Putnam Convertible Securities Fund – ‘485BPOS’ on 2/28/00

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Document/Exhibit                   Description                      Pages   Size 

 1: 485BPOS     Putnam Convertible Income-Growth Trust               166±   685K 
 2: EX-99.M12B-1PLAN  Miscellaneous Exhibit                            3±    11K 
 3: EX-99.N18F-3PLAN  Miscellaneous Exhibit                            6±    21K 

485BPOS   —   Putnam Convertible Income-Growth Trust
Document Table of Contents

As filed with the Securities and Exchange Commission on     

February 28, 2000         

                                        Registration No. 2-43384
                                                        811-2280
------------------------------------------------------------------------        

SECURITIES AND EXCHANGE COMMISSION          
WASHINGTON, D.C. 20549            

---------------             

FORM N-1A               
                                                            ----
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933            / X /        
                                                            ----
                                                            ----
          Pre-Effective Amendment No.                      /   /
                                                            ----
                                                            ----

         Post-Effective Amendment No.  37                  / X /

                      and/or                                ----
                                                            ----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY        / X /
                   ACT OF 1940                              ----
                                                            ----

                 Amendment No.   29                        / X /

         (Check appropriate box or boxes)                   ----
---------------               
PUTNAM CONVERTIBLE INCOME-GROWTH TRUST              
(Exact Name of Registrant as Specified in Charter)              

One Post Office Square, Boston, Massachusetts 02109             
(Address of Principal Executive Offices) (Zip Code)             

Registrant's Telephone Number, including Area Code              
(617) 292-1000                  
--------------                  

It is proposed that this filing will become effective           
(check appropriate box)                   
----                                                                            
/   /   immediately upon filing pursuant to paragraph (b)                       
----                                                                            
----                                                                            

/ X /   on  February 29, 2000 pursuant to paragraph (b)                         

----                                                                            
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/   /   60 days after filing pursuant to paragraph (a)(1)                       
----                                                                            
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/   /   on (date) pursuant to paragraph (a)(1)                                  

----                                                                            
----                                                                            
/   /   75 days after filing pursuant to paragraph (a)(2)                       
----                                                                            
----                                                                            
/   /   on (date) pursuant to paragraph (a)(2) of Rule 485.                     

----                                                                            

If appropriate, check the following box:                        
----                                                                            
/   /   this post-effective amendment designates a new                          
----    effective date for a previously filed post-effective amendment.         

-----------------------         
JOHN R. VERANI, Vice President          
PUTNAM CONVERTIBLE INCOME-GROWTH TRUST          
One Post Office Square              
Boston, Massachusetts 02109               
(Name and address of agent for service)         
---------------           
Copy to:            
JOHN W. GERSTMAYR, Esquire              
ROPES & GRAY              
One International Place               
Boston, Massachusetts 02110               

Prospectus                                                                      

February 29, 2000                                                               

Putnam Convertible Income-Growth Trust                                          

Class A, B, C and M shares                                                      

Investment Category: Growth and Income                                          

This prospectus explains what you should know about this mutual fund            
before you invest. Please read it carefully.                                    

Putnam Investment Management, Inc. (Putnam Management), which has managed       
mutual funds since 1937, manages the fund.                                      

These securities have not been approved or disapproved by the Securities        
and Exchange Commission nor has the Commission passed upon the accuracy or      
adequacy of this prospectus. Any statement to the contrary is a crime.          

CONTENTS                                                                

2  Fund summary                                                               

2  Goal                                                                       

2  Main investment strategies                                                 

2  Main risks                                                                 

3  Performance information                                                    

4  Fees and expenses                                                          

6  What are the fund's main investment strategies and related risks?          

9  Who manages the fund?                                                      

10  How does the fund price its shares?                                         

11  How do I buy fund shares?                                                   

14  How do I sell fund shares?                                                  

15  How do I exchange fund shares?                                              

16  Fund distributions and taxes                                                

17  Financial highlights                                                        

[LOGO: BOSTON * LONDON * TOKYO]                                                 

Fund summary                                                                    

GOAL                                                                            

The fund seeks, with equal emphasis, current income and capital                 
appreciation. Its secondary objective is conservation of capital.               

MAIN INVESTMENT STRATEGIES -- CONVERTIBLE SECURITIES                            

We invest mainly in U.S. convertible securities. Convertible securities         
typically are bonds, preferred stocks or warrants that can be converted         
into or exchanged for common stock. Most of the convertible securities we       
buy for the fund are convertible into value stocks. Value stocks are those      
we believe are currently undervalued by the market. If we are correct and       
other investors recognize the value of the company, the price of the stock      
may rise.                                                                       

The price of a convertible security normally varies with the price of the       
underlying stock. A convertible security tends to provide a higher yield        
than the underlying stock, which may cushion it against declines in the         
price of that stock. The convertible bonds we buy usually have                  
intermediate- to long-term maturities (three years or longer). We invest        
mainly in midsized and large companies.                                         

MAIN RISKS                                                                      

The main risks that could adversely affect the value of the fund's shares       
and the total return on your investment include:                                

* The risk that the stock price of one or more of the companies in the          
fund's portfolio will fall, or will fail to rise. Many factors can          
adversely affect a stock's performance, including both general financial    
market conditions and factors related to a specific company or industry.    
This risk is generally greater for small and midsized companies, which tend 
to be more vulnerable to adverse developments.                              

* The risk that movements in financial markets will adversely affect the        
price of the fund's investments, regardless of how well the companies in    
which we invest perform. The market as a whole may not favor the types of   
investments we make.                                                        

* The risk that prices of bonds we buy will fall if interest rates rise.        
Interest rate risk is generally higher for investments with longer          
maturities.                                                                 

* The risk that issuers of the bonds we buy will not make timely payments       
of interest and principal. This credit risk is generally higher for debt    
that is below investment-grade in quality. Because the fund invests         
significantly in junk bonds and below investment-grade preferred stocks,    
this risk is heightened for the fund. Investors should carefully consider   
the risks associated with an investment in the fund.                        

You can lose money by investing in the fund. The fund may not achieve its       
goal, and is not intended as a complete investment program. An investment       
in the fund is not a deposit in a bank and is not insured or guaranteed by      
the Federal Deposit Insurance Corporation or any other government agency.       

PERFORMANCE INFORMATION                                                         

The following information provides some indication of the fund's risks. The     
chart shows year-to-year changes in the performance of one of the fund's        
classes of shares, class A shares. The table following the chart compares       
the fund's performance to that of two broad measures of market performance.     
Of course, a fund's past performance is not an indication of future             
performance.                                                                    

[GRAPHIC OMITTED: vertical bar chart]                                           

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES                                  
Plot points                                                                     

1990      -10.02%                                                               
1991       29.40%                                                               
1992       21.09%                                                               
1993       17.03%                                                               
1994       -1.92%                                                               
1995       23.81%                                                               
1996       17.82%                                                               
1997       19.64%                                                               
1998        4.85%                                                               
1999       17.49%                                                               

Performance figures in the bar chart do not reflect the impact of sales         
charges. If they did, performance would be less than that shown. During the     
periods shown in the bar chart, the highest return for a quarter was 14.90%     
(quarter ending 3/31/91) and the lowest return for a quarter was -12.74%        
(quarter ending 9/30/90).                                                       
-----------------------------------------------------------------------         
Average Annual Total Returns (for periods ending 12/31/99)                      
-----------------------------------------------------------------------         
                             Past       Past      Past
                            1 year    5 years   10 years
-----------------------------------------------------------------------         
Class A                                  10.71%     15.16%     12.61%           
Class B                                  11.60%     15.45%     12.42%           
Class C                                  15.66%     15.68%     12.43%           
Class M                                  12.81%     15.14%     12.30%           
S&P 500 Index                            21.04%     28.56%     18.21%           
Lehman Bros. Corp. Bond Index            -1.95%      8.19%      8.22%           
-----------------------------------------------------------------------         

Unlike the bar chart, this performance information reflects the impact of       
sales charges. Both class A and class M share performance reflect the           
current maximum initial sales charges; both class B and class C share           
performance reflect the maximum applicable deferred sales charge if shares      
had been redeemed on 12/31/99 and, for class B, assumes conversion to class     
A shares after eight years. For periods before the inception of class B         
shares (7/15/93), class C shares (7/26/99) and class M shares (3/13/95),        
performance shown for these classes in the table is based on the                
performance of the fund's class A shares, adjusted to reflect the               
appropriate sales charge and the higher 12b-1 fees paid by class B, class C     
and class M shares. The fund's performance is compared to the Standard &        
Poor's 500 Index, an unmanaged index of large-capitalization common stocks      
frequently used as a general measure of U.S. stock market performance, and      
the Lehman Brothers Corporate Bond Index, an unmanaged index of corporate       
bonds.                                                                          

FEES AND EXPENSES                                                               

This table summarizes the fees and expenses you may pay if you invest in        
the fund. Expenses are based on the fund's last fiscal year.                    

Shareholder Fees (fees paid directly from your investment)                      
------------------------------------------------------------------------------- 
                             Class A   Class B   Class C   Class M
------------------------------------------------------------------------------- 
Maximum Sales Charge                                                            
(Load) Imposed on                                                               
Purchases (as a                                                                 
percentage of the                                                               
offering price)                       5.75%     NONE      NONE      3.50%       

Maximum Deferred Sales                                                          
Charge (Load) (as a                                                             
percentage of the                                                               
original purchase price                                                         
or redemption proceeds,                                                         
whichever is lower)                   NONE*     5.00%     1.00%     NONE        
------------------------------------------------------------------------------- 

------------------------------------------------------------------------------- 
Annual Fund Operating Expenses                                                  
(expenses that are deducted from fund assets)                                   
------------------------------------------------------------------------------- 
                                                          Total Annual
                      Management   Distribution   Other     Fund Operating
                Fees         (12b-1) Fees   Expenses  Expenses
------------------------------------------------------------------------------- 
Class A                  0.57%         0.25%         0.16%         0.98%        
Class B                  0.57%         1.00%         0.16%         1.73%        
Class C                  0.57%         1.00%         0.16%         1.73%        
Class M                  0.57%         0.75%         0.16%         1.48%        
------------------------------------------------------------------------------- 
* A deferred sales charge of up to 1% may be imposed on certain redemptions     
of class A shares bought without an initial sales charge.                   

EXAMPLE                                                                         

The example translates the expenses shown in the preceding table into           
dollar amounts. By doing this, you can more easily compare the cost of          
investing in the fund to the cost of investing in other mutual funds. The       
example makes certain assumptions. It assumes that you invest $10,000 in        
the fund for the time periods shown and then, except as shown for class B       
and class C shares, redeem all your shares at the end of those periods. It      
also assumes a 5% return on your investment each year and that the fund's       
operating expenses remain the same. The example is hypothetical; your           
actual costs and returns may be higher or lower.                                
------------------------------------------------------------------------------- 
              1 year       3 years       5 years      10 years
------------------------------------------------------------------------------- 
Class A                  $669          $869        $1,086        $1,707         
Class B                  $676          $845        $1,139        $1,842*        
Class B                                                                         
(no redemption)         $176          $545        $  939        $1,842*       
Class C                  $276          $545        $  939        $2,041         
Class C                                                                         
(no redemption)         $176          $545        $  939        $2,041        
Class M                  $495          $802        $1,130        $2,057         
------------------------------------------------------------------------------- 
* Reflects the conversion of class B shares to class A shares, which pay        
lower 12b-1 fees. Conversion occurs no more than eight years after          
purchase.                                                                   

What are the fund's main investment strategies and related risks?               

Any investment carries with it some level of risk that generally reflects       
its potential for reward. We pursue the fund's goal by investing mainly in      
convertible securities and value stocks. We will consider, among other          
things, a company's financial strength, competitive position in its             
industry, projected future earnings, cash flows and dividends when deciding     
whether to buy or sell investments. A description of the risks associated       
with the fund's main investment strategies follows.                             

* Interest rate risk. The values of bonds and other debt usually rise and       
fall in response to changes in interest rates. Declining interest rates     
generally increase the values of existing debt instruments, and rising      
interest rates generally decrease them. Changes in a debt instrument's      
value usually will not affect the amount of income the fund receives from   
it, but will affect the value of the fund's shares. Interest rate risk is   
generally greater for investments with longer maturities.                   

Some securities give the issuers the option to "call," or redeem, them          
before their maturity date. If an issuer "calls" its securities during a        
time of declining interest rates, we might have to reinvest the proceeds in     
an investment offering a lower yield, and therefore might not benefit from      
any increase in value as a result of declining interest rates.                  

"Premium" investments offer interest rates higher than prevailing               
market rates. However, they involve a greater risk of loss, because their       
values tend to decline over time. You may find it useful to compare the         
fund's yield, which factors out the effect of premium investments, with its     
current dividend rate, which does not factor out that effect.                   

* Credit risk. Investors normally expect to be compensated in proportion to     
the risk they are assuming. Thus, debt of issuers with poor credit          
prospects usually offers higher yields than debt of issuers with more       
secure credit. Higher-rated investments generally offer lower credit risk.  
A company's convertible securities generally receive payments only after    
the company has paid the holders of its non-convertible debt; for this      
reason, the credit risk of a company's convertible securities is generally  
greater than that of its non-convertible debt.                              

We invest mostly in non investment-grade convertible securities. These are      
rated below BBB or its equivalent at the time of purchase by a nationally       
recognized securities rating agency, or are unrated investments that we         
believe are of comparable quality. We may invest up to 10% of the fund's        
net assets in convertible securities rated CC or C or their equivalent at       
the time of purchase by each rating agency rating the investment, and           
unrated investments we believe are of comparable quality. We will not           
invest in non-convertible securities rated below CCC or its equivalent at       
the time of purchase by each rating agency rating the investment or unrated     
securities that we think are of comparable quality. We will not necessarily     
sell an investment if its rating is reduced after we buy it.                    

Investments rated below BBB or its equivalent are known as "junk bonds."        
This rating reflects a greater possibility that the issuers may be unable       
to make timely payments of interest and principal and thus default. If this     
happens, or is perceived as likely to happen, the values of those               
investments are likely to fall. A default or expected default could also        
make it difficult for us to sell the investments at prices approximating        
the values we had previously placed on them. Credit risk is generally           
greater for investments that are issued at less than their face value and       
that require payments of interest only at maturity rather than at intervals     
during the life of the investment.                                              

Credit ratings are based largely on the issuer's historical financial           
condition and the rating agencies' investment analysis at the time of           
rating. The rating assigned to any particular investment does not               
necessarily reflect the issuer's current financial condition, and does not      
reflect an assessment of the investment's volatility or liquidity. Although     
we consider credit ratings in making investment decisions, we perform our       
own investment analysis and do not rely only on ratings assigned by the         
rating agencies. The fund depends more on our ability when we buy               
lower-rated debt than it does when we buy investment-grade debt. We may         
have to participate in legal proceedings or take possession of and manage       
assets that secure the issuer's obligations. This could increase the fund's     
operating expenses and decrease its net asset value.                            

Although investment-grade investments generally have lower credit risk,         
they may share some of the risks of non investment-grade investments.           

* Common stocks. Common stock represents an ownership interest in a             
company. The value of a company's stock may fall as a result of factors     
relating directly to that company, such as decisions made by its management 
or lower demand for the company's products or services. A stock's value may 
also fall because of factors affecting not just the company, but also       
companies in the same industry or in a number of different industries, such 
as increases in production costs. The value of a company's stock may also   
be affected by changes in financial markets that are relatively unrelated   
to the company or its industry, such as changes in interest rates or        
currency exchange rates. In addition, a company's stock generally pays      
dividends only after the company invests in its own business and makes      
required payments to holders of its bonds and other debt. For this reason,  
the value of a company's stock will usually react more strongly than its    
bonds and other debt to actual or perceived changes in the company's        
financial condition or prospects. Stocks of smaller companies may be more   
vulnerable to adverse developments than those of larger companies.          

Companies whose stock we believe is undervalued by the market may have          
experienced adverse business developments or may be subject to special          
risks that have caused their stocks to be out of favor. If our assessment       
of a company's prospects is wrong, or if other investors do not similarly       
recognize the value of the company, then the price of the company's stock       
may fall or may not approach the value we have placed on it.                    

* Foreign investments. We may invest in securities of foreign issuers.          
Foreign investments involve certain special risks. For example, their       
values may decline in response to changes in currency exchange rates,       
unfavorable political and legal developments, unreliable or untimely        
information, and economic and financial instability. In addition, the       
liquidity of these investments may be more limited than for U.S.            
investments, which means we may at times be unable to sell them at          
desirable prices. Foreign settlement procedures may also involve additional 
risks. These risks are generally greater in the case of developing (also    
known as emerging) markets with less developed legal and financial systems. 

Certain of these risks may also apply to U.S. investments that are              
denominated in foreign currencies or that are traded in foreign markets, or     
to securities of U.S. companies that have significant foreign operations.       

* Smaller companies. We may invest in smaller and midsized companies.           
Smaller companies, which may have a market capitalization of less than $1   
billion, are more likely than larger companies to have limited product      
lines, markets or financial resources, or to depend on a small,             
inexperienced management group. Stocks of these companies often trade less  
frequently and in limited volume, and their prices may fluctuate more than  
stocks of larger companies. Stocks of smaller and midsized companies may    
therefore be more vulnerable to adverse developments than those of larger   
companies.                                                                  

* Other investments. In addition to the main investment strategies              
described above, the fund may also make other investments, such as          
investments in common stocks, non-convertible preferred stocks,             
asset-backed securities and derivatives, which may be subject to other      
risks, as described in the fund's statement of additional information       
(SAI).                                                                      

* Alternative strategies. At times we may judge that market conditions make     
pursuing the fund's usual investment strategies inconsistent with the best  
interests of its shareholders. We then may temporarily use alternative      
strategies that are mainly designed to limit losses. However, we may choose 
not to use these strategies for a variety of reasons, even in very volatile 
market conditions. These strategies may cause the fund to miss out on       
investment opportunities, and may prevent the fund from achieving its goal. 

* Changes in policies. The fund's Trustees may change the fund's                
goal, investment strategies and other policies described above without      
shareholder approval, except as otherwise indicated.                        

Who manages the fund?                                                           

The fund's Trustees oversee the general conduct of the fund's business. The     
Trustees have retained Putnam Management to be the fund's investment            
manager, responsible for making investment decisions for the fund and           
managing the fund's other affairs and business. The fund pays Putnam            
Management a quarterly management fee for these services based on the           
fund's average net assets. The fund paid Putnam Management a management fee     
of 0.57% of average net assets for the fund's last fiscal year. Putnam          
Management's address is One Post Office Square, Boston, MA 02109.               

The following officers of Putnam Management have had primary responsibility     
for the day-to-day management of the fund's portfolio since the years shown     
below. Their experience as portfolio managers or investment analysts over       
at least the last five years is also shown.                                     

----------------------------------------------------------------------          
Manager                       Since  Experience                                 
----------------------------------------------------------------------          
Forrest N. Fontana            1998   1993 - Present  Putnam Management          
Senior Vice President                                                           
----------------------------------------------------------------------          
Charles G. Pohl               1992   1983 - Present  Putnam Management          
Senior Vice President                                                           
----------------------------------------------------------------------          

* Year 2000 issues. The fund could be adversely affected if the computer        
systems that we and the fund's other service providers use do not properly  
process and calculate date-related information relating to the year 2000.   
While year 2000-related computer problems could have a negative effect on   
the fund, both in its operations and in its investments, we are working to  
avoid such problems and to obtain assurances from service providers that    
they are taking similar steps. No assurances, though, can be provided that  
the fund will not be adversely impacted by these matters.                   

How does the fund price its shares?                                             

The price of the fund's shares is based on its net asset value (NAV). The       
NAV per share of each class equals the total value of its assets, less its      
liabilities, divided by the number of its outstanding shares. Shares are        
only valued as of the close of regular trading on the New York Stock            
Exchange each day the exchange is open.                                         

The fund values its investments for which market quotations are readily         
available at market value. It values short-term investments that will           
mature within 60 days at amortized cost, which approximates market value.       
It values all other investments and assets at their fair value.                 

The fund translates prices for its investments quoted in foreign currencies     
into U.S. dollars at current exchange rates. As a result, changes in the        
value of those currencies in relation to the U.S. dollar may affect the         
fund's NAV. Because foreign markets may be open at different times than the     
New York Stock Exchange, the value of the fund's shares may change on days      
when shareholders are not able to buy or sell them. If events materially        
affecting the values of the fund's foreign investments occur between the        
close of foreign markets and the close of regular trading on the New York       
Stock Exchange, these investments will be valued at their fair value.           

How do I buy fund shares?                                                       

You can open a fund account with as little as $500 and make additional          
investments at any time with as little as $50 ($25 through systematic           
investing). The fund sells its shares at the offering price, which is the       
NAV plus any applicable sales charge. Your financial advisor or Putnam          
Investor Services generally must receive your completed buy order before        
the close of regular trading on the New York Stock Exchange for your shares     
to be bought at that day's offering price.                                      

You can buy shares:                                                             

* Through a financial advisor. Your advisor will be responsible for             
furnishing all necessary documents to Putnam Investor Services, and may     
charge you for his or her services.                                         

* Through systematic investing. You can make regular investments of $25 or      
more per month through automatic deductions from your bank checking or      
savings account. Application forms are available through your advisor or    
Putnam Investor Services at 1-800-225-1581.                                 

You may also complete an order form and write a check for the amount you        
wish to invest, payable to the fund. Return the check and completed form to     
Putnam Mutual Funds.                                                            

The fund may periodically close to new purchases of shares or refuse any        
order to buy shares if the fund determines that doing so would be in the        
best interests of the fund and its shareholders.                                

WHICH CLASS OF SHARES IS BEST FOR ME?                                           

This prospectus offers you a choice of four classes of fund shares: A, B, C     
and M. This allows you to choose among different types of sales charges and     
different levels of ongoing operating expenses, as illustrated in the "Fees     
and expenses" section. The class of shares that is best for you depends on      
a number of factors, including the amount you plan to invest and how long       
you plan to hold the shares. Here is a summary of the differences among the     
classes of shares:                                                              

Class A shares                                                                  

* Initial sales charge of up to 5.75%                                           

* Lower sales charge for investments of $50,000 or more                         

* No deferred sales charge (except on certain redemptions of shares bought      
without an initial sales charge)                                            

* Lower annual expenses, and higher dividends, than class B, C or M shares      
because of lower 12b-1 fee                                                  

Class B shares                                                                  

* No initial sales charge; your entire investment goes to work for you          

* Deferred sales charge of up to 5.00% if you sell shares within 6 years        
after purchase                                                              

* Higher annual expenses, and lower dividends, than class A or M shares         
because of higher 12b-1 fee                                                 

* Convert automatically to class A shares after 8 years, reducing the           
future 12b-1 fee (may convert sooner in some cases)                         

* Orders for class B shares for $250,000 or more are treated as orders for      
class A shares or refused                                                   

Class C shares                                                                  

* No initial sales charge; your entire investment goes to work for you          

* Deferred sales charge of 1.00% if you sell shares within one year after       
purchase                                                                    

* Higher annual expenses, and lower dividends, than class A or M shares         
because of higher 12b-1 fee                                                 

* No conversion to class A shares, so future 12b-1 fee does not decrease        

* Orders of $1,000,000 or more and orders that, because of a right of           
accumulation or statement of intent, would qualify for the purchase of      
class A shares without an initial sales charge will be treated as orders    
for class A shares or refused                                               

Class M shares                                                                  

* Initial sales charge of up to 3.50%                                           

* Lower sales charge for investments of $50,000 or more                         

* No deferred sales charge                                                      

* Lower annual expenses, and higher dividends, than class B or C shares         
because of lower 12b-1 fee                                                  

* Higher annual expenses, and lower dividends, than class A shares because      
of higher 12b-1 fee                                                         

* No conversion to class A shares, so future 12b-1 fee does not decrease        

------------------------------------------------------------------------------- 
Initial sales charges for class A and M shares                                  
------------------------------------------------------------------------------- 
               Class A sales charge       Class M sales charge
                as a percentage of:        as a percentage of:
------------------------------------------------------------------------------- 
Amount of purchase      Net amount     Offering    Net amount     Offering      
at offering price ($)    invested       price*      invested       price*       
------------------------------------------------------------------------------- 
Under 50,000              6.10%         5.75%        3.63%         3.50%        
50,000 but under                                                                
100,000                   4.71          4.50         2.56          2.50         
100,000 but under                                                               
250,000                   3.63          3.50         1.52          1.50         
250,000 but under                                                               
500,000                   2.56          2.50         1.01          1.00         
500,000 but under                                                               
1,000,000                 2.04          2.00         NONE          NONE         
1,000,000 and above       NONE          NONE         NONE          NONE         
------------------------------------------------------------------------------- 
* Offering price includes sales charge.                                         

Deferred sales charges for class B, class C and certain                         
class A shares                                                                  

If you sell (redeem) class B shares within six years after you bought them,     
you will generally pay a deferred sales charge according to the following       
schedule.                                                                       

Year after purchase       1      2      3      4      5      6     7+           
------------------------------------------------------------------------------- 
Charge                    5%     4%     3%     3%     2%     1%    0%           

A deferred sales charge of 1% will apply to class C shares if redeemed          
within one year of purchase. A deferred sales charge of up to 1% may apply      
to class A shares purchased without an initial sales charge, if redeemed        
within two years of purchase.                                                   

Deferred sales charges will be based on the lower of the shares' cost and       
current NAV. Shares not subject to any charge will be redeemed first,           
followed by shares held longest. You may sell shares acquired by                
reinvestment of distributions without a charge at any time.                     

* You may be eligible for reductions and waivers of sales charges. Sales        
charges may be reduced or waived under certain circumstances and for        
certain groups. Information about reductions and waivers of sales charges   
is included in the SAI. You may consult your financial advisor or Putnam    
Mutual Funds for assistance.                                                

* Distribution (12b-1) plans. The fund has adopted distribution plans to        
pay for the marketing of fund shares and for services provided to           
shareholders. The plans provide for payments at annual rates (based on      
average net assets) of up to 0.35% on class A shares and 1.00% on class B,  
class C and class M shares. The Trustees currently limit payments on class  
A and class M shares to 0.25% and 0.75% of average net assets,              
respectively. Because these fees are paid out of the fund's assets on an    
ongoing basis, they will increase the cost of your investment. The higher   
fees for class B, class C and class M shares may cost you more than paying  
the initial sales charge for class A shares. Because class C and class M    
shares, unlike class B shares, do not convert to class A shares, class C    
and class M shares may cost you more over time than class B shares.         

How do I sell fund shares?                                                      

You can sell your shares back to the fund any day the New York Stock            
Exchange is open, either through your financial advisor or directly to the      
fund. Payment for redemption may be delayed until the fund collects the         
purchase price of shares, which may take up to 15 calendar days after the       
purchase date.                                                                  

* Selling shares through your financial advisor. Your advisor must receive      
your request in proper form before the close of regular trading on the New  
York Stock Exchange for you to receive that day's NAV, less any applicable  
deferred sales charge. Your advisor will be responsible for furnishing all  
necessary documents to Putnam Investor Services on a timely basis and may   
charge you for his or her services.                                         

* Selling shares directly to the fund. Putnam Investor Services must            
receive your request in proper form before the close of regular trading on  
the New York Stock Exchange in order to receive that day's NAV, less any    
applicable sales charge.                                                    

By mail. Send a letter of instruction signed by all registered owners or        
their legal representatives to Putnam Investor Services. If you have            
certificates for the shares you want to sell, you must include them along       
with completed stock power forms.                                               

By telephone. You may use Putnam's telephone redemption privilege               
to redeem shares valued at less than $100,000 unless you have notified          
Putnam Investor Services of an address change within the preceding              
15 days, in which case other requirements may apply. Unless you indicate        
otherwise on the account application, Putnam Investor Services will be          
authorized to accept redemption instructions received by telephone.             

The telephone redemption privilege is not available if there are                
certificates for your shares. The telephone redemption privilege may be         
modified or terminated without notice.                                          

* Additional requirements. In certain situations, for example, if you sell      
shares with a value of $100,000 or more, the signatures of all registered   
owners or their legal representatives must be guaranteed by a bank,         
broker-dealer or certain other financial institutions. In addition, Putnam  
Investor Services usually requires additional documents for the sale of     
shares by a corporation, partnership, agent or fiduciary, or a              
surviving joint owner. For more information concerning Putnam's             
signature guarantee and documentation requirements, contact Putnam          
Investor Services.                                                          

* When will the fund pay me? The fund generally sends you payment for your      
shares the business day after your request is received. Under unusual       
circumstances, the fund may suspend redemptions, or postpone payment for    
more than seven days, as permitted by federal securities law.               

* Redemption by the fund. If you own fewer shares than the minimum set by       
the Trustees (presently 20 shares), the fund may redeem your shares without 
your permission and send you the proceeds. The fund may also redeem shares  
if you own more than a maximum amount set by the Trustees. There is         
presently no maximum, but the Trustees could set a maximum that would       
apply to both present and future shareholders.                              

How do I exchange fund shares?                                                  

If you want to switch your investment from one Putnam fund to another, you      
can exchange your fund shares for shares of the same class of another           
Putnam fund at NAV. Not all Putnam funds offer all classes of shares or         
are open to new investors. If you exchange shares subject toa deferred          
sales charge, the transaction will not be subject to the deferred sales         
charge. When you redeem the shares acquired through the exchange, the           
redemption may be subject to the deferred sales charge, depending upon          
when you originally purchased the shares. The deferred sales charge will        
be computed using the schedule of any fund into or from which you have          
exchanged your shares that would result in your paying the highest              
deferred sales charge applicable to your class of shares. For purposes          
of computing the deferred sales charge, the length of time you have             
owned your shares will be measured from the date of original purchase           
and will not be affected by any subsequent exchanges among funds.               

To exchange your shares, complete an Exchange Authorization Form and send       
it to Putnam Investor Services. The form is available from Putnam Investor      
Services. A telephone exchange privilege is currently available for amounts     
up to $500,000. The telephone exchange privilege is not available if the        
fund issued certificates for your shares. Ask your financial advisor or         
Putnam Investor Services for prospectuses of other Putnam funds. Some           
Putnam funds are not available in all states.                                   

The exchange privilege is not intended as a vehicle for short-term trading.     
Excessive exchange activity may interfere with portfolio management and         
have an adverse effect on all shareholders. In order to limit excessive         
exchange activity and otherwise to promote the best interests of the fund,      
the fund reserves the right to revise or terminate the exchange privilege,      
limit the amount or number of exchanges or reject any exchange. The fund        
into which you would like to exchange may also reject your exchange. These      
actions may apply to all shareholders or only to those shareholders whose       
exchanges Putnam Management determines are likely to have a negative effect     
on the fund or other Putnam funds. Consult Putnam Investor Services before      
requesting an exchange.                                                         

Fund distributions and taxes                                                    

The fund normally distributes any net investment income quarterly and any       
net realized capital gains annually. You may choose to:                         

* reinvest all distributions in additional shares;                              

* receive any distributions from net investment income in cash while            
reinvesting capital gains distributions in additional shares; or            

* receive all distributions in cash.                                            

If you do not select an option when you open your account, all                  
distributions will be reinvested. If you do not cash a distribution check       
within a specified period or notify Putnam Investor Services to issue a new     
check, the distribution will be reinvested in the fund. You will not            
receive any interest on uncashed distribution or redemption checks.             
Similarly, if any correspondence sent by the fund or Putnam Investor            
Services is returned as "undeliverable," fund distributions will                
automatically be reinvested in the fund or in another Putnam fund.              

For federal income tax purposes, distributions of investment income are         
taxable as ordinary income. Taxes on distributions of capital gains are         
determined by how long the fund owned the investments that generated them,      
rather than how long you have owned your shares. Distributions are taxable      
to you even if they are paid from income or gains earned by the fund before     
your investment (and thus were included in the price you paid).                 
Distributions of gains from investments that the fund owned for more than       
one year will be taxable as capital gains. Distributions of gains from          
investments that the fund owned for one year or less will be taxable as         
ordinary income. Distributions are taxable whether you received them in         
cash or reinvested them in additional shares.                                   

The fund's investments in foreign securities may be subject to foreign          
withholding taxes. In that case, the fund's return on those investments         
would be decreased. Shareholders generally will not be entitled to claim a      
credit or deduction with respect to foreign taxes. In addition, the fund's      
investments in foreign securities or foreign currencies may increase the        
amount of taxes payable by shareholders.                                        

The fund's investments in certain debt obligations may cause the fund to        
recognize taxable income in excess of the cash generated by such                
obligations. Thus, the fund could be required at times to liquidate other       
investments in order to satisfy its distribution requirements.                  

Any gain resulting from the sale or exchange of your shares will generally      
also be subject to tax. You should consult your tax advisor for more            
information on your own tax situation, including possible foreign, state        
and local taxes.                                                                

Financial highlights                                                            

The financial highlights table is intended to help you understand the           
fund's recent financial performance. Certain information reflects financial     
results for a single fund share. The total returns represent the rate that      
an investor would have earned or lost on an investment in the fund,             
assuming reinvestment of all dividends and distributions. This information      
for the year ended October 31, 1999 has been derived from the fund's            
financial statements, which have been audited by KPMG LLP. Its report and       
the fund's financial statements are included in the fund's annual report to     
shareholders, which is available upon request. The information for all          
periods prior to the year ended October 31, 1999 has been derived from the      
fund's financial statements which have been audited by the fund's previous      
independent accountants.                                                        

                                                                [Download Table]


FINANCIAL HIGHLIGHTS                                                                

CLASS A                                                                             
(For a share outstanding throughout the period)                                     
                                        Year ended October 31                       
                           ---------------------------------------------------------
                           1999         1998         1997          1996       1995  
------------------------------------------------------------------------------------
                                                                                    
------------------------------------------------------------------------------------
Net asset value,                                                                    
beginning of period        $20.04      $23.22       $21.24       $19.42      $19.09 
------------------------------------------------------------------------------------
Investment operations                                                               
Net investment income         .75c        .76c         .78c         .81c        .85 
Net realized and                                                                    
unrealized gain (loss)                                                              
on investments               2.30       (1.02)        3.70         2.70        1.60 
------------------------------------------------------------------------------------
Total from                                                                          
investment operations        3.05        (.26)        4.48         3.51        2.45 
------------------------------------------------------------------------------------
Less distributions:                                                                 
From net investment income   (.75)       (.76)        (.87)        (.98)       (.96)
In excess of net                                                                    
investment income            (.06)       (.03)        (.06)          --          -- 
From net realized gain                                                              
on investments              (2.02)      (2.13)       (1.57)        (.71)      (1.16)
------------------------------------------------------------------------------------
Total distributions         (2.83)      (2.92)       (2.50)       (1.69)      (2.12)
------------------------------------------------------------------------------------
Net asset value,                                                                    
end of period              $20.26      $20.04       $23.22       $21.24      $19.42 
------------------------------------------------------------------------------------
Ratios and                                                                          
supplemental data                                                                   
Total return at                                                                     
net asset value (%)a        16.42       (1.37)       22.86        18.99       14.38 
Net assets, end                                                                     
of period                                                                           
(in thousands)           $982,956  $1,056,693   $1,168,470     $898,486    $756,645 
------------------------------------------------------------------------------------
Ratio of expenses                                                                   
to average                                                                          
net assets (%)b               .98         .97         1.03         1.06        1.16 
Ratio of net                                                                        
investment income                                                                   
to average net assets (%)    3.73        3.50         3.56         3.99        4.64 
Portfolio turnover (%)      54.74       92.76        70.74        61.43       69.52 
------------------------------------------------------------------------------------

a Total return assumes dividend reinvestment and does not reflect the effect of     
  sales charges.                                                                    

b Includes amounts paid through expense offset and brokerage service arrangements.  

c Per share net investment income has been determined on the basis of the weighted  
  average number of shares outstanding during the period.                           


