub. deb. stepped-coupon
zero % (10 1/2s, 6/1/98), 2005(e) 1,618,750
1,000,000 Triangle Pacific sr. notes 10
1/2s, 2003 1,041,250
3,695,000
Cellular Communications (3.4%)
750,000 Cellular, Inc. sr. sub. disc.
notes stepped-coupon
zero % (11 3/4s, 9/1/98), 2003(e) 487,500
1,500,000 Comcast Cellular Corp. sr. participating
notes Ser. A, zero %, 2000 922,500
1,250,000 Horizon Cellular Telephone Co. sr.
sub. disc. notes stepped-coupon
zero % (11 3/8s, 10/1/97),
2000(c)(e) 875,000
2,000,000 NEXTEL Communications Inc. sr.
disc. notes stepped-coupon
zero % (11 1/2s, 9/1/98), 2003(e) 1,340,000
3,625,000
Conglomerates (3.3%)
1,000,000 Collins & Aikman Group, Inc. sr.
sub. deb. 11 7/8s, 2001 1,025,000
1,250,000 Jordan Industries, Inc. sr.
notes 10 3/8s, 2003 1,262,500
850,000 Talley Industries, Inc. sr. disc.
deb. stepped-coupon zero %
(12 1/4s, 10/15/98), 2005(e) 476,000
745,000 Universal Outdoor Inc. sub. deb.
11s, 2003(c) 756,175
3,519,675
Agriculture (3.2%)
600,000 PMI Acquisition Corp. sr. sub.
notes 10 1/4s, 2003 627,000
902,000 PMI Acquisition Corp. units
stepped-coupon zero %
(11 1/2s, 3/1/00), 2005(c)(e) 448,745
2,250,000 Premium Standard Farms sr. secd.
notes 12s, 2000(c) 2,356,875
3,432,620
Forest Products (3.2%)
2,500,000 Gaylord Container Corp. sr. sub.
deb. stepped-coupon zero %
(12 3/4s, 5/15/96), 2005(e) 1,975,000
1,000,000 Stone Container Corp. sr. sub.
notes 10 3/4s, 1997 900,000
500,000 Williamhouse Regency Delaware,
Inc. sr. sub. deb. 11 1/2s, 2005 520,000
3,395,000
Publishing (2.7%)
1,750,000 Affinity Group Inc. sr. sub.
notes 11 1/2s, 2003 1,841,873
1,750,000 Marvel Holdings, Inc. sr. secd.
notes zero %, 1998 1,085,000
2,926,873
Specialty Consumer Products (2.6%)
1,140,000 Equitable Bag Co. sr. notes
12 3/8s, 2002 991,800
1,000,000 Playtex Family Products Corp.
sr. sub. disc. notes
stepped-coupon zero % (14 3/4s,
12/15/93), 1997(e) 1,057,500
1,500,000 Revlon Worldwide Corp. sr. secd.
disc. notes zero %, 1998 753,750
2,803,050
Advertising (2.6%)
1,600,000 Lamar Advertising Co. sr. secd.
notes 11s, 2003 1,684,000
<PAGE>
1,000,000 Outdoor Systems Inc. deb. 10
3/4s, 2003 1,045,000
2,729,000
Transportation (Marine) (2.4%)
1,500,000 OMI Corp. sr. notes 10 1/4s, 2003 1,515,000
1,000,000 Viking Star Shipping Co. sr. secd.
notes 9 5/8s, 2003(c) 1,020,000
2,535,000
Insurance (2.1%)
1,000,000 American Annuity Group, Inc. sr.
notes 9 1/2s, 2001 1,022,500
300,000 Reliance Group Holdings sr.
sub. notes 9 3/4s, 2003 306,000
900,000 Reliance Group Holdings sr.
notes 9s, 2000 904,500
2,233,000
Finance (2.1%)
2,000,000 Comdata Network, Inc. sr. sub.
deb. 13 1/4s, 2002 2,225,000
Automotive Parts (1.9%)
450,000 Exide Corp. sr. sub. deb.
stepped-coupon zero %
(12 1/4s, 12/15/97), 2004(e) 310,500
1,500,000 Key Plastics Corp. sr. notes
14s, 1999 1,762,500
2,073,000
Steel (1.7%)
1,500,000 WCI Steel Co. deb. 12 5/8s, 2002 1,800,000
Restaurants (1.7%)
500,000 Flagstar Corp. sr. sub. deb.
