44867 7/98
Prospectus Supplement
dated July 13, 1998 to:
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Putnam Diversified Equity Trust
Prospectus dated June 30, 1998
The following is inserted at the end of the section entitled "How
the fund pursues its objective - Futures and options."
Swap Agreements
The fund may enter into "over-the-counter" transactions with
broker-dealers or other financial institutions in which its
investment return will depend on the change in value of a
specified security or index. The fund would typically receive
from the counterparty the amount of any increase, and pay to the
counterparty the amount of any decrease, in the value of the
underlying security or index. The contracts would thus, absent
the failure of the counterparty to complete its obligations,
provide to the fund approximately the same return as it would
have realized if it had owned the security or index directly.
The fund's ability to realize a profit from such transactions
will depend on the ability of the financial institutions with
which it enters into the transactions to meet their obligations
to the fund. Under certain circumstances, suitable transactions
may not be available to the fund, or the fund may be unable to
close out its positions under such transactions at the same
times, or at the same prices, as if it had purchased comparable
publicly traded securities.