                                                                [Download Table]


FINANCIAL HIGHLIGHTS                                                                

CLASS B                                                                             
(For a share outstanding throughout the period)                                     
                                          Year ended October 31                     
                           ---------------------------------------------------------
                           1999         1998         1997          1996       1995  
------------------------------------------------------------------------------------
                                                                                    
Net asset value,                                                                    
beginning of period        $19.83      $23.01       $21.09       $19.30      $19.00 
------------------------------------------------------------------------------------
Investment operations                                                               
Net investment income         .60c        .59c         .63c         .66c        .69 
Net realized and                                                                    
unrealized gain                                                                     
(loss) on investments        2.27       (1.01)        3.64         2.68        1.61 
------------------------------------------------------------------------------------
Total from                                                                          
investment operations        2.87        (.42)        4.27         3.34        2.30 
------------------------------------------------------------------------------------
Less distributions:                                                                 
From net investment                                                                 
income                       (.60)       (.61)        (.73)        (.84)       (.84)
In excess of net                                                                    
investment income            (.06)       (.02)        (.05)          --          -- 
From net realized gain                                                              
on investments              (2.02)      (2.13)       (1.57)        (.71)      (1.16)
------------------------------------------------------------------------------------
Total distributions         (2.68)      (2.76)       (2.35)       (1.55)      (2.00)
------------------------------------------------------------------------------------
Net asset value,                                                                    
end of period              $20.02      $19.83       $23.01       $21.09      $19.30 
------------------------------------------------------------------------------------
Ratios and                                                                          
supplemental data                                                                   
Total return at                                                                     
net asset value (%)a        15.58       (2.11)       21.89        18.14       13.54 
Net assets, end of period                                                           
(in thousands)           $291,017     289,652     $257,163     $146,127     $75,309 
------------------------------------------------------------------------------------
Ratio of expenses                                                                   
to average                                                                          
net assets (%)b              1.73        1.72         1.78         1.81        1.91 
Ratio of net                                                                        
investment income                                                                   
to average net assets (%)    2.99        2.74         2.78         3.26        3.92 
Portfolio turnover (%)      54.74       92.76        70.74        61.43       69.52 
------------------------------------------------------------------------------------

a Total return assumes dividend reinvestment and does not reflect the effect of     
  sales charges.                                                                    

b Includes amounts paid through expense offset and brokerage service arrangements.  

c Per share net investment income has been determined on the basis of the weighted  
  average number of shares outstanding   during the period.                         


                                                                [Download Table]


FINANCIAL HIGHLIGHTS                                                                

CLASS C                                                                             
(For a share outstanding throughout the period)                                     
                                                                       For the      
                                                                        period      
                                                                      July 26,      
                                                                      1999+ to      
                                                                      Oct. 31,      
                                                                     ----------     
                                                                        1999        
------------------------------------------------------------------------------------
                                                                                    
Net asset value,                                                                    
beginning of period                                                    $20.85       
------------------------------------------------------------------------------------
Investment operations                                                               
Net investment income                                                     .20c      
Net realized and unrealized gain (loss)                                             
on investments                                                           (.59)      
------------------------------------------------------------------------------------
Total from investment operations                                         (.39)      
------------------------------------------------------------------------------------
Less distributions:                                                                 
From net investment income                                               (.20)      
In excess of net investment income                                       (.03)      
From net realized gain on investments                                      --       
------------------------------------------------------------------------------------
Total distributions                                                      (.23)      
------------------------------------------------------------------------------------
Net asset value,                                                                    
end of period                                                          $20.23       
------------------------------------------------------------------------------------
Ratios and supplemental data                                                        
Total return at                                                                     
net asset value (%)a                                                    (1.87)*     
Net assets, end of period                                                           
(in thousands)                                                           $661       
------------------------------------------------------------------------------------
Ratio of expenses to average                                                        
net assets (%)b                                                           .47*      
Ratio of net investment income                                                      
to average net assets (%)                                                1.12*      
Portfolio turnover (%)                                                  54.74       
------------------------------------------------------------------------------------

+ Commencement of operations.                                                       

* Not annualized.                                                                   

a Total return assumes dividend reinvestment and does not reflect the effect of     
  sales charges.                                                                    

b Includes amounts paid through expense offset and brokerage service arrangements.  

c Per share net investment income has been determined on the basis of the weighted  
  average number of shares outstanding during the period.                           


                                                                [Download Table]


FINANCIAL HIGHLIGHTS                                                              

CLASS M                                                                           
(For a share outstanding throughout the period)                                   
                                                                       For the    
                                                                       period     
                                                                       March 13,  
                                                                        1995+     
                                   Year ended October 31            to Oct. 31,   
                          ------------------------------------------------------- 
                          1999       1998         1997          1996     1995     
--------------------------------------------------------------------------------- 
                                                                                  
Net asset value,                                                                  
beginning of period      $19.92     $23.08       $21.14         $19.37    $17.79  
--------------------------------------------------------------------------------- 
Investment operations                                                             
Net investment income       .65c       .65c         .67c           .73c      .64  
Net realized and                                                                  
unrealized gain (loss)                                                            
on investments             2.28      (1.00)        3.67           2.65      1.64  
--------------------------------------------------------------------------------- 
Total from                                                                        
investment operations      2.93       (.35)        4.34           3.38      2.28  
--------------------------------------------------------------------------------- 
Less distributions:                                                               
From net investment                                                               
income                     (.65)      (.66)        (.78)          (.90)     (.70) 
In excess of net                                                                  
investment income          (.05)      (.02)        (.05)            --        --  
From net realized gain                                                            
on investments            (2.02)     (2.13)       (1.57)          (.71)       --  
--------------------------------------------------------------------------------- 
Total distributions       (2.72)     (2.81)       (2.40)         (1.61)     (.70) 
--------------------------------------------------------------------------------- 
Net asset value,                                                                  
end of period            $20.13     $19.92       $23.08         $21.14    $19.37  
--------------------------------------------------------------------------------- 
Ratios and                                                                        
supplemental data                                                                 
Total return at                                                                   
net asset value (%)a      15.87      (1.75)       22.24          18.30     12.99* 
Net assets, end                                                                   
of period                                                                         
(in thousands)          $16,338    $18,081      $14,719         $7,128    $1,753  
--------------------------------------------------------------------------------- 
Ratio of expenses                                                                 
to average                                                                        
net assets (%)b            1.48       1.47         1.53           1.54      1.04* 
Ratio of net                                                                      
investment income                                                                 
to average net assets (%)  3.23       2.99         3.04           3.55      2.89* 
Portfolio turnover (%)    54.74      92.76        70.74          61.43     69.52  
--------------------------------------------------------------------------------- 

+ Commencement of operations.                                                     

* Not annualized.                                                                 

a Total return assumes dividend reinvestment and does not reflect the effect of   
  sales charges.                                                                  

b Includes amounts paid through expense offset and brokerage service arrangements.

c Per share net investment income has been determined on the basis of the weighted
  average number of shares outstanding during the period.                         


Make the most of your Putnam privileges                                         

As a Putnam mutual fund shareholder, you have access to a number of             
services that can help you build a more effective and flexible                  
financial program. Here are some of the ways you can use these                  
privileges to make the most of your Putnam mutual fund investment.              

SYSTEMATIC INVESTMENT PLAN                                                      

Invest as much as you wish ($25 or more) on any business day of the             
month except for the 29th, 30th, or 31st.  The amount you choose will           
be automatically transferred each month from your checking or savings           
account.                                                                        

SYSTEMATIC WITHDRAWAL                                                           

Make regular withdrawals of $50 or more monthly, quarterly, or                  
semiannually from your Putnam mutual fund account valued at $10,000 or          
more. Your automatic withdrawal may be made on any business day of the          
month except for the 29th, 30th, or 31st.                                       

SYSTEMATIC EXCHANGE                                                             

Transfer assets automatically from one Putnam account to another on a           
regular, prearranged basis. There is no additional charge for this              
service.                                                                        

FREE EXCHANGE PRIVILEGE                                                         

Exchange money between Putnam funds in the same class of shares without         
charge. The exchange privilege allows you to adjust your investments as         
your objectives change. A  signature guarantee is required for                  
exchanges  of more than $500,000 and shares of all  Putnam funds may            
not be available to all investors.                                              

DIVIDENDS PLUS                                                                  

Diversify your portfolio by investing dividends and other distributions         
from one Putnam fund automatically into another at net asset value.             

STATEMENT OF INTENTION                                                          

To reduce a front-end sales charge, you may agree to invest a minimum           
dollar amount over  13 months. Depending on your fund, the  minimum is          
$25,000, $50,000, or $100,000. Whenever you make an investment under            
this arrangement, you or your investment advisor should notify Putnam           
Mutual Funds that a Statement of Intention is in effect.                        

Investors may not maintain, within the same fund, simultaneous plans            
for systematic investment or exchange (into the fund) and system atic           
withdrawal or exchange (out of the fund). These privileges are subject          
to change or termination.                                                       

For more information about any of these services and privileges, call           
your investment advisor or a Putnam customer service representative             
toll free at 1-800-225-1581.                                                    

For more information                                                            
about Putnam Convertible                                                        
Income-Growth Trust                                                             

The fund's statement of additional information (SAI) and annual and             
semi-annual reports to shareholders include additional information about        
the fund. The SAI, and the independent accountants' reports and financial       
statements included in the fund's two most recent annual reports to its         
shareholders, are incorporated by reference into this prospectus, which         
means they are part of this prospectus for legal purposes. The fund's           
annual report discusses the market conditions and investment strategies         
that significantly affected the fund's performance during its last fiscal       
year. You may get free copies of these materials, request other                 
information about the fund and other Putnam funds, or make shareholder          
inquiries, by contacting your financial advisor, by visiting Putnam's Web       
site, or by calling Putnam toll-free at 1-800-225-1581.                         

You may review and copy information about the fund, including its SAI, at       
the Securities and Exchange Commission's public reference room in               
Washington, D.C. You may call the Commission at 1-800-SEC-0330  for             
information about the operation of the public reference room. You may also      
access reports and other information about the fund on the Commission's         
Internet site at http://www.sec.gov. You may get copies of this                 
information, with payment of a duplication fee, by writing the Public           
Reference Section of the Commission, Washington, D.C. 20549-6009. You may       
need to refer to the fund's file number.                                        

P U T N A M  I N V E S T M E N T S                                              

One Post Office Square                                
Boston, Massachusetts 02109                           
1-800-225-1581                                        

Address correspondence to                             
Putnam Investor Services                              
P.O. Box 989                                          
Boston, Massachusetts 02103                           

www.putnaminv.com                                     

File No. 811-2280      NP019 58899 2/00               

Prospectus                                                                      

February 29, 2000                                                               

Putnam Convertible Income-Growth Trust                                          

Class A shares -- for eligible retirement plans                                 
Investment Category: Growth and Income                                          

This prospectus explains what you should know about this mutual fund            
before you invest. Please read it carefully. This prospectus only offers        
class A shares of the fund without a sales charge to eligible retirement        
plans.                                                                          

Putnam Investment Management, Inc. (Putnam Management), which has managed       
mutual funds since 1937, manages the fund.                                      

These securities have not been approved or disapproved by the Securities        
and Exchange Commission nor has the Commission passed upon the accuracy or      
adequacy of this prospectus. Any statement to the contrary is a crime.          

CONTENTS                                                                

2  Fund summary                                                               

2  Goal                                                                       

2  Main investment strategies                                                 

2  Main risks                                                                 

3  Performance information                                                    

3  Fees and expenses                                                          

4  What are the fund's main investment strategies and related risks?          

8  Who manages the fund?                                                      

8  How does the fund price its shares?                                        

9  How do I buy fund shares?                                                  

10  How do I sell fund shares?                                                  

10  How do I exchange fund shares?                                              

11  Fund distributions and taxes                                                

12  Financial highlights                                                        

[LOGO: BOSTON * LONDON * TOKYO]                                                 

Fund summary                                                                    

GOAL                                                                            

The fund seeks, with equal emphasis, current income and capital                 
appreciation. Its secondary objective is conservation of capital.               

MAIN INVESTMENT STRATEGIES -- CONVERTIBLE SECURITIES                            

We invest mainly in U.S. convertible securities. Convertible securities         
typically are bonds, preferred stocks or warrants that can be converted         
into or exchanged for common stock. Most of the convertible securities we       
buy for the fund are convertible into value stocks. Value stocks are those      
we believe are currently undervalued by the market. If we are correct and       
other investors recognize the value of the company, the price of the stock      
may rise.                                                                       

The price of a convertible security normally varies with the price of the       
underlying stock. A convertible security tends to provide a higher yield        
than the underlying stock, which may cushion it against declines in the         
price of that stock. The convertible bonds we buy usually have                  
intermediate- to long-term maturities (three years or longer). We invest        
mainly in midsized and large companies.                                         

MAIN RISKS                                                                      

The main risks that could adversely affect the value of the fund's shares       
and the total return on your investment include:                                

* The risk that the stock price of one or more of the companies in the          
fund's portfolio will fall, or will fail to rise. Many factors can          
adversely affect a stock's performance, including both general financial    
market conditions and factors related to a specific company or industry.    
This risk is generally greater for small and midsized companies, which tend 
to be more vulnerable to adverse developments.                              

* The risk that movements in financial markets will adversely affect the        
price of the fund's investments, regardless of how well the companies in    
which we invest perform. The market as a whole may not favor the types of   
investments we make.                                                        

* The risk that prices of bonds we buy will fall if interest rates rise.        
Interest rate risk is generally higher for investments with longer          
maturities.                                                                 

* The risk that issuers of the bonds we buy will not make timely payments       
of interest and principal. This credit risk is generally higher for debt    
that is below investment-grade in quality. Because the fund invests         
significantly in junk bonds and below investment-grade preferred stocks,    
this risk is heightened for the fund. Investors should carefully consider   
the risks associated with an investment in the fund.                        

You can lose money by investing in the fund. The fund may not achieve its       
goal, and is not intended as a complete investment program. An investment       
in the fund is not a deposit in a bank and is not insured or guaranteed by      
the Federal Deposit Insurance Corporation or any other government agency.       

PERFORMANCE INFORMATION                                                         

The following information provides some indication of the fund's risks. The     
chart shows year-to-year changes in the performance of the fund's class A       
shares. The table following the chart compares the fund's performance to        
that of two broad measures of market performance. Of course, a fund's past      
performance is not an indication of future performance.                         

[GRAPHIC OMITTED: vertical bar chart]                                           

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES                                  
Plot points                                                                     

1990     -10.02%                                                                
1991      29.40%                                                                
1992      21.09%                                                                
1993      17.03%                                                                
1994      -1.92%                                                                
1995      23.81%                                                                
1996      17.82%                                                                
1997      19.64%                                                                
1998       4.85%                                                                
1999      17.49%                                                                

During the periods shown in the bar chart, the highest return for a quarter     
was 14.90% (quarter ending 3/31/91) and the lowest return for a quarter was     
-12.74% (quarter ending 9/30/90).                                               

Average Annual Total Returns (for periods ending 12/31/99)                      
-------------------------------------------------------------------------       
                                  Past       Past     Past
                                      1 year     5 years  10 years
-------------------------------------------------------------------------       
Class A                                      17.49%     16.54%     13.28%       
S&P 500 Index                                21.04%     28.56%     18.21%       
Lehman Bros. Corporate Bond Index            -1.95%      8.19%      8.22%       
-------------------------------------------------------------------------       

Class A share performance reflects the waiver of sales charges for              
purchases through eligible retirement plans. The fund's performance is          
compared to the Standard & Poor's 500 Index, an unmanaged index of common       
stocks frequently used as a general measure of U.S. stock market                
performance, and the Lehman Brothers Corporate Bond Index, an unmanaged         
index of corporate bonds.                                                       

FEES AND EXPENSES                                                               

This table summarizes the fees and expenses you may pay if you invest in        
class A shares of the fund. Expenses are based on the fund's last fiscal        
year.                                                                           

Shareholder Fees (fees paid directly from your investment)                      
-------------------------------------------------------------------------       
Maximum Sales Charge (Load)                                 NONE                

Maximum Deferred Sales Charge (Load)                        0.75%*              
-------------------------------------------------------------------------       

Annual Fund Operating Expenses                                                  
(expenses that are deducted from fund assets)                                   
------------------------------------------------------------------------------  
                                                            Total Annual
                   Management   Distribution      Other     Fund Operating
                    Fees     (12b-1) Fees     Expenses      Expenses
------------------------------------------------------------------------------  
Class A                  0.57%         0.25%         0.16%         0.98%        
------------------------------------------------------------------------------  

* The deferred sales charge is applicable only to a plan that redeems 90%       
or more of its cumulative purchases within two years of its initial         
purchase, and only if Putnam Mutual Funds paid a commission on the plan's   
purchases.                                                                  

EXAMPLE                                                                         

The example translates the expenses shown in the preceding table into           
dollar amounts. By doing this, you can more easily compare the cost of          
investing in the fund to the cost of investing in other mutual funds. The       
example makes certain assumptions. It assumes that you invest $10,000 in        
the fund for the time periods shown and then redeem all your shares at the      
end of those periods. It also assumes a 5% return on your investment each       
year and that the fund's operating expenses remain the same. The example is     
hypothetical; your actual costs and returns may be higher or lower.             

------------------------------------------------------------------------        
                1 year       3 years       5 years      10 years
------------------------------------------------------------------------        
Class A                  $175          $312          $542        $1,201         
------------------------------------------------------------------------        

What are the fund's main investment strategies and                              
related risks?                                                                  

Any investment carries with it some level of risk that generally reflects       
its potential for reward. We pursue the fund's goal by investing mainly in      
convertible securities and value stocks. We will consider, among other          
things, a company's financial strength, competitive position in its             
industry, projected future earnings, cash flows and dividends when deciding     
whether to buy or sell investments. A description of the risks associated       
with the fund's main investment strategies follows.                             

* Interest rate risk. The values of bonds and other debt usually rise and       
fall in response to changes in interest rates. Declining interest rates     
generally increase the values of existing debt instruments, and rising      
interest rates generally decrease them. Changes in a debt instrument's      
value usually will not affect the amount of income the fund receives from   
it, but will affect the value of the fund's shares. Interest rate risk is   
generally greater for investments with longer maturities.                   

Some securities give the issuers the option to "call," or redeem, them          
before their maturity date. If an issuer "calls" its securities during a        
time of declining interest rates, we might have to reinvest the proceeds in     
an investment offering a lower yield, and therefore might not benefit from      
any increase in value as a result of declining interest rates.                  

"Premium" investments offer interest rates higher than prevailing market        
rates. However, they involve a greater risk of loss, because their values       
tend to decline over time. You may find it useful to compare the fund's         
yield, which factors out the effect of premium investments, with its            
current dividend rate, which does not factor out that effect.                   

* Credit risk. Investors normally expect to be compensated in proportion to     
the risk they are assuming. Thus, debt of issuers with poor credit          
prospects usually offers higher yields than debt of issuers with more       
secure credit. Higher-rated investments generally offer lower credit risk.  
A company's convertible securities generally receive payments only after    
the company has paid the holders of its non-convertible debt; for this      
reason, the credit risk of a company's convertible securities is generally  
greater than that of its non-convertible debt.                              

We invest mostly in non investment-grade convertible securities. These are      
rated below BBB or its equivalent at the time of purchase by a nationally       
recognized securities rating agency, or are unrated investments that we         
believe are of comparable quality. We may invest up to 10% of the fund's        
net assets in convertible securities rated CC or C or their equivalent at       
the time of purchase by each rating agency rating the investment, and           
unrated investments we believe are of comparable quality. We will not           
invest in non-convertible securities rated below CCC or its equivalent at       
the time of purchase by each rating agency rating the investment or unrated     
securities that we think are of comparable quality. We will not necessarily     
sell an investment if its rating is reduced after we buy it.                    

Investments rated below BBB or its equivalent are known as "junk bonds."        
This rating reflects a greater possibility that the issuers may be unable       
to make timely payments of interest and principal and thus default. If this     
happens, or is perceived as likely to happen, the values of those investments   
are likely to fall. A default or expected default could also make it difficult  
for us to sell the investments at prices approximating the values we had        
previously placed on them. Credit risk is generally greater for investments     
that are issued at less than their face value and that require payments of      
interest only at maturity rather than at intervals during the life of the       
investment.                                                                     

Credit ratings are based largely on the issuer's historical financial           
condition and the rating agencies' investment analysis at the time of           
rating. The rating assigned to any particular investment does not               
necessarily reflect the issuer's current financial condition, and does not      
reflect an assessment of the investment's volatility or liquidity. Although     
we consider credit ratings in making investment decisions, we perform our       
own investment analysis and do not rely only on ratings assigned by the         
rating agencies. The fund depends more on our ability when we buy               
lower-rated debt than it does when we buy investment-grade debt. We may         
have to participate in legal proceedings or take possession of and manage       
assets that secure the issuer's obligations. This could increase the fund's     
operating expenses and decrease its net asset value.                            

Although investment-grade investments generally have lower credit risk,         
they may share some of the risks of non investment-grade investments.           

* Common stocks. Common stock represents an ownership interest in a             
company. The value of a company's stock may fall as a result of factors     
relating directly to that company, such as decisions made by its management 
or lower demand for the company's products or services. A stock's value may 
also fall because of factors affecting not just the company, but also       
companies in the same industry or in a number of different industries, such 
as increases in production costs. The value of a company's stock may also   
be affected by changes in financial markets that are relatively unrelated   
to the company or its industry, such as changes in interest rates or        
currency exchange rates. In addition, a company's stock generally pays      
dividends only after the company invests in its own business and makes      
required payments to holders of its bonds and other debt. For this reason,  
the value of a company's stock will usually react more strongly than its    
bonds and other debt to actual or perceived changes in the company's        
financial condition or prospects. Stocks of smaller companies may be more   
vulnerable to adverse developments than those of larger companies.          

Companies whose stock we believe is undervalued by the market may have          
experienced adverse business developments or may be subject to special          
risks that have caused their stocks to be out of favor. If our assessment       
of a company's prospects is wrong, or if other investors do not similarly       
recognize the value of the company, then the price of the company's stock       
may fall or may not approach the value we have placed on it.                    

* Foreign investments. We may invest in securities of foreign issuers.          
Foreign investments involve certain special risks. For example, their       
values may decline in response to changes in currency exchange rates,       
unfavorable political and legal developments, unreliable or untimely        
information, and economic and financial instability. In addition, the       
liquidity of these investments may be more limited than for U.S.            
investments, which means we may at times be unable to sell them at          
desirable prices. Foreign settlement procedures may also involve additional 
risks. These risks are generally greater in the case of developing (also    
known as emerging) markets with less developed legal and financial systems. 

Certain of these risks may also apply to U.S. investments that are              
denominated in foreign currencies or that are traded in foreign markets, or     
to securities of U.S. companies that have significant foreign operations.       

* Smaller companies. We may invest in smaller and midsized companies.           
Smaller companies, which may have a market capitalization of less than $1   
billion, are more likely than larger companies to have limited product      
lines, markets or financial resources, or to depend on a small,             
inexperienced management group. Stocks of these companies often trade less  
frequently and in limited volume, and their prices may fluctuate more than  
stocks of larger companies. Stocks of smaller and midsized companies may    
therefore be more vulnerable to adverse developments than those of larger   
companies.                                                                  

* Other investments. In addition to the main investment strategies              
described above, the fund may also make other investments, such as          
investments in common stocks, non-convertible preferred stocks,             
asset-backed securities and derivatives, which may be subject to other      
risks, as described in the fund's statement of additional information       
(SAI).                                                                      

* Alternative strategies. At times we may judge that market conditions make     
pursuing the fund's usual investment strategies inconsistent with the best  
interests of its shareholders. We then may temporarily use alternative      
strategies that are mainly designed to limit the fund's losses. However, we 
may choose not to use these strategies for a variety of reasons, even in    
very volatile market conditions. These strategies may cause the fund to     
miss out on investment opportunities, and may prevent the fund from         
achieving its goal.                                                         

* Changes in policies. The fund's Trustees may change the fund's goal,          
investment strategies and other policies described above without            
shareholder approval, except as otherwise indicated.                        

Who manages the fund?                                                           

The fund's Trustees oversee the general conduct of the fund's business. The     
Trustees have retained Putnam Management to be the fund's investment            
manager, responsible for making investment decisions for the fund and           
managing the fund's other affairs and business. The fund pays Putnam            
Management a quarterly management fee for these services based on the           
fund's average net assets. The fund paid Putnam Management a management fee     
of 0.57% of average net assets for the fund's last fiscal year. Putnam          
Management's address is One Post Office Square, Boston, MA 02109.               

The following officers of Putnam Management have had primary responsibility     
for the day-to-day management of the fund's portfolio since the years shown     
below. Their experience as portfolio managers or investment analysts over       
at least the last five years is also shown.                                     

-----------------------------------------------------------------------------   
Manager                       Since  Experience                                 
-----------------------------------------------------------------------------   
Forrest N. Fontana            1998   1993-Present           Putnam Management   
Senior Vice President                                                           
-----------------------------------------------------------------------------   
Charles G. Pohl               1992   1983-Present           Putnam Management   
Senior Vice President                                                           
-----------------------------------------------------------------------------   

* Year 2000 issues. The fund could be adversely affected if the computer        
systems that we and the fund's other service providers use do not properly  
process and calculate date-related information relating to the year 2000.   
While year 2000-related computer problems could have a negative effect on   
the fund, both in its operations and in its investments, we are working to  
avoid such problems and to obtain assurances from service providers that    
they are taking similar steps. No assurances, though, can be provided that  
the fund will not be adversely impacted by these matters.                   

How does the fund price its shares?                                             

The price of the fund's shares is based on its net asset value (NAV). The       
NAV per share of each class equals the total value of its assets, less its      
liabilities, divided by the number of its outstanding shares. Shares are        
only valued as of the close of regular trading on the New York Stock            
Exchange each day the exchange is open.                                         

The fund values its investments for which market quotations are readily         
available at market value. It values short-term investments that will           
mature within 60 days at amortized cost, which approximates market value.       
It values all other investments and assets at their fair value.                 

The fund translates prices for its investments quoted in foreign currencies     
into U.S. dollars at current exchange rates. As a result, changes in the        
value of those currencies in relation to the U.S. dollar may affect the         
fund's NAV. Because foreign markets may be open at different times than the     
New York Stock Exchange, the value of the fund's shares may change on days      
when shareholders are not able to buy or sell them. If events materially        
affecting the values of the fund's foreign investments occur between the        
close of foreign markets and the close of regular trading on the New York       
Stock Exchange, these investments will be valued at their fair value.           

How do I buy fund shares?                                                       

All orders to purchase shares must be made through your employer's              
retirement plan. For more information about how to purchase shares of the       
fund through your employer's plan or limitations on the amount that may be      
purchased, please consult your employer.                                        

Putnam Mutual Funds Corp. (Putnam Mutual Funds) generally must receive your     
plan's completed buy order before the close of regular trading on the New       
York Stock Exchange for shares to be bought at that day's offering price.       

To eliminate the need for safekeeping, the fund will not issue certificates     
for shares.                                                                     

The fund may periodically close to new purchases of shares or refuse any        
order to buy shares if Putnam Management determines that doing so would be      
in the best interests of the fund and its shareholders.                         

* Distribution (12b-1) plan. The fund has adopted a distribution plan to        
pay for the marketing of class A shares and for services provided to        
shareholders. The plan provides for payments at an annual rate (based on    
average net assets) of up to 0.35%. The Trustees currently limit payments   
on class A shares to 0.25% of average net assets. Because the fees are paid 
out of the fund's assets on an ongoing basis, they will increase the cost   
of your investment.                                                         

* Eligible retirement plans. An employer-sponsored retirement plan is           
eligible to purchase class A shares without an initial sales charge through 
this prospectus if it invests at least $1 million in class A shares. A      
deferred sales charge of up to 0.75% will apply if the plan redeems 90% or  
more of its cumulative purchases within two years of the plan's initial     
purchase of class A shares, and only if Putnam Mutual Funds paid a          
commission on the plan's purchase. Employer-sponsored plans may make        
additional investments of any amount at any time.                           

How do I sell fund shares?                                                      

Subject to any restrictions imposed by your employer's plan, you can sell       
your shares through the plan back to the fund any day the New York Stock        
Exchange is open. For more information about how to sell shares of the fund     
through your employer's plan, including any charges that the plan may           
impose, please consult your employer.                                           

Your plan administrator must send a signed letter of instruction to Putnam      
Investor Services. The price you will receive is the next NAV per share         
calculated after the fund receives the instruction in proper form. In order     
to receive that day's NAV, Putnam Investor Services must receive the            
instruction before the close of regular trading on the New York Stock           
Exchange.                                                                       

The fund generally sends payment for your shares the business day after         
your request is received. Under unusual circumstances, the fund may suspend     
redemptions, or postpone payment for more than seven days, as permitted by      
federal securities law.                                                         

How do I exchange fund shares?                                                  

Subject to any restrictions your plan imposes, you can exchange your fund       
shares for shares of other Putnam funds offered through your employer's         
plan without a sales charge. Contact your plan administrator or Putnam          
Investor Services for more information.                                         

The exchange privilege is not intended as a vehicle for short-term trading.     
Excessive exchange activity may interfere with portfolio management and         
have an adverse effect on all shareholders. In order to limit excessive         
exchange activity and otherwise to promote the best interests of the fund,      
the fund reserves the right to revise or terminate the exchange privilege,      
limit the amount or number of exchanges or reject any exchange. The fund        
into which you would like to exchange may also reject your exchange. These      
actions may apply to all shareholders or only to those shareholders whose       
exchanges Putnam Management determines are likely to have a negative effect     
on the fund or other Putnam funds.                                              

Fund distributions and taxes                                                    

The fund normally distributes any net investment income quarterly and any       
net realized capital gains annually.                                            

The terms of your employer's plan will govern how your employer's plan may      
receive distributions from the fund. Generally, periodic distributions from     
the fund to your employer's plan are reinvested in additional fund shares,      
although your employer's plan may permit you to receive fund distributions      
from net investment income in cash while reinvesting capital gains              
distributions in additional shares or to receive all fund distributions in      
cash. If another option is not selected, all distributions will be              
reinvested in additional fund shares.                                           

Generally, for federal income tax purposes, fund distributions are taxable      
as ordinary income, except that any distributions of long-term capital          
gains will be taxed as such regardless of how long you have held your           
shares. However, distributions by the fund to retirement plans that qualify     
for tax-exempt treatment under federal income tax laws will not be taxable.     
Special tax rules apply to investments through such plans. You should           
consult your tax advisor to determine the suitability of the fund as an         
investment through such a plan and the tax treatment of distributions           
(including distributions of amounts attributable to an investment in the        
fund) from such a plan.                                                         

The fund's investments in foreign securities may be subject to foreign          
withholding taxes. In that case, the fund's return on those investments         
would be decreased.                                                             

The fund's investments in certain debt obligations may cause the fund to        
recognize taxable income in excess of the cash generated by such                
obligations. Thus, the fund could be required at times to liquidate other       
investments in order to satisfy its distribution requirements.                  

You should consult your tax advisor for more information on your own tax        
situation, including possible foreign, state and local taxes.                   

Financial highlights                                                            

The financial highlights table is intended to help you understand the           
fund's recent financial performance. Certain information reflects financial     
results for a single fund share. The total returns represent the rate that      
an investor would have earned or lost on an investment in the fund,             
assuming reinvestment of all dividends and distributions. This information      
for the year ended October 31, 1999 has been derived from the fund's            
financial statements, which have been audited by KPMG LLP. Its report and       
the fund's financial statements are included in the fund's annual report to     
shareholders, which is available upon request. The information for all          
periods prior to the year ended October 31, 1999 has been derived from the      
fund's financial statements which have been audited by the fund's previous      
independent accountants.                                                        

                                                        [Enlarge/Download Table]


FINANCIAL HIGHLIGHTS                                                                   

CLASS A                                                                                
(For a share outstanding throughout the period)                                        
                                                     Year ended October 31             
                                  ---------------------------------------------------- 
                                  1999         1998         1997       1996       1995 
-------------------------------------------------------------------------------------- 
                                                                                       
Net asset value,                                                                       
beginning of period             $20.04       $23.22       $21.24     $19.42     $19.09 
-------------------------------------------------------------------------------------- 
Investment operations                                                                  
Net investment income              .75c         .76c         .78c       .81c       .85 
Net realized and unrealized                                                            
gain (loss) on investments        2.30        (1.02)        3.70       2.70       1.60 
-------------------------------------------------------------------------------------- 
Total from                                                                             
investment operations             3.05         (.26)        4.48       3.51       2.45 
-------------------------------------------------------------------------------------- 
Less distributions:                                                                    
From net investment income        (.75)        (.76)        (.87)      (.98)      (.96)
In excess of net                                                                       
investment income                 (.06)        (.03)        (.06)        --         -- 
From net realized gain                                                                 
on investments                   (2.02)       (2.13)       (1.57)      (.71)     (1.16)
-------------------------------------------------------------------------------------- 
Total distributions              (2.83)       (2.92)       (2.50)     (1.69)     (2.12)
-------------------------------------------------------------------------------------- 
Net asset value,                                                                       
end of period                   $20.26       $20.04       $23.22     $21.24     $19.42 
-------------------------------------------------------------------------------------- 
Ratios and                                                                             
supplemental data                                                                      
Total return at                                                                        
net asset value (%)a             16.42        (1.37)       22.86      18.99      14.38 
Net assets,                                                                            
end of period                                                                          
(in thousands)                $982,956   $1,056,693   $1,168,470   $898,486   $756,645 
-------------------------------------------------------------------------------------- 
Ratio of expenses to                                                                   
average net assets (%)b            .98          .97         1.03       1.06       1.16 
Ratio of net investment                                                                
income to average                                                                      
net assets (%)                    3.73         3.50         3.56       3.99       4.64 
Portfolio turnover (%)           54.74        92.76        70.74      61.43      69.52 
-------------------------------------------------------------------------------------- 

a Total return assumes dividend reinvestment and does not reflect the effect of        
  sales charges.                                                                       

b Includes amounts paid through brokerage service and expense offset arrangements.     

c Per share net investment income has been determined on the basis of the weighted     
  average number of shares outstanding during the period.                              


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For more information                                                            
about Putnam Convertible                                                        
Income-Growth Trust                                                             

The fund's statement of additional information (SAI) and annual and             
semi-annual reports to shareholders include additional information about        
the fund. The SAI, and the independent accountants' reports and financial       
statements included in the fund's two most recent annual reports to its         
shareholders, are incorporated by reference into this prospectus, which         
means they are part of this prospectus for legal purposes. The fund's           
annual report discusses the market conditions and investment strategies         
that significantly affected the fund's performance during its last fiscal       
year. You may get free copies of these materials, request other                 
information about the fund and other Putnam funds, or make shareholder          
inquiries, by calling Putnam toll-free at 1-800-752-9894.                       