11 1/4s, 2004 502,500
1,250,000 Flagstar Corp. sr. sub. notes
11 3/8s, 2003 1,284,375
1,786,875
Textiles (1.5%)
1,500,000 Foamex (L.P.) Capital Corp. sr.
notes 11 1/4s, 2002 1,616,250
Medical Supplies (1.4%)
1,500,000 Wright Medical Technology Inc.
sr. secd. notes
10 3/4s, 2000(c) 1,500,000
Electric Utilities (1.3%)
1,393,038 Midland Cogeneration Venture L.P.
sr. secd. lease oblig. bonds
10.33s, 2002 1,438,312
Entertainment (1.3%)
300,000 Cinemark Mexico sr. notes 12s, 2003(c) 282,750
1,000,000 Cinemark USA sr. notes 12s, 2002 1,120,000
1,402,750
Real Estate (1.2%)
1,250,000 Kearny Street Real Estate L.P.
secd. notes 9.56s, 2003 1,278,125
Food Chains (1.2%)
8,500,000 Grand Union Capital Corp. gtd.
sr. sub. notes zero %, 2007 1,062,500
200,000 Megafoods Stores Inc. sr.
notes 10 1/4s, 2000 196,000
1,258,500
Food (1.1%)
750,000 Specialty Foods Corp. sr. sub.
notes 11 3/4s, 2003(c) 772,500
850,000 Specialty Foods Corp. units
stepped-coupon 1/2s
(13s, 8/15/99), 2005(c)(e) 414,375
1,186,875
Business Services (1.0%)
1,000,000 Unisys Corp. sr. notes 10 5/8s, 1999 1,072,500
Gas (1.0%)
1,000,000 TransTexas Gas Corp. sr. secd.
notes 10 1/2s, 2000 1,065,000
Electronics (1.0%)
2,000,000 International Semi-Tech Corp.
sr. secd. disc. notes
stepped-coupon zero % (11 1/2s,
8/15/00), 2003(e) 1,040,000
Apparel (1.0%)
1,000,000 Guess Jeans, Inc. sr. sub. notes
10s, 2003(c) 1,020,000
Oil (1.0%)
1,000,000 Giant Industries Inc. sr. sub.
notes 9 3/4s, 2003 1,015,000
<PAGE>
Containers (0.9%)
1,000,000 Anchor Glass Container Corp. sr.
sub. deb. 9 7/8s, 2008 1,010,000
Airlines (0.9%)
1,000,000 USAir, Inc. sr. notes 10 3/8s, 2013 993,750
Environmental Services (0.9%)
1,000,000 Envirosource, Inc. sr. notes
9 3/4s, 2003 980,000
Communications (0.8%)
150,000 Page Mart Inc. sr. disc. units
stepped-coupon zero % (12 1/4s,
11/1/98), 2003(c)(e) 888,750
Home Furnishings (0.6%)
666,293 Simmons Mattress Corp. deb. 8s,
2003(c)(d) 637,976
Banks (0.5%)
500,000 Chevy Chase Savings Bank Inc.
sub. notes 9 1/4s,
2005 508,750
Electrical Equipment (0.4%)
366,000 Amphenol Corp. sr. sub. notes
12 3/4s, 2002 406,260
Computers (0.4%)
500,000 Computervision Corp. sr. sub.
notes 11 3/8s, 1999 385,000
Consumer Services (0.1%)
150,000 ADT Ltd. sr. sub. notes
9 1/4s, 2003 153,750
Total Corporate Bonds and Notes
(cost $103,005,363) $104,394,084
Yankee Bonds and Notes (0.7%)(a) (cost $746,565)
Principal Amount Value
$750,000 Banco De Galicia Inc. sr.
notes 9s, 2003 $748,125
<PAGE>
Common Stocks (0.3%)(a)(f)
Number of Shares Value
5,000 Finlay Enterprises Inc. Class A $57,500
12,750 Specialty Foods Corp. 21,516
5,053 Taj Mahal Holding Corp. Class A 113,693
10,000 Triangle Pacific Corp. 145,000
Total Common Stocks (cost $226,383) $337,709
Warrants (0.3%)(a)(f)
Number of Shares Expiration Date Value
25,000 Becker Gaming Corp.(c) 11/15/00 $62,500
150 Belle Casinos Inc. 10/15/03 6,000
3,340 Cinemark Mexico 8/1/03 30,895
1,800 Presidential Riverboat Casinos 9/15/96 7,650
6,000 Sam Houston Corp. 7/15/99 135,000
618 Wright Medical Technology Inc. 6/30/03 52,500
Total Warrants
(cost $161,225) $294,545
Total Investments
(cost $104,139,536)(g) $105,774,463
Notes
(a) Percentages indicated are based on net assets of
$106,943,904, which correspond to a net asset value per share of
$14.25.
