PUTNAM ASSET ALLOCATION FUNDS
Putnam Asset Allocation: Growth Portfolio ("Growth Portfolio")
Putnam Asset Allocation: Balanced Portfolio
("Balanced Portfolio")
Putnam Asset Allocation: Conservative Portfolio
("Conservative Portfolio")
Prospectus Supplement dated June 10, 1996 to
Prospectuses dated February 1, 1996
The Trustees of the Trust have approved changes in the
funds' investment policies that will permit each of the Growth
and Balanced Portfolios to invest up to 60% of its total assets
in foreign securities and the Conservative Portfolio to invest up
to 40% of its total assets in foreign securities. Eurodollor
certificates of deposit are not considered foreign securities for
these purposes. The prospectuses are supplemented by adding the
following disclosure:
Fund transactions in foreign currencies and hedging activities
will likely produce a difference between book income and taxable
income. This difference may cause a portion of income
distributions to constitute a return of capital for tax purposes
or require the fund to make distributions exceeding book income
to qualify as a regulated investment company for tax purposes.
If at the end of the fiscal year more than 50% of the value of
the fund's total assets represents securities of foreign
corporations, the fund intends to make an election permitted by
the Internal Revenue Code to treat any foreign taxes it paid as
paid by shareholders. In this case, shareholders who are U.S.
citizens, U.S. corporations and, in some cases, U.S. residents
generally will be required to include in U.S. taxable income
their pro rata share of such taxes, but may then generally be
entitled to claim a foreign tax credit or deduction (but not
both) for their share of such taxes.