You may review and copy information about the fund, including its SAI, at       
the Securities and Exchange Commission's public reference room in               
Washington, D.C. You may call the Commission at 1-800-SEC-0330 for              
information about the operation of the public reference room. You may also      
access reports and other information about the fund on the Commission's         
Internet site at http://www.sec.gov. You may get copies of this                 
information, with payment of a duplication fee, by writing the Public           
Reference Section of the Commission, Washington, D.C. 20549-6009. You may       
need to refer to the fund's file number.                                        

P U T N A M  I N V E S T M E N T S                                              

Putnam Defined Contribution Plans                     
One Post Office Square                                
Boston, Massachusetts 02109                           
1-800-752-9894                                        

Address correspondence to                             
Putnam Investor Services                              
P.O. Box 989                                          
Boston, Massachusetts 02103                           

www.putnaminv.com                                     

59487 2/00   File No. 811-2280                                                  

Prospectus                                                                      

February 29, 2000                                                               

Putnam Convertible Income-Growth Trust                                          

Class Y shares                                                                  
Investment Category: Growth and Income                                          

This prospectus explains what you should know about this mutual fund            
before you invest. Please read it carefully.                                    

Putnam Investment Management, Inc. (Putnam Management), which has managed       
mutual funds since 1937, manages the fund.                                      

These securities have not been approved or disapproved by the Securities        
and Exchange Commission nor has the Commission passed upon the accuracy or      
adequacy of this prospectus. Any statement to the contrary is a crime.          

CONTENTS                                                                        

2  Fund summary                                                               

2  Goal                                                                       

2  Main investment strategies                                                 

2  Main risks                                                                 

3  Performance information                                                    

4  Fees and expenses                                                          

4  What are the fund's main investment strategies and related risks?          

8  Who manages the fund?                                                      

8  How does the fund price its shares?                                        

9  How do I buy fund shares?                                                  

10  How do I sell fund shares?                                                  

10  How do I exchange fund shares?                                              

10  Fund distributions and taxes                                                

11  Financial highlights                                                        

Putnam Defined Contribution Plans                                               

[LOGO: BOSTON * LONDON * TOKYO]                                                 

Fund summary                                                                    

GOAL                                                                            

The fund seeks, with equal emphasis, current income and capital                 
appreciation. Its secondary objective is conservation of capital.               

MAIN INVESTMENT STRATEGIES -- CONVERTIBLE SECURITIES                            

We invest mainly in U.S. convertible securities. Convertible securities         
typically are bonds, preferred stocks or warrants that can be converted         
into or exchanged for common stock. Most of the convertible securities we       
buy for the fund are convertible into value stocks. Value stocks are those      
we believe are currently undervalued by the market. If we are correct and       
other investors recognize the value of the company, the price of the stock      
may rise.                                                                       

The price of a convertible security normally varies with the price of the       
underlying stock. A convertible security tends to provide a higher yield        
than the underlying stock, which may cushion it against declines in the         
price of that stock. The convertible bonds we buy usually have                  
intermediate- to long-term maturities (three years or longer). We invest        
mainly in midsized and large companies.                                         

MAIN RISKS                                                                      

The main risks that could adversely affect the value of the fund's shares       
and the total return on your investment include:                                

* The risk that the stock price of one or more of the companies in the          
fund's portfolio will fall, or will fail to rise. Many factors can          
adversely affect a stock's performance, including both general financial    
market conditions and factors related to a specific company or industry.    
This risk is generally greater for small and midsized companies, which tend 
to be more vulnerable to adverse developments.                              

* The risk that movements in financial markets will adversely affect the        
price of the fund's investments, regardless of how well the companies in    
which we invest perform. The market as a whole may not favor the types of   
investments we make.                                                        

* The risk that prices of bonds we buy will fall if interest rates rise.        
Interest rate risk is generally higher for investments with longer          
maturities.                                                                 

* The risk that issuers of the bonds we buy will not make timely payments       
of interest and principal. This credit risk is generally higher for debt    
that is below investment-grade in quality. Because the fund invests         
significantly in junk bonds and below investment-grade preferred stocks,    
this risk is heightened for the fund. Investors should carefully consider   
the risks associated with an investment in the fund.                        

You can lose money by investing in the fund. The fund may not achieve its       
goal, and is not intended as a complete investment program. An investment       
in the fund is not a deposit in a bank and is not insured or guaranteed by      
the Federal Deposit Insurance Corporation or any other government agency.       

PERFORMANCE INFORMATION                                                         

The following information provides some indication of the fund's risks. The     
chart shows year-to-year changes in the performance of the fund's class Y       
shares. The table following the chart compares the fund's performance to        
that of two broad measures of market performance. Of course, a fund's past      
performance is not an indication of future performance.                         

[GRAPHIC OMITTED: vertical bar chart]                                           

CALENDAR YEAR TOTAL RETURNS                                                     
Plot points                                                                     

1990     -10.02%                                                                
1991      29.40%                                                                
1992      21.09%                                                                
1993      17.03%                                                                
1994      -1.92%                                                                
1995      23.81%                                                                
1996      17.82%                                                                
1997      19.64%                                                                
1998       4.85%                                                                
1999      17.79%                                                                

During the periods shown in the bar chart, the highest return for a quarter     
was 14.90% (quarter ending 3/31/91) and the lowest return for a quarter was     
-12.74% (quarter ending 9/30/90).                                               

Performance of class Y shares in the bar chart and the table following the      
chart, for periods prior to their inception on 12/30/98, is derived from        
the historical performance of class A shares (not offered by this               
prospectus). Performance of class Y shares prior to their inception does        
not reflect the initial sales charge currently applicable to class A shares     
or differences in operating expenses which, for class Y shares, are lower       
than the operating expenses applicable to class A shares.                       

Average Annual Total Returns (for periods ending 12/31/99)                      
-------------------------------------------------------------------------       
                                  Past       Past     Past
                                      1 year     5 years  10 years
-------------------------------------------------------------------------       
Class Y                                      17.79%     16.60%     13.31%       
S&P 500 Index                                21.04%     28.56%     18.21%       
Lehman Bros. Corporate                                                          
Bond Index                                 -1.95%      8.19%      8.22%     
-------------------------------------------------------------------------       

The fund's performance is compared to the Standard & Poor's 500 Index, an       
unmanaged index of common stocks frequently used as a general measure of        
U.S. stock market performance, and the Lehman Brothers Corporate Bond           
Index, an unmanaged index of corporate bonds.                                   

FEES AND EXPENSES                                                               

This table summarizes the fees and expenses you may pay if you invest in        
class Y shares of the fund. Expenses are based on the fund's last fiscal        
year.                                                                           

----------------------------------------------------------------                
Annual Fund Operating Expenses                                                  
(expenses that are deducted from fund assets)                                   
----------------------------------------------------------------                
                                  Total Annual
      Management         Other    Fund Operating
      Fees          Expenses      Expenses
----------------------------------------------------------------                
Class Y                  0.57%           0.16%         0.73%                    
----------------------------------------------------------------                

EXAMPLE                                                                         

The example translates the expenses shown in the preceding table into           
dollar amounts. By doing this, you can more easily compare the cost of          
investing in the fund to the cost of investing in other mutual funds. The       
example makes certain assumptions. It assumes that you invest $10,000 in        
the fund for the time periods shown and then redeem all your shares at the      
end of those periods. It also assumes a 5% return on your investment each       
year and that the fund's operating expenses remain the same. The example is     
hypothetical; your actual costs and returns may be higher or lower.             

------------------------------------------------------------------------        
                1 year       3 years       5 years      10 years
------------------------------------------------------------------------        
Class Y                   $75          $233          $406          $906         
------------------------------------------------------------------------        

What are the fund's main investment strategies and  related risks?              

Any investment carries with it some level of risk that generally reflects       
its potential for reward. We pursue the fund's goal by investing mainly in      
convertible securities and value stocks. We will consider, among other          
things, a company's financial strength, competitive position in its             
industry, projected future earnings, cash flows and dividends when deciding     
whether to buy or sell investments. A description of the risks associated       
with the fund's main investment strategies follows.                             

* Interest rate risk. The values of bonds and other debt usually rise and       
fall in response to changes in interest rates. Declining interest rates     
generally increase the values of existing debt instruments, and rising      
interest rates generally decrease them. Changes in a debt instrument's      
value usually will not affect the amount of income the fund receives from   
it, but will affect the value of the fund's shares. Interest rate risk is   
generally greater for investments with longer maturities.                   

Some securities give the issuers the option to "call," or redeem, them          
before their maturity date. If an issuer "calls" its securities during a        
time of declining interest rates, we might have to reinvest the proceeds in     
an investment offering a lower yield, and therefore might not benefit from      
any increase in value as a result of declining interest rates.                  

"Premium" investments offer interest rates higher than prevailing market        
rates. However, they involve a greater risk of loss, because their values       
tend to decline over time. You may find it useful to compare the fund's         
yield, which factors out the effect of premium investments, with its            
current dividend rate, which does not factor out that effect.                   

* Credit risk. Investors normally expect to be compensated in proportion to     
the risk they are assuming. Thus, debt of issuers with poor credit          
prospects usually offers higher yields than debt of issuers with more       
secure credit. Higher-rated investments generally offer lower credit risk.  
A company's convertible securities generally receive payments only after    
the company has paid the holders of its non-convertible debt; for this      
reason, the credit risk of a company's convertible securities is generally  
greater than that of its non-convertible debt.                              

We invest mostly in non investment-grade convertible securities. These are      
rated below BBB or its equivalent at the time of purchase by a nationally       
recognized securities rating agency, or are unrated investments that we         
believe are of comparable quality. We may invest up to 10% of the fund's        
net assets in convertible securities rated CC or C or their equivalent at       
the time of purchase by each rating agency rating the investment, and           
unrated investments we believe are of comparable quality. We will not           
invest in non-convertible securities rated below CCC or its equivalent at       
the time of purchase by each rating agency rating the investment or unrated     
securities that we think are of comparable quality. We will not necessarily     
sell an investment if its rating is reduced after we buy it.                    

Investments rated below BBB or its equivalent are known as "junk bonds."        
This rating reflects a greater possibility that the issuers may be unable       
to make timely payments of interest and principal and thus default. If this     
happens, or is perceived as likely to happen, the values of those               
investments are likely to fall. A default or expected default could also        
make it difficult for us to sell the investments at prices approximating        
the values we had previously placed on them. Credit risk is generally           
greater for investments that are issued at less than their face value and       
that require payments of interest only at maturity rather than at intervals     
during the life of the investment.                                              

Credit ratings are based largely on the issuer's historical financial           
condition and the rating agencies' investment analysis at the time of           
rating. The rating assigned to any particular investment does not               
necessarily reflect the issuer's current financial condition, and does not      
reflect an assessment of the investment's volatility or liquidity. Although     
we consider credit ratings in making investment decisions, we perform our       
own investment analysis and do not rely only on ratings assigned by other       
rating agencies. The fund depends more on our ability when we buy               
lower-rated debt than it does when we buy investment grade debt. We may         
have to participate in legal proceedings or take possession of and manage       
assets that secure the issuer's obligations. This could increase the fund's     
operating expenses and decrease its net asset value.                            

Although investment-grade investments generally have lower credit risk,         
they may share some of the risks of non investment-grade investments.           

* Common stocks. Common stock represents an ownership interest in a             
company. The value of a company's stock may fall as a result of factors     
relating directly to that company, such as decisions made by its management 
or lower demand for the company's products or services. A stock's value may 
also fall because of factors affecting not just the company, but also       
companies in the same industry or in a number of different industries, such 
as increases in production costs. The value of a company's stock may also   
be affected by changes in financial markets that are relatively unrelated   
to the company or its industry, such as changes in interest rates or        
currency exchange rates. In addition, a company's stock generally pays      
dividends only after the company invests in its own business and makes      
required payments to holders of its bonds and other debt. For this reason,  
the value of a company's stock will usually react more strongly than its    
bonds and other debt to actual or perceived changes in the company's        
financial condition or prospects. Stocks of smaller companies may be more   
vulnerable to adverse developments than those of larger companies.          

Companies whose stock we believe is under valued by the market may have         
experienced adverse business developments or may be subject to special          
risks that have caused their stocks to be out of favor. If our assessment       
of a company's prospects is wrong, or if other investors do not similarly       
recognize the value of the company, then the price of the company's stock       
may fall or may not approach the value we have placed on it.                    

* Foreign investments. We may invest in securities of foreign issuers.          
Foreign investments involve certain special risks. For example, their       
values may decline in response to changes in currency exchange rates,       
unfavorable political and legal developments, unreliable or untimely        
information, and economic and financial instability. In addition, the       
liquidity of these investments may be more limited than for U.S.            
investments, which means we may at times be unable to sell them at          
desirable prices. Foreign settlement procedures may also involve additional 
risks. These risks are generally greater in the case of developing (also    
known as emerging) markets with less developed legal and financial systems. 

Certain of these risks may also apply to U.S. investments that are              
denominated in foreign currencies or that are traded in foreign markets, or     
to securities of U.S. companies that have significant foreign operations.       

* Smaller companies. We may invest in smaller and midsized companies.           
Smaller companies, which may have a market capitalization of less than $1   
billion, are more likely than larger companies to have limited product      
lines, markets or financial resources, or to depend on a small,             
inexperienced management group. Stocks of these companies often trade less  
frequently and in limited volume, and their prices may fluctuate more than  
stocks of larger companies. Stocks of smaller and midsized companies may    
therefore be more vulnerable to adverse developments than those of larger   
companies.                                                                  

* Other investments. In addition to the main investment strategies              
described above, the fund may also make other investments, such as          
investments in common stocks, non-convertible preferred stocks,             
asset-backed securities and derivatives, which may be  subject to other     
risks, as described in the fund's statement of additional information       
(SAI).                                                                      

* Alternative strategies. At times we may judge that market conditions make     
pursuing the fund's usual investment strategies inconsistent with the best  
interests of its shareholders. We then may temporarily use alternative      
strategies that are mainly designed to limit losses. However, we may choose 
not to use these strategies for a variety of reasons, even in very volatile 
market conditions. These strategies may cause the fund to miss out on       
investment opportunities, and may prevent the fund from achieving its goal. 

* Changes in policies. The fund's Trustees may change the fund's goal,          
investment strategies and other policies described above without            
shareholder approval, except as otherwise indicated.                        

Who manages the fund?                                                           

The fund's Trustees oversee the general conduct of the fund's business. The     
Trustees have retained Putnam Management to be the fund's investment            
manager, responsible for making investment decisions for the fund and           
managing the fund's other affairs and business. The fund pays Putnam            
Management a quarterly management fee for these services based on the           
fund's average net assets. The fund paid Putnam Management a management fee     
of 0.57% of average net assets for the fund's last fiscal year. Putnam          
Management's address is One Post Office Square, Boston, MA 02109.               

The following officers of Putnam Management have had primary responsibility     
for the day-to-day management of the fund's portfolio since the years shown     
below. Their experience as portfolio managers or investment analysts over       
at least the last five years is also shown.                                     

-------------------------------------------------------------------------       
Manager                       Since    Experience                               
-------------------------------------------------------------------------       
Forrest N. Fontana            1998     1993 - Present   Putnam Management       
Senior Vice President                                                           
-------------------------------------------------------------------------       
Charles G. Pohl               1992     1983 - Present   Putnam Management       
Senior Vice President                                                           
-------------------------------------------------------------------------       

* Year 2000 issues. The fund could be adversely affected if the computer        
systems that we and the fund's other service providers use do not properly  
process and calculate date-related information relating to the year 2000.   
While year 2000-related computer problems could have a negative effect on   
the fund, both in its operations and in its investments, we are working to  
avoid such problems and to obtain assurances from service providers that    
they are taking similar steps. No assurances, though, can be provided that  
the fund will not be adversely impacted by these matters.                   

How does the fund price its shares?                                             

The price of the fund's shares is based on its net asset value (NAV). The       
NAV per share of each class equals the total value of its assets, less its      
liabilities, divided by the number of its outstanding shares. Shares are        
only valued as of the close of regular trading on the New York Stock            
Exchange each day the exchange is open.                                         

The fund values its investments for which market quotations are readily         
available at market value. It values short-term investments that will           
mature within 60 days at amortized cost, which approximates market value.       
It values all other investments and assets at their fair value.                 

The fund translates prices for its investments quoted in foreign currencies     
into U.S. dollars at current exchange rates. As a result, changes in the        
value of those currencies in relation to the U.S. dollar may affect the         
fund's NAV. Because foreign markets may be open at different times than the     
New York Stock Exchange, the value of the fund's shares may change on days      
when shareholders are not able to buy or sell them. If events materially        
affecting the values of the fund's foreign investments occur between the        
close of foreign markets and the close of regular trading on the New York       
Stock Exchange, these investments will be valued at their fair value.           

How do I buy fund shares?                                                       

All orders to purchase shares must be made through your employer's              
retirement plan. For more information about how to purchase shares of the       
fund through your employer's plan or limitations on the amount that may be      
purchased, please consult your employer.                                        

Putnam Mutual Funds Corp. (Putnam Mutual Funds) generally must receive your     
plan's completed buy order before the close of regular trading on the New       
York Stock Exchange for shares to be bought at that day's offering price.       

To eliminate the need for safekeeping, the fund will not issue certificates     
for shares.                                                                     

The fund may periodically close to new purchases of shares or refuse any        
order to buy shares if Putnam Management determines that doing so would be      
in the best interests of the fund and its shareholders.                         

* Eligible purchasers. A defined contribution plan (including a corporate       
IRA) is eligible to purchase class Y shares if                              

* the plan, its sponsor and other employee benefit plans of the sponsor         
invest at least $150 million in Putnam funds and other investments managed  
by Putnam Management or its affiliates, or                                  

* the plan's sponsor confirms a good faith expectation that investments in      
Putnam-managed assets by the sponsor and its employee benefit plans will    
attain $150 million (using the higher of purchase price or current market   
value) within one year of initial purchase, and agrees that class Y shares  
may be redeemed and class A shares purchased if that level is not attained. 

How do I sell fund shares?                                                      

Subject to any restrictions imposed by your employer's plan, you can sell       
your shares through the plan back to the fund any day the New York Stock        
Exchange is open. For more information about how to sell shares of the fund     
through your employer's plan, including any charges that the plan may           
impose, please consult your employer.                                           

Your plan administrator must send a signed letter of instruction to Putnam      
Investor Services. The price you will receive is the next NAV per share         
calculated after the fund receives the instruction in proper form. In order     
to receive that day's NAV, Putnam Investor Services must receive the            
instruction before the close of regular trading on the New York Stock           
Exchange.                                                                       

The fund generally sends payment for your shares the business day after         
your request is received. Under unusual circumstances, the fund may suspend     
redemptions, or postpone payment for more than seven days, as permitted by      
federal securities law.                                                         

How do I exchange fund shares?                                                  

Subject to any restrictions your plan imposes, you can exchange your fund       
shares for shares of other Putnam funds offered through your employer's         
plan without a sales charge. Contact your plan administrator or Putnam          
Investor Services for more information.                                         

The exchange privilege is not intended as a vehicle for short-term trading.     
Excessive exchange activity may interfere with portfolio management and         
have an adverse effect on all shareholders. In order to limit excessive         
exchange activity and otherwise to promote the best interests of the fund,      
the fund reserves the right to revise or terminate the exchange privilege,      
limit the amount or number of exchanges or reject any exchange. The fund        
into which you would like to exchange may also reject your exchange. These      
actions may apply to all shareholders or only to those shareholders whose       
exchanges Putnam Management determines are likely to have a negative effect     
on the fund or other Putnam funds.                                              

Fund distributions and taxes                                                    

The fund normally distributes any net investment income quarterly and any       
net realized capital gains annually.                                            

The terms of your employer's plan will govern how your employer's plan may      
receive distributions from the fund. Generally, periodic distributions from     
the fund to your employer's plan are reinvested in additional fund shares,      
although your employer's plan may permit you to receive fund distributions      
from net investment income in cash while reinvesting capital gains              
distributions in additional shares or to receive all fund distributions in      
cash. If another option is not selected, all distributions will be              
reinvested in additional fund shares.                                           

Generally, for federal income tax purposes, fund distributions are taxable      
as ordinary income, except that any distributions of long-term capital          
gains will be taxed as such regardless of how long you have held your           
shares. However, distributions by the fund to retirement plans that qualify     
for tax-exempt treatment under federal income tax laws will not be taxable.     
Special tax rules apply to investments through such plans. You should           
consult your tax advisor to determine the suitability of the fund as an         
investment through such a plan and the tax treatment of distributions           
(including distributions of amounts attributable to an investment in the        
fund) from such a plan.                                                         

The fund's investments in foreign securities may be subject to foreign          
withholding taxes. In that case, the fund's return on those investments         
would be decreased.                                                             

The fund's investments in certain debt obligations may cause the fund to        
recognize taxable income in excess of the cash generated by such                
obligations. Thus, the fund could be required at times to liquidate other       
investments in order to satisfy its distribution requirements.                  

You should consult your tax advisor for more information on your own tax        
situation, including possible foreign, state and local taxes.                   

Financial highlights                                                            

The financial highlights table is intended to help you understand the           
fund's recent financial performance. Certain information reflects financial     
results for a single fund share. The total returns represent the rate that      
an investor would have earned or lost on an investment in the fund,             
assuming reinvestment of all dividends and distributions. This information      
for the period ended October 31, 1999 has been derived from the fund's          
financial statements, which have been audited by KPMG LLP. Its report and       
the fund's financial statements are included in the fund's annual report to     
shareholders, which is available upon request.                                  

                                                                [Download Table]


FINANCIAL HIGHLIGHTS                                                          

CLASS Y                                                                       
(For a share outstanding throughout the period)                               
                                                                For the period
                                                                Dec. 30, 1998+
                                                                to October 31,
                                                               ---------------
                                                                     1999     
------------------------------------------------------------------------------
                                                                              
Net asset value,                                                              
beginning of period                                                 $19.32    
------------------------------------------------------------------------------
Investment operations                                                         
Net investment income                                                  .72c   
Net realized and unrealized                                                   
gain (loss) on investments                                             .98    
------------------------------------------------------------------------------
Total from                                                                    
investment operations                                                 1.70    
------------------------------------------------------------------------------
Less distributions:                                                           
From net investment income                                            (.72)   
In excess of net                                                              
investment income                                                     (.04)   
From net realized gain                                                        
on investments                                                          --    
------------------------------------------------------------------------------
Total distributions                                                   (.76)   
------------------------------------------------------------------------------
Net asset value,                                                              
end of period                                                       $20.26    
------------------------------------------------------------------------------
Ratios and                                                                    
supplemental data                                                             
Total return at                                                               
net asset value (%)a                                                  8.87*   
Net assets,                                                                   
end of period                                                                 
(in thousands)                                                     $63,425    
------------------------------------------------------------------------------
Ratio of expenses to                                                          
average net assets (%)b                                                .61*   
Ratio of net investment                                                       
income to average                                                             
net assets (%)                                                        3.43*   
Portfolio turnover (%)                                               54.74    
------------------------------------------------------------------------------

+ Commencement of operations.                                                 

* Not annualized.                                                             

a Total return assumes dividend reinvestment and does not reflect the effect  
  of sales charges.                                                           

b Includes amounts paid through brokerage service and expense offset          
  arrangements.                                                               

c Per share net investment income has been determined on the basis of         
  the weighted average number of shares outstanding during the period.        


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For more information about Putnam Convertible                                   
Income-Growth Trust                                                             

The fund's statement of additional information (SAI) and annual and             
semi-annual reports to shareholders include additional information about        
the fund. The SAI, and the independent accountants' reports and financial       
statements included in the fund's two most recent annual report to its          
shareholders, are incorporated by reference into this prospectus, which         
means they are part of this prospectus for legal purposes. The fund's           
annual report discusses the market conditions and investment strategies         
that significantly affected the fund's performance during its last fiscal       
year. You may get free copies of these materials, request other                 
information about the fund, or make shareholder inquiries, by calling           
Putnam toll-free at 1-800-752-9894.                                             

You may review and copy information about the fund, including its SAI, at       
the Securities and Exchange Commission's public reference room in               
Washington, D.C. You may call the Commission at 1-800-SEC-0330 for              
information about the operation of the public reference room. You may also      
access reports and other information about the fund on the Commission's         
Internet site at http://www.sec.gov. You may get copies of this                 
information, with payment of a duplication fee, by writing the Public           
Reference Section of the Commission, Washington, D.C. 20549-6009. You may       
need to refer to the fund's file number.                                        

P U T N A M  I N V E S T M E N T S                                              

Putnam Defined Contribution Plans                     
One Post Office Square                                
Boston, Massachusetts 02109                           
1-800-752-9894                                        

Address correspondence to                             
Putnam Investor Services                              
P.O. Box 989                                          
Boston, Massachusetts 02103                           

www.putnaminv.com                                     

59488 2/00   File No. 811-2280                                                  

PUTNAM CONVERTIBLE INCOME-GROWTH TRUST                                          

FORM N-1A                                                                       
PART B                                                                          

STATEMENT OF ADDITIONAL INFORMATION ("SAI")                                     

February  29, 2000                                                              

This SAI is not a prospectus and is only authorized for distribution when       
accompanied or preceded by the prospectus of the fund dated February  29,       
2000, as revised from time to time. This SAI contains information that may      
be useful to investors but that is not included in the prospectus.  If the      
fund has more than one form of current prospectus, each reference to the        
prospectus in this SAI shall include all of the fund's prospectuses, unless     
otherwise noted. The SAI should be read together with the applicable            
prospectus.  Certain disclosure has been incorporated by reference from the     
fund's annual report.  For a free copy of the fund's annual report or           
prospectus, call Putnam Investor Services at 1-800-225-1581 or write Putnam     
Investor Services, Mailing address: P.O. Box 41203, Providence, RI              
02940-1203.                                                                     

Part I of this SAI contains specific information about the fund.  Part II       
includes information about the fund and the other Putnam funds.                 

Table of Contents                                                               

PART I                                                                          

FUND ORGANIZATION AND CLASSIFICATION                               I-3          
INVESTMENT RESTRICTIONS                                            I-4          
CHARGES AND EXPENSES                                               I-5          

INVESTMENT PERFORMANCE                                            I-13          
ADDITIONAL OFFICERS                                               I-14          
INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS                  I-15          

Part II                                                                         
MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS         II-1          

TAXES                                                            II-25          
MANAGEMENT                                                       II-28          
DETERMINATION OF NET ASSET VALUE                                 II-36          
HOW TO BUY SHARES                                                II-37          

DISTRIBUTION PLANS                                               II-47          
INVESTOR SERVICES                                                II-51          
SIGNATURE GUARANTEES                                             II-55          
SUSPENSION OF REDEMPTIONS                                        II-55          
SHAREHOLDER LIABILITY                                            II-56          
STANDARD PERFORMANCE MEASURES                                    II-56          
COMPARISON OF PORTFOLIO PERFORMANCE                              II-57          
SECURITIES RATINGS                                               II-60          
DEFINITIONS                                                      II-65          

SAI                                                                             
PART I                                                                          

FUND ORGANIZATION AND CLASSIFICATION                                            

Putnam Convertible Income-Growth Trust is a Massachusetts business trust        
organized on August 13, 1982 as the successor to Putnam Convertible Fund,       
Inc., a Massachusetts corporation organized on March 8, 1972.  A copy of        
the Agreement and Declaration of Trust, which is governed by Massachusetts      
law, is on file with the Secretary of State of The Commonwealth of              
Massachusetts.                                                                  

The fund is an open-end management investment company with an unlimited         
number of authorized shares of beneficial interest, which may be divided        
without shareholder approval into two or more classes of shares having such     
preferences and special or relative rights and privileges as the Trustees       
determine. The fund offers classes of shares with different sales charges       
and expenses.  Because of these different sales charges and expenses, the       
investment performance of the classes will vary.  For more information,         
including your eligibility to purchase certain classes of shares, contact       
your investment dealer or Putnam Mutual Funds (at 1-800-225-1581).              

Each share has one vote, with fractional shares voting proportionally.          
Shares of all classes will vote together as a single class except when          
otherwise required by law or as determined by the Trustees.  Shares are         
freely transferable, are entitled to dividends as declared by the Trustees,     
and, if the fund were liquidated, would receive the net assets of the fund.     
The fund may suspend the sale of shares at any time and may refuse any          
order to purchase shares.  Although the fund is not required to hold annual     
meetings of its shareholders, shareholders holding at least 10% of the          
outstanding shares entitled to vote have the right to call a meeting to         
elect or remove Trustees, or to take other actions as provided in the           
Agreement and Declaration of Trust.                                             

The fund is a "diversified" investment company under the Investment Company     
Act of 1940.  This means that with respect to 75% of its total assets, the      
fund may not invest more than 5% of its total assets in the securities of       
any one issuer (except U.S. government securities).  The remaining 25% of       
its total assets is not subject to this restriction.  To the extent the         
fund invests a significant portion of its assets in the securities of a         
particular issuer, it will be subject to an increased risk of loss if the       
market value of such issuer's securities declines.                              

INVESTMENT RESTRICTIONS                                                         

As fundamental investment restrictions, which may not be changed without a      
vote of a majority of the outstanding voting securities, the fund may not       
and will not:                                                                   

(1) With respect to 75% of its total assets, invest in the securities of        
any issuer if, immediately after such investment, more than 5% of the total     
assets of the fund (taken at current value) would be invested in the            
securities of such issuer; provided that this limitation does not apply to      
obligations issued or guaranteed as to interest or principal by the U.S.        
government or its agencies or instrumentalities.                                

(2) With respect to 75% of its total assets, acquire more than 10% of the       
outstanding voting securities of any issuer.                                    

(3) Borrow money in excess of 5% of its net assets (taken at the lower of       
cost or current value) and then only from banks as a temporary measure for      
extraordinary or emergency reasons and not for investment purposes.             

(4) Make loans, except by purchase of debt obligations in which the fund        
may invest consistent with its investment policies, by entering into            
repurchase agreements, or by lending its portfolio securities.                  

(5) Purchase or sell real estate, although it may purchase securities of        
issuers which deal in real estate, securities which are secured by              
interests in real estate, and securities which represent interests in real      
estate, and it may acquire and dispose of real estate or interests in real      
estate acquired through the exercise of its rights as a holder of debt          
obligations secured by real estate or interests therein.                        

(6) Purchase securities (other than securities of the U.S. government, its      
agencies or instrumentalities) if, as a result of such purchase, more than      
25% of the fund's total assets would be invested in any one industry.           

(7) Purchase or sell commodities or commodity contracts, except that the        
fund may purchase and sell financial futures contracts and options and may      
enter into foreign exchange contracts and other financial transactions not      
involving physical commodities.                                                 

(8) Underwrite securities issued by other persons except to the extent          
that, in connection with the disposition of its portfolio investments, it       
may be deemed to be an underwriter under certain federal securities laws.       

The Investment Company Act of 1940 provides that a "vote of a majority of       
the outstanding voting securities" of the fund means the affirmative vote       
of the lesser of (1) more than 50% of the outstanding shares of the fund,       
or (2) 67% or more of the shares present at a meeting if more than 50% of       
the outstanding shares of the fund are represented at the meeting in person     
or by proxy.                                                                    

The following non-fundamental investment policies may be changed without        
shareholder approval:                                                           

(1) The fund may not invest in (a) securities which are not readily             
marketable, (b) securities restricted as to resale (excluding securities        
determined by the Trustees of the fund (or the person designated by the         
Trustees of the fund to make such determinations) to be readily marketable)     
and (c) repurchase agreements maturing in more than seven days, if, as a        
result, more than 15% of the fund's net assets (taken at current value)         
would be invested in securities described in (a), (b) and (c) above.            

(2) The fund generally invests at least 65% of its total assets in              
convertible securities. These include corporate bonds, debentures, notes or     
preferred stocks that can be converted into (that is, exchanged for) common     
stock or other equity securities of the same or different issuer, and other     
securities, such as warrants, that also provide an opportunity for equity       
participation.                                                                  

---------------------------------                 

All percentage limitations on investments (other than pursuant to the           
non-fundamental restriction (1) above) will apply at the time of the making     
of an investment and shall not be considered violated unless an excess or       
deficiency occurs or exists immediately after and as a result of such           
investment.                                                                     

---------------------------------                 

CHARGES AND EXPENSES                                                            

Management fees                                                                 

Under a Management Contract dated February 20, 1997, the fund pays a            
quarterly fee to Putnam Management based on the average net assets of the       
fund, as determined at the close of each business day during the quarter,       
at the annual rate of 0.65% of the first $500 million of average net            
assets, 0.55% of the next $500 million, 0.50% of the next $500 million,         
0.45% of the next $5 billion, 0.425% of the next $5 billion, 0.405% of the      
next $5 billion, 0.39% of the next $5 billion and 0.38% thereafter.  For        
the past three fiscal years, pursuant to the Management Contract (and a         
management contract in effect prior to February 20, 1997, under which the       
management fee payable to Putnam Management was paid at the annual rate of      
0.65% of the first $500 million of average net assets, 0.55% of the next        
$500 million, 0.50% of the next $500 million and 0.45% of any amount over       
$1.5 billion), the fund incurred the following fees:                            

Fiscal                   Management                                             
year                     fee paid                                               

1999                     $7,951,230                                             

1998                     $8,280,168                                             
1997                     $7,310,176                                             

Brokerage commissions                                                           

The following table shows brokerage commissions paid during the fiscal          
periods indicated:                                                              

Fiscal                   Brokerage                                              
year                     commissions                                            

1999                     $1,151,004                                             

1998                     $1,418,931                                             
1997                     $  703,872                                             

The following table shows transactions placed with brokers and dealers          
during the most recent fiscal year to recognize research, statistical and       
quotation services received by Putnam Management and its affiliates:            

Dollar                                                                          
value                    Percent of                                             
of these                 total                    Amount of                     
transactions             transactions             commissions                   

$430,582,600             33.27%                    $454,171                     

Administrative expense reimbursement                                            

The fund reimbursed Putnam Management for administrative services during        
fiscal  1999, including compensation of certain fund officers and               
contributions to the Putnam Investments, Inc. Profit Sharing Retirement         
Plan for their benefit, as follows:                                             

Portion of total              
reimbursement for             
Total                    compensation and                                       
reimbursement             contributions                                         

$18,621                     $15,146                                             

Trustee responsibilities and fees                                               

The Trustees are responsible for generally overseeing the conduct of fund       
business.  Subject to such policies as the Trustees may determine, Putnam       
Management furnishes a continuing investment program for the fund and makes     
investment decisions on its behalf.  Subject to the control of the              
Trustees, Putnam Management also manages the fund's other affairs and           
business.                                                                       

Each Trustee receives a fee for his or her services.  Each Trustee also         
receives fees for serving as Trustee of other Putnam funds.  The Trustees       
periodically review their fees to assure that such fees continue to be          
appropriate in light of their responsibilities as well as in relation to        
fees paid to trustees of other mutual fund complexes.  The Trustees meet        
monthly over a two-day period, except in August.  The Board Policy              
Committee, which consists solely of Trustees not affiliated with Putnam         
Management and is responsible for recommending Trustee compensation,            
estimates that Committee and Trustee meeting time together with the             
appropriate preparation requires the equivalent of at least three business      
days per Trustee meeting.  The following table shows the year each Trustee      
was first elected a Trustee of the Putnam funds, the fees paid to each          
Trustee by the fund for fiscal  1999 and the fees paid to each Trustee by       
all of the Putnam funds during calendar year  1999:                             

                                                                [Download Table]


COMPENSATION TABLE                                                                 

                                      Pension or                                   
                                      retirement                                   
                                   benefits accrued     Estimated          Total   
                      Aggregate        from all      annual benefits   compensation
                    compensation      as part of        from all         from all  
                      from the          fund         Putnam funds         Putnam   
Trustees/Year         fund(1)         expenses     upon retirement(2)     funds(3) 
-----------------------------------------------------------------------------------
                                                                                   

Jameson A. Baxter/                                                                 
1994(4)                $1,530           $297           $95,000           $191,000  

Hans H. Estin/                                                                     
1972                    1,520            680            95,000            190,000  

John A. Hill/                                                                      
1985(4)(5)              1,844            324           115,000            239,750  

Ronald J. Jackson/                                                                 
1996(4)                 1,547            298            95,000            193,500  

Paul L. Joskow/                                                                    
1997(4)                 1,520             90            95,000            191,000  

Elizabeth T. Kennan/                                                               
1992                    1,520            412            95,000            190,000  

Lawrence J. Lasser/                                                                
1992                    1,510            313            95,000            189,000  

John H. Mullin, III/                                                               
1997(4)                 1,567            135            95,000            196,000  

Robert E. Patterson/                                                               
1984                    1,525            223            95,000            190,250  

William F. Pounds/                                                                 
1971(5)                 1,786            758           115,000            231,000  

George Putnam/                                                                     
1957                    1,520            709            95,000            190,000  

George Putnam, III/                                                                
1984                    1,520            150            95,000            190,000  

A.J.C. Smith/                                                                      
1986                    1,500            480            95,000            188,000  

W. Thomas Stephens/                                                                
1997(4)                 1,500            126            95,000            188,000  

W. Nicholas Thorndike/                                                             
1992                    1,520            580            95,000            190,000  


(1) Includes an annual retainer and an attendance fee for each meeting          
attended.                                                                       

(2) Assumes that each Trustee retires at the normal retirement date.            
Estimated benefits for each Trustee are based on Trustee fee rates in           
effect during calendar  1999.                                                   

(3) As of December 31,  1999, there were  114 funds in the Putnam family.       