(b) Restricted as to public resale other than Rule 144A
securities. At the date of acquisition these securities were
valued at cost. There were no outstanding unrestricted securities
of the same class as those held. Total market value of restricted
securities owned at November 30, 1993 was $1,590,000 or 1.5% of
net assets.
(c) Securities exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At November 30, 1993, these securities were
valued at $19,718,314 or 18.4% of net assets.
(d) Income may be received in additional securities or cash at
the discretion of the issuer.
(e) The interest rate and date shown parenthetically represent
the next interest rate to be paid and the date the Fund will
begin accruing this rate.
(f) Non-income-producing security.
(g) The aggregate identified cost on a tax basis is $104,165,474,
resulting in gross unrealized appreciation and depreciation of
$2,351,652 and $742,663, respectively, or net unrealized
appreciation of $1,608,989.
<PAGE>
<TABLE>
<CAPTION>
Statement of
assets and liabilities
November 30, 1993
<S> <C> <C>
Assets
Investments in securities, at value (identified cost
$104,139,536) (Note 1) $105,774,463
Interest receivable 2,094,117
Receivable for securities sold 1,942,000
Unamortized organization expenses (Notes 1 and 2) 27,298
Total assets 109,837,878
Liabilities
Payable to subcustodian (Note 3) $199,808
Distributions payable to shareholders 825,383
Payable for securities purchased 1,164,000
Payable for compensation of Manager (Note 3) 197,067
Payable for investor servicing and custodian
fees (Note 3) 44,694
Payable to Trustees (Note 3) 77
Payable for administrative services (Note 3) 1,097
Payable for offering and organization expense
(Notes 1 and 2) 419,462
Other accrued expenses 42,386
Total liabilities 2,893,974
Net assets $106,943,904
Represented by
Paid-in capital $105,235,422
Undistributed net investment income 820,716
Accumulated net realized loss on investments (747,161)
Net unrealized appreciation of investments 1,634,927
Net assets $106,943,904
Computation of net asset value
Net asset value per share ($106,943,904 divided by
7,507,107 shares) $14.25
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Statement of
operations
For the period June 25, 1993 (commencement of operations) to November 30, 1993
<S> <C> <C>
Interest income $4,631,638
Expenses:
Compensation of Manager (Note 3) $333,710
Investor servicing and custodian fees (Note 3) 90,323
Compensation of Trustees (Note 3) 2,960
Reports to shareholders 2,500
Auditing 21,388
Legal 15,206
Postage 2,612
Administrative services (Note 3) 2,742
Exchange listing fees 24,945
Amortization of organization expenses (Note 1) 2,586
Other expenses 9,366
Total expenses 508,338
Net investment income 4,123,300
Net realized loss on investments (Notes 1 and 4) (747,161)
Net unrealized appreciation of investments
during the period 1,634,927
Net gain on investments 887,766
Net increase in net assets resulting from operations $5,011,066
/TABLE
<PAGE>
Statement of
changes in net assets
For the period
June 25, 1993
(commencement
of operations) to
November 30
-----------------
1993
Increase in net assets
Operations:
Net investment income $4,123,300
Net realized loss on investments (747,161)
Net unrealized appreciation of investments 1,634,927
Net increase in net assets resulting from operations 5,011,066
Distributions to shareholders from net
investment income (3,302,654)
Increase from capital share transactions (Note 2) 105,135,422
Total increase in net assets 106,843,834
Net assets
Beginning of period 100,070
End of period (including undistributed net
investment income of $820,716) $106,943,904
Number of fund shares
Shares outstanding at beginning of period 7,107
Shares issued in public offering 7,500,000
Shares outstanding at end of period (Note 2) 7,507,107
<PAGE>
Financial
highlights
(For a share outstanding throughout the period)*
For the period
June 25, 1993
(commencement
of operations) to
November 30
-----------------
1993
Net Asset Value, Beginning of Period $14.01*
Investment Operations:
Net Investment Income .55
Net Realized and Unrealized Gain on Investments .13
Total from Investment Operations .68
Less Distributions from:
Net Investment Income (.44)
Total Distributions (.44)
Net Asset Value, End of period $14.25
Total Investment Return at Market Value (%) -18.53(a)
Net Assets, End of Period (in thousands) $106,944
Ratio of Expenses to Average Net Assets (%) 1.14(a)
Ratio of Net Investment Income to Average
Net Assets (%) 9.28(a)
Portfolio Turnover Rate (%) 39.60(b)
*Represents initial net asset value of $14.07 less offering
expenses of approximately $0.06.
