Prospectus Supplement
dated September 14, 1998 to: 46396 9/98
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Putnam New Value Fund (the "fund")
Prospectuses dated December 31, 1997
The first paragraph under the heading "How the fund pursues its
objective - Basic investment strategy" is replaced with the
following:
HOW THE FUND PURSUES ITS OBJECTIVE
BASIC INVESTMENT STRATEGY
The fund will invest primarily in common stocks which Putnam
Investment Management, Inc., the fund's investment manager
("Putnam Management"), believes are undervalued at the time of
purchase and have the potential for long-term capital
appreciation. Because Putnam Management evaluates securities for
the fund based on their long-term potential for capital
appreciation, the fund's investments may not appreciate over the
shorter term, and as a result the fund's total return over
certain periods may be less than that of other equity mutual
funds. Putnam Management's investment decisions for the fund may
be contrary to those of most other investors.