(4) Includes compensation deferred pursuant to a Trustee Compensation           
Deferral Plan.   The total amounts of deferred compensation payable by the      
fund to Ms. Baxter, Messrs. Hill, Jackson, Joskow, Mullin and Stephens as       
of October 31,  1999 were, respectively, $7,543; $8,949; $6,471; $2,928;        
$2,967 and $3,432, including income earned on such amounts.                     

(5) Includes additional compensation for service as Vice Chairman of the        
Putnam funds.                                                                   

Under a Retirement Plan for Trustees of the Putnam funds (the "Plan"), each     
Trustee who retires with at least five years of service as a Trustee of the     
funds is entitled to receive an annual retirement benefit equal to one-half     
of the average annual compensation paid to such Trustee for the last three      
years of service prior to retirement.  This retirement benefit is payable       
during a Trustee's lifetime, beginning the year following retirement, for a     
number of years equal to such Trustee's years of service.  A death benefit,     
also available under the Plan, assures that the Trustee and his or her          
beneficiaries will receive benefit payments for the lesser of an aggregate      
period of (i) ten years or (ii) such Trustee's total years of service.          

The Plan Administrator (a committee comprised of Trustees that are not          
"interested persons" of the fund, as defined in the Investment Company Act      
of 1940) may terminate or amend the Plan at any time, but no termination or     
amendment will result in a reduction in the amount of benefits (i)              
currently being paid to a Trustee at the time of such termination or            
amendment, or (ii) to which a current Trustee would have been entitled had      
he or she retired immediately prior to such termination or amendment.           

For additional information concerning the Trustees, see "Management" in         
Part II of this SAI.                                                            

Share ownership                                                                 

At  January 31, 2000, the officers and Trustees of the fund as a group          
owned less than 1% of the outstanding shares of each class of the fund,         
and, except as noted below, to the knowledge of the fund, no person owned       
of record or beneficially 5% or more of any class of shares of the fund.        

                Shareholder name                    Percentage
Class                    and address                         owned          

B                    Merrill Lynch                         9.00%        
4800 Deer Lake Drive E        
Jacksonville, FL 32246        

C                    Merrill Lynch                         9.80%        
4800 Deer Lake Drive E        
Jacksonville, FL 32246        

C                    Donaldson, Lufkin, Jenrette           8.00%        
P.O. Box 2052                 
Jersey City, NJ 07303         

C                    First Trust Corp.                     6.30%        
717 17th Street               
Ste. 2600                     
Denver, CO 80202              

C                    Alice J. Krelle TTEE                  5.30%        
P.O. Box 4515                 
Incline Village, NV 89450     

M                    Merrill Lynch                         6.10%        
4800 Deer Lake Drive E        
Jacksonville, FL 32246        

M                    Edward D. Jones & Co.                 9.70%        
P.O. Box 2500                 
Maryland Heights, MO 63043    

Y*                   Potlach Corporation Savings Plan     46.09%        

Y*                   IT Corp.                             10.77%        

*The address for the names listed is:                                           
c/o Putnam Fiduciary Trust Company, as trustee or agent, 859 Willard Street,    
Quincy, MA 02269.                                                               

Distribution fees                                                               

During fiscal  1999, the fund paid the following 12b-1 fees to Putnam           
Mutual Funds:                                                                   

      Class A        Class B         Class  C        Class M
      $2,584,777     $2,978,033         $763          $130,967

Class A sales charges and contingent deferred sales charges                     

Putnam Mutual Funds received sales charges with respect to class A shares       
in the following amounts during the periods indicated:                          

     Sales charges
                   retained by Putnam       Contingent
       Total          Mutual Funds          deferred
  front-end             after              sales
Fiscal year      sales charges   dealer concessions       charges               

1999               $  747,121          $134,006           $ 8,041               

1998               $1,981,391          $328,284           $14,672               
1997               $2,031,348          $334,044           $12,459               

Class B contingent deferred sales charges                                       

Putnam Mutual Funds received contingent deferred sales charges upon             
redemptions of class B shares in the following amounts during the periods       
indicated:                                                                      

Contingent deferred                     
Fiscal year           sales charges                                             

1999                     $645,251                                               

1998                     $421,192                                               
1997                     $209,400                                               

Class C contingent deferred sales charges                                       

Putnam Mutual Funds received no contingent deferred sales charges upon          
redemptions of class C shares since inception.                                  

Class M sales charges                                                           

Putnam Mutual Funds received sales charges with respect to class M shares       
in the following amounts during the periods indicated:                          

                       Sales charges
                        retained by Putnam
                      Mutual Funds
Total                  after
Fiscal year           sales charges        dealer concessions                   

1999                     $ 39,239               $ 7,112                         

1998                     $132,149               $21,844                         
1997                     $ 98,861               $14,946                         

Investor servicing and custody fees and expenses                                

During the 1999 fiscal year, the fund incurred  $1,659,844 in fees and          
out-of-pocket expenses for investor servicing and custody services provided     
by Putnam Fiduciary Trust Company.                                              

INVESTMENT PERFORMANCE                                                          

Standard performance measures                                                   

(for periods ended October 31,  1999)                                           

                Class A     Class B     Class  C     Class M       Class Y
Inception Date     6/29/72     7/15/93      7/26/99      3/13/95      12/30/98  

Average annual total return                                                     

1 year              9.74%       10.58%      14.53%       11.83%        16.64%   
5 years            12.60%       12.85%      13.08%       12.57%        13.98%   
10 years           11.90%       11.71%      11.72%       11.60%        12.59%   

Yield                                                                           

30-day yield        3.52%        3.04%       3.05%        3.16%         4.00%   

Returns for class A and class M shares reflect the deduction of the current     
maximum initial sales charges of 5.75% for class A shares and 3.50% for         
class M shares.                                                                 

Returns for class B and class C shares reflect the deduction of the             
applicable contingent deferred sales charge ("CDSC"), which for class B is      
5% in the first year, declining to 1% in the sixth year, and  eliminated        
thereafter, and for class C is 1% in the first year and eliminated              
thereafter.                                                                     

Returns shown for class B, class  C, class M and class Y shares for             
periods prior to their inception are derived from the historical                
performance of class A shares, adjusted to reflect both the deduction of        
the initial sales charge or CDSC, if any, currently applicable to each          
class and, in the case of class B, class C and class M shares, the higher       
operating expenses applicable to such shares.                                   

Returns shown for class A shares have not been adjusted to reflect payments     
under the class A distribution plan prior to its implementation.  All           
returns assume reinvestment of distributions at net asset value and             
represent past performance; they do not guarantee future results.               
Investment return and principal value will fluctuate so that an investor's      
shares, when redeemed, may be worth more or less than their original cost.      

See "Standard performance measures" in Part II of this SAI for information      
on how performance is calculated.                                               

ADDITIONAL OFFICERS                                                             

In addition to the persons listed as fund officers in Part II of this SAI,      
each of the following persons is also a Vice President of the fund and          
certain of the other Putnam funds, the total number of which is noted           
parenthetically.  Officers of Putnam Management hold the same offices in        
Putnam Management's parent company, Putnam Investments, Inc.                    

Officer Name (Age) (Number of funds)                                            

Thomas V. Reilly (age  53) (17 funds).  Managing Director of Putnam             
Management.                                                                     

Edward T. Shadek Jr. (age 39) (5 funds). Managing Director of Putnam            
Management. Prior to March 1997, Mr. Shadek was a Portfolio Manager at          
Newbold's Asset Management Co.                                                  

Forrest N. Fontana (age  34) (2 funds).  Senior Vice President of Putnam        
Management.                                                                     

Charles G. Pohl (age  39) (3 funds).  Senior Vice President of Putnam           
Management.                                                                     

INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS                                

KPMG LLP,  99 High Street, Boston, Massachusetts 02110, are the fund's          
independent accountants, providing audit services, tax return review and        
other tax consulting services and assistance and consultation in connection     
with the review of various Securities and Exchange Commission filings.  The     
Report of Independent Accountants, financial highlights and financial           
statements included in the fund's Annual Report for the fiscal year ended       
October 31,  1999, filed electronically on December  17, 1999 (File No.         
811-2280), are incorporated by reference into this SAI.  The financial          
highlights included in the prospectus and incorporated by reference into        
this SAI and the financial statements incorporated by reference into the        
prospectus and this SAI have been so included and incorporated in reliance      
upon the  reports of the independent accountants and, for all periods prior     
to the year ended October 31, 1999, the previous independent accountants,       
PricewaterhouseCoopers, LLP given on their authority as experts in auditing     
and accounting.                                                                 

II-102                
Oct/28/99                                                                       

TABLE OF CONTENTS                 

MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS    II-1               

TAXES..                                                     II-25               

MANAGEMENT                                                  II-28               

DETERMINATION OF NET ASSET VALUE                            II-36               

HOW TO BUY SHARES                                           II-37               

DISTRIBUTION PLANS                                          II-47               

INVESTOR SERVICES                                           II-51               

SIGNATURE GUARANTEES                                        II-55               

SUSPENSION OF REDEMPTIONS                                   II-55               

SHAREHOLDER LIABILITY                                       II-56               

STANDARD PERFORMANCE MEASURES                               II-56               

COMPARISON OF PORTFOLIO PERFORMANCE                         II-57               

SECURITIES RATINGS                                          II-60               

DEFINITIONS                                                 II-65               

THE PUTNAM FUNDS                
STATEMENT OF ADDITIONAL INFORMATION ("SAI")                 
PART II                 

As noted in the prospectus, in addition to the principal                        
investment strategies and the principal risks described in the                  
prospectus, the fund may employ other investment practices and                  
may be subject to other risks, which are described below.                       
Because the following is a combined description of investment                   
strategies of all of the Putnam funds, certain matters described                
herein may not apply to your fund.  Unless a strategy or policy                 
described below is specifically prohibited by the investment                    
restrictions explained in a fund's prospectus or part I of this                 
SAI, or by applicable law, the fund may engage in each of the                   
practices described below.  Shareholders who purchase shares at                 
net asset value through employer-sponsored defined contribution                 
plans should also consult their employer for information about                  
the extent to which the matters described below apply to them.                  

MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS                       

FOREIGN INVESTMENTS                                                             

The fund may invest in securities of foreign issuers.  These                    
foreign investments involve certain special risks described                     
below.                                                                          

Foreign securities are normally denominated and traded in foreign               
currencies.  As a result, the value of the fund's foreign                       
investments and the value of its shares may be affected favorably               
or unfavorably by changes in currency exchange rates relative to                
the U.S. dollar.  There may be less information publicly                        
available about a foreign issuer than about a U.S. issuer, and                  
foreign issuers are not generally subject to accounting, auditing               
and financial reporting standards and practices comparable to                   
those in the United States.  The securities of some foreign                     
issuers are less liquid and at times more volatile than                         
securities of comparable U.S. issuers.  Foreign brokerage                       
commissions and other fees are also generally higher than in the                
United States.  Foreign settlement procedures and trade                         
regulations may involve certain risks (such as delay in payment                 
or delivery of securities or in the recovery of the fund's assets               
held abroad) and expenses not present in the settlement of                      
investments in U.S. markets.                                                    

In addition, the fund's investments in foreign securities may be                
subject to the risk of nationalization or expropriation of                      
assets, imposition of currency exchange controls, foreign                       
withholding taxes or restrictions on the repatriation of foreign                
currency, confiscatory taxation, political or financial                         
instability and diplomatic developments which could affect the                  
value of the fund's investments in certain foreign countries.                   
Dividends or interest on, or proceeds from the sale of, foreign                 
securities may be subject to foreign withholding taxes, and                     
special U.S. tax considerations may apply.                                      

Legal remedies available to investors in certain foreign                        
countries may be more limited than those available with respect                 
to investments in the United States or in other foreign                         
countries.  The laws of some foreign countries may limit the                    
fund's ability to invest in securities of certain issuers                       
organized under the laws of those foreign countries.                            

The risks described above, including the risks of nationalization               
or expropriation of assets, are typically increased in connection               
with investments in "emerging markets."   For example, political                
and economic structures in these countries may be in their                      
infancy and developing rapidly, and such countries may lack the                 
social, political and economic stability characteristic of more                 
developed countries.  Certain of these countries have in the past               
failed to recognize private property rights and have at times                   
nationalized and expropriated the assets of private companies.                  
High rates of inflation or currency devaluations may adversely                  
affect the economies and securities markets of such countries.                  
Investments in emerging markets may be considered speculative.                  

The currencies of certain emerging market countries have                        
experienced a steady devaluation relative to the U.S. dollar, and               
continued devaluations may adversely affect the value of a fund's               
assets denominated in such currencies.  Many emerging market                    
companies have experienced substantial, and in some periods                     
extremely high, rates of inflation or deflation for many years,                 
and continued inflation may adversely affect the economies and                  
securities markets of such countries.                                           

In addition, unanticipated political or social developments may                 
affect the value of the fund's investments in emerging markets                  
and the availability to the fund of additional investments in                   
these markets.  The small size, limited trading volume and                      
relative inexperience of the securities markets in these                        
countries may make the fund's investments in securities traded in               
emerging markets illiquid and more volatile than investments in                 
securities traded in more developed countries, and the fund may                 
be required to establish special custodial or other arrangements                
before making investments in securities traded in emerging                      
markets.  There may be little financial or accounting information               
available with respect to issuers of emerging market securities,                
and it may be difficult as a result to assess the value of                      
prospects of an investment in such securities.                                  

Certain of the foregoing risks may also apply to some extent to                 
securities of U.S. issuers that are denominated in foreign                      
currencies or that are traded in foreign markets, or securities                 
of U.S. issuers having significant foreign operations.                          

FOREIGN CURRENCY TRANSACTIONS                                                   

The fund may engage without limit in currency exchange                          
transactions, including purchasing and selling foreign currency,                
foreign currency options, foreign currency forward contracts and                
foreign currency futures contracts and related options, to manage               
its exposure to foreign currencies.  In addition, the fund may                  
write covered call and put options on foreign currencies for the                
purpose of increasing its current return.                                       

Generally, the fund may engage in both "transaction hedging" and                
"position hedging."  The fund may also engage in foreign currency               
transactions for non-hedging purposes, subject to applicable law.               
When it engages in transaction hedging, the fund enters into                    
foreign currency transactions with respect to specific                          
receivables or payables, generally arising in connection with the               
purchase or sale of portfolio securities.  The fund will engage                 
in transaction hedging when it desires to "lock in" the U.S.                    
dollar price of a security it has agreed to purchase or sell, or                
the U.S. dollar equivalent of a dividend or interest payment in a               
foreign currency.  By transaction hedging the fund will attempt                 
to protect itself against a possible loss resulting from an                     
adverse change in the relationship between the U.S. dollar and                  
the applicable foreign currency during the period between the                   
date on which the security is purchased or sold, or on which the                
dividend or interest payment is earned, and the date on which                   
such payments are made or received.                                             

The fund may purchase or sell a foreign currency on a spot (or                  
cash) basis at the prevailing spot rate in connection with the                  
settlement of transactions in portfolio securities denominated in               
that foreign currency. If conditions warrant, for transaction                   
hedging purposes the fund may also enter into contracts to                      
purchase or sell foreign currencies at a future date ("forward                  
contracts") and purchase and sell foreign currency futures                      
contracts.  A foreign currency forward contract is a negotiated                 
agreement to exchange currency at a future time at a rate or                    
rates that may be higher or lower than the spot rate.  Foreign                  
currency futures contracts are standardized exchange-traded                     
contracts and have margin requirements.  In addition, for                       
transaction hedging purposes the fund may also purchase or sell                 
exchange-listed and over-the-counter call and put options on                    
foreign currency futures contracts and on foreign currencies.                   
The fund may also enter into contracts to purchase or sell                      
foreign currencies at a future date ("forward contracts") and                   
purchase and sell foreign currency futures contracts.                           

For transaction hedging purposes the fund may also purchase                     
exchange-listed and over-the-counter call and put options on                    
foreign currency futures contracts and on foreign currencies.  A                
put option on a futures contract gives the fund the right to                    
assume a short position in the futures contract until the                       
expiration of the option.  A put option on a currency gives the                 
fund the right to sell the currency at an exercise price until                  
the expiration of the option.  A call option on a futures                       
contract gives the fund the right to assume a long position in                  
the futures contract until the expiration of the option.  A call                
option on a currency gives the fund the right to purchase the                   
currency at the exercise price until the expiration of the                      
option.                                                                         

The fund may engage in position hedging to protect against a                    
decline in the value relative to the U.S. dollar of the                         
currencies in which its portfolio securities are denominated or                 
quoted (or an increase in the value of the currency in which the                
securities the fund intends to buy are denominated, when the fund               
holds cash or short-term investments).  For position hedging                    
purposes, the fund may purchase or sell, on exchanges or in over-               
the-counter markets, foreign currency futures contracts, foreign                
currency forward contracts and options on foreign currency                      
futures contracts and on foreign currencies.  In connection with                
position hedging, the fund may also purchase or sell foreign                    
currency on a spot basis.                                                       

It is impossible to forecast with precision the market value of                 
portfolio securities at the expiration or maturity of a forward                 
or futures contract.  Accordingly, it may be necessary for the                  
fund to purchase additional foreign currency on the spot market                 
(and bear the expense of such purchase) if the market value of                  
the security or securities being hedged is less than the amount                 
of foreign currency the fund is obligated to deliver and a                      
decision is made to sell the security or securities and make                    
delivery of the foreign currency.  Conversely, it may be                        
necessary to sell on the spot market some of the foreign currency               
received upon the sale of the portfolio security or securities if               
the market value of such security or securities exceeds the                     
amount of foreign currency the fund is obligated to deliver.                    

Transaction and position hedging do not eliminate fluctuations in               
the underlying prices of the securities which the fund owns or                  
intends to purchase or sell.  They simply establish a rate of                   
exchange which one can achieve at some future point in time.                    
Additionally, although these techniques tend to minimize the risk               
of loss due to a decline in the value of the hedged currency,                   
they tend to limit any potential gain which might result from the               
increase in value of such currency.  See "Risk factors in options               
transactions."                                                                  

The fund may seek to increase its current return or to offset                   
some of the costs of hedging against fluctuations in current                    
exchange rates by writing covered call options and covered put                  
options on foreign currencies.  The fund receives a premium from                
writing a call or put option, which increases the fund's current                
return if the option expires unexercised or is closed out at a                  
net profit.  The fund may terminate an option that it has written               
prior to its expiration by entering into a closing purchase                     
transaction in which it purchases an option having the same terms               
as the option written.                                                          

The fund's currency hedging transactions may call for the                       
delivery of one foreign currency in exchange for another foreign                
currency and may at times not involve currencies in which its                   
portfolio securities are then denominated.  Putnam Management                   
will engage in such "cross hedging" activities when it believes                 
that such transactions provide significant hedging opportunities                
for the fund.  Cross hedging transactions by the fund involve the               
risk of imperfect correlation between changes in the values of                  
the currencies to which such transactions relate and changes in                 
the value of the currency or other asset or liability which is                  
the subject of the hedge.                                                       

The fund may also engage in non-hedging currency transactions.                  
For example, Putnam Management may believe that exposure to a                   
currency is in the fund's best interest but that securities                     
denominated in that currency are unattractive.  In that case the                
fund may purchase a currency forward contract or option in order                
to increase its exposure to the currency.  In accordance with SEC               
regulations, the fund will segregate liquid assets in its                       
portfolio to cover forward contracts used for non-hedging                       
purposes.                                                                       

The value of any currency, including U.S. dollars and foreign                   
currencies, may be affected by complex political and economic                   
factors applicable to the issuing country.  In addition, the                    
exchange rates of foreign currencies (and therefore the values of               
foreign currency options, forward contracts and futures                         
contracts) may be affected significantly, fixed, or supported                   
directly or indirectly by U.S. and foreign government actions.                  
Government intervention may increase risks involved in purchasing               
or selling foreign currency options, forward contracts and                      
futures contracts, since exchange rates may not be free to                      
fluctuate in response to other market forces.                                   

The value of a foreign currency option, forward contract or                     
futures contract reflects the value of an exchange rate, which in               
turn reflects relative values of two currencies, the U.S. dollar                
and the foreign currency in question.  Because foreign currency                 
transactions occurring in the interbank market involve                          
substantially larger amounts than those that may be involved in                 
the exercise of foreign currency options, forward contracts and                 
futures contracts, investors may be disadvantaged by having to                  
deal in an odd-lot market for the underlying foreign currencies                 
in connection with options at prices that are less favorable than               
for round lots.  Foreign governmental restrictions or taxes could               
result in adverse changes in the cost of acquiring or disposing                 
of foreign currencies.                                                          

There is no systematic reporting of last sale information for                   
foreign currencies and there is no regulatory requirement that                  
quotations available through dealers or other market sources be                 
firm or revised on a timely basis.  Available quotation                         
information is generally representative of very large round-lot                 
transactions in the interbank market and thus may not reflect                   
exchange rates for smaller odd-lot transactions (less than $1                   
million) where rates may be less favorable. The interbank market                
in foreign currencies is a global, around-the-clock market.  To                 
the extent that options markets are closed while the markets for                
the underlying currencies remain open, significant price and rate               
movements may take place in the underlying markets that cannot be               
reflected in the options markets.                                               

The decision as to whether and to what extent the fund will                     
engage in foreign currency exchange transactions will depend on a               
number of factors, including prevailing market conditions, the                  
composition of the fund's portfolio and the availability of                     
suitable transactions. Accordingly, there can be no assurance                   
that the fund will engage in foreign currency exchange                          
transactions at any given time or from time to time.                            

CURRENCY FORWARD AND FUTURES CONTRACTS.  A forward foreign                      
currency contract involves an obligation to purchase or sell a                  
specific currency at a future date, which may be any fixed number               
of days from the date of the contract as agreed by the parties,                 
at a price set at the time of the contract.  In the case of a                   
cancelable forward contract, the holder has the unilateral right                
to cancel the contract at maturity by paying a specified fee.                   
The contracts are traded in the interbank market conducted                      
directly between currency traders (usually large commercial                     
banks) and their customers.  A forward contract generally has no                
deposit requirement, and no commissions are charged at any stage                
for trades.  A foreign currency futures contract is a                           
standardized contract for the future delivery of a specified                    
amount of a foreign currency at a price set at the time of the                  
contract.  Foreign currency futures contracts traded in the                     
United States are designed by and traded on exchanges regulated                 
by the CFTC, such as the New York Mercantile Exchange.                          

Forward foreign currency exchange contracts differ from foreign                 
currency futures contracts in certain respects.  For example, the               
maturity date of a forward contract may be any fixed number of                  
days from the date of the contract agreed upon by the parties,                  
rather than a predetermined date in a given month.  Forward                     
contracts may be in any amount agreed upon by the parties rather                
than predetermined amounts.  Also, forward foreign exchange                     
contracts are traded directly between currency traders so that no               
intermediary is required.  A forward contract generally requires                
no margin or other deposit.                                                     

At the maturity of a forward or futures contract, the fund either               
may accept or make delivery of the currency specified in the                    
contract, or at or prior to maturity enter into a closing                       
transaction involving the purchase or sale of an offsetting                     
contract.  Closing transactions with respect to forward contracts               
are usually effected with the currency trader who is a party to                 
the original forward contract.  Closing transactions with respect               
to futures contracts are effected on a commodities exchange; a                  
clearing corporation associated with the exchange assumes                       
responsibility for closing out such contracts.                                  

Positions in the foreign currency futures contracts may be closed               
out only on an exchange or board of trade which provides a                      
secondary market in such contracts.  Although the fund intends to               
purchase or sell foreign currency futures contracts only on                     
exchanges or boards of trade where there appears to be an active                
secondary market, there is no assurance that a secondary market                 
on an exchange or board of trade will exist for any particular                  
contract or at any particular time.  In such event, it may not be               
possible to close a futures position and, in the event of adverse               
price movements, the fund would continue to be required to make                 
daily cash payments of variation margin.                                        

FOREIGN CURRENCY OPTIONS.  In general, options on foreign                       
currencies operate similarly to options on securities and are                   
subject to many of the risks described above.  Foreign currency                 
options are traded primarily in the over-the-counter market,                    
although options on foreign currencies are also listed on several               
exchanges.  Options are traded not only on the currencies of                    
individual nations, but also on the euro, the joint currency of                 
most countries in the European Union.                                           

The fund will only purchase or write foreign currency options                   
when Putnam Management believes that a liquid secondary market                  
exists for such options.  There can be no assurance that a liquid               
secondary market will exist for a particular option at any                      
specific time.  Options on foreign currencies are affected by all               
of those factors which influence foreign exchange rates and                     
investments generally.                                                          

SETTLEMENT PROCEDURES.  Settlement procedures relating to the                   
fund's investments in foreign securities and to the fund's                      
foreign currency exchange transactions may be more complex than                 
settlements with respect to investments in debt or equity                       
securities of U.S. issuers, and may involve certain risks not                   
present in the fund's domestic investments.  For example,                       
settlement of transactions involving foreign securities or                      
foreign currencies may occur within a foreign country, and the                  
fund may be required to accept or make delivery of the underlying               
securities or currency in conformity with any applicable U.S. or                
foreign restrictions or regulations, and may be required to pay                 
any fees, taxes or charges associated with such delivery.  Such                 
investments may also involve the risk that an entity involved in                
the settlement may not meet its obligations.                                    

FOREIGN CURRENCY CONVERSION.  Although foreign exchange dealers                 
do not charge a fee for currency conversion, they do realize a                  
profit based on the difference (the "spread") between prices at                 
which they are buying and selling various currencies.  Thus, a                  
dealer may offer to sell a foreign currency to the fund at one                  
rate, while offering a lesser rate of exchange should the fund                  
desire to resell that currency to the dealer.                                   

OPTIONS ON SECURITIES                                                           

WRITING COVERED OPTIONS.  The fund may write covered call options               
and covered put options on optionable securities held in its                    
portfolio, when in the opinion of Putnam Management such                        
transactions are consistent with the fund's investment                          
objective(s) and policies.  Call options written by the fund give               
the purchaser the right to buy the underlying securities from the               
fund at a stated exercise price; put options give the purchaser                 
the right to sell the underlying securities to the fund at a                    
stated price.                                                                   

The fund may write only covered options, which means that, so                   
long as the fund is obligated as the writer of a call option, it                
will own the underlying securities subject to the option (or                    
comparable securities satisfying the cover requirements of                      
securities exchanges).  In the case of put options, the fund will               
hold cash and/or high-grade short-term debt obligations equal to                
the price to be paid if the option is exercised.  In addition,                  
the fund will be considered to have covered a put or call option                
if and to the extent that it holds an option that offsets some or               
all of the risk of the option it has written.  The fund may write               
combinations of covered puts and calls on the same underlying                   
security.                                                                       

The fund will receive a premium from writing a put or call                      
option, which increases the fund's return on the underlying                     
security in the event the option expires unexercised or is closed               
out at a profit.  The amount of the premium reflects, among other               
things, the relationship between the exercise price and the                     
current market value of the underlying security, the volatility                 
of the underlying security, the amount of time remaining until                  
expiration, current interest rates, and the effect of supply and                
demand in the options market and in the market for the underlying               
security.  By writing a call option, the fund limits its                        
opportunity to profit from any increase in the market value of                  
the underlying security above the exercise price of the option                  
but continues to bear the risk of a decline in the value of the                 
underlying security.  By writing a put option, the fund assumes                 
the risk that it may be required to purchase the underlying                     
security for an exercise price higher than its then-current                     
market value, resulting in a potential capital loss unless the                  
security subsequently appreciates in value.                                     

The fund may terminate an option that it has written prior to its               
expiration by entering into a closing purchase transaction, in                  
which it purchases an offsetting option.  The fund realizes a                   
profit or loss from a closing transaction if the cost of the                    
transaction (option premium plus transaction costs) is less or                  
more than the premium received from writing the option.  If the                 
fund writes a call option but does not own the underlying                       
security, and when it writes a put option, the fund may be                      
required to deposit cash or securities with its broker as                       
"margin," or collateral, for its obligation to buy or sell the                  
underlying security.  As the value of the underlying security                   
varies, the fund may have to deposit additional margin with the                 
broker.  Margin requirements are complex and are fixed by                       
individual brokers, subject to minimum requirements currently                   
imposed by the Federal Reserve Board and by stock exchanges and                 
other self-regulatory organizations.                                            

PURCHASING PUT OPTIONS.  The fund may purchase put options to                   
protect its portfolio holdings in an underlying security against                
a decline in market value.  Such protection is provided during                  
the life of the put option since the fund, as holder of the                     
option, is able to sell the underlying security at the put                      
exercise price regardless of any decline in the underlying                      
security's market price.  In order for a put option to be                       
profitable, the market price of the underlying security must                    
decline sufficiently below the exercise price to cover the                      
premium and transaction costs. By using put options in this                     
manner, the fund will reduce any profit it might otherwise have                 
realized from appreciation of the underlying security by the                    
premium paid for the put option and by transaction costs.                       

PURCHASING CALL OPTIONS.  The fund may purchase call options to                 
hedge against an increase in the price of securities that the                   
fund wants ultimately to buy.  Such hedge protection is provided                
during the life of the call option since the fund, as holder of                 
the call option, is able to buy the underlying security at the                  
exercise price regardless of any increase in the underlying                     
security's market price.  In order for a call option to be                      
profitable, the market price of the underlying security must rise               
sufficiently above the exercise price to cover the premium and                  
transaction costs.                                                              

RISK FACTORS IN OPTIONS TRANSACTIONS                                            

The successful use of the fund's options strategies depends on                  
the ability of Putnam Management to forecast correctly interest                 
rate and market movements.  For example, if the fund were to                    
write a call option based on Putnam Management's expectation that               
the price of the underlying security would fall, but the price                  
were to rise instead, the fund could be required to sell the                    
security upon exercise at a price below the current market price.               
Similarly, if the fund were to write a put option based on Putnam               
Management's expectation that the price of the underlying                       
security would rise, but the price were to fall instead, the fund               
could be required to purchase the security upon exercise at a                   
price higher than the current market price.                                     

When the fund purchases an option, it runs the risk that it will                
lose its entire investment in the option in a relatively short                  
period of time, unless the fund exercises the option or enters                  
into a closing sale transaction before the option's expiration.                 
If the price of the underlying security does not rise (in the                   
case of a call) or fall (in the case of a put) to an extent                     
sufficient to cover the option premium and transaction costs, the               
fund will lose part or all of its investment in the option.  This               
contrasts with an investment by the fund in the underlying                      
security, since the fund will not realize a loss if the                         
security's price does not change.                                               

The effective use of options also depends on the fund's ability                 
to terminate option positions at times when Putnam Management                   
deems it desirable to do so.  There is no assurance that the fund               
will be able to effect closing transactions at any particular                   
time or at an acceptable price.                                                 

If a secondary market in options were to become unavailable, the                
fund could no longer engage in closing transactions.  Lack of                   
investor interest might adversely affect the liquidity of the                   
market for particular options or series of options.  A market may               
discontinue trading of a particular option or options generally.                
In addition, a market could become temporarily unavailable if                   
unusual events -- such as volume in excess of trading or clearing               
capability -- were to interrupt its normal operations.                          

A market may at times find it necessary to impose restrictions on               
particular types of options transactions, such as opening                       
transactions.  For example, if an underlying security ceases to                 
meet qualifications imposed by the market or the Options Clearing               
Corporation, new series of options on that security will no                     
longer be opened to replace expiring series, and opening                        
transactions in existing series may be prohibited.  If an options               
market were to become unavailable, the fund as a holder of an                   
option would be able to realize profits or limit losses only by                 
exercising the option, and the fund, as option writer, would                    
remain obligated under the option until expiration or exercise.                 

Disruptions in the markets for the securities underlying options                
purchased or sold by the fund could result in losses on the                     
options.  If trading is interrupted in an underlying security,                  
the trading of options on that security is normally halted as                   
well.  As a result, the fund as purchaser or writer of an option                
will be unable to close out its positions until options trading                 
resumes, and it may be faced with considerable losses if trading                
in the security reopens at a substantially different price.  In                 
addition, the Options Clearing Corporation or other options                     
markets may impose exercise restrictions.  If a prohibition on                  
exercise is imposed at the time when trading in the option has                  
also been halted, the fund as purchaser or writer of an option                  
will be locked into its position until one of the two                           
restrictions has been lifted.  If the Options Clearing                          
Corporation were to determine that the available supply of an                   
underlying security appears insufficient to permit delivery by                  
the writers of all outstanding calls in the event of exercise, it               
may prohibit indefinitely the exercise of put options.  The fund,               
as holder of such a put option, could lose its entire investment                
if the prohibition remained in effect until the put option's                    
expiration.                                                                     

Foreign-traded options are subject to many of the same risks                    
presented by internationally-traded securities.  In addition,                   
because of time differences between the United States and various               
foreign countries, and because different holidays are observed in               
different countries, foreign options markets may be open for                    
trading during hours or on days when U.S. markets are closed.  As               
a result, option premiums may not reflect the current prices of                 
the underlying interest in the United States.                                   

Over-the-counter ("OTC") options purchased by the fund and assets               
held to cover OTC options written by the fund may, under certain                
circumstances, be considered illiquid securities for purposes of                
any limitation on the fund's ability to invest in illiquid                      
securities.                                                                     

INVESTMENTS IN MISCELLANEOUS FIXED-INCOME SECURITIES                            

If the fund may invest in inverse floating obligations, premium                 
securities, or interest-only or principal-only classes of                       
mortgage-backed securities (IOs and POs), it may do so without                  
limit.  The fund, however, currently does not intend to invest                  
more than 15% of its assets in inverse floating obligations or                  
more than 35% of its assets in IOs and POs under normal market                  
conditions.                                                                     

LOWER-RATED SECURITIES                                                          

The fund may invest in lower-rated fixed-income securities                      
(commonly known as "junk bonds").  The lower ratings of certain                 
securities held by the fund reflect a greater possibility that                  
adverse changes in the financial condition of the issuer or in                  
general economic conditions, or both, or an unanticipated rise in               
interest rates, may impair the ability of the issuer to make                    
payments of interest and principal.  The inability (or perceived                
inability) of issuers to make timely payment of interest and                    
principal would likely make the values of securities held by the                
fund more volatile and could limit the fund's ability to sell its               
securities at prices approximating the values the fund had placed               
on such securities.  In the absence of a liquid trading market                  
for securities held by it, the fund at times may be unable to                   
establish the fair value of such securities.                                    