(a) Annualized
(b) Not annualized
<PAGE>
Notes to
financial statements
November 30, 1993
Note 1 Significant accounting policies
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. The Fund intends to achieve its objective by
investing in high yielding income securities.
The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with
generally accepted accounting principles.
A) Security valuation Investments for which market quotations are
readily available are stated at market value, which is determined
using the last reported sale price, or, if no sales are reported
- -- as in the case of some securities traded over-the-counter --
the last reported bid price, except that certain U.S. government
obligations are stated at the mean between the last reported bid
and asked prices. Market quotations are not considered to be
readily available for long-term corporate bonds and notes; such
investments are stated at fair value on the basis of valuations
furnished by a pricing service, approved by the Trustees, which
determines valuations for normal, institutional-size trading
units of such securities using methods based on market
transactions for comparable securities and various relationships
between securities that are generally recognized by institutional
traders. Short-term investments having remaining maturities of 60
days or less are stated at amortized cost, which approximates
market value, and other investments, including restricted
securities, are stated at fair value following procedures
approved 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 and dividend income is recorded on the ex-dividend
date.
Discount on zero coupon bonds, original issue discount bonds,
stepped coupon bonds and payment in kind securities is accreted
according to the effective yield method.
<PAGE>
C) 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. Therefore, no provision has been made for federal taxes on
income, capital gains or unrealized appreciation of securities
held and excise tax on income and capital gains.
D) Distributions to shareholders Income dividends are declared
and distributed monthly by the Fund. Capital gains distributions,
if any, are recorded on the ex-dividend date and paid annually.
E) Unamortized organization expenses Expenses incurred by the
Fund in connection with its organization aggregated $29,884.
These expenses are being amortized on a straight-line basis over
a five-year period.
Note 2 Initial capitalization and offering of shares
The Fund was established as a Massachusetts business trust under
the laws of The Commonwealth of Massachusetts on April 16, 1993.
During the period June 10, 1993 to June 24, 1993, the Fund had no
operations other than those related to organizational matters,
including the initial capital contribution of $100,000 and the
issuance of common shares to Putnam Investments, Inc. on June 10,
1993.
On June 25, 1993, the Fund completed the initial offering of
6,600,000 of its common shares for which it received net proceeds
of $92,862,000 before deducting $389,578 of initial offering
expenses. Such offering expenses and the Fund's organizational
expenses of $29,884 were paid initially by Putnam Investment
Management, Inc., the Fund's Manager, a wholly-owned subsidiary
of Putnam Investments, Inc., and the Fund will reimburse the
Manager for such costs. During the period June 10, 1993 to June
25, 1993, invested initial capital resulted in interest income of
$70. Regular Investment operations commenced on June 25, 1993.
On August 3, 1993, the Fund completed a supplemental offering of
900,000 shares for which it received net proceeds of $12,663,000.
<PAGE>
Note 3 Management fee, administrative services, and other
transactions
Compensation of Putnam Investment Management, Inc., the Fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc.,
for management and investment advisory services is paid quarterly
based on the average weekly net assets of the Fund. Such
management and investment advisory fee is based on the following
annual rate: 0.55% of the first $500 million, 0.48% of the next
$500 million, 0.44% of the next $500 million, and 0.40% of any
excess over $1.5 billion. The Fund compensates the Manager for
administrative services based on quarterly net assets of the
Fund. Such administrative fees are based on the following annual
rate: 0.20% of the first $500 million, 0.17% of the next $500
million, 0.16% of the next $500 million and 0.15% of any excess
over $1.5 billion.
The Fund also reimburses the Manager 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. For the period ended November 30, 1993, the Fund paid
$2,742 for these services.
Trustees of the Fund receive an annual Trustee's fee of $610 and
an additional fee for each Trustees' meeting attended. Trustees
who are not interested persons of the Manager and who serve on
committees of the Trustees receive additional fees for attendance
at certain committee meetings.
