PUTNAM ASSET ALLOCATION FUNDS
PUTNAM ASSET ALLOCATION: GROWTH PORTFOLIO
PUTNAM ASSET ALLOCATION: BALANCED PORTFOLIO
PUTNAM ASSET ALLOCATION: CONSERVATIVE PORTFOLIO
Class A, B and C Shares
Supplement dated March 8, 1995 to
Prospectus dated February 1, 1995
The Funds also offer Class M shares pursuant to this Prospectus.
Accordingly, the Prospectus is revised as follows:
(1) The following information supplements the information under
"Expenses Summary":
CLASS M
SHARES
SHAREHOLDER TRANSACTION
EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 3.50%*
Deferred Sales Charge (as a percentage of
the lower of original purchase price or redemption
proceeds) NONE
* The higher 12b-1 fees borne by Class M shares may cause
long-term shareholders to pay more than the economic
equivalent of the maximum permitted front-end sales charge
on Class A shares.
ANNUAL FUND OPERATING EXPENSES
CLASS M SHARES
---------------
GROWTH BALANCED CONSERVATIVE
PORTFOLIO PORTFOLIO PORTFOLIO
------- ------- -------
Management Fees 0.70% 0.70% 0.33%+
12b-1 Fees 0.75% 0.75% 0.75%
Other Expenses 0.63% 0.30% 0.67%
Total Fund Operating
Expenses 2.08% 1.75% 1.75%+
+ (after expense limitation)
The table is provided to help you understand the expenses of
investing in each Fund and your share of the operating
expenses which each Fund expects to incur during its first
full fiscal year. The estimated management fees shown in the
table for the Conservative Portfolio reflect an expense
limitation currently in effect. In the absence of the expense
limitation, estimated management fees and total Fund operating
expenses for Class M shares of the Conservative Portfolio
would be 0.70% and 2.12%, respectively. The 12b-1 fees shown
in the table reflect the amount to which the Trustees
currently limit payments under the Class M Distribution Plan.
"Management fees" and "Other expenses" are based on estimated
amounts for each Fund's first full fiscal year and for the
Growth and Balanced Portfolios do not reflect an expense
limitation terminated as of December 31, 1994. No Class M
shares were outstanding during the last fiscal period.
EXAMPLE
Your investment of $1,000 would incur the following expenses,
assuming 5% annual return and redemption at the end of each
period:
1 year 3 years
Growth Portfolio
Class M $55 $98
Balanced Portfolio
Class M $52 $88
Conservative Portfolio
Class M $52 $88
The Example does not represent past or future expense levels.
Actual expenses may be greater or less than those shown.
Federal regulations require the Example to assume a 5% annual
return, but actual annual return will vary.
(2) THE FOLLOWING PARAGRAPH IS ADDED AFTER THE SECOND PARAGRAPH
UNDER "HOW PERFORMANCE IS SHOWN":
"Yield" and "total return" for Class M shares are calculated
in the same manner as they are for each Fund's Class A shares.
(3) THE LAST PARAGRAPH UNDER "ALTERNATIVE SALES ARRANGEMENTS" IS
REPLACED BY THE FOLLOWING:
CLASS M SHARES. An investor who purchases Class M shares pays
a sales charge at the time of purchase which is lower than the
sales charge applicable to Class A shares. Class M shares are
not subject to any contingent deferred sales charge when they
are redeemed. Certain purchases of Class M shares qualify for
reduced sales charges. Class M shares currently bear a 12b-1
fee at the annual rate of 0.75% of a Fund's average net assets
attributable to Class M shares. See "How to buy shares--Class
M Shares."
WHICH ARRANGEMENT IS BETTER FOR YOU? The decision as to which
class of shares provides a more suitable investment for an
investor depends on a number of factors, including the amount
and intended length of the investment. Investors making
investments that qualify for reduced sales charges might
consider Class A or Class M shares. Investors who prefer not
to pay an initial sales charge might consider Class B or Class
C shares. Orders for Class B shares for $250,000 or more or
orders for Class C shares for $1,000,000 or more will be
treated as orders for Class A shares or declined. For more
information about these sales arrangements, consult your
investment dealer or Putnam Investor Services. Sales
personnel may receive different compensation depending on
which class of shares they sell. Shares may only be exchanged
for shares of the same class of another Putnam fund. See
"How to exchange shares."