Securities ratings are based largely on the issuer's historical                 
financial condition and the rating agencies' analysis at the time               
of rating.  Consequently, the rating assigned to any particular                 
security is not necessarily a reflection of the issuer's current                
financial condition, which may be better or worse than the rating               
would indicate.  In addition, the rating assigned to a security                 
by Moody's Investors Service, Inc. or Standard & Poor's (or by                  
any other nationally recognized securities rating agency) does                  
not reflect an assessment of the volatility of the security's                   
market value or the liquidity of an investment in the security.                 
See "Securities ratings."                                                       

Like those of other fixed-income securities, the values of lower-               
rated securities fluctuate in response to changes in interest                   
rates.  A decrease in interest rates will generally result in an                
increase in the value of the fund's assets.  Conversely, during                 
periods of rising interest rates, the value of the fund's assets                
will generally decline.  The values of lower-rated securities may               
often be affected to a greater extent by changes in general                     
economic conditions and business conditions affecting the issuers               
of such securities and their industries.  Negative publicity or                 
investor perceptions may also adversely affect the values of                    
lower-rated securities.   Changes by nationally recognized                      
securities rating agencies in their ratings of any fixed-income                 
security and changes in the ability of an issuer to make payments               
of interest and principal may also affect the value of these                    
investments.  Changes in the value of portfolio securities                      
generally will not affect income derived from these securities,                 
but will affect the fund's net asset value.  The fund will not                  
necessarily dispose of a security when its rating is reduced                    
below its rating at the time of purchase.  However, Putnam                      
Management will monitor the investment to determine whether its                 
retention will assist in meeting the fund's investment                          
objective(s).                                                                   

Issuers of lower-rated securities are often highly leveraged, so                
that their ability to service their debt obligations during an                  
economic downturn or during sustained periods of rising interest                
rates may be impaired.  Such issuers may not have more                          
traditional methods of financing available to them and may be                   
unable to repay outstanding obligations at maturity by                          
refinancing.  The risk of loss due to default in payment of                     
interest or repayment of principal by such issuers is                           
significantly greater because such securities frequently are                    
unsecured and subordinated to the prior payment of senior                       
indebtedness.                                                                   

At times, a substantial portion of the fund's assets may be                     
invested in securities of which the fund, by itself or together                 
with other funds and accounts managed by Putnam Management or its               
affiliates, holds all or a major portion.  Although Putnam                      
Management generally considers such securities to be liquid                     
because of the availability of an  institutional market for such                
securities, it is possible that, under adverse market or economic               
conditions or in the event of adverse changes in the financial                  
condition of the issuer, the fund could find it more difficult to               
sell these securities when Putnam Management believes it                        
advisable to do so or may be able to sell the securities only at                
prices lower than if they were more widely held.  Under these                   
circumstances, it may also be more difficult to determine the                   
fair value of such securities for purposes of computing the                     
fund's net asset value.  In order to enforce its rights in the                  
event of a default of such securities, the fund may be required                 
to participate in various legal proceedings or take possession of               
and manage assets securing the issuer's obligations on such                     
securities.  This could increase the fund's operating expenses                  
and adversely affect the fund's net asset value.  In the case of                
tax-exempt funds, any income derived from the fund's ownership or               
operation of such assets would not be tax-exempt.  The ability of               
a holder of a tax-exempt security to enforce the terms of that                  
security in a bankruptcy proceeding may be more limited than                    
would be the case with respect to securities of private issuers.                
In addition, the fund's intention to qualify as a "regulated                    
investment company" under the Internal Revenue Code may limit the               
extent to which the fund may exercise its rights by taking                      
possession of such assets.                                                      

Certain securities held by the fund may permit the issuer at its                
option to "call," or redeem, its securities.  If an issuer were                 
to redeem securities held by the fund during a time of declining                
interest rates, the fund may not be able to reinvest the proceeds               
in securities providing the same investment return as the                       
securities redeemed.                                                            

The fund may invest without limit in so-called "zero-coupon"                    
bonds and "payment-in-kind" bonds.  Zero-coupon bonds are issued                
at a significant discount from their principal amount in lieu of                
paying interest periodically.  Payment-in-kind bonds allow the                  
issuer, at its option, to make current interest payments on the                 
bonds either in cash or in additional bonds.  Because zero-coupon               
and payment-in-kind bonds do not pay current interest in cash,                  
their value is subject to greater fluctuation in response to                    
changes in market interest rates than bonds that pay interest                   
currently.  Both zero-coupon and payment-in-kind bonds allow an                 
issuer to avoid the need to generate cash to meet current                       
interest payments.  Accordingly, such bonds may involve greater                 
credit risks than bonds paying interest currently in cash.  The                 
fund is required to accrue interest income on such investments                  
and to distribute such amounts at least annually to shareholders                
even though such bonds do not pay current interest in cash.                     
Thus, it may be necessary at times for the fund to liquidate                    
investments in order to satisfy its dividend requirements.                      

To the extent the fund invests in securities in the lower rating                
categories, the achievement of the fund's goals is more dependent               
on Putnam Management's investment analysis than would be the case               
if the fund were investing in securities in the higher rating                   
categories.  This may be particularly true with respect to tax-                 
exempt securities, as the amount of information about the                       
financial condition of an issuer of tax-exempt securities may not               
be as extensive as that which is made available by corporations                 
whose securities are publicly traded.                                           

LOAN PARTICIPATIONS                                                             

The fund may invest in "loan participations."  By purchasing a                  
loan participation, the fund acquires some or all of the interest               
of a bank or other lending institution in a loan to a particular                
borrower.  Many such loans are secured, and most impose                         
restrictive covenants which must be met by the borrower.                        

The loans in which the fund may invest are typically made by a                  
syndicate of banks, represented by an agent bank which has                      
negotiated and structured the loan and which is responsible                     
generally for collecting interest, principal, and other amounts                 
from the borrower on its own behalf and on behalf of the other                  
lending institutions in the syndicate and for enforcing its and                 
their other rights against the borrower.  Each of the lending                   
institutions, including the agent bank, lends to the borrower a                 
portion of the total amount of the loan, and retains the                        
corresponding interest in the loan.                                             

The fund's ability to receive payments of principal and interest                
and other amounts in connection with loan participations held by                
it will depend primarily on the financial condition of the                      
borrower.  The failure by the fund to receive scheduled interest                
or principal payments on a loan participation would adversely                   
affect the income of the fund and would likely reduce the value                 
of its assets, which would be reflected in a reduction in the                   
fund's net asset value.  Banks and other lending institutions                   
generally perform a credit analysis of the borrower before                      
originating a loan or participating in a lending syndicate.  In                 
selecting the loan participations in which the fund will invest,                
however, Putnam Management will not rely solely on that credit                  
analysis, but will perform its own investment analysis of the                   
borrowers.  Putnam Management's analysis may include                            
consideration of the borrower's financial strength and managerial               
experience, debt coverage, additional borrowing requirements or                 
debt maturity schedules, changing financial conditions, and                     
responsiveness to changes in business conditions and interest                   
rates.  Because loan participations in which the fund may invest                
are not generally rated by independent credit rating agencies, a                
decision by the fund to invest in a particular loan participation               
will depend almost exclusively on Putnam Management's, and the                  
original lending institution's, credit analysis of the borrower.                

Loan participations may be structured in different forms,                       
including novations, assignments, and participating interests.                  
In a novation, the fund assumes all of the rights of a lending                  
institution in a loan, including the right to receive payments of               
principal and interest and other amounts directly from the                      
borrower and to enforce its rights as a lender directly against                 
the borrower.  The fund assumes the position of a co-lender with                
other syndicate members.  As an alternative, the fund may                       
purchase an assignment of a portion of a lender's interest in a                 
loan.  In this case, the fund may be required generally to rely                 
upon the assigning bank to demand payment and enforce its rights                
against the borrower, but would otherwise be entitled to all of                 
such bank's rights in the loan.  The fund may also purchase a                   
participating interest in a portion of the rights of a lending                  
institution in a loan.  In such case, it will be entitled to                    
receive payments of principal, interest, and premium, if any, but               
will not generally be entitled to enforce its rights directly                   
against the agent bank or the borrower, but must rely for that                  
purpose on the lending institution.  The fund may also acquire a                
loan participation directly by acting as a member of the original               
lending syndicate.                                                              

The fund will in many cases be required to rely upon the lending                
institution from which it purchases the loan participation to                   
collect and pass on to the fund such payments and to enforce the                
fund's rights under the loan.  As a result, an insolvency,                      
bankruptcy, or reorganization of the lending institution may                    
delay or prevent the fund from receiving principal, interest, and               
other amounts with respect to the underlying loan.  When the fund               
is required to rely upon a lending institution to pay to the fund               
principal, interest, and other amounts received by it, Putnam                   
Management will also evaluate the creditworthiness of the lending               
institution.                                                                    

The borrower of a loan in which the fund holds a participation                  
interest may, either at its own election or pursuant to terms of                
the loan documentation, prepay amounts of the loan from time to                 
time.  There is no assurance that the fund will be able to                      
reinvest the proceeds of any loan prepayment at the same interest               
rate or on the same terms as those of the original loan                         
participation.                                                                  

Corporate loans in which the fund may purchase a loan                           
participation are made generally to finance internal growth,                    
mergers, acquisitions, stock repurchases, leveraged buy-outs, and               
other corporate activities.  Under current market conditions,                   
most of the corporate loan participations purchased by the fund                 
will represent interests in loans made to finance highly                        
leveraged corporate acquisitions, known as "leveraged buy-out"                  
transactions.  The highly leveraged capital structure of the                    
borrowers in such transactions may make such loans especially                   
vulnerable to adverse changes in economic or market conditions.                 
In addition, loan participations generally are subject to                       
restrictions on transfer, and only limited opportunities may                    
exist to sell such participations in secondary markets.  As a                   
result, the fund may be unable to sell loan participations at a                 
time when it may otherwise be desirable to do so or may be able                 
to sell them only at a price that is less than their fair market                
value.                                                                          

Certain of the loan participations acquired by the fund may                     
involve revolving credit facilities under which a borrower may                  
from time to time borrow and repay amounts up to the maximum                    
amount of the facility.  In such cases, the fund would have an                  
obligation to advance its portion of such additional borrowings                 
upon the terms specified in the loan participation.  To the                     
extent that the fund is committed to make additional loans under                
such a participation, it will at all times hold and maintain in a               
segregated account liquid assets in an amount sufficient to meet                
such commitments.  Certain of the loan participations acquired by               
the fund may also involve loans made in foreign currencies.  The                
fund's investment in such participations would involve the risks                
of currency fluctuations described above with respect to                        
investments in the foreign securities.                                          

FLOATING RATE AND VARIABLE RATE DEMAND NOTES                                    

Certain funds may purchase floating rate and variable rate demand               
notes and bonds. These securities may have a stated maturity in                 
excess of one year, but permit a holder to demand payment of                    
principal plus accrued interest upon a specified number of days                 
notice. Frequently, such obligations are secured by letters of                  
credit or other credit support arrangements provided by banks.                  
The issuer has a corresponding right, after a given period, to                  
prepay in its discretion the outstanding principal of the                       
obligation plus accrued interest upon a specific number of days                 
notice to the holders. The interest rate of a floating rate                     
instrument may be based on a known lending rate, such as a bank's               
prime rate, and is reset whenever such rate is adjusted. The                    
interest rate on a variable rate demand note is reset at                        
specified intervals at a market rate.                                           

MORTGAGE RELATED AND ASSET-BACKED SECURITIES                                    

The fund may invest in mortgage-backed securities, including                    
collateralized mortgage obligations ("CMOs") and certain stripped               
mortgage-backed securities.  CMOs and other mortgage-backed                     
securities represent a participation in, or are secured by,                     
mortgage loans.                                                                 

The fund may also invest in asset-backed securities. Asset-backed               
securities are structured like mortgage-backed securities, but                  
instead of mortgage loans or interests in mortgage loans, the                   
underlying assets  may include such items as motor vehicle                      
installment sales or installment loan contracts, leases of                      
various types of real and personal property, and receivables from               
credit card agreements.  The ability of an issuer of asset-backed               
securities to enforce its security interest in the underlying                   
assets may be limited.                                                          

Mortgage-backed securities have yield and maturity                              
characteristics corresponding to the underlying assets.  Unlike                 
traditional debt securities, which may pay a fixed rate of                      
interest until maturity, when the entire principal amount comes                 
due, payments on certain mortgage-backed securities include both                
interest and a partial repayment of principal.  Besides the                     
scheduled repayment of principal, repayments of principal may                   
result from the voluntary prepayment, refinancing, or foreclosure               
of the underlying mortgage loans.  If property owners make                      
unscheduled prepayments of their mortgage loans, these                          
prepayments will result in early payment of the applicable                      
mortgage-related securities.  In that event the fund may be                     
unable to invest the proceeds from the early payment of the                     
mortgage-related securities in an investment that provides as                   
high a yield as the mortgage-related securities.  Consequently,                 
early payment associated with mortgage-related securities may                   
cause these securities to experience significantly greater price                
and yield volatility than that experienced by traditional fixed-                
income securities.  The occurrence of mortgage prepayments is                   
affected by factors including the level of interest rates,                      
general economic conditions, the location and age of the mortgage               
and other social and demographic conditions.  During periods of                 
falling interest rates, the rate of mortgage prepayments tends to               
increase, thereby tending to decrease the life of mortgage-                     
related securities.  During periods of rising interest rates, the               
rate of mortgage prepayments usually decreases, thereby tending                 
to increase the life of mortgage-related securities.  If the life               
of a mortgage-related security is inaccurately predicted, the                   
fund may not be able to realize the rate of return it expected.                 

Mortgage-backed and asset-backed securities are less effective                  
than other types of securities as a means of "locking in"                       
attractive long-term interest rates.  One reason is the need to                 
reinvest prepayments of principal; another is the possibility of                
significant unscheduled prepayments resulting from declines in                  
interest rates.  These prepayments would have to be reinvested at               
lower rates.  As a result, these securities may have less                       
potential for capital appreciation during periods of declining                  
interest rates than other securities of comparable maturities,                  
although they may have a similar risk of decline in market value                
during periods of rising interest rates. Prepayments may also                   
significantly shorten the effective maturities of these                         
securities, especially during periods of declining interest                     
rates.  Conversely, during periods of rising interest rates, a                  
reduction in prepayments may increase the effective maturities of               
these securities, subjecting them to a greater risk of decline in               
market value in response to rising interest rates than                          
traditional debt securities, and, therefore, potentially                        
increasing the volatility of the fund.                                          

Prepayments may cause losses on securities purchased at a                       
premium.  At times, some of the mortgage-backed and asset-backed                
securities in which the fund may invest will have higher than                   
market interest rates and therefore will be purchased at a                      
premium above their par value. Unscheduled prepayments, which are               
made at par, will cause the fund to experience a loss equal to                  
any unamortized premium.                                                        

CMOs may be issued by a U.S. government agency or instrumentality               
or by a private issuer.  Although payment of the principal of,                  
and interest on, the underlying collateral securing privately                   
issued CMOs may be guaranteed by the U.S. government or its                     
agencies or instrumentalities, these CMOs represent obligations                 
solely of the private issuer and are not insured or guaranteed by               
the U.S. government, its agencies or instrumentalities or any                   
other person or entity.                                                         

Prepayments could cause early retirement of CMOs.  CMOs are                     
designed to reduce the risk of prepayment for investors by                      
issuing multiple classes of securities, each having different                   
maturities, interest rates and payment schedules, and with the                  
principal and interest on the underlying mortgages allocated                    
among the several classes in various ways.  Payment of interest                 
or principal on some classes or series of CMOs may be subject to                
contingencies or some classes or series may bear some or all of                 
the risk of default on the underlying mortgages.  CMOS of                       
different classes or series are generally retired in sequence as                
the underlying mortgage loans in the mortgage pool are repaid.                  
If enough mortgages are repaid ahead of schedule, the classes or                
series of a CMO with the earliest maturities generally will be                  
retired prior to their maturities.  Thus, the early retirement of               
particular classes or series of a CMO held by the fund would have               
the same effect as the prepayment of mortgages underlying other                 
mortgage-backed securities. Conversely, slower than anticipated                 
prepayments can extend the effective maturities of CMOs,                        
subjecting them to a greater risk of decline in market value in                 
response to rising interest rates than traditional debt                         
securities, and, therefore, potentially increasing the volatility               
of the fund.                                                                    

Prepayments could result in losses on stripped mortgage-backed                  
securities. Stripped mortgage-backed securities are usually                     
structured with two classes that receive different portions of                  
the interest and principal distributions on a pool of mortgage                  
loans.  The fund may invest in both the interest-only or "IO"                   
class and the principal-only or "PO" class.  The yield to                       
maturity on an IO class of stripped mortgage-backed securities is               
extremely sensitive not only to changes in prevailing interest                  
rates but also to the rate of principal payments (including                     
prepayments) on the underlying assets.  A rapid rate of principal               
prepayments may have a measurable adverse effect on the fund's                  
yield to maturity to the extent it invests in IOs.  If the assets               
underlying the IO experience greater than anticipated prepayments               
of principal, the fund may fail to recoup fully its initial                     
investment in these securities.  Conversely, POs tend to increase               
in value if prepayments are greater than anticipated and decline                
if prepayments are slower than anticipated.                                     

The secondary market for stripped mortgage-backed securities may                
be more volatile and less liquid than that for other mortgage-                  
backed securities, potentially limiting the fund's ability to buy               
or sell those securities at any particular time.                                

STRUCTURED NOTES                                                                

A fund may be able to invest in so-called structured notes. These               
securities are generally derivative instruments whose value is                  
tied to an underlying index or other security or asset class.                   
Such structured notes may include, for example, notes that allow                
a fund to invest indirectly in certain foreign investments which                
the fund would otherwise would not be able to directly invest                   
often because of restrictions imposed by local laws.                            

TAX-EXEMPT SECURITIES                                                           

GENERAL DESCRIPTION.  As used in this SAI, the term "Tax-exempt                 
securities" includes debt obligations issued by a state, its                    
political subdivisions (for example, counties, cities, towns,                   
villages, districts and authorities) and their agencies,                        
instrumentalities or other governmental units, the interest from                
which is, in the opinion of bond counsel, exempt from federal                   
income tax and the appropriate state's personal income tax.  Such               
obligations are issued to obtain funds for various public                       
purposes, including the construction of a wide range of public                  
facilities, such as airports, bridges, highways, housing,                       
hospitals, mass transportation, schools, streets and water and                  
sewer works.  Other public purposes for which Tax-exempt                        
securities may be issued include the refunding of outstanding                   
obligations or the payment of general operating expenses.                       

Short-term Tax-exempt securities are generally issued by state                  
and local governments and public authorities as interim financing               
in anticipation of tax collections, revenue receipts, or bond                   
sales to finance such public purposes.                                          

In addition, certain types of "private activity" bonds may be                   
issued by public authorities to finance projects such as                        
privately operated housing facilities; certain local facilities                 
for supplying water, gas or electricity; sewage or solid waste                  
disposal facilities; student loans; or public or private                        
institutions for the construction of educational, hospital,                     
housing and other facilities.  Such obligations are included                    
within the term Tax-exempt securities if the interest paid                      
thereon is, in the opinion of bond counsel, exempt from federal                 
income tax and state personal income tax (such interest may,                    
however, be subject to federal alternative minimum tax).  Other                 
types of private activity bonds, the proceeds of which are used                 
for the construction, repair or improvement of, or to obtain                    
equipment for, privately operated industrial or commercial                      
facilities, may also constitute Tax-exempt securities, although                 
the current federal tax laws place substantial limitations on the               
size of such issues.                                                            

PARTICIPATION INTERESTS (MONEY MARKET FUNDS ONLY).  The Money                   
Market Fund may invest in Tax-exempt securities either by                       
purchasing them directly or by purchasing certificates of accrual               
or similar instruments evidencing direct ownership of interest                  
payments or principal payments, or both, on Tax-exempt                          
securities, provided that, in the opinion of counsel to the                     
initial seller of each such certificate or instrument, any                      
discount accruing on a certificate or instrument that is                        
purchased at a yield not greater than the coupon rate of interest               
on the related Tax-exempt securities will be exempt from federal                
income tax to the same extent as interest on the Tax-exempt                     
securities.  The Money Market Fund may also invest in Tax-exempt                
securities by purchasing from banks participation interests in                  
all or part of specific holdings of Tax-exempt securities.  These               
participations may be backed in whole or in part by an                          
irrevocable letter of credit or guarantee of the selling bank.                  
The selling bank may receive a fee from the Money Market Fund in                
connection with the arrangement.  The Money Market Fund will not                
purchase such participation interests unless it receives an                     
opinion of counsel or a ruling of the Internal Revenue Service                  
that interest earned by it on Tax-exempt securities in which it                 
holds such participation interests is exempt from federal income                
tax.  The Money Market Fund does not expect to invest more than                 
5% of its assets in participation interests.                                    

STAND-BY COMMITMENTS.  When the fund purchases Tax-exempt                       
securities, it has the authority to acquire stand-by commitments                
from banks and broker-dealers with respect to those Tax-exempt                  
securities.  A stand-by commitment may be considered a security                 
independent of the Tax-exempt security to which it relates.  The                
amount payable by a bank or dealer during the time a stand-by                   
commitment is exercisable, absent unusual circumstances, would be               
substantially the same as the market value of the underlying Tax-               
exempt security to a third party at any time.  The fund expects                 
that stand-by commitments generally will be available without the               
payment of direct or indirect consideration.  The fund does not                 
expect to assign any value to stand-by commitments.                             

YIELDS.  The yields on Tax-exempt securities depend on a variety                
of factors, including general money market conditions, effective                
marginal tax rates, the financial condition of the issuer,                      
general conditions of the Tax-exempt security market, the size of               
a particular offering, the maturity of the obligation and the                   
rating of the issue.  The ratings of nationally recognized                      
securities rating agencies represent their opinions as to the                   
credit quality of the Tax-exempt securities which they undertake                
to rate.  It should be emphasized, however, that ratings are                    
general and are not absolute standards of quality.  Consequently,               
Tax-exempt securities with the same maturity and interest rate                  
but with different ratings may have the same yield.  Yield                      
disparities may occur for reasons not directly related to the                   
investment quality of particular issues or the general movement                 
of interest rates and may be due to such factors as changes in                  
the overall demand or supply of various types of Tax-exempt                     
securities or changes in the investment objectives of investors.                
Subsequent to purchase by the fund, an issue of  Tax-exempt                     
securities or other investments may cease to be rated, or its                   
rating may be reduced below the minimum rating required for                     
purchase by the fund.  Neither event will require the elimination               
of an investment from the fund's portfolio, but Putnam Management               
will consider such an event in its determination of whether the                 
fund should continue to hold an investment in its portfolio.                    

"MORAL OBLIGATION" BONDS.  The fund does not  currently intend to               
invest in so-called "moral obligation" bonds, where repayment is                
backed by a moral commitment of an entity other than the issuer,                
unless the credit of the issuer itself, without regard to the                   
"moral obligation," meets the investment criteria established for               
investments by the fund.                                                        

MUNICIPAL LEASES. The fund may acquire participations in lease                  
obligations or installment purchase contract obligations                        
(collectively, "lease obligations") of municipal authorities or                 
entities. Lease obligations do not constitute general obligations               
of the municipality for which the municipality's taxing power is                
pledged. Certain of these lease obligations contain "non-                       
appropriation" clauses, which provide that the municipality has                 
no obligation to make lease or installment purchase payments in                 
future years unless money is appropriated for such purpose on a                 
yearly basis. In addition to the "non-appropriation" risk, these                
securities represent a relatively new type of financing that has                
not yet developed the depth of marketability associated with more               
conventional bonds. In the case of a "non-appropriation" lease,                 
the fund's ability to recover under the lease in the event of non-              
appropriation or default will be limited solely to the                          
repossession of the leased property, and in any event,                          
foreclosure of that property might prove difficult.                             

ADDITIONAL RISKS.  Securities in which the fund may invest,                     
including Tax-exempt securities, are subject to the provisions of               
bankruptcy, insolvency and other laws affecting the rights and                  
remedies of creditors, such as the federal Bankruptcy Code                      
(including special provisions related to municipalities and other               
public entities), and laws, if any, that may be enacted by                      
Congress or state legislatures extending the time for payment of                
principal or interest, or both, or imposing other constraints                   
upon enforcement of such obligations.  There is also the                        
possibility that, as a result of litigation or other conditions,                
the power, ability or willingness of issuers to meet their                      
obligations for the payment of interest and principal on their                  
Tax-exempt securities may be materially affected.                               

From time to time, proposals have been introduced before Congress               
for the purpose of restricting or eliminating the federal income                
tax exemption for interest on debt obligations issued by states                 
and their political subdivisions.  Federal tax laws limit the                   
types and amounts of tax-exempt bonds issuable for certain                      
purposes, especially industrial development bonds and private                   
activity bonds.  Such limits may affect the future supply and                   
yields of these types of Tax-exempt securities.  Further                        
proposals limiting the issuance of tax-exempt bonds may well be                 
introduced in the future.  If it appeared that the availability                 
of Tax-exempt securities for investment by the fund and the value               
of the fund's portfolio could be materially affected by such                    
changes in law, the Trustees of the fund would reevaluate its                   
investment objective and policies and consider changes in the                   
structure of the fund or its dissolution.                                       

CONVERTIBLE SECURITIES                                                          

Convertible securities include bonds, debentures, notes,                        
preferred stocks and other securities that may be converted into                
or exchanged for, at a specific price or formula within a                       
particular period of time, a prescribed amount of common stock or               
other equity securities of the same or a different issuer.                      
Convertible securities entitle the holder to receive interest                   
paid or accrued on debt or dividends paid or accrued on preferred               
stock until the security matures or is redeemed, converted or                   
exchanged.                                                                      

The market value of a convertible security is a function of its                 
"investment value" and its "conversion value."  A security's                    
"investment value" represents the value of the security without                 
its conversion feature (i.e., a nonconvertible fixed income                     
security).  The investment value may be determined by reference                 
to its credit quality and the current value of its yield to                     
maturity or probable call date.  At any given time, investment                  
value is dependent upon such factors as the general level of                    
interest  rates, the yield of similar nonconvertible securities,                
the financial strength of the issuer and the seniority of the                   
security in the issuer's capital structure. A security's                        
"conversion value" is determined by multiplying the number of                   
shares the holder is entitled to receive upon conversion or                     
exchange by the current price of the underlying security.                       

If the conversion value of a convertible security is                            
significantly below its investment value, the convertible                       
security will trade like nonconvertible debt or preferred stock                 
and its market value will not be influenced greatly by                          
fluctuations in the market price of the underlying security.                    
Conversely, if the conversion value of a convertible security is                
near or above its investment value, the market value of the                     
convertible security will be more heavily influenced by                         
fluctuations in the market price of the underlying security.                    

The fund's investments in convertible securities may at times                   
include securities that have a mandatory conversion feature,                    
pursuant to which the securities convert automatically into                     
common stock or other equity securities at a specified date and a               
specified conversion ratio, or that are convertible at the option               
of the issuer.  Because conversion of the security is not at the                
option of the holder, the fund may be required to convert the                   
security into the underlying common stock even at times when the                
value of the underlying common stock or other equity security has               
declined substantially.                                                         

The fund's investments in convertible securities, particularly                  
securities that are convertible into securities of an issuer                    
other than the issuer of the convertible security, may be                       
illiquid.  The fund may not be able to dispose of such securities               
in a timely fashion or for a fair price, which could result in                  
losses to the fund.                                                             

PRIVATE PLACEMENTS                                                              

The fund may invest in securities that are purchased in private                 
placements and, accordingly, are subject to restrictions on                     
resale as a matter of contract or under federal securities laws.                
Because there may be relatively few potential purchasers for such               
investments, especially under adverse market or economic                        
conditions or in the event of adverse changes in the financial                  
condition of the issuer, the fund could find it more difficult to               
sell such securities when Putnam Management believes it advisable               
to do so or may be able to sell such securities only at prices                  
lower than if such securities were more widely held.  At times,                 
it may also be more difficult to determine the fair value of such               
securities for purposes of computing the fund's net asset value.                

While such private placements may often offer attractive                        
opportunities for investment not otherwise available on the open                
market, the securities so purchased are often "restricted                       
securities,"  i.e., securities  which cannot be sold to the                     
public without registration under the Securities Act of 1933 or                 
the availability of an exemption  from registration (such as                    
Rules 144 or 144A), or which are "not readily marketable" because               
they are subject to other legal or contractual delays in or                     
restrictions on resale.                                                         

The absence of a trading market can make it difficult to                        
ascertain a market value for illiquid investments.  Disposing of                
illiquid investments may involve time-consuming negotiation and                 
legal expenses, and it may be difficult or impossible for the                   
fund to sell them promptly at an acceptable price.  The fund may                
have to bear the extra expense of registering such securities for               
resale and the risk of substantial delay in effecting such                      
registration.  Also market quotations are less readily available.               
The judgment of Putnam Management may at times play a greater                   
role in valuing these securities than in the case of unrestricted               
securities.                                                                     

Generally speaking, restricted securities may be sold only to                   
qualified institutional buyers, or in a privately negotiated                    
transaction to a limited number of purchasers, or in limited                    
quantities after they have been held for a specified period of                  
time and other conditions are met pursuant to an exemption from                 
registration, or in a public offering for which a registration                  
statement is in effect under the Securities Act of 1933.  The                   
funds may be deemed to be an "underwriter" for purposes of the                  
Securities Act of 1933 when selling restricted securities to the                
public, and in such event the fund may be liable to purchasers of               
such securities if the registration statement prepared by the                   
issuer, or the prospectus forming a part of it, is materially                   
inaccurate or misleading.                                                       

FUTURES CONTRACTS AND RELATED OPTIONS                                           

Subject to applicable law the fund may invest without limit in                  
futures contracts and related options for hedging and non-hedging               
purposes, such as to manage the effective duration of the fund's                
portfolio or as a substitute for direct investment.  A financial                
futures contract sale creates an obligation by the seller to                    
deliver the type of financial instrument called for in the                      
contract in a specified delivery month for a stated price.  A                   
financial futures contract purchase creates an obligation by the                
purchaser to take delivery of the type of financial instrument                  
called for in the contract in a specified delivery month at a                   
stated price.  The specific instruments delivered or taken,                     
respectively, at settlement date are not determined until on or                 
near that date.  The determination is made in accordance with the               
rules of the exchange on which the futures contract sale or                     
purchase was made.  Futures contracts are traded in the United                  
States only on commodity exchanges or boards of trade -- known as               
"contract markets" -- approved for such trading by the Commodity                
Futures Trading Commission (the "CFTC"), and must be executed                   
through a futures commission merchant or brokerage firm which is                
a member of the relevant contract market.                                       

Although futures contracts (other than index futures) by their                  
terms call for actual delivery or acceptance of commodities or                  
securities, in most cases the contracts are closed out before the               
settlement date without the making or taking of delivery.                       
Closing out a futures contract sale is effected by purchasing a                 
futures contract for the same aggregate amount of the specific                  
type of financial instrument or commodity with the same delivery                
date.  If the price of the initial sale of the futures contract                 
exceeds the price of the offsetting purchase, the seller is paid                
the difference and realizes a gain.  Conversely, if the price of                
the offsetting purchase exceeds the price of the initial sale,                  
the seller realizes a loss.  If the fund is unable to enter into                
a closing transaction, the amount of the fund's potential loss is               
unlimited.  The closing out of a futures contract purchase is                   
effected by the purchaser's entering into a futures contract                    
sale.  If the offsetting sale price exceeds the purchase price,                 
the purchaser realizes a gain, and if the purchase price exceeds                
the offsetting sale price, he realizes a loss.  In general, 40%                 
of the gain or loss arising from the closing out of a futures                   
contract traded on an exchange approved by the CFTC is treated as               
short-term gain or loss, and 60% is treated as long-term gain or                
loss.                                                                           

Unlike when the fund purchases or sells a security, no price is                 
paid or received by the fund upon the purchase or sale of a                     
futures contract.  Upon entering into a contract, the fund is                   
required to deposit with its custodian in a segregated account in               
the name of the futures broker an amount of liquid assets.  This                
amount is known as "initial margin."  The nature of initial                     
margin in futures transactions is different from that of margin                 
in security transactions in that futures contract margin does not               
involve the borrowing of funds to finance the transactions.                     
Rather, initial margin is similar to a performance bond or good                 
faith deposit which is returned to the fund upon termination of                 
the futures contract, assuming all contractual obligations have                 
been satisfied.  Futures contracts also involve brokerage costs.                

Subsequent payments, called "variation margin" or "maintenance                  
margin," to and from the broker (or the custodian) are made on a                
daily basis as the price of the underlying security or commodity                
fluctuates, making the long and short positions in the futures                  
contract more or less valuable, a process known as "marking to                  
the market."  For example, when the fund has purchased a futures                
contract on a security and the price of the underlying security                 
has risen, that position will have increased in value and the                   
fund will receive from the broker a variation margin payment                    
based on that increase in value.  Conversely, when the fund has                 
purchased a security futures contract and the price of the                      
underlying security has declined, the position would be less                    
valuable and the fund would be required to make a variation                     
margin payment to the broker.                                                   

The fund may elect to close some or all of its futures positions                
at any time prior to their expiration in order to reduce or                     
eliminate a hedge position then currently held by the fund.  The                
fund may close its positions by taking opposite positions which                 
will operate to terminate the fund's position in the futures                    
contracts.  Final determinations of variation margin are then                   
made, additional cash is required to be paid by or released to                  
the fund, and the fund realizes a loss or a gain.  Such closing                 
transactions involve additional commission costs.                               

The fund does not intend to purchase or sell futures or related                 
options for other than hedging purposes, if, as a result, the sum               
of the initial margin deposits on the fund's existing futures and               
related options positions and premiums paid for outstanding                     
options on futures contracts would exceed 5% of the fund's net                  
assets.                                                                         

OPTIONS ON FUTURES CONTRACTS.  The fund may purchase and write                  
call and put options on futures contracts it may buy or sell and                
enter into closing transactions with respect to such options to                 
terminate existing positions.  In return for the premium paid,                  
options on futures contracts give the purchaser the right to                    
assume a position in a futures contract at the specified option                 
exercise price at any time during the period of the option.  The                
fund may use options on futures contracts in lieu of writing or                 
buying options directly on the underlying securities or                         
purchasing and selling the underlying futures contracts.  For                   
example, to hedge against a possible decrease in the value of its               
portfolio securities, the fund may purchase put options or write                
call options on futures contracts rather than selling futures                   
contracts.  Similarly, the fund may purchase call options or                    
write put options on futures contracts as a substitute for the                  
purchase of futures contracts to hedge against a possible                       
increase in the price of securities which the fund expects to                   
purchase.  Such options generally operate in the same manner as                 
options purchased or written directly on the underlying                         
investments.                                                                    

As with options on securities, the holder or writer of an option                
may terminate his position by selling or purchasing an offsetting               
option.  There is no guarantee that such closing transactions can               
be effected.                                                                    

The fund will be required to deposit initial margin and                         
maintenance margin with respect to put and call options on                      
futures contracts written by it pursuant to brokers' requirements               
similar to those described above in connection with the                         
discussion of futures contracts.                                                

RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS.                 
Successful use of futures contracts by the fund is subject to                   
Putnam Management's ability to predict movements in various                     
factors affecting securities markets, including interest rates.                 
Compared to the purchase or sale of futures contracts, the                      
purchase of call or put options on futures contracts involves                   
less potential risk to the fund because the maximum amount at                   
risk is the premium paid for the options (plus transaction                      
costs).  However, there may be circumstances when the purchase of               
a call or put option on a futures contract would result in a loss               
to the fund when the purchase or sale of a futures contract would               
not, such as when there is no movement in the prices of the                     
hedged investments.  The writing of an option on a futures                      
contract involves risks similar to those risks relating to the                  
sale of futures contracts.                                                      

The use of options and futures strategies also involves the risk                
of imperfect correlation among movements in the prices of the                   
securities underlying the futures and options purchased and sold                
by the fund, of the options and futures contracts themselves,                   
and, in the case of hedging transactions, of the securities which               
are the subject of a hedge.  The successful use of these                        
strategies further depends on the ability of Putnam Management to               
forecast interest rates and market movements correctly.                         