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. Fees paid for
these investor servicing and custodial functions for the period
ended November 30, 1993 amounted to $90,323. Investor servicing
and custodian fees reported in the Statement of operations for
the period ended November 30, 1993 have been reduced by credits
allowed by PFTC.
As part of the custodian contract between PFTC and the
subcustodian bank, the subcustodian has a lien on the securities
of the Fund to the extent permitted by the Fund's investment
restrictions to cover any advances by the subcustodian for the
settlement of securities purchased by the Fund.
<PAGE>
Note 4 Purchases and sales of securities
During the period ended November 30, 1993, purchases and sales of
investment securities other than short-term investments
aggregated $143,003,993 and $39,190,675, respectively. In
determining the net gain or loss on securities sold, the cost of
securities has been determined on the identified cost basis.
<PAGE>
<TABLE>
<CAPTION>
Selected
Quarterly Data
(Unaudited)
For the period
June 25, 1993
Three months (commencement
ended of operations) to
November 30 August 31
------------ -----------------
1993 1993
<S> <C> <C>
Total investment income
Total $2,883,439 $1,748,199
Per Share $.38 $.24
Net investment income
Total $2,565,194 $1,558,106
Per Share $.34 $.21
Net realized and unrealized gain (loss)
on investments
Total $1,684,482 $(796,716)
Per Share $.22 $(.09)
Net increase in net assets resulting
from operations
Total $4,249,676 $761,390
Per Share $.56 $.12
Net assets available at end of period
Total $106,943,904 $105,218,364
Per Share $14.25 $14.02
/TABLE
<PAGE>
Fund performance
supplement
Putnam Managed High Yield Trust is a portfolio managed for high
current income. Capital growth is a secondary objective. The fund
is designed for investors willing to assume additional risk in
return for the potential for high current income and capital
growth. The fund invests in lower-rated securities, which may
pose a greater risk to principal than higher-rated securities.
High-yield securities are rated lower than investment-grade
securities because there is a greater possibility that negative
changes in the issuer's financial condition, or in general
economic conditions, may hinder the issuer's ability to pay
principal and interest on securities. The First Boston High Yield
Index is an unmanaged list of higher-yielding, lower-rated
corporate bonds. Index performance is tracked monthly and does
not include the effects of sales charges. The fund's portfolio
contains securities that do not match those in the index.
The fund performance supplement has been prepared by Putnam
Management to provide additional information about the fund and
the indexes used for performance comparisons. The information is
not part of the portfolio of investments owned or the financial
statements.
<PAGE>
Putnam
Managed
High Yield
Trust
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
Investor servicing agent
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
1-800-225-1581
Custodian
Putnam Fiduciary
Trust Company
Legal counsel
Ropes & Gray
Independent accountants
Price Waterhouse
(DALBAR logo)
Putnam Investor Services has received the DALBAR award each year
since the award's 1990 inception. In more than 10,000 tests of 38
shareholder service components, Putnam outperformed the industry
standard in every category.
MHYT-10027<PAGE>
Officers
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Gary N. Coburn
Vice President
Edward D'Alelio
Vice President
and Fund Manager
Jennifer Leichter
Vice President
and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul O'Neil
Vice President
John D. Hughes
Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
Trustees
George Putnam, Chairman,
William F. Pounds, Vice Chairman,
Hans H. Estin, John A. Hill,
Elizabeth T. Kennan, Lawrence J. Lasser,
Robert E. Patterson, Donald S. Perkins,
George Putnam, III, A.J.C. Smith,
W. Nicholas Thorndike
Call 1-800-634-1587 weekdays from 9 a.m. to 5 p.m. Eastern time
for up-to-date information about the fund's NAV or to request
Putnam's quarterly Closed-End Fund Commentary.
- ---------------
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
- ---------------
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
<PAGE>
APPENDIX TO FORM N30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN
PRINTED AND EDGAR-FILED TEXTS:
(1) Rule lines for tables are omitted.
(2) Boldface and italic typefaces are displayed in normal type.
(3) Headers (e.g, the name of the fund) and footers (e.g., page
numbers and "The accompanying notes are an integral part of these
financial statements") are omitted.
(4) Because the printed page breaks are not reflected, certain
tabular and columnar headings and symbols are displayed
differently in this filing.
(5) Bullet points and similar graphic signals are omitted.
(6) Page numbering is different.