(4) THE FIRST SENTENCE IN THE FIRST PARAGRAPH UNDER "HOW TO BUY
SHARES" IS REPLACED BY THE FOLLOWING:
You can open a Fund account with as little as $500 (in the cse
of Class A, Class B and Class M shares) and make additional
investments at any time with as little as $50.
(5) THE FOLLOWING PARAGRAPH IS ADDED AFTER THE PARAGRAPH UNDER
"HOW TO BUY SHARES--CLASS C SHARES":
Class M shares
The public offering price of Class M shares is the net asset
value plus a sales charge. A Fund receives the net asset
value. The sales charge varies depending on the size of your
purchase and is allocated between your investment dealer and
Putnam Mutual Funds. The current sales charges are:
SALES CHARGE
AS A PERCENTAGE OF:
-------------------
AMOUNT OF SALES
CHARGE REALLOWED
AMOUNT OF NET TO DEALERS
TRANSACTION AT AMOUNT OFFERING AS A PERCENTAGE OF
OFFERING PRICE INVESTED PRICE OFFERING PRICE*
-----------------------------------------------------------------------
Less than $50,000 3.63% 3.50% 3.00%
$50,000 but less than 100,000 2.56 2.50 2.00
100,000 but less than 250,000 1.52 1.50 1.00
250,000 but less than 500,000 1.01 1.00 1.00
500,000 and above NONE NONE NONE
-----------------------------------------------------------------------
* At the discretion of Putnam Mutual Funds, however, the entire sales
charge may at times be reallowed to dealers. The Staff of the
Securities and Exchange Commission has indicated that dealers who
receive more than 90% of the sales charge may be considered
underwriters.
Class M shares do not convert into any other class of shares.
You may also be eligible to buy Class M shares at reduced sales
charges in the same manner as Class A shares. See "How to Buy
Shares--Class A shares." Each Fund may sell Class M shares at
net asset value without an initial sales charge in the same
manner as the Fund may sell Class A shares. See "How to Buy
Shares--General." In addition, sales charges will not apply to
Class M shares purchased with redemption proceeds received within
the prior ninety days from non-Putnam mutual funds on which the
investor paid a front-end or contingent deferred sales change.
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(6) THE SUB-HEADING "DISTRIBUTION PLANS--CLASS B AND CLASS C
DISTRIBUTION PLANS" AND THE FIRST PARAGRAPH AFTER SUCH HEADING ARE
REPLACED BY THE FOLLOWING:
Class B, Class C and Class M Distribution Plans. The Class B,
Class C and Class M Plans provide for payments by the Funds to
Putnam Mutual Funds at the annual rate of up to 1.00% of the
Fund's average net assets attributable to Class B shares, Class C
shares and Class M shares, as the case may be. The Trustees
currently limit payments under the Class M Plan to the annual
rate of 0.75%. Should the Trustees decide in the future to
approve payments in excess of this amount, shareholders will be
notified and this Prospectus will be revised.
The amount paid to dealers at the time of the sale of Class M
shares is set forth above under "How to buy shares--Class M
Shares." In addition, in order to further compensate dealers
(including, for this purpose, certain financial institutions) for
services provided in connection with sales of Class M shares and
the maintenance of shareholder accounts, Putnam Mutual Funds
makes quarterly payments to qualifying dealers based on the
average net asset value of Class M shares which are attributable
to shareholders for whom the dealers are designated as the dealer
of record. Putnam Mutual Funds makes such payments at an annual
rate of 0.65% of such average net asset value of Class M shares.
(7) THE FIRST SENTENCE OF THE FIRST PARAGRAPH UNDER "HOW TO
EXCHANGE SHARES" IS REPLACED BY THE FOLLOWING:
You can exchange your Class A, Class B or Class M shares for
shares of the same class of another Putnam fund at net asset
value beginning 15 days after purchase.
(8) THE LAST SENTENCE OF THE FIRST PARAGRAPH UNDER "HOW
DISTRIBUTIONS ARE MADE; TAX INFORMATION" IS REPLACED BY THE
FOLLOWING:
Distributions paid by each Fund with respect to Class A shares
will generally be greater than those paid with respect to Class
B, Class C and Class M shares because expenses attributable to
Class B, Class C and Class M shares will generally be higher.