There is no assurance that higher than anticipated trading                      
activity or other unforeseen events might not, at times, render                 
certain market clearing facilities inadequate, and thereby result               
in the institution by exchanges of special procedures which may                 
interfere with the timely execution of customer orders.                         

To reduce or eliminate a position held by the fund, the fund may                
seek to close out such position.  The ability to establish and                  
close out positions will be subject to the development and                      
maintenance of a liquid secondary market.  It is not certain that               
this market will develop or continue to exist for a particular                  
futures contract or option.  Reasons for the absence of a liquid                
secondary market on an exchange include the following:  (i) there               
may be insufficient trading interest in certain contracts or                    
options; (ii) restrictions may be imposed by an exchange on                     
opening transactions or closing transactions or both; (iii)                     
trading halts, suspensions or other restrictions may be imposed                 
with respect to particular classes or series of contracts or                    
options, or underlying securities; (iv) unusual or unforeseen                   
circumstances may interrupt normal operations on an exchange; (v)               
the facilities of an exchange or a clearing corporation may not                 
at all times be adequate to handle current trading volume; or                   
(vi) one or more exchanges could, for economic or other reasons,                
decide or be compelled at some future date to discontinue the                   
trading of contracts or options (or a particular class or series                
of contracts or options), in which event the secondary market on                
that exchange for such contracts or options (or in the class or                 
series of contracts or options) would cease to exist, although                  
outstanding contracts or options on the exchange that had been                  
issued by a clearing corporation as a result of trades on that                  
exchange would continue to be exercisable in accordance with                    
their terms.                                                                    

U.S. TREASURY SECURITY FUTURES CONTRACTS AND OPTIONS.  U.S.                     
Treasury security futures contracts require the seller to                       
deliver, or the purchaser to take delivery of, the type of U.S.                 
Treasury security called for in the contract at a specified date                
and price.  Options on U.S. Treasury security futures contracts                 
give the purchaser the right in return for the premium paid to                  
assume a position in a U.S. Treasury security futures contract at               
the specified option exercise price at any time during the period               
of the option.                                                                  

Successful use of U.S. Treasury security futures contracts by the               
fund is subject to Putnam Management's ability to predict                       
movements in the direction of interest rates and other factors                  
affecting markets for debt securities.  For example, if the fund                
has sold U.S. Treasury security futures contracts in order to                   
hedge against the possibility of an increase in interest rates                  
which would adversely affect securities held in its portfolio,                  
and the prices of the fund's securities increase instead as a                   
result of a decline in interest rates, the fund will lose part or               
all of the benefit of the increased value of its securities which               
it has hedged because it will have offsetting losses in its                     
futures positions.  In addition, in such situations, if the fund                
has insufficient cash, it may have to sell securities to meet                   
daily maintenance margin requirements at a time when it may be                  
disadvantageous to do so.                                                       

There is also a risk that price movements in U.S. Treasury                      
security futures contracts and related options will not correlate               
closely with price movements in markets for particular                          
securities.  For example, if the fund has hedged against a                      
decline in the values of tax-exempt securities held by it by                    
selling Treasury security futures and the values of Treasury                    
securities subsequently increase while the values of its tax-                   
exempt securities decrease, the fund would incur losses on both                 
the Treasury security futures contracts written by it and the tax-              
exempt securities held in its portfolio.                                        

INDEX FUTURES CONTRACTS.  An index futures contract is a contract               
to buy or sell units of an index at a specified future date at a                
price agreed upon when the contract is made.  Entering into a                   
contract to buy units of an index is commonly referred to as                    
buying or purchasing a contract or holding a long position in the               
index.  Entering into a contract to sell units of an index is                   
commonly referred to as selling a contract or holding a short                   
position.  A unit is the current value of the index.  The fund                  
may enter into stock index futures contracts, debt index futures                
contracts, or other index futures contracts appropriate to its                  
objective(s).  The fund may also purchase and sell options on                   
index futures contracts.                                                        

For example, the Standard & Poor's 500 Composite Stock Price                    
Index ("S&P 500") is composed of 500 selected common stocks, most               
of which are listed on the New York Stock Exchange.  The S&P 500                
assigns relative weightings to the common stocks included in the                
Index, and the value fluctuates with changes in the market values               
of those common stocks.  In the case of the S&P 500, contracts                  
are to buy or sell 500 units.  Thus, if the value of the S&P 500                
were $150, one contract would be worth $75,000 (500 units x                     
$150).  The stock index futures contract specifies that no                      
delivery of the actual stocks making up the index will take                     
place.  Instead, settlement in cash must occur upon the                         
termination of the contract, with the settlement being the                      
difference between the contract price and the actual level of the               
stock index at the expiration of the contract.  For example, if                 
the fund enters into a futures contract to buy 500 units of the                 
S&P 500 at a specified future date at a contract price of $150                  
and the S&P 500 is at $154 on that future date, the fund will                   
gain $2,000 (500 units x gain of $4).  If the fund enters into a                
futures contract to sell 500 units of the stock index at a                      
specified future date at a contract price of $150 and the S&P 500               
is at $152 on that future date, the fund will lose $1,000 (500                  
units x loss of $2).                                                            

There are several risks in connection with the use by the fund of               
index futures.  One risk arises because of the imperfect                        
correlation between movements in the prices of the index futures                
and movements in the prices of securities which are the subject                 
of the hedge.  Putnam Management will, however, attempt to reduce               
this risk by buying or selling, to the extent possible, futures                 
on indices the movements of which will, in its judgment, have a                 
significant correlation with movements in the prices of the                     
securities sought to be hedged.                                                 

Successful use of index futures by the fund is also subject to                  
Putnam Management's ability to predict movements in the direction               
of the market.  For example, it is possible that, where the fund                
has sold futures to hedge its portfolio against a decline in the                
market, the index on which the futures are written may advance                  
and the value of securities held in the fund's portfolio may                    
decline.  If this occurred, the fund would lose money on the                    
futures and also experience a decline in value in its portfolio                 
securities.  It is also possible that, if the fund has hedged                   
against the possibility of a decline in the market adversely                    
affecting securities held in its portfolio and securities prices                
increase instead, the fund will lose part or all of the benefit                 
of the increased value of those securities it has hedged because                
it will have offsetting losses in its futures positions.  In                    
addition, in such situations, if the fund has insufficient cash,                
it may have to sell securities to meet daily variation margin                   
requirements at a time when it is disadvantageous to do so.                     

In addition to the possibility that there may be an imperfect                   
correlation, or no correlation at all, between movements in the                 
index futures and the portion of the portfolio being hedged, the                
prices of index futures may not correlate perfectly with                        
movements in the underlying index due to certain market                         
distortions.  First, all participants in the futures market are                 
subject to margin deposit and maintenance requirements.  Rather                 
than meeting additional margin deposit requirements, investors                  
may close futures contracts through offsetting transactions which               
could distort the normal relationship between the index and                     
futures markets.  Second, margin requirements in the futures                    
market are less onerous than margin requirements in the                         
securities market, and as a result the futures market may attract               
more speculators than the securities market does.  Increased                    
participation by speculators in the futures market may also cause               
temporary price distortions.  Due to the possibility of price                   
distortions in the futures market and also because of the                       
imperfect correlation between movements in the index and                        
movements in the prices of index futures, even a correct forecast               
of general market trends by Putnam Management may still not                     
result in a profitable position over a short time period.                       

OPTIONS ON STOCK INDEX FUTURES.  Options on index futures are                   
similar to options on securities except that options on index                   
futures give the purchaser the right, in return for the premium                 
paid, to assume a position in an index futures contract (a long                 
position if the option is a call and a short position if the                    
option is a put) at a specified exercise price at any time during               
the period of the option.  Upon exercise of the option, the                     
delivery of the futures position by the writer of the option to                 
the holder of the option will be accompanied by delivery of the                 
accumulated balance in the writer's futures margin account which                
represents the amount by which the market price of the index                    
futures contract, at exercise, exceeds (in the case of a call) or               
is less than (in the case of a put) the exercise price of the                   
option on the index future.  If an option is exercised on the                   
last trading day prior to its expiration date, the settlement                   
will be made entirely in cash equal to the difference between the               
exercise price of the option and the closing level of the index                 
on which the future is based on the expiration date.  Purchasers                
of options who fail to exercise their options prior to the                      
exercise date suffer a loss of the premium paid.                                

OPTIONS ON INDICES                                                              

As an alternative to purchasing call and put options on index                   
futures, the fund may purchase and sell call and put options on                 
the underlying indices themselves.  Such options would be used in               
a manner identical to the use of options on index futures.                      

INDEX WARRANTS                                                                  

The fund may purchase put warrants and call warrants whose values               
vary depending on the change in the value of one or more                        
specified securities indices ("index warrants").  Index warrants                
are generally issued by banks or other financial institutions and               
give the holder the right, at any time during the term of the                   
warrant, to receive upon exercise of the warrant a cash payment                 
from the issuer based on the value of the underlying index at the               
time of exercise.  In general, if the value of the underlying                   
index rises above the exercise price of the index warrant, the                  
holder of a call warrant will be entitled to receive a cash                     
payment from the issuer upon exercise based on the difference                   
between the value of the index and the exercise price of the                    
warrant; if the value of the underlying index falls, the holder                 
of a put warrant will be entitled to receive a cash payment from                
the issuer upon exercise based on the difference between the                    
exercise price of the warrant and the value of the index.  The                  
holder of a warrant would not be entitled to any payments from                  
the issuer at any time when, in the case of a call warrant, the                 
exercise price is greater than the value of the underlying index,               
or, in the case of a put warrant, the exercise price is less than               
the value of the underlying index.  If the fund were not to                     
exercise an index warrant prior to its expiration, then the fund                
would lose the amount of the purchase price paid by it for the                  
warrant.                                                                        

The fund will normally use index warrants in a manner similar to                
its use of options on securities indices.  The risks of the                     
fund's use of index warrants are generally similar to those                     
relating to its use of index options. Unlike most index options,                
however, index warrants are issued in limited amounts and are not               
obligations of a regulated clearing agency, but are backed only                 
by the credit of the bank or other institution which issues the                 
warrant.  Also, index warrants generally have longer terms than                 
index options.  Although the fund will normally invest only in                  
exchange-listed warrants, index warrants are not likely to be as                
liquid as certain index options backed by a recognized clearing                 
agency.  In addition, the terms of index warrants may limit the                 
fund's ability to exercise the warrants at such time, or in such                
quantities, as the fund would otherwise wish to do.                             

SHORT-TERM TRADING                                                              

In seeking the fund's objective(s), Putnam Management will buy or               
sell portfolio securities whenever Putnam Management believes it                
appropriate to do so.  In deciding whether to sell a portfolio                  
security, Putnam Management does not consider how long the fund                 
has owned the security.  From time to time the fund will buy                    
securities intending to seek short-term trading profits.  A                     
change in the securities held by the fund is known as "portfolio                
turnover" and generally involves some expense to the fund.  This                
expense may include brokerage commissions or dealer markups and                 
other transaction costs on both the sale of securities and the                  
reinvestment of the proceeds in other securities.  If sales of                  
portfolio securities cause the fund to realize net short-term                   
capital gains, such gains will be taxable as ordinary income.  As               
a result of the fund's investment policies, under certain market                
conditions the fund's portfolio turnover rate may be higher than                
that of other mutual funds.  Portfolio turnover rate for a fiscal               
year is the ratio of the lesser of purchases or sales of                        
portfolio securities to the monthly average of the value of                     
portfolio securities -- excluding securities whose maturities at                
acquisition were one year or less.  The fund's portfolio turnover               
rate is not a limiting factor when Putnam Management considers a                
change in the fund's portfolio.                                                 

SECURITIES LOANS                                                                

The fund may make secured loans of its portfolio securities, on                 
either a short-term or long-term basis, amounting to not more                   
than 25% of its total assets, thereby realizing additional                      
income.  The risks in lending portfolio securities, as with other               
extensions of credit, consist of possible delay in recovery of                  
the securities or possible loss of rights in the collateral                     
should the borrower fail financially.  As a matter of policy,                   
securities loans are made to broker-dealers pursuant to                         
agreements requiring that the loans be continuously secured by                  
collateral consisting of cash or short-term debt obligations at                 
least equal at all times to the value of the securities on loan,                
"marked-to-market" daily.  The borrower pays to the fund an                     
amount equal to any dividends or interest received on securities                
lent.  The fund retains all or a portion of the interest received               
on investment of the cash collateral or receives a fee from the                 
borrower.  Although voting rights, or rights to consent, with                   
respect to the loaned securities may pass to the borrower, the                  
fund retains the right to call the loans at any time on                         
reasonable notice, and it will do so to enable the fund to                      
exercise voting rights on any matters materially affecting the                  
investment.  The fund may also call such loans in order to sell                 
the securities.                                                                 

REPURCHASE AGREEMENTS                                                           

The fund (except for Putnam Money Market Fund) may enter into                   
repurchase agreements, amounting to not more than 25% of its                    
total assets.  A repurchase agreement is a contract under which                 
the fund acquires a security for a relatively short period                      
(usually not more than one week) subject to the obligation of the               
seller to repurchase and the fund to resell such security at a                  
fixed time and price (representing the fund's cost plus                         
interest).  It is the fund's present intention to enter into                    
repurchase agreements only with commercial banks and registered                 
broker-dealers and only with respect to obligations of the U.S.                 
government or its agencies or instrumentalities.  Repurchase                    
agreements may also be viewed as loans made by the fund which are               
collateralized by the securities subject to repurchase.  Putnam                 
Management will monitor such transactions to ensure that the                    
value of the underlying securities will be at least equal at all                
times to the total amount of the repurchase obligation, including               
the interest factor.  If the seller defaults, the fund could                    
realize a loss on the sale of the underlying security to the                    
extent that the proceeds of the sale including accrued interest                 
are less than the resale price provided in the agreement                        
including interest.  In addition, if the seller should be                       
involved in bankruptcy or insolvency proceedings, the fund may                  
incur delay and costs in selling the underlying security or may                 
suffer a loss of principal and interest if the fund is treated as               
an unsecured creditor and required to return the underlying                     
collateral to the seller's estate.                                              

Pursuant to an exemptive order issued by the Securities and                     
Exchange Commission, the fund may transfer uninvested cash                      
balances into a joint account, along with cash of other Putnam                  
funds and certain other accounts.  These balances may be invested               
in one or more repurchase agreements and/or short-term money                    
market instruments.                                                             

RESTRICTED SECURITIES                                                           

The SEC Staff currently takes the view that any delegation by the               
Trustees of the authority to determine that a restricted security               
is readily marketable (as described in the investment                           
restrictions of the funds) must be pursuant to written procedures               
established by the Trustees.  It is the present intention of the                
funds' Trustees that, if the Trustees decide to delegate such                   
determinations to Putnam Management or another person, they would               
do so pursuant to written procedures, consistent with the Staff's               
position.  Should the Staff modify its position in the future,                  
the Trustees would consider what action would be appropriate in                 
light of the Staff's position at that time.                                     

FORWARD COMMITMENTS                                                             

The fund may enter into contracts to purchase securities for a                  
fixed price at a future date beyond customary settlement time                   
("forward commitments") if the fund sets aside, on the books and                
records of its custodian, liquid assets in an amount sufficient                 
to meet the purchase price, or if the fund enters into offsetting               
contracts for the forward sale of other securities it owns.  In                 
the case of to-be-announced ("TBA") purchase commitments, the                   
unit price and the estimated principal amount are established                   
when the fund enters into a contract, with the actual principal                 
amount being within a specified range of the estimate.  Forward                 
commitments may be considered securities in themselves, and                     
involve a risk of loss if the value of the security to be                       
purchased declines prior to the settlement date, which risk is in               
addition to the risk of decline in the value of the fund's other                
assets.  Where such purchases are made through dealers, the fund                
relies on the dealer to consummate the sale.  The dealer's                      
failure to do so may result in the loss to the fund of an                       
advantageous yield or price.  Although the fund will generally                  
enter into forward commitments with the intention of acquiring                  
securities for its portfolio or for delivery pursuant to options                
contracts it has entered into, the fund may dispose of a                        
commitment prior to settlement if Putnam Management deems it                    
appropriate to do so.  The fund may realize short-term profits or               
losses upon the sale of forward commitments.                                    

The fund may enter into TBA sale commitments to hedge its                       
portfolio positions or to sell securities it owns under delayed                 
delivery arrangements.  Proceeds of TBA sale commitments are not                
received until the contractual settlement date.  During the time                
a TBA sale commitment is outstanding, equivalent deliverable                    
securities, or an offsetting TBA purchase commitment deliverable                
on or before the sale commitment date, are held as "cover" for                  
the transaction.  Unsettled TBA sale commitments are valued at                  
current market value of the underlying securities.  If the TBA                  
sale commitment is closed through the acquisition of an                         
offsetting purchase commitment, the fund realizes a gain or loss                
on the commitment without regard to any unrealized gain or loss                 
on the underlying security.  If the fund delivers securities                    
under the commitment, the fund realizes a gain or loss from the                 
sale of the securities based upon the unit price established at                 
the date the commitment was entered into.                                       

SWAP AGREEMENTS                                                                 

The fund may enter into swap agreements and other types of over-                
the-counter transactions with broker-dealers or other financial                 
institutions   .  Depending on their structures, swap agreements                
may increase or decrease a fund's exposure to long-or short-term                
interest rates (in the United States or abroad), foreign currency               
values, mortgage securities, corporate borrowing rates, or other                
factors such as security prices or inflation rates.  The value of               
a fund's swap positions would increase or decrease depending on                 
the changes in     value of the underlying    rates, currency                   
values, or other indices or measures.  A fund's ability to engage               
in certain swap transactions may be limited by tax                              
considerations.                                                                 

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 position under such transactions at the same time,                
or at the same price, as if it had purchased comparable publicly                
traded securities.                                                              

DERIVATIVES                                                                     

Certain of the instruments in which the fund may invest, such as                
futures contracts, options and forward contracts, are considered                
to be "derivatives."  Derivatives are financial instruments whose               
value depends upon, or is derived from, the value of an                         
underlying asset, such as a security or an index.  Further                      
information about these instruments and the risks involved in                   
their use is included elsewhere in the prospectus or in this SAI.               
The fund's use of derivatives may cause the fund to recognize                   
higher amounts of short-term capital gains, generally taxed to                  
shareholders at ordinary income tax rates.                                      

YEAR 2000                                                                       

Like other financial and business organizations, the funds depend               
on the proper function of their service providers' computer                     
systems.  To the extent that the systems used by the funds or                   
their service providers cannot distinguish between the year 1900                
and the year 2000 or have other operating difficulties as a                     
result of the year 2000, the operations of and services provided                
to the funds and their shareholders could be adversely impacted.                
Putnam Management and its affiliates have reported that each                    
expects to modify its systems, as necessary, to address this so-                
called "year 2000 problem," and will, on behalf of the funds,                   
inquire as to the year 2000 compliance of the funds' other major                
service providers.  However, there can be no assurance that the                 
operations of and services provided to the funds and their                      
shareholders will not be adversely affected.  Similarly,                        
companies in which the funds invest may also experience "year                   
2000 problems," which could ultimately result in losses to a fund               
to the extent that the securities of any such company decline in                
value as a result of a "year 2000 problem."                                     

EURO CONVERSION                                                                 

Eleven member countries of the European Economic and Monetary                   
Union (the "EMU") have qualified for conversion of their national               
currencies to the euro on January 1, 1999.  The euro is a common                
currency that is expected to eventually be used as the sole                     
currency for these countries and other EMU members that wish to                 
convert to the euro. National currencies will remain for the                    
converting countries through at least July of 2002 while the full               
transition to the euro in the countries involved in the                         
conversion occurs. Possible consequences to funds that invest in                
securities denominated in any of the national currencies affected               
include the risks that: (i) the unification of economic and                     
monetary policies underpinning the currency unification may                     
increase the potential for similarities in the movements of                     
markets in the European countries converting to the euro, (ii)                  
contracts (including contracts regarding currency transactions)                 
denominated in (or tied to) those currencies may become more                    
difficult to enforce, and that (iii) companies in which the funds               
invest may be adversely affected by their failure (or the failure               
of other companies with which they do business) to adequately                   
address the operational aspects of the conversion.                              

Like other financial and business organizations, the funds depend               
on the proper function of their service providers' computer and                 
other systems.  The funds could be adversely affected if the                    
computer or other systems used by Putnam Management and the                     
funds' other service providers cannot appropriately account for                 
the conversion to the euro. Putnam Management and its affiliates                
expect that their systems will be able to address this issue                    
without any material interruption of service.  However, there can               
be no assurance that the operations of and services provided to                 
the funds and their shareholders will not be adversely affected.                
Similarly, companies in which the funds invest may also                         
experience similar problems in dealing with the conversion to the               
euro, which could result in losses to the funds.                                

TAXES                                                                           

TAXATION OF THE FUND.  The fund intends to qualify each year as a               
regulated investment company under Subchapter M of the Internal                 
Revenue Code of 1986, as amended (the "Code").  In order to                     
qualify for the special tax treatment accorded regulated                        
investment companies and their shareholders, the fund must, among               
other things:                                                                   

(a) Derive at least 90% of its gross income from dividends,                     
interest, payments with respect to certain securities loans, and                
gains from the sale of stock, securities and foreign currencies,                
or other income (including but not limited to gains from options,               
futures, or forward contracts) derived with respect to its                      
business of investing in such stock, securities, or currencies;                 

(b) distribute with respect to each taxable year at least 90% of                
the sum of its taxable net investment income, its net tax-exempt                
income, and the excess, if any, of net short-term capital gains                 
over net long-term capital losses for such year; and                            

(c) diversify its holdings so that, at the end of each fiscal                   
quarter, (i) at least 50% of the market value of the fund's                     
assets is represented by cash and cash items, U.S. government                   
securities, securities of other regulated investment companies,                 
and other securities limited in respect of any one issuer to a                  
value not greater than 5% of the value of the fund's total assets               
and to not more than 10% of the outstanding voting securities of                
such issuer, and (ii) not more than 25% of the value of its                     
assets is invested in the securities (other than those of the                   
U.S. Government or other regulated investment companies) of any                 
one issuer or of two or more issuers which the fund controls and                
which are engaged in the same, similar, or related trades or                    
businesses.                                                                     

If the fund qualifies as a regulated investment company that is                 
accorded special tax treatment, the fund will not be subject to                 
federal income tax on income paid to its shareholders in the form               
of dividends (including capital gain dividends).                                

If the fund failed to qualify as a regulated investment company                 
accorded special tax treatment in any taxable year, the fund                    
would be subject to tax on its taxable income at corporate rates,               
and all distributions from earnings and profits, including any                  
distributions of net tax-exempt income and net long-term capital                
gains, would be taxable to shareholders as ordinary income.  In                 
addition, the fund could be required to recognize unrealized                    
gains, pay substantial taxes and interest and make substantial                  
distributions before requalifying as a regulated investment                     
company that is accorded special tax treatment.                                 

If the fund fails to distribute in a calendar year substantially                
all of its ordinary income for such year and substantially all of               
its capital gain net income for the one-year period ending                      
October 31 (or later if the fund is permitted so to elect and so                
elects), plus any retained amount from the prior year, the fund                 
will be subject to a 4% excise tax on the undistributed amounts.                
A dividend paid to shareholders by the fund in January of a year                
generally is deemed to have been paid by the fund on December 31                
of the preceding year, if the dividend was declared and payable                 
to shareholders of record on a date in October, November or                     
December of that preceding year.  The fund intends generally to                 
make distributions sufficient to avoid imposition of the 4%                     
excise tax.                                                                     

FUND DISTRIBUTIONS.  Distributions from the fund (other than                    
exempt-interest dividends, as discussed below) will be taxable to               
shareholders as ordinary income to the extent derived from the                  
fund's investment income and net short-term gains. Distributions                
of net capital gains (that is, the excess of net gains from                     
capital assets held more than one year over net losses from                     
capital assets held for not more than one year) will be taxable                 
to shareholders as such, regardless of how long a shareholder has               
held the shares in the fund.                                                    

EXEMPT-INTEREST DIVIDENDS.  The fund will be qualified to pay                   
exempt-interest dividends to its shareholders only if, at the                   
close of each quarter of the fund's taxable year, at least 50% of               
the total value of the fund's assets consists of obligations the                
interest on which is exempt from federal income tax.                            
Distributions that the fund properly designates as exempt-                      
interest dividends are treated as interest excludable from                      
shareholders' gross income for federal income tax purposes but                  
may be taxable for federal alternative minimum tax purposes and                 
for state and local purposes.  If the fund intends to be                        
qualified to pay exempt-interest dividends, the fund may be                     
limited in its ability to enter into taxable transactions                       
involving forward commitments, repurchase agreements, financial                 
futures and options contracts on financial futures, tax-exempt                  
bond indices and other assets.                                                  

Part or all of the interest on indebtedness, if any, incurred or                
continued by a shareholder to purchase or carry shares of a fund                
paying exempt-interest dividends is not deductible.  The portion                
of interest that is not deductible is equal to the total interest               
paid or accrued on the indebtedness, multiplied by the percentage               
of the fund's total distributions (not including distributions                  
from net long-term capital gains) paid to the shareholder that                  
are exempt-interest dividends.  Under rules used by the Internal                
Revenue Service for determining when borrowed funds are                         
considered used for the purpose of purchasing or carrying                       
particular assets, the purchase of shares may be considered to                  
have been made with borrowed funds even though such funds are not               
directly traceable to the purchase of shares.                                   

In general, exempt-interest dividends, if any, attributable to                  
interest received on certain private activity obligations and                   
certain industrial development bonds will not be tax-exempt to                  
any shareholders who are "substantial users" of the facilities                  
financed by such obligations or bonds or who are "related                       
persons" of such substantial users.                                             

A fund which is qualified to pay exempt-interest dividends will                 
inform investors within 60 days of the fund's fiscal year-end of                
the percentage of its income distributions designated as tax-                   
exempt.  The percentage is applied uniformly to all distributions               
made during the year.  The percentage of income designated as tax-              
exempt for any particular distribution may be substantially                     
different from the percentage of the fund's income that was tax-                
exempt during the period covered by the distribution.                           

HEDGING TRANSACTIONS.  If the fund engages in hedging                           
transactions, including hedging transactions in options, futures                
contracts, and straddles, or other similar transactions, it will                
be subject to special tax rules (including constructive sale,                   
mark-to-market, straddle, wash sale, and short sale rules), the                 
effect of which may be to accelerate income to the fund, defer                  
losses to the fund, cause adjustments in the holding periods of                 
the fund's securities, convert long-term capital gains into short-              
term capital gains or convert short-term capital losses into long-              
term capital losses.  These rules could therefore affect the                    
amount, timing and character of distributions to shareholders.                  
The fund will endeavor to make any available elections pertaining               
to such transactions in a manner believed to be in the best                     
interests of the fund.                                                          

Certain of the fund's hedging activities (including its                         
transactions, if any, in foreign currencies or foreign currency-                
denominated instruments) are likely to produce a difference                     
between its book income and its taxable income.  If the fund's                  
book income exceeds its taxable income, the distribution (if any)               
of such excess will be treated as (i) a dividend to the extent of               
the fund's remaining earnings and profits (including earnings and               
profits arising from tax-exempt income), (ii) thereafter as a                   
return of capital to the extent of the recipient's basis in the                 
shares, and (iii) thereafter as gain from the sale or exchange of               
a capital asset.  If the fund's book income is less than its                    
taxable income, the fund could be required to make distributions                
exceeding book income to qualify as a regulated investment                      
company that is accorded special tax treatment.                                 

RETURN OF CAPITAL DISTRIBUTIONS.  If the fund makes a                           
distribution to you in excess of its current and accumulated                    
"earnings and profits" in any taxable year, the excess                          
distribution will be treated as a return of capital to the extent               
of your tax basis in your shares, and thereafter as capital gain.               
A return of capital is not taxable, but it reduces your tax basis               
in your shares, thus reducing any loss or increasing any gain on                
a subsequent taxable disposition by you of your shares.                         

Dividends and distributions on a fund's shares are generally                    
subject to federal income tax as described herein to the extent                 
they do not exceed the fund's realized income and gains, even                   
though such dividends and distributions may economically                        
represent a return of a particular shareholder's investment.                    
Such distributions are likely to occur in respect of shares                     
purchased at a time when the fund's net asset value reflects                    
gains that are either unrealized, or realized but not                           
distributed.                                                                    

SECURITIES ISSUED OR PURCHASED AT A DISCOUNT.  The fund's                       
investment in securities issued at a discount and certain other                 
obligations will (and investments in securities purchased at a                  
discount may) require the fund to accrue and distribute income                  
not yet received.  In order to generate sufficient cash to make                 
the requisite distributions, the fund may be required to sell                   
securities in its portfolio that it otherwise would have                        
continued to hold.                                                              

CAPITAL LOSS CARRYOVER.  Distributions from capital gains are                   
generally made after applying any available capital loss                        
carryovers.  The amounts and expiration dates of any capital loss               
carryovers available to the fund are shown in Note 1 (Federal                   
income taxes) to the financial statements included in Part I of                 
this SAI or incorporated by reference into this SAI.                            

FOREIGN CURRENCY-DENOMINATED SECURITIES AND RELATED HEDGING                     
TRANSACTIONS.  The fund's transactions in foreign currencies,                   
foreign currency-denominated debt securities and certain foreign                
currency options, futures contracts and forward contracts (and                  
similar instruments) may give rise to ordinary income or loss to                
the extent such income or loss results from fluctuations in the                 
value of the foreign currency concerned.                                        

If more than 50% of the fund's assets at year end consists of the               
securities of foreign corporations, the fund may elect to permit                
shareholders to claim a credit or deduction on their income tax                 
returns for their pro rata portion of qualified taxes paid by the               
fund to foreign countries in respect of foreign securities the                  
fund has held for at least the minimum period specified in the                  
Code.  In such a case, shareholders will include in gross income                
from foreign sources their pro rata shares of such taxes.  A                    
shareholder's ability to claim a foreign tax credit or deduction                
in respect of foreign taxes paid by the fund may be subject to                  
certain limitations imposed by the Code, as a result of which a                 
shareholder may not get a full credit or deduction for the amount               
of such taxes.  In particular, shareholders must hold their fund                
shares (without protection from risk of loss) on the ex-dividend                
date and for at least 15 additional days during the 30-day period               
surrounding the ex-dividend date to be eligible to claim a                      
foreign tax credit with respect to a given dividend.                            
Shareholders who do not itemize on their federal income tax                     
returns may claim a credit (but no deduction) for such foreign                  
taxes.                                                                          

Investment by the fund in "passive foreign investment companies"                
could subject the fund to a U.S. federal income tax or other                    
charge on the proceeds from the sale of its investment in such a                
company; however, this tax can be avoided by making an election                 
to mark such investments to market annually or to treat the                     
passive foreign investment company as a "qualified electing                     
fund."                                                                          

A "passive foreign investment company" is any foreign                           
corporation: (i) 75 percent or more of the income of which for                  
the taxable year is passive income, or (ii) the average                         
percentage of the assets of which (generally by value, but by                   
adjusted tax basis in certain cases) that produce or are held for               
the production of passive income is at least 50 percent.                        
Generally, passive income for this purpose means dividends,                     
interest (including income equivalent to interest), royalties,                  
rents, annuities, the excess of gains over losses from certain                  
property transactions and commodities transactions, and foreign                 
currency gains.  Passive income for this purpose does not include               
rents and royalties received by the foreign corporation from                    
active business and certain income received from related persons.               

SALE OR REDEMPTION OF SHARES.  The sale, exchange or redemption                 
of fund shares may give rise to a gain or loss.  In general, any                
gain or loss realized upon a taxable disposition of shares will                 
be treated as long-term capital gain or loss if the shares have                 
been held for more than 12 months.  Otherwise the gain or loss on               
the sale, exchange or redemption of fund shares will be treated                 
as short-term capital gain or loss. However, if a shareholder                   
sells shares at a loss within six months of purchase, any loss                  
will be disallowed for Federal income tax purposes to the extent                
of any exempt-interest dividends received on such shares.  In                   
addition, any loss (not already disallowed as provided in the                   
preceding sentence) realized upon a taxable disposition of shares               
held for six months or less will be treated as long-term, rather                
than short-term, to the extent of any long-term capital gain                    
distributions received by the shareholder with respect to the                   
shares.  All or a portion of any loss realized upon a taxable                   
disposition of fund shares will be disallowed if other shares of                
the same fund are purchased within 30 days before or after the                  
disposition.  In such a case, the basis of the newly purchased                  
shares will be adjusted to reflect the disallowed loss.                         

SHARES PURCHASED THROUGH TAX-QUALIFIED PLANS.  Special tax rules                
apply to investments though defined contribution plans and other                
tax-qualified plans.  Shareholders should consult their tax                     
adviser to determine the suitability of shares of a fund as an                  
investment through such plans and the precise effect of an                      
investment on their particular tax situation.                                   

BACKUP WITHHOLDING.  The fund generally is required to withhold                 
and remit to the U.S. Treasury 31% of the taxable dividends and                 
other distributions paid to any individual shareholder who fails                
to furnish the fund with a correct taxpayer identification number               
(TIN), who has under-reported dividends or interest income, or                  
who fails to certify to the fund that he or she is not subject to               
such withholding.                                                               

The Internal Revenue Service recently revised its regulations                   
affecting the application to foreign investors of the back-up                   
withholding and withholding tax rules described above.  The new                 
regulations will generally be effective for payments made after                 
December 31, 1999 (although transition rules will apply).  In                   
some circumstances, the new rules will increase the certification               
and filing requirements imposed on foreign investors in order to                
qualify for exemption from the 31% back-up withholding tax rates                
under income tax treaties.  Foreign investors in a fund should                  
consult their tax advisors with respect to the potential                        
application of these new regulations.                                           

MANAGEMENT                                                                      

TRUSTEES NAME (AGE)                                                             

*+GEORGE PUTNAM (72), Chairman and President.  Chairman and                     
Director of Putnam Management and Putnam Mutual Funds.  Director,               
Freeport Copper and Gold, Inc. (a mining and natural resource                   
company), Houghton Mifflin Company (a major publishing company)                 
and Marsh & McLennan Companies, Inc.                                            

JOHN A. HILL (57), Vice Chairman.  Chairman and Managing                        
Director, First Reserve Corporation (a registered investment                    
adviser investing in companies in the world-wide energy industry                
on behalf of institutional investors).  Director of Snyder Oil                  
Corporation, TransMontaigne Oil Company and various private                     
companies owned by First Reserve Corporation, such as James River               
Coal and Anker Coal Corporation.                                                

+WILLIAM F. POUNDS (70), Vice Chairman. Professor Emeritus of                   
Management, Alfred P. Sloan School of Management, Massachusetts                 
Institute of Technology.  Director of IDEXX Laboratories, Inc. (a               
provider of diagnostic products and services for the animal                     
health and food and environmental industries), Management                       
Sciences for Health, Inc. (a non-profit organization), and Sun                  
Company, Inc. (a petroleum refining and marketing company).                     

JAMESON A. BAXTER (55), Trustee. President, Baxter Associates,                  
Inc. (a management consulting and private investments firm).                    
Director of MB Financial, Inc., ASHTA Chemicals, Inc., Banta                    
Corporation (printing and digital imaging), and Ryerson Tull,                   
Inc. (America's largest steel service corporation).  Chairman                   
Emeritus of the Board of Trustees, Mount Holyoke College.                       

+HANS H. ESTIN (70), Trustee.  Chartered Financial Analyst and                  
Vice Chairman, North American Management Corp. (a registered                    
investment adviser).                                                            

RONALD J. JACKSON (55), Trustee.  Former Chairman, President and                
Chief Executive Officer of Fisher-Price, Inc. (a major toy                      
manufacturer).                                                                  

*PAUL L. JOSKOW (51), Trustee.  Professor Emeritus of Economics                 
and Management and Director of the Center for Energy and                        
Environmental Policy Research, Massachusetts Institute of                       
Technology.  Director, New England Electric System (a public                    
utility holding company), State Farm Indemnity Company (an                      
automobile insurance company) and the Whitehead Institute for                   
Biomedical Research (a non-profit research institution).                        

ELIZABETH T. KENNAN (61), Trustee.  President Emeritus and                      
Professor, Mount Holyoke College.  Director, Bell Atlantic (a                   
telecommunications company), the Kentucky Home Life Insurance                   
Companies, Bell Atlantic, Northeast Utilities and Talbots (a                    
distributor of women's apparel).                                                

*LAWRENCE J. LASSER (56), Trustee and Vice President.  President,               
Chief Executive Officer and Director of Putnam Investments, Inc.                
and Putnam Investment Management, Inc.  Director of Marsh &                     
McLennan Companies, Inc. and the United Way of Massachusetts Bay.               

JOHN H. MULLIN, III (57), Trustee.  Chairman and CEO of Ridgeway                
Farm, Director of ACX Technologies, Inc. (a company engaged in                  
the manufacture of industrial ceramics and packaging products),                 
Alex. Brown Realty, Inc. and The Liberty Corporation (a company                 
engaged in the life insurance and broadcasting industries).                     

+ROBERT E. PATTERSON (53), Trustee.  President and Trustee of                   
Cabot Industrial Trust (a publicly traded real estate investment                
trust).  Director of Brandywine Trust Company.                                  

*GEORGE PUTNAM III (47), Trustee.  President, New Generation                    
Research, Inc. (a publisher of financial advisory and other                     
research services relating to bankrupt and distressed companies)                
and New Generation Advisers, Inc. (a registered investment                      
adviser).  Director, Massachusetts Audubon Society and The Boston               
Family Office, L.L.C. (a registered investment advisor).                        

*A.J.C. SMITH (64), Trustee.  Chairman and Chief Executive                      
Officer, Marsh & McLennan Companies, Inc.  Director, Trident                    
Partnership (a $667 million 10-year limited partnership with over               
30 institutional investors).                                                    

W. THOMAS STEPHENS (56), Trustee.  President and Chief Executive                
Officer of MacMillan Bloedel Ltd. (a major forest products                      
company).  Director, Qwest Communications (a fiber optics                       
manufacturer) and New Century Energies (a public utility                        
company).                                                                       

W. NICHOLAS THORNDIKE (65), Trustee.  Director of various                       
corporations and charitable organizations, including Courier                    
Corporation (a book manufacturer), Data General Corporation (a                  
provider of customized computer solutions), Bradley Real Estate,                
Inc., and Providence Journal Co.                                                

OFFICERS NAME (AGE)                                                             

CHARLES E. PORTER (60), Executive Vice President.  Managing                     
Director of Putnam Investments, Inc. and Putnam Management.                     

PATRICIA C. FLAHERTY (52), Vice President.  Senior Vice President               
of Putnam Investments, Inc. and Putnam Management.                              

GORDON H. SILVER (51), Vice President.  Director and Senior                     
Managing Director of Putnam Investments, Inc. and Putnam                        
Management.                                                                     

BRETT C. BROWCHUK (36), Vice President. Managing Director of                    
Putnam Management.                                                              

IAN C. FERGUSON (41), Vice President.  Senior Managing Director                 
of  Putnam Investments, Inc. and Putnam Management.                             

RICHARD A. MONAGHAN (44), Vice President.  Managing Director of                 
Putnam Investments, Inc., Putnam Management and Putnam Mutual                   
Funds.                                                                          

JOHN R. VERANI (59), Vice President.  Senior Vice President of                  
Putnam Investments, Inc. and Putnam Management.                                 

JOHN D. HUGHES (64), Senior Vice President and Treasurer.                       

*Trustees who are or may be deemed to be "interested persons" (as               
defined in the Investment Company Act of 1940) of the fund,                     
Putnam Management or Putnam Mutual Funds.                                       

Messrs. Putnam, Lasser and Smith are deemed "interested persons"                
by virtue of their positions as officers or shareholders of the                 
fund, or directors of Putnam Management, Putnam Mutual Funds, or                
Marsh & McLennan Companies, Inc., the parent company of Putnam                  
Management and Putnam Mutual Funds.                                             

Mr. George Putnam, III, Mr. Putnam's son, is also an "interested                
person" of the fund, Putnam Management, and Putnam Mutual Funds.                
Mr. Joskow is not currently an "interested person" of the fund                  
but could be deemed by the Securities and Exchange Commission to                
be an "interested person" on account of his prior consulting                    
relationship with National Economic Research Associates, Inc., a                
wholly-owned subsidiary of Marsh & McLennan Companies, Inc.,                    
which was terminated as of August 31, 1998.  The balance of the                 
Trustees are not "interested persons."                                          

+Members of the Executive Committee of the Trustees.  The                       
Executive Committee meets between regular meetings of the                       
Trustees as may be required to review investment matters and                    
other affairs of the fund and may exercise all of the powers of                 
the Trustees.                                                                   

-----------------                 

Certain other officers of Putnam Management are officers of the                 
fund.  SEE "ADDITIONAL OFFICERS" IN PART I OF THIS SAI.  The                    
mailing address of each of the officers and Trustees is One Post                
Office Square, Boston, Massachusetts 02109.                                     

Except as stated below, the principal occupations of the officers               
and Trustees for the last five years have been with the employers               
as shown above, although in some cases they have held different                 
positions with such employers.  Prior to July, 1998, Mr. Joskow                 
was Chairman of the Department of Economics, Massachusetts                      
Institute of Technology, and, prior to September, 1998, he was a                
consultant to National Economic Research Associates.  Prior to                  
June, 1995, Dr. Kennan was President of Mount Holyoke College.                  
Prior to 1996, Mr. Stephens was Chairman of the Board of                        
Directors, President and Chief Executive Officer of Johns                       
Manville Corporation.  Prior to April, 1996, Mr. Ferguson was CEO               
at Hong Kong Shanghai Banking Corporation.  Prior to February,                  
1998, Mr. Patterson was Executive Vice President and Director of                
Acquisitions of Cabot Partners Limited Partnership.  Prior to                   
November, 1998, Mr. Monaghan was Managing Director at Merrill                   
Lynch.                                                                          

Each Trustee of the fund receives an annual fee and an additional               
fee for each Trustees' meeting attended.  Trustees who are not                  
interested persons of Putnam Management and who serve on                        
committees of the Trustees receive additional fees for attendance               
at certain committee meetings and for special services rendered                 
in that connection.  All of the Trustees are Trustees of all the                
Putnam funds and each receives fees for his or her services.  FOR               
DETAILS OF TRUSTEES' FEES PAID BY THE FUND AND INFORMATION                      
CONCERNING RETIREMENT GUIDELINES FOR THE TRUSTEES, SEE "CHARGES                 
AND EXPENSES" IN PART I OF THIS SAI.                                            

The Agreement and Declaration of Trust of the fund provides that                
the fund will indemnify its Trustees and officers against                       
liabilities and expenses incurred in connection with litigation                 
in which they may be involved because of their offices with the                 
fund, except if it is determined in the manner specified in the                 
Agreement and Declaration of Trust that they have not acted in                  
good faith in the reasonable belief that their actions were in                  
the best interests of the fund or that such indemnification would               
relieve any officer or Trustee of any liability to the fund or                  
its shareholders by reason of willful misfeasance, bad faith,                   
gross negligence or reckless disregard of his or her duties.  The               
fund, at its expense, provides liability insurance for the                      
benefit of its Trustees and officers.                                           

PUTNAM MANAGEMENT AND ITS AFFILIATES                                            

Putnam Management is one of America's oldest and largest money                  
management firms.  Putnam Management's staff of experienced                     
portfolio managers and research analysts selects securities and                 
constantly supervises the fund's portfolio.  By pooling an                      
investor's money with that of other investors, a greater variety                
of securities can be purchased than would be the case                           
individually; the resulting diversification helps reduce                        
investment risk. Putnam Management has been managing mutual funds               
since 1937.  Today, the firm serves as the investment manager for               
the funds in the Putnam Family, with nearly $222 billion in                     
assets in nearly 11 million shareholder accounts at December 31,                
1998.  An affiliate, The Putnam Advisory Company, Inc., manages                 
domestic and foreign institutional accounts and mutual funds,                   
including the accounts of many Fortune 500 companies.  Another                  
affiliate, Putnam Fiduciary Trust Company, provides investment                  
advice to institutional clients under its banking and fiduciary                 
powers.  At December 31, 1998, Putnam Management and its                        
affiliates managed over $294 billion in assets, including over                  
$20 billion in tax-exempt securities and over $71 billion in                    
retirement plan assets.                                                         

Putnam Management, Putnam Mutual Funds and Putnam Fiduciary Trust               
Company are subsidiaries of Putnam Investments, Inc., a holding                 
company which in turn is, except for a minority stake owned by                  
employees, owned by Marsh & McLennan Companies, Inc., a publicly-               
owned holding company whose principal businesses are                            
international insurance and reinsurance brokerage, employee                     
benefit consulting and investment management.                                   

Trustees and officers of the fund who are also officers of Putnam               
Management or its affiliates or who are stockholders of Marsh &                 
McLennan Companies, Inc. will benefit from the advisory fees,                   
sales commissions, distribution fees, custodian fees and transfer               
agency fees paid or allowed by the fund.                                        

THE MANAGEMENT CONTRACT                                                         

Under a Management Contract between the fund and Putnam                         
Management, subject to such policies as the Trustees may                        
determine, Putnam Management, at its expense, furnishes                         
continuously an investment program for the fund and makes                       
investment decisions on behalf of the fund.  Subject to the                     
control of the Trustees, Putnam Management also manages,                        
supervises and conducts the other affairs and business of the                   
fund, furnishes office space and equipment, provides bookkeeping                
and clerical services (including determination of the fund's net                
asset value, but excluding shareholder accounting services) and                 
places all orders for the purchase and sale of the fund's                       
portfolio securities.  Putnam Management may place fund portfolio               
transactions with broker-dealers which furnish Putnam Management,               
without cost to it, certain research, statistical and quotation                 
services of value to Putnam Management and its affiliates in                    
advising the fund and other clients.  In so doing, Putnam                       
Management may cause the fund to pay greater brokerage                          
commissions than it might otherwise pay.                                        

FOR DETAILS OF PUTNAM MANAGEMENT'S COMPENSATION UNDER THE                       
MANAGEMENT CONTRACT, SEE "CHARGES AND EXPENSES" IN PART I OF THIS               
SAI.  Putnam Management's compensation under the Management                     
Contract may be reduced in any year if the fund's expenses exceed               
the limits on investment company expenses imposed by any statute                
or regulatory authority of any jurisdiction in which shares of                  
the fund are qualified for offer or sale.  The term "expenses" is               
defined in the statutes or regulations of such jurisdictions, and               
generally excludes brokerage commissions, taxes, interest,                      
extraordinary expenses and, if the fund has a distribution plan,                
payments made under such plan.                                                  

Under the Management Contract, Putnam Management may reduce its                 
compensation to the extent that the fund's expenses exceed such                 
lower expense limitation as Putnam Management may, by notice to                 
the fund, declare to be effective.  The expenses subject to this                
limitation are exclusive of brokerage commissions, interest,                    
taxes, deferred organizational and extraordinary expenses and, if               
the fund has a distribution plan, payments required under such                  
plan.  For the purpose of determining any such limitation on                    
Putnam Management's compensation, expenses of the fund shall not                
reflect the application of commissions or cash management credits               
that may reduce designated fund expenses.  THE TERMS OF ANY                     
EXPENSE LIMITATION FROM TIME TO TIME IN EFFECT ARE DESCRIBED IN                 
THE PROSPECTUS AND/OR PART I OF THIS SAI.                                       

In addition to the fee paid to Putnam Management, the fund                      
reimburses Putnam Management for the compensation and related                   
expenses of certain officers of the fund and their assistants who               
provide certain administrative services for the fund and the                    
other Putnam funds, each of which bears an allocated share of the               
foregoing costs.  The aggregate amount of all such payments and                 
reimbursements is determined annually by the Trustees.                          

THE AMOUNT OF THIS REIMBURSEMENT FOR THE FUND'S MOST RECENT                     
FISCAL YEAR IS INCLUDED IN "CHARGES AND EXPENSES" IN PART I OF                  
THIS SAI.  Putnam Management pays all other salaries of officers                
of the fund.  The fund pays all expenses not assumed by Putnam                  
Management including, without limitation, auditing, legal,                      
custodial, investor servicing and shareholder reporting expenses.               
The fund pays the cost of typesetting for its prospectuses and                  
the cost of printing and mailing any prospectuses sent to its                   
shareholders.  Putnam Mutual Funds pays the cost of printing and                
distributing all other prospectuses.                                            

The Management Contract provides that Putnam Management shall not               
be subject to any liability to the fund or to any shareholder of                
the fund for any act or omission in the course of or connected                  
with rendering services to the fund in the absence of willful                   
misfeasance, bad faith, gross negligence or reckless disregard of               
its duties on the part of Putnam Management.                                    

The Management Contract may be terminated without penalty by vote               
of the Trustees or the shareholders of the fund, or by Putnam                   
Management, on 30 days' written notice.  It may be amended only                 
by a vote of the shareholders of the fund.  The Management                      
Contract also terminates without payment of any penalty in the                  
event of its assignment.  The Management Contract provides that                 
it will continue in effect only so long as such continuance is                  
approved at least annually by vote of either the Trustees or the                
shareholders, and, in either case, by a majority of the Trustees                
who are not "interested persons" of Putnam Management or the                    
fund.  In each of the foregoing cases, the vote of the                          
shareholders is the affirmative vote of a "majority of the                      
outstanding voting securities" as defined in the Investment                     
Company Act of 1940.                                                            

PERSONAL INVESTMENTS BY EMPLOYEES OF PUTNAM MANAGEMENT                          

Employees of Putnam Management are permitted to engage in                       
personal securities transactions, subject to requirements and                   
restrictions set forth in Putnam Management's Code of Ethics.                   
The Code of Ethics contains provisions and requirements designed                
to identify and address certain conflicts of interest between                   
personal investment activities and the interests of investment                  
advisory clients such as the funds.  Among other things, the Code               
of Ethics, consistent with standards recommended by the                         
Investment Company Institute's Advisory Group on Personal                       
Investing, prohibits certain types of transactions absent prior                 
approval, imposes time periods during which personal transactions               
may not be made in certain securities, and requires the                         
submission of duplicate broker confirmations and quarterly                      
reporting of securities transactions.  Additional restrictions                  
apply to portfolio managers, traders, research analysts and                     
others involved in the investment advisory process.  Exceptions                 
to these and other provisions of the Code of Ethics may be                      
granted in particular circumstances after review by appropriate                 
personnel.                                                                      

PORTFOLIO TRANSACTIONS                                                          

INVESTMENT DECISIONS.  Investment decisions for the fund and for                
the other investment advisory clients of Putnam Management and                  
its affiliates are made with a view to achieving their respective               
investment objectives.  Investment decisions are the product of                 
many factors in addition to basic suitability for the particular                
client involved.  Thus, a particular security may be bought or                  
sold for certain clients even though it could have been bought or               
sold for other clients at the same time.  Likewise, a particular                
security may be bought for one or more clients when one or more                 
other clients are selling the security.  In some instances, one                 
client may sell a particular security to another client.  It also               
sometimes happens that two or more clients simultaneously                       
purchase or sell the same security, in which event each day's                   
transactions in such security are, insofar as possible, averaged                
as to price and allocated between such clients in a manner which                
in Putnam Management's opinion is equitable to each and in                      
accordance with the amount being purchased or sold by each.                     
There may be circumstances when purchases or sales of portfolio                 
securities for one or more clients will have an adverse effect on               
other clients.                                                                  

BROKERAGE AND RESEARCH SERVICES.  Transactions on U.S. stock                    
exchanges, commodities markets and futures markets and other                    
agency transactions involve the payment by the fund of negotiated               
brokerage commissions.  Such commissions vary among different                   
brokers.  A particular broker may charge different commissions                  
according to such factors as the difficulty and size of the                     
transaction.  Transactions in foreign investments often involve                 
the payment of fixed brokerage commissions, which may be higher                 
than those in the United States.  There is generally no stated                  
commission in the case of securities traded in the over-the-                    
counter markets, but the price paid by the fund usually includes                
an undisclosed dealer commission or mark-up.  In underwritten                   
offerings, the price paid by the fund includes a disclosed, fixed               
commission or discount retained by the underwriter or dealer.  It               
is anticipated that most purchases and sales of securities by                   
funds investing primarily in tax-exempt securities and certain                  
other fixed-income securities will be with the issuer or with                   
underwriters of or dealers in those securities, acting as                       
principal.  Accordingly, those funds would not ordinarily pay                   
significant brokerage commissions with respect to securities                    
transactions.  SEE "CHARGES AND EXPENSES" IN PART I OF THIS SAI                 
FOR INFORMATION CONCERNING COMMISSIONS PAID BY THE FUND.                        

It has for many years been a common practice in the investment                  
advisory business for advisers of investment companies and other                
institutional investors to receive brokerage and research                       
services (as defined in the Securities Exchange Act of 1934, as                 
amended (the "1934 Act")) from broker-dealers that execute                      
portfolio transactions for the clients of such advisers and from                
third parties with which such broker-dealers have arrangements.                 
Consistent with this practice, Putnam Management receives                       
brokerage and research services and other similar services from                 
many broker-dealers with which Putnam Management places the                     
fund's portfolio transactions and from third parties with which                 
these broker-dealers have arrangements.  These services include                 
such matters as general economic and market reviews, industry and               
company reviews, evaluations of investments, recommendations as                 
to the purchase and sale of investments, newspapers, magazines,                 
pricing services, quotation services, news services and personal                
computers utilized by Putnam Management's managers and analysts.                
Where the services referred to above are not used exclusively by                
Putnam Management for research purposes, Putnam Management, based               
upon its own allocations of expected use, bears that portion of                 
the cost of these services which directly relates to their non-                 
research use.  Some of these services are of value to Putnam                    
Management and its affiliates in advising various of their                      
clients (including the fund), although not all of these services                
are necessarily useful and of value in managing the fund.  The                  
management fee paid by the fund is not reduced because Putnam                   
Management and its affiliates receive these services even though                
Putnam Management might otherwise be required to purchase some of               
these services for cash.                                                        

Putnam Management places all orders for the purchase and sale of                
portfolio investments for the fund and buys and sells investments               
for the fund through a substantial number of brokers and dealers.               
In so doing, Putnam Management uses its best efforts to obtain                  
for the fund the most favorable price and execution available,                  
except to the extent it may be permitted to pay higher brokerage                
commissions as described below.  In seeking the most favorable                  
price and execution, Putnam Management, having in mind the fund's               
best interests, considers all factors it deems relevant,                        
including, by way of illustration, price, the size of the                       
transaction, the nature of the market for the security or other                 
investment, the amount of the commission, the timing of the                     
transaction taking into account market prices and trends, the                   
reputation, experience and financial stability of the broker-                   
dealer involved and the quality of service rendered by the broker-              
dealer in other transactions.                                                   

As permitted by Section 28(e) of the 1934 Act, and by the                       
Management Contract, Putnam Management may cause the fund to pay                
a broker-dealer which provides "brokerage and research services"                
(as defined in the 1934 Act) to Putnam Management an amount of                  
disclosed commission for effecting securities transactions on                   
stock exchanges and other transactions for the fund on an agency                
basis in excess of the commission which another broker-dealer                   
would have charged for effecting that transaction.  Putnam                      
Management's authority to cause the fund to pay any such greater                
commissions is also subject to such policies as the Trustees may                
adopt from time to time.  Putnam Management does not currently                  
intend to cause the fund to make such payments.  It is the                      
position of the staff of the Securities and Exchange Commission                 
that Section 28(e) does not apply to the payment of such greater                
commissions in "principal" transactions.  Accordingly Putnam                    
Management will use its best effort to obtain the most favorable                
price and execution available with respect to such transactions,                
as described above.                                                             

The Management Contract provides that commissions, fees,                        
brokerage or similar payments received by Putnam Management or an               
affiliate in connection with the purchase and sale of portfolio                 
investments of the fund, less any direct expenses approved by the               
Trustees, shall be recaptured by the fund through a reduction of                
the fee payable by the fund under the Management Contract.                      
Putnam Management seeks to recapture for the fund soliciting                    
dealer fees on the tender of the fund's portfolio securities in                 
tender or exchange offers.  Any such fees which may be recaptured               
are likely to be minor in amount.                                               

Consistent with the Conduct Rules of the National Association of                
Securities Dealers, Inc. and subject to seeking the most                        
favorable price and execution available and such other policies                 
as the Trustees may determine, Putnam Management may consider                   
sales of shares of the fund (and, if permitted by law, of the                   
other Putnam funds) as a factor in the selection of broker-                     
dealers to execute portfolio transactions for the fund.                         

PRINCIPAL UNDERWRITER                                                           

Putnam Mutual Funds is the principal underwriter of shares of the               
fund and the other continuously offered Putnam funds.  Putnam                   
Mutual Funds is not obligated to sell any specific amount of                    
shares of the fund and will purchase shares for resale only                     
against orders for shares.  SEE "CHARGES AND EXPENSES" IN PART I                
OF THIS SAI FOR INFORMATION ON SALES CHARGES AND OTHER PAYMENTS                 
RECEIVED BY PUTNAM MUTUAL FUNDS.                                                

INVESTOR SERVICING AGENT AND CUSTODIAN                                          

Putnam Investor Services, a division of Putnam Fiduciary Trust                  
Company ("PFTC"), is the fund's investor servicing agent                        
(transfer, plan and dividend disbursing agent), for which it                    
receives fees which are paid monthly by the fund as an expense of               
all its shareholders.  The fee paid to Putnam Investor Services                 
is determined on the basis of the number of shareholder accounts,               
the number of transactions and the assets of the fund.  Putnam                  
Investor Services has won the DALBAR Service Award eight times in               
the past nine years.  In 1997 and 1998, Putnam was the only                     
company to win all three DALBAR Awards: for service to investors,               
to financial advisors, and to variable annuity contract holders.                
DALBAR, Inc. an independent research firm, presents the awards to               
financial services firms that provide consistently excellent                    
service.                                                                        

PFTC is the custodian of the fund's assets.  In carrying out its                
duties under its custodian contract, PFTC may employ one or more                
subcustodians whose responsibilities include safeguarding and                   
controlling the fund's cash and securities, handling the receipt                
and delivery of securities and collecting interest and dividends                
on the fund's investments.  PFTC and any subcustodians employed                 
by it have a lien on the securities of the fund (to the extent                  
permitted by the fund's investment restrictions) to secure                      
charges and any advances made by such subcustodians at the end of               
any day for the purpose of paying for securities purchased by the               
fund.  The fund expects that such advances will exist only in                   
unusual circumstances.  Neither PFTC nor any subcustodian                       
determines the investment policies of the fund or decides which                 
securities the fund will buy or sell.  PFTC pays the fees and                   
other charges of any subcustodians employed by it.  The fund may                
from time to time pay custodial expenses in full or in part                     
through the placement by Putnam Management of the fund's                        
portfolio transactions with the subcustodians or with a third-                  
party broker having an agreement with the subcustodians.  The                   
fund pays PFTC an annual fee based on the fund's assets,                        
securities transactions and securities holdings and reimburses                  
PFTC for certain out-of-pocket expenses incurred by it or any                   
subcustodian employed by it in performing custodial services.                   

SEE "CHARGES AND EXPENSES" IN PART I OF THIS SAI FOR INFORMATION                
ON FEES AND REIMBURSEMENTS FOR INVESTOR SERVICING AND CUSTODY                   
RECEIVED BY PFTC.  THE FEES MAY BE REDUCED BY CREDITS ALLOWED BY                
PFTC.                                                                           

DETERMINATION OF NET ASSET VALUE                                                

The fund determines the net asset value per share of each class                 
of shares once each day the New York Stock Exchange (the                        
"Exchange") is open.  Currently, the Exchange is closed                         
Saturdays, Sundays and the following holidays: New Year's Day,                  
Rev. Dr. Martin Luther King, Jr. Day, Presidents' Day, Good                     
Friday, Memorial Day, the Fourth of July, Labor Day, Thanksgiving               
and Christmas. The fund determines net asset value as of the                    
close of regular trading on the Exchange, currently 4:00 p.m.                   
However, equity options held by the fund are priced as of the                   
close of trading at 4:10 p.m., and futures contracts on U.S.                    
government and other fixed-income securities and index options                  
held by the fund are priced as of their close of trading at 4:15                
p.m.                                                                            

Securities for which market quotations are readily available are                
valued at prices which, in the opinion of Putnam Management, most               
nearly represent the market values of such securities.                          
Currently, such prices are 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 securities are valued at the mean between the               
last reported bid and asked prices.  Short-term investments                     
having remaining maturities of 60 days or less are valued at                    
amortized cost, which approximates market value.  All other                     
securities and assets are valued at their fair value following                  
procedures approved by the Trustees.  Liabilities are deducted                  
from the total, and the resulting amount is divided by the number               
of shares of the class outstanding.                                             

Reliable market quotations are not considered to be readily                     
available for long-term corporate bonds and notes, certain                      
preferred stocks, tax-exempt securities, and certain foreign                    
securities.  These investments are valued at fair value on the                  
basis of valuations furnished by pricing services, which                        
determine valuations for normal, institutional-size trading units               
of such securities using methods based on market transactions for               
comparable securities and various relationships between                         
securities which are generally recognized by institutional                      
traders.                                                                        

If any securities held by the fund are restricted as to resale,                 
Putnam Management determines their fair value following                         
procedures approved by the Trustees.  The fair value of such                    
securities is generally determined as the amount which the fund                 
could reasonably expect to realize from an orderly disposition of               
such securities over a reasonable period of time.  The valuation                
procedures applied in any specific instance are likely to vary                  
from case to case.  However, consideration is generally given to                
the financial position of the issuer and other fundamental                      
analytical data relating to the investment and to the nature of                 
the restrictions on disposition of the securities (including any                
registration expenses that might be borne by the fund in                        
connection with such disposition).  In addition, specific factors               
are also generally considered, such as the cost of the                          
investment, the market value of any unrestricted securities of                  
the same class, the size of the holding, the prices of any recent               
transactions or offers with respect to such securities and any                  
available analysts' reports regarding the issuer.                               

Generally, trading in certain securities (such as foreign                       
securities) is substantially completed each day at various times                
prior to the close of the Exchange.  The values of these                        
securities used in determining the net asset value of the fund's                
shares are computed as of such times.  Also, because of the                     
amount of time required to collect and process trading                          
information as to large numbers of securities issues, the values                
of certain securities (such as convertible bonds, U.S. government               
securities, and tax-exempt securities) are determined based on                  
market quotations collected earlier in the day at the latest                    
practicable time prior to the close of the Exchange.                            
Occasionally, events affecting the value of such securities may                 
occur between such times and the close of the Exchange which will               
not be reflected in the computation of the fund's net asset                     
value.  If events materially affecting the value of such                        
securities occur during such period, then these securities will                 
be valued at their fair value following procedures approved by                  
the Trustees.  In addition, securities held by some of the funds                
may be traded in foreign markets that are open for business on                  
days that a fund is not, and the trading of such securities on                  
those days may have an impact on the value of a shareholder's                   
investment at a time when the shareholder cannot buy and sell                   
shares of the fund.                                                             

Money market funds generally value their portfolio securities at                
amortized cost according to Rule 2a-7 under the Investment                      
Company Act of 1940.                                                            

HOW TO BUY SHARES                                                               

GENERAL                                                                         

The prospectus contains a general description of how investors                  
may buy shares of the fund and states whether the fund offers                   
more than one class of shares.  This SAI contains additional                    
information which may be of interest to investors.                              

Class A shares and class M shares are generally sold with a sales               
charge payable at the time of purchase (except for class A shares               
and class M shares of money market funds).  As used in this SAI                 
and unless the context requires otherwise, the term "class A                    
shares" includes shares of funds that offer only one class of                   
shares.  The prospectus contains a table of applicable sales                    
charges.  For information about how to purchase class A or class                
M shares of a Putnam fund at net asset value through an employer-               
sponsored retirement plan, please consult your employer.  Certain               
purchases of class A shares and class M shares may be exempt from               
a sales charge or, in the case of class A shares, may be subject                
to a contingent deferred sales charge ("CDSC").  See "General--                 
Sales without sales charges or contingent deferred sales                        
charges," "Additional Information About Class A and Class M                     
shares," and "Contingent Deferred Sales Charges--Class A shares."               

Class B shares and class C shares are sold subject to a CDSC                    
payable upon redemption within a specified period after purchase.               
The prospectus contains a table of applicable CDSCs.                            

Class B shares will automatically convert into class A shares no                
later than the end of the month eight years after the purchase                  
date, and may, in the discretion of the Trustees, convert to                    
class A shares earlier.  Class B shares acquired by exchanging                  
class B shares of another Putnam fund will convert into class A                 
shares based on the time of the initial purchase.  Class B shares               
acquired through reinvestment of distributions will convert into                
Class A shares based on the date of the initial purchase to which               
such shares relate.  For this purpose, class B shares acquired                  
through reinvestment of distributions will be attributed to                     
particular purchases of class B shares in accordance with such                  
procedures as the Trustees may determine from time to time.  The                
conversion of class B shares to class A shares is subject to the                
condition that such conversions will not constitute taxable                     
events for Federal tax purposes.                                                

Class Y shares, which are not subject to sales charges or a CDSC,               
are available only to certain defined contribution plans.  See                  
the prospectus that offers class Y shares for more information.                 
Certain purchase programs described below are not available to                  
defined contribution plans.  Consult your employer for                          
information on how to purchase shares through your plan.                        

The fund is currently making a continuous offering of its shares.               
The fund receives the entire net asset value of shares sold.  The               
fund will accept unconditional orders for shares to be executed                 
at the public offering price based on the net asset value per                   
share next determined after the order is placed.  In the case of                
class A shares and class M shares, the public offering price is                 
the net asset value plus the applicable sales charge, if any.  No               
sales charge is included in the public offering price of other                  
classes of shares.  In the case of orders for purchase of shares                
placed through dealers, the public offering price will be based                 
on the net asset value determined on the day the order is placed,               
but only if the dealer receives the order before the close of                   
regular trading on the Exchange.  If the dealer receives the                    
order after the close of the Exchange, the price will be based on               
the net asset value next determined.  If funds for the purchase                 
of shares are sent directly to Putnam Investor Services, they                   
will be invested at the public offering price based on the net                  
asset value next determined after receipt.  Payment for shares of               
the fund must be in U.S. dollars; if made by check, the check                   
must be drawn on a U.S. bank.                                                   

Initial and subsequent purchases must satisfy the minimums stated               
in the prospectus, except that (i) individual investments under                 
certain employee benefit plans or Tax Qualified Retirement Plans                
may be lower, (ii) persons who are already shareholders may make                
additional purchases of $50 or more by sending funds directly to                
Putnam Investor Services (see "Your investing account" below),                  
and (iii) for investors participating in systematic investment                  
plans and military allotment plans, the initial and subsequent                  
purchases must be $25 or more.  Information about these plans is                
available from investment dealers or from Putnam Mutual Funds.                  

As a convenience to investors, shares may be purchased through a                
systematic investment plan. Pre-authorized monthly bank drafts                  
for a fixed amount (at least $25) are used to purchase fund                     
shares at the applicable public offering price next determined                  
after Putnam Mutual Funds receives the proceeds from the draft.                 
A shareholder may choose any day of the month and, if a given                   
month (for example, February) does not contain that particular                  
date, or if the date falls on a weekend or holiday, the draft                   
will be processed on the next business day.  Further information                
and application forms are available from investment dealers or                  
from Putnam Mutual Funds.                                                       

Except for funds that declare a distribution daily, distributions               
to be reinvested are reinvested without a sales charge in shares                
of the same class as of the ex-dividend date using the net asset                
value determined on that date, and are credited to a                            
shareholder's account on the payment date.  Dividends for Putnam                
money market funds are credited to a shareholder's account on the               
payment date.  Distributions for all other funds that declare a                 
distribution daily are reinvested without a sales charge as of                  
the last day of the period for which distributions are paid using               
the net asset value determined on that date, and are credited to                
a shareholder's account on the payment date.                                    

PAYMENT IN SECURITIES.  In addition to cash, the fund may accept                
securities as payment for fund shares at the applicable net asset               
value.  Generally, the fund will only consider accepting                        
securities to increase its holdings in a portfolio security, or                 
if Putnam Management determines that the offered securities are a               
suitable investment for the fund and in a sufficient amount for                 
efficient management.                                                           

While no minimum has been established, it is expected that the                  
fund would not accept securities with a value of less than                      
$100,000 per issue as payment for shares.  The fund may reject in               
whole or in part any or all offers to pay for purchases of fund                 
shares with securities, may require partial payment in cash for                 
such purchases to provide funds for applicable sales charges, and               
may discontinue accepting securities as payment for fund shares                 
at any time without notice.  The fund will value accepted                       
securities in the manner described in the section "Determination                
of Net Asset Value" for valuing shares of the fund.  The fund                   
will only accept securities which are delivered in proper form.                 
The fund will not accept options or restricted securities as                    
payment for shares.  The acceptance of securities by certain                    
funds in exchange for fund shares is subject to additional                      
requirements.  For federal income tax purposes, a purchase of                   
fund shares with securities will be treated as a sale or exchange               
of such securities on which the investor will generally realize a               
taxable gain or loss.  The processing of a purchase of fund                     
shares with securities involves certain delays while the fund                   
considers the suitability of such securities and while other                    
requirements are satisfied.  For information regarding procedures               
for payment in securities, contact Putnam Mutual Funds.                         
Investors should not send securities to the fund except when                    
authorized to do so and in accordance with specific instructions                
received from Putnam Mutual Funds.                                              

SALES WITHOUT SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES.               
The fund may sell shares without a sales charge or CDSC to:                     

(i) current and retired Trustees of the fund; officers of the             
fund; directors and current and retired U.S. full-time                    
employees of Putnam Management, Putnam Mutual Funds, their                
parent corporations and certain corporate affiliates; family              
members of and employee benefit plans for the foregoing; and              
partnerships, trusts or other entities in which any of the                
foregoing has a substantial interest;                                     

(ii) employer-sponsored retirement plans, for the repurchase              
of shares in connection with repayment of plan loans made to              
plan participants (if the sum loaned was obtained by                      
redeeming shares of a Putnam fund sold with a sales charge)               
(not offered by tax-exempt funds);                                        

(iii) clients of administrators of tax-qualified employer-                
sponsored retirement plans which have entered into agreements             
with Putnam Mutual Funds (not offered by tax-exempt funds);               

(iv) registered representatives and other employees of broker-            
dealers having sales agreements with Putnam Mutual Funds;                 
employees of financial institutions having sales agreements               
with Putnam Mutual Funds or otherwise having an arrangement               
with any such broker-dealer or financial institution with                 
respect to sales of fund shares; and their spouses and                    
children under age 21  (Putnam Mutual Funds is regarded as                
the dealer of record for all such accounts);                              

(v) investors meeting certain requirements who sold shares of             
certain Putnam closed-end funds pursuant to a tender offer by             
such closed-end fund;                                                     

(vi) a trust department of any financial institution                      
purchasing shares of the fund in its capacity as trustee of               
any trust (other than a tax-qualified retirement plan trust),             
through an arrangement approved by Putnam Mutual Funds, if                
the value of the shares of the fund and other Putnam funds                
purchased or held by all such trusts exceeds $1 million in                
the aggregate; and                                                        

(vii) "wrap accounts" maintained for clients of broker-                   
dealers, financial institutions or financial intermediaries               
who have entered into agreements with Putnam Mutual Funds                 
with respect to such accounts, which in all cases shall be                
subject to a wrap fee economically comparable to a sales                  
charge.  Fund shares offered pursuant to this waiver may not              
be advertised as "no load," or otherwise offered for sale at              
NAV without a wrap fee.                                                   

In addition, each of the Putnam funds may issue its shares at net               
asset value without an initial sales charge or a CDSC in                        
connection with the acquisition of substantially all of the                     
securities owned by other investment companies or personal                      
holding companies, and the CDSC will be waived on redemptions of                
shares arising out of death or post-purchase disability of a                    
shareholder or settlor of a living trust account and on                         
redemptions in connection with certain withdrawals from IRA or                  
other retirement plans and on redemptions to pay premiums for                   
insurance under Putnam's insured investor program.  Up to 12% of                
the value of shares subject to a systematic withdrawal plan may                 
also be redeemed each year without a CDSC.  The fund may sell                   
class A or class M shares at net asset value to members of                      
qualified groups.  See "Group purchases of class A and class M                  
shares" below.  Class A and class M shares are available without                
an initial sales charge to "class A qualified benefit plans" and                
"class M qualified benefit plans," respectively, as described                   
below.  See "Qualified benefit plans; Individual account plans"                 
below.                                                                          

PAYMENTS TO DEALERS.  Putnam Mutual Funds may, at its expense,                  
pay concessions in addition to the payments disclosed in the                    
prospectus to dealers which satisfy certain criteria established                
from time to time by Putnam Mutual Funds relating to increasing                 
net sales of shares of the Putnam funds over prior periods, and                 
certain other factors.                                                          

ADDITIONAL INFORMATION ABOUT CLASS A AND CLASS M SHARES                         

The underwriter's commission is the sales charge shown in the                   
prospectus less any applicable dealer discount.  Putnam Mutual                  
Funds will give dealers ten days' notice of any changes in the                  
dealer discount.  Putnam Mutual Funds retains the entire sales                  
charge on any retail sales made by it.                                          

Putnam Mutual Funds offers several plans by which an investor may               
obtain reduced sales charges on purchases of class A shares and                 
class M shares.  The variations in sales charges reflect the                    
varying efforts required to sell shares to separate categories of               
purchasers.  These plans may be altered or discontinued at any                  
time.                                                                           

The public offering price of class A and class M shares is the                  
net asset value plus a sales charge that varies depending on the                
size of your purchase.  The fund receives the net asset value.                  
The sales charge is allocated between your investment dealer and                
Putnam Mutual Funds as shown in the following table, except when                
Putnam Mutual Funds, in its discretion, allocates the entire                    
amount to your investment dealer.                                               

For Growth Funds, Growth and Income Funds and Asset Allocation                  
Funds only:                                                                     

       CLASS A             CLASS M
                AMOUNT OF              AMOUNT OF
       SALES CHARGE         SALES CHARGE     SALES
CHARGE                SALES CHARGE                                              
 AS A      REALLOWED TO           AS A
REALLOWED TO                                                                    
PERCENTAGE           DEALERS AS A   
PERCENTAGE            DEALERS AS A                                              
AMOUNT OF TRANSACTION OF OFFERING          PERCENTAGE OF    OF                  
OFFERING              PERCENTAGE OF                                             
AT OFFERING PRICE ($) PRICE     OFFERING PRICE         PRICE                    
OFFERING PRICE                                                                  
-----------------------------------------------------------------               
-----------------------------------------------------------------               
----                                                                            
Under 50,000          5.75%     5.00%      3.50%       3.00%                    
50,000 but under 100,000        4.50       3.75        2.50 2.00                
100,000 but under 250,000       3.50       2.75        1.50 1.00                
250,000 but under 500,000       2.50       2.00        1.00 1.00                
500,000 but under 1,000,000     2.00       1.75        NONE NONE                
1,000,000 and above   NONE      NONE       NONE        NONE                     
-----------------------------------------------------------------               
-----------------------------------------------------------------               
----                                                                            

For Income Funds only (except for Putnam Intermediate U.S.                      
Government Income Fund and Putnam Preferred Income Fund):                       

       CLASS A             CLASS M
                AMOUNT OF              AMOUNT OF
       SALES CHARGE         SALES CHARGE     SALES
CHARGE                SALES CHARGE                                              
 AS A      REALLOWED TO           AS A
REALLOWED TO                                                                    
PERCENTAGE           DEALERS AS A   
PERCENTAGE            DEALERS AS A                                              
AMOUNT OF TRANSACTION OF OFFERING          PERCENTAGE OF    OF                  
OFFERING              PERCENTAGE OF                                             
AT OFFERING PRICE ($) PRICE     OFFERING PRICE         PRICE                    
OFFERING PRICE                                                                  
-----------------------------------------------------------------               
-----------------------------------------------------------------               
---                                                                             
Under 50,000          4.75%     4.25%      3.25%       3.00%                    
50,000 but under 100,000        4.50       4.00        2.25 2.00                
100,000 but under 250,000       3.50       3.00        1.50 1.25                
250,000 but under 500,000       2.50       2.25        1.00 1.00                
500,000 but under 1,000,000     2.00       1.75        NONE NONE                
1,000,000 and above   NONE      NONE       NONE        NONE                     
-----------------------------------------------------------------               
-----------------------------------------------------------------               
---                                                                             

For Putnam Intermediate U.S. Government Income Fund and Putnam                  
Preferred Income Fund only:                                                     

       CLASS A             CLASS M
                AMOUNT OF              AMOUNT OF
       SALES CHARGE         SALES CHARGE     SALES
CHARGE                SALES CHARGE                                              
 AS A      REALLOWED TO           AS A
REALLOWED TO                                                                    
PERCENTAGE           DEALERS AS A   
PERCENTAGE            DEALERS AS A                                              
AMOUNT OF TRANSACTION OF OFFERING          PERCENTAGE OF    OF                  
OFFERING              PERCENTAGE OF                                             
AT OFFERING PRICE ($) PRICE     OFFERING PRICE         PRICE                    
OFFERING PRICE                                                                  
-----------------------------------------------------------------               
-----------------------------------------------------------------               
----                                                                            
Under 100,000         3.25%     3.00%      2.00%       1.80%                    
100,000 but under 250,000       2.50       2.25        1.50 1.30                
250,000 but under 500,000       2.00       1.75        1.00 1.00                
500,000 but under 1,000,000     1.50       1.25        NONE NONE                
1,000,000 and above   NONE      NONE       NONE        NONE                     
-----------------------------------------------------------------               
-----------------------------------------------------------------               
----                                                                            

For Tax Free Funds only:                                                        

       CLASS A             CLASS M
                AMOUNT OF              AMOUNT OF
       SALES CHARGE         SALES CHARGE     SALES
CHARGE                SALES CHARGE                                              
 AS A      REALLOWED TO           AS A
REALLOWED TO                                                                    
PERCENTAGE           DEALERS AS A   
PERCENTAGE            DEALERS AS A                                              
AMOUNT OF TRANSACTION OF OFFERING          PERCENTAGE OF    OF                  
OFFERING              PERCENTAGE OF                                             
AT OFFERING PRICE ($) PRICE     OFFERING PRICE         PRICE                    
OFFERING PRICE                                                                  
-----------------------------------------------------------------               
-----------------------------------------------------------------               
----                                                                            
Under 25,000          4.75%     4.50%      3.25%       3.00%                    
25,000 but under 50,000         4.50       4.25        3.25 3.00                
50,000 but under 100,000        4.50       4.25        2.25 2.00                
100,000 but under 250,000       3.75       3.50        1.50 1.25                
250,000 but under 500,000       3.00       2.75        1.00 1.00                
500,000 but under 1,000,000     2.00       1.85        NONE NONE                
1,000,000 and above   NONE      NONE       NONE        NONE                     
-----------------------------------------------------------------               
-----------------------------------------------------------------               
----                                                                            

COMBINED PURCHASE PRIVILEGE.  The following persons may qualify                 
for the sales charge reductions or eliminations shown in the                    
prospectus by combining into a single transaction the purchase of               
class A shares or class M shares with other purchases of any                    
class of shares:                                                                

(i) an individual, or a "company" as defined in Section             
2(a)(8) of the Investment Company Act of 1940 (which                
includes corporations which are corporate affiliates of             
each other);                                                        

(ii) an individual, his or her spouse and their children            
under twenty-one, purchasing for his, her or their own              
account;                                                            

(iii) a trustee or other fiduciary purchasing for a single          
trust estate or single fiduciary account (including a               
pension, profit-sharing, or other employee benefit trust            
created pursuant to a plan qualified under Section 401 of           
the Internal Revenue Code of 1986, as amended (the                  
"Code"));                                                           

(iv) tax-exempt organizations qualifying under Section              
501(c)(3) of the Internal Revenue Code (not including tax-          
exempt organizations qualifying under Section 403(b)(7) (a          
"403(b) plan") of the Code; and                                     

(v) employee benefit plans of a single employer or of               
affiliated employers, other than 403(b) plans.                      

A combined purchase currently may also include shares of any                    
class of other continuously offered Putnam funds (other than                    
money market funds) purchased at the same time through a single                 
investment dealer, if the dealer places the order for such shares               
directly with Putnam Mutual Funds.                                              

CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION).  A                        
purchaser of class A shares or class M shares may qualify for a                 
cumulative quantity discount by combining a current purchase (or                
combined purchases as described above) with certain other shares                
of any class of Putnam funds already owned.  The applicable sales               
charge is based on the total of:                                                

(i) the investor's current purchase; and                            

(ii) the maximum public offering price (at the close of             
business on the previous day) of:                                   

(a) all shares held by the investor in all of the     
Putnam funds (except money market funds); and         

(b) any shares of money market funds acquired by      
exchange from other Putnam funds; and                 

(iii) the maximum public offering price of all shares               
described in paragraph (ii) owned by another shareholder            
eligible to participate with the investor in a "combined            
purchase" (see above).                                              

To qualify for the combined purchase privilege or to obtain the                 
cumulative quantity discount on a purchase through an investment                
dealer, when each purchase is made the investor or dealer must                  
provide Putnam Mutual Funds with sufficient information to verify               
that the purchase qualifies for the privilege or discount.  The                 
shareholder must furnish this information to Putnam Investor                    
Services when making direct cash investments.                                   

STATEMENT OF INTENTION.  Investors may also obtain the reduced                  
sales charges for class A shares or class M shares shown in the                 
prospectus for investments of a particular amount by means of a                 
written Statement of Intention, which expresses the investor's                  
intention to invest that amount (including certain "credits," as                
described below) within a period of 13 months in shares of any                  
class of the fund or any other continuously offered Putnam fund                 
(excluding money market funds).  Each purchase of class A shares                
or class M shares under a Statement of Intention will be made at                
the public offering price applicable at the time of such purchase               
to a single transaction of the total dollar amount indicated in                 
the Statement of Intention.  A Statement of Intention may include               
purchases of shares made not more than 90 days prior to the date                
that an investor signs a Statement; however, the 13-month period                
during which the Statement of Intention is in effect will begin                 
on the date of the earliest purchase to be included.                            

An investor may receive a credit toward the amount indicated in                 
the Statement of Intention equal to the maximum public offering                 
price as of the close of business on the previous day of all                    
shares he or she owns on the date of the Statement of Intention                 
which are eligible for purchase under a Statement of Intention                  
(plus any shares of money market funds acquired by exchange of                  
such eligible shares).  Investors do not receive credit for                     
shares purchased by the reinvestment of distributions.  Investors               
qualifying for the "combined purchase privilege" (see above) may                
purchase shares under a single Statement of Intention.                          

The Statement of Intention is not a binding obligation upon the                 
investor to purchase the full amount indicated.  The minimum                    
initial investment under a Statement of Intention is 5% of such                 
amount, and must be invested immediately.  Class A shares or                    
class M shares purchased with the first 5% of such amount will be               
held in escrow to secure payment of the higher sales charge                     
applicable to the shares actually purchased if the full amount                  
indicated is not purchased.  When the full amount indicated has                 
been purchased, the escrow will be released.  If an investor                    
desires to redeem escrowed shares before the full amount has been               
purchased, the shares will be released from escrow only if the                  
investor pays the sales charge that, without regard to the                      
Statement of Intention, would apply to the total investment made                
to date.                                                                        

To the extent that an investor purchases more than the dollar                   
amount indicated on the Statement of Intention and qualifies for                
a further reduced sales charge, the sales charge will be adjusted               
for the entire amount purchased at the end of the 13-month                      
period, upon recovery from the investor's dealer of its portion                 
of the sales charge adjustment.  Once received from the dealer,                 
which may take a period of time or may never occur, the sales                   
charge adjustment will be used to purchase additional shares at                 
the then current offering price applicable to the actual amount                 
of the aggregate purchases.  These additional shares will not be                
considered as part of the total investment for the purpose of                   
determining the applicable sales charge pursuant to the Statement               
of Intention.  No sales charge adjustment will be made unless and               
until the investor's dealer returns any excess commissions                      
previously received.                                                            

To the extent that an investor purchases less than the dollar                   
amount indicated on the Statement of Intention within the 13-                   
month period, the sales charge will be adjusted upward for the                  
entire amount purchased at the end of the 13-month period.  This                
adjustment will be made by redeeming shares from the account to                 
cover the additional sales charge, the proceeds of which will be                
paid to the investor's dealer and Putnam Mutual Funds in                        
accordance with the prospectus.  If the account exceeds an amount               
that would otherwise qualify for a reduced sales charge, that                   
reduced sales charge will be applied.                                           

Statements of Intention are not available for certain employee                  
benefit plans.                                                                  

Statement of Intention forms may be obtained from Putnam Mutual                 
Funds or from investment dealers.  Interested investors should                  
read the Statement of Intention carefully.                                      

GROUP PURCHASES OF CLASS A AND CLASS M SHARES.  Members of                      
qualified groups may purchase class A shares of the fund at a                   
group sales charge rate of 4.50% of the public offering price                   
(4.71% of the net amount invested).  The dealer discount on such                
sales is 3.75% of the offering price.  Members of qualified                     
groups may also purchase class M shares at net asset value.                     

To receive the class A or class M group rate, group members must                
purchase shares through a single investment dealer designated by                
the group.  The designated dealer must transmit each member's                   
initial purchase to Putnam Mutual Funds, together with payment                  
and completed application forms.  After the initial purchase, a                 
member may send funds for the purchase of shares directly to                    
Putnam Investor Services.  Purchases of shares are made at the                  
public offering price based on the net asset value next                         
determined after Putnam Mutual Funds or Putnam Investor Services                
receives payment for the shares.  The minimum investment                        
requirements described above apply to purchases by any group                    
member.  Only shares purchased under the class A group discount                 
are included in calculating the purchased amount for the purposes               
of these requirements.                                                          

Qualified groups include the employees of a corporation or a sole               
proprietorship, members and employees of a partnership or                       
association, or other organized groups of persons (the members of               
which may include other qualified groups) provided that: (i) the                
group has at least 25 members of which, with respect to the class               
A discount only, at least 10 members participate in the initial                 
purchase; (ii) the group has been in existence for at least six                 
months; (iii) the group has some purpose in addition to the                     
purchase of investment company shares at a reduced sales charge;                
(iv) the group's sole organizational nexus or connection is not                 
that the members are credit card holders of a company, policy                   
holders of an insurance company, customers of a bank or broker-                 
dealer, clients of an investment adviser or security holders of a               
company; (v) with respect to the class A discount only, the group               
agrees to provide its designated investment dealer access to the                
group's membership by means of written communication or direct                  
presentation to the membership at a meeting on not less                         
frequently than an annual basis; (vi) the group or its investment               
dealer will provide annual certification in form satisfactory to                
Putnam Investor Services that the group then has at least 25                    
members and, with respect to the class A discount only, that at                 
least ten members participated in group purchases during the                    
immediately preceding 12 calendar months; and (vii) the group or                
its investment dealer will provide periodic certification in form               
satisfactory to Putnam Investor Services as to the eligibility of               
the purchasing members of the group.                                            

Members of a qualified group include: (i) any group which meets                 
the requirements stated above and which is a constituent member                 
of a qualified group; (ii) any individual purchasing for his or                 
her own account who is carried on the records of the group or on                
the records of any constituent member of the group as being a                   
good standing employee, partner, member or person of like status                
of the group or constituent member; or (iii) any fiduciary                      
purchasing shares for the account of a member of a qualified                    
group or a member's beneficiary.  For example, a qualified group                
could consist of a trade association which would have as its                    
members individuals, sole proprietors, partnerships and                         
corporations.  The members of the group would then consist of the               
individuals, the sole proprietors and their employees, the                      
members of the partnerships and their employees, and the                        
corporations and their employees, as well as the trustees of                    
employee benefit trusts acquiring class A shares for the benefit                
of any of the foregoing.                                                        

A member of a qualified group may, depending upon the value of                  
class A shares of the fund owned or proposed to be purchased by                 
the member, be entitled to purchase class A shares of the fund at               
non-group sales charge rates shown in the prospectus which may be               
lower than the group sales charge rate, if the member qualifies                 
as a person entitled to reduced non-group sales charges.  Such a                
group member will be entitled to purchase at the lower rate if,                 
at the time of purchase, the member or his or her investment                    
dealer furnishes sufficient information for Putnam Mutual Funds                 
or Putnam Investor Services to verify that the purchase qualifies               
for the lower rate.                                                             

Interested groups should contact their investment dealer or                     
Putnam Mutual Funds.  The fund reserves the right to revise the                 
terms of or to suspend or discontinue group sales at any time.                  

QUALIFIED BENEFIT PLANS; INDIVIDUAL ACCOUNT PLANS.  The terms                   
"class A qualified benefit plan" and "class M qualified benefit                 
plan" mean any employer-sponsored plan or arrangement, whether or               
not tax-qualified and whether or not Putnam Fiduciary Trust                     
Company or its affiliates provide recordkeeping or other                        
services, that initially invest at least $1 million or $500,000,                
respectively, in class A shares or class M shares of the fund and               
other Putnam funds.                                                             

The fund may sell class A shares at net asset value to class A                  
qualified benefit plans and may sell class M shares at net asset                
value to class M qualified benefit plans.                                       

The table of sales charges in the prospectus applies to sales to                
employer-sponsored retirement plans that choose not to be treated               
as class A qualified benefit plans, except that the fund may sell               
class A shares at net asset value to employee benefit plans,                    
including plans with respect to which separate accounts are                     
maintained for each participant, of employers or of affiliated                  
(as defined in Section 2(a)(3)(C) of the Investment Company Act                 
of 1940) employers which have at least $1 million in assets to                  
whom such plan is made available, in connection with a payroll                  
deduction system of plan funding (or other system acceptable to                 
Putnam Investor Services) by which contributions or account                     
information for plan participation are transmitted to Putnam                    
Investor Services by methods acceptable to Putnam Investor                      
Services.                                                                       

Additional information about qualified benefit plans is available               
from investment dealers or from Putnam Mutual Funds.                            

CONTINGENT DEFERRED SALES CHARGES; COMMISSIONS                                  

CLASS A SHARES.  Except as described below, a CDSC of 0.50%                     
(0.75% in the case of plans with less than $5 million in Putnam                 
funds and other investments managed by Putnam Management or its                 
affiliates) of the total amount redeemed is imposed on                          
redemptions of shares purchased by class A qualified benefit                    
plans if, within two years of a plan's initial purchase of class                
A shares, it redeems 90% or more of its cumulative purchases.                   
Thereafter, such plan is no longer liable for any CDSC. Class A                 
qualified benefit plans whose dealer of record has, with Putnam                 
Mutual Funds' approval, waived its commission or agreed to refund               
its commission to Putnam Mutual Funds in the event a CDSC would                 
otherwise be applicable, are not subject to any CDSC.                           

Similarly, class A shares purchased at net asset value by any                   
investor other than a class A qualified benefit plan, including                 
purchases pursuant to any Combined Purchase Privilege, Right of                 
Accumulation or Statement of Intention, are subject to a CDSC of                
1.00% or 0.50%, respectively, if redeemed within the first or                   
second year after purchase, unless the dealer of record waived                  
its commission with Putnam Mutual Funds' approval.  The class A                 
CDSC is imposed on the lower of the cost and the current net                    
asset value of the shares redeemed.                                             

Except as described below for sales to class A qualified benefit                
plans, Putnam Mutual Funds pays investment dealers of record                    
commissions on sales of class A shares of $1 million or more,                   
including purchases pursuant to any Combined Purchase Privilege,                
Right of Accumulation or Statement of Intention, during the one-                
year period beginning with the date of the initial purchase at                  
net asset value.  Each subsequent one-year measuring period for                 
these purposes will begin with the first net asset value purchase               
following the end of the prior period.  Such commissions are paid               
at the rate of 1.00% of the amount under $3 million, 0.50% of the               
next $47 million and 0.25% thereafter.                                          

On sales at net asset value to a class A qualified benefit plan,                
Putnam Mutual Funds pays commissions to the dealer of record at                 
the time of the sale on net monthly purchases up to the following               
rates:  1.00% of the first $1 million, 0.75% of the next $1                     
million and 0.50% thereafter.                                                   

Different CDSC and commission rates may apply to shares purchased               
prior to April 15, 1997 and to shares purchased by investment-                  
only plans prior to August 1, 1999.                                             

ALL SHARES. Investors who set up an Automatic Cash Withdrawal                   
Plan ("ACWP") for a share account (see "Plans available to                      
shareholders -- Automatic Cash Withdrawal Plan") may withdraw                   
through the ACWP up to 12% of the net asset value of the account                
(calculated as set forth below) each year without incurring any                 
CDSC.  Shares not subject to a CDSC (such as shares representing                
reinvestment of distributions) will be redeemed first and will                  
count toward the 12% limitation.  If there are insufficient                     
shares not subject to a CDSC, shares subject to the lowest CDSC                 
liability will be redeemed next until the 12% limit is reached.                 
The 12% figure is calculated on a pro rata basis at the time of                 
the first payment made pursuant to an ACWP and recalculated                     
thereafter on a pro rata basis at the time of each ACWP payment.                
Therefore, shareholders who have chosen an ACWP based on a                      
percentage of the net asset value of their account of up to 12%                 
will be able to receive ACWP payments without incurring a CDSC.                 
However, shareholders who have chosen a specific dollar amount                  
(for example, $100 per month from a fund that pays income                       
distributions monthly) for their periodic ACWP payment should be                
aware that the amount of that payment not subject to a CDSC may                 
vary over time depending on the net asset value of their account.               
For example, if the net asset value of the account is $10,000 at                
the time of payment, the shareholder will receive $100 free of                  
the CDSC (12% of $10,000 divided by 12 monthly payments).                       
However, if at the time of the next payment the net asset value                 
of the account has fallen to $9,400, the shareholder will receive               
$94 free of any CDSC (12% of $9,400 divided by 12 monthly                       
payments) and $6 subject to the lowest applicable CDSC.  This                   
ACWP privilege may be revised or terminated at any time.                        

No CDSC is imposed on the redemption of shares of any class                     
subject to a CDSC to the extent that the shares redeemed (i) are                
no longer subject to the holding period therefor, (ii) resulted                 
from reinvestment of distributions, or (iii) were exchanged for                 
shares of another Putnam fund, provided that the shares acquired                
in such exchange or subsequent exchanges (including shares of a                 
Putnam money market fund) will continue to remain subject to the                
CDSC, if applicable, until the applicable holding period expires.               
In determining whether the CDSC applies to each redemption,                     
shares not subject to a CDSC are redeemed first.                                

The fund will waive any CDSC on redemptions, in the case of                     
individual, joint or Uniform Transfers to Minors Act accounts, in               
the event of death or post-purchase disability of a shareholder,                
for the purpose of paying benefits pursuant to tax-qualified                    
retirement plans ("Benefit Payments"), or, in the case of living                
trust accounts, in the event of the death or post-purchase                      
disability of the settlor of the trust. Benefit Payments                        
currently include, without limitation, (1) distributions from an                
IRA due to death or disability, (2) a return of excess                          
contributions to an IRA or 401(k) plan, and (3) distributions                   
from retirement plans qualified under Section 401(a) of the Code                
or from a 403(b) plan due to death, disability, retirement or                   
separation from service. These waivers may be changed at any                    
time.  Additional waivers may apply to IRA accounts opened prior                
to February 1, 1994.                                                            

ADDITIONAL INFORMATION ABOUT CLASS B SHARES                                     

Except as noted below, Putnam Mutual Funds will pay a 4%                        
commission on sales of class B shares of a fund only to those                   
financial intermediaries who have entered into service agreements               
with Putnam Mutual Funds.  For tax-exempt funds, this commission                
includes a 0.20% pre-paid service fee (except for Putnam                        
Municipal Income Fund, which has a 0.25% pre-paid service fee).                 
For Putnam Intermediate U.S. Government Income Fund, Putnam                     
Mutual Funds will pay a 2.75% commission to financial                           
intermediaries selling class B shares of the fund. For money                    
market funds, class B shares may only be purchased as part of an                
exchange to class B shares of another Putnam fund or from class B               
shares of another Putnam fund.  Class B share purchases for money               
market funds are not subject to a separate CDSC, but a if a                     
shareholder exchanges class B shares from a non-money market fund               
to a money market fund and then redeems the class B shares of the               
money market fund, that redemption will be subject to the CDSC                  
applicable to the class B shares of the non-money market fund.                  
Therefore no up-front commission is paid on sales of class B                    
shares for money market funds.  Putnam Mutual Funds will retain                 
any contingent deferred sales charges imposed on redemptions of                 
class B shares to compensate it for the cost of paying the up-                  
front commissions paid to financial intermediaries for class B                  
share sales.                                                                    

DISTRIBUTION PLANS                                                              

If the fund or a class of shares of the fund has adopted a                      
distribution plan, the prospectus describes the principal                       
features of the plan.  This SAI contains additional information                 
which may be of interest to investors.                                          

Continuance of a plan is subject to annual approval by a vote of                
the Trustees, including a majority of the Trustees who are not                  
interested persons of the fund and who have no direct or indirect               
interest in the plan or related arrangements (the "Qualified                    
Trustees"), cast in person at a meeting called for that purpose.                
All material amendments to a plan must be likewise approved by                  
the Trustees and the Qualified Trustees.  No plan may be amended                
in order to increase materially the costs which the fund may bear               
for distribution pursuant to such plan without also being                       
approved by a majority of the outstanding voting securities of                  
the fund or the relevant class of the fund, as the case may be.                 
A plan terminates automatically in the event of its assignment                  
and may be terminated without penalty, at any time, by a vote of                
a majority of the Qualified Trustees or by a vote of a majority                 
of the outstanding voting securities of the fund or the relevant                
class of the fund, as the case may be.                                          

Putnam Mutual Funds compensates qualifying dealers (including,                  
for this purpose, certain financial institutions) for sales of                  
shares and the maintenance of shareholder accounts.                             

Putnam Mutual Funds may suspend or modify its payments to                       
dealers.  The payments are also subject to the continuation of                  
the relevant distribution plan, the terms of the service                        
agreements between the dealers and Putnam Mutual Funds and any                  
applicable limits imposed by the National Association of                        
Securities Dealers, Inc.                                                        

Financial institutions receiving payments from Putnam Mutual                    
Funds as described above may be required to comply with various                 
state and federal regulatory requirements, including among others               
those regulating the activities of securities brokers or dealers.               

Except as otherwise agreed between Putnam Mutual Funds and a                    
dealer, for purposes of determining the amounts payable to                      
dealers for shareholder accounts for which such dealers are                     
designated as the dealer of record, "average net asset value"                   
means the product of (i) the average daily share balance in such                
account(s) and (ii) the average daily net asset value of the                    
relevant class of shares over the quarter.                                      

CLASS A SHARES:                                                                 

Putnam Mutual Funds makes quarterly payments to dealers at the                  
annual rates set forth below (as a percentage of the average net                
asset value of class A shares for which such dealers are                        
designated the dealer of record) except that payments to dealers                
for shares held by class A qualified benefit plans may be made at               
other rates, as described below.  No payments are made during the               
first year after purchase on shares purchased at net asset value                
by shareholders that invest at least $1 million or that are class               
A qualified benefit plans, unless the shareholder has made                      
arrangements with Putnam Mutual Funds and the dealer of record                  
has waived the sales commission.                                                

Rate                     Fund                                         

0.25%                         All funds currently making              
payments under a                                                      
             class A distribution plan, except
for those listed                                                      
below               

0.50% for shares purchased on      Putnam Diversified Equity          
Trust                                                                 
or before 7/1/95; 0.25% for                                           
shares purchased after 7/1/95                                         

0.20%                    Putnam Tax-Free High Yield Fund              
        Putnam Tax-Free Insured Fund

0.20% for shares purchased on      Putnam Balanced                    
Retirement Fund                                                                 
or before 12/31/89; 0.25% for      Putnam Convertible Income-         
Growth Trust                                                                    
shares purchased after 12/31/89         The George Putnam             
Fund of Boston                                                                  
     Putnam Global Growth Fund
           Putnam Global Natural Resources
Fund                                                                            
        Putnam Health Sciences Trust
          The Putnam Fund for Growth and
Income                                                                          
 Putnam Investors Fund
Putnam Vista Fund   
Putnam Voyager Fund 

0.20% for shares purchased on      Putnam High Yield Trust            
or before 3/31/90; 0.25% for       Putnam U.S. Government             
Income Trust                                                                    
shares purchased after 3/31/90                                        

0.20% for shares purchased on      Putnam Income Fund                 
or before 3/31/91; 0.25% for                                          
shares purchased after 3/31/91                                        

0.20% for shares purchased on      Putnam Municipal Income            
Fund                                                                            
or before 5/7/92; 0.25% for                                           
shares purchased after 5/7/92                                         

0.15% for shares purchased on      Putnam Michigan Tax                
Exempt Income Fund                                                              
or before 3/9/92; 0.20% for        Putnam Minnesota Tax               
Exempt Income Fund                                                              
shares purchased after 3/9/92      Putnam Ohio Tax Exempt             
Income Fund                                                                     

0.15% for shares purchased on      Putnam Massachusetts Tax           
Exempt Income Fund                                                              
or before 5/11/92; 0.20% for                                          
shares purchased after 5/11/92                                        

0.15% for shares purchased on      Putnam New York Tax Exempt         
Opportunities Fund                                                              
or before 7/13/92; 0.20% for                                          
shares purchased after 7/13/92                                        

0.15% for shares purchased on      Putnam California Tax              
Exempt Income Fund                                                              
or before 12/31/92; 0.20% for      Putnam New Jersey Tax              
Exempt Income Fund                                                              
shares purchased after 12/31/92         Putnam New York Tax           
Exempt Income Fund                                                              
         Putnam Tax Exempt Income Fund

0.15% for res purchased on         Putnam Arizona Tax Exempt          
Income Fund                                                                     
or before 3/5/93; 0.20% for                                           
shares purchased after 3/5/93                                         

0.15% for shares purchased on      Putnam Florida Tax Exempt          
Income Fund                                                                     
or before 7/8/93; 0.20% for        Putnam Pennsylvania Tax            
Exempt Income Fund                                                              
shares purchased after 7/8/93                                         

0.00%                    Putnam California Money Market Fund          
    Putnam Money Market Fund
             Putnam New York Money Market Fund
        Putnam Preferred Income Fund
               Putnam Tax Exempt Money Market Fund

Putnam Mutual Funds pays service fees to the dealer of record for               
plans at the rate of up to 0.25% of average net assets, depending               
on the level of service provided by Putnam Fiduciary Trust                      
Company or its affiliates, by the dealer of record, and by third                
parties.  Service fees are paid quarterly to the dealer of record               
for that quarter.                                                               

CLASS B SHARES:                                                                 

Putnam Mutual Funds makes quarterly payments to dealers at the                  
annual rates set forth below (as a percentage of the average net                
asset value of class B shares for which such dealers are                        
designated the dealer of record).                                               

Rate                     Fund                                         

0.25%                         All funds currently making              
payments under a                                            
             class B distribution plan, except
for those listed                                            
below               

0.25%, except that the first       Putnam Municipal Income            
Fund                                                                  
year's service fees of 0.25%                                          
are prepaid at time of sale                                           

0.25%, except that the first       Putnam Arizona Tax Exempt          
Income Fund                                                           
year's service fees of 0.20%       Putnam California Tax              
Exempt Income Fund                                                    
are prepaid at time of sale        Putnam Florida Tax Exempt          
Income Fund                                                           
           Putnam Massachusetts Tax Exempt
Income Fund                                                           
             Putnam Michigan Tax Exempt Income
Fund                                                                  
              Putnam Minnesota Tax Exempt Income
Fund                                                                  
               Putnam New Jersey Tax Exempt Income
Fund                                                                  
             Putnam New York Tax Exempt Income
Fund                                                                  
      Putnam New York Tax Exempt
Opportunities Fund                                                    
              Putnam Ohio Tax Exempt Income Fund
          Putnam Pennsylvania Tax Exempt
Income Fund                                                           
         Putnam Tax Exempt Income Fund

0.20% for shares purchased on      Putnam Tax-Free Insured            
Fund                                                                  
or before 3/31/90; 0.25% for       Putnam Tax-Free High               
Yield                                                                 
shares purchased after 3/31/90;                                       
first year's service fees are prepaid                                 
at time of sale                                                       

0.00%                    Putnam Money Market Fund                     

CLASS C SHARES:                                                                 

Putnam Mutual Funds makes quarterly payments to dealers at the                  
annual rates set forth below (as a percentage of the average net                
asset value of class C shares for which such dealers are                        
designated the dealer of record).                                               

Rate                     Fund                                         

1.00%                    All funds currently making payments          
under a                                                               
             class C distribution plan, except
the fund listed                                                       
below               

0.50%                         Putnam Money Market Fund                

CLASS M SHARES:                                                                 

Putnam Mutual Funds makes quarterly payments to dealers at the                  
annual rates set forth below (as a percentage of the average net                
asset value of class M shares for which such dealers are                        
designated the dealer of record).                                               

Rate                     Fund                                         

0.65%                         All growth and growth and               
         income funds currently making
    payments under a class M
distribution plan   

0.45%                         Putnam Diversified Income               
Trust               

0.40%                         All income and money market             
funds currently     
                       making payments under a
class M distribution
                       plan (except for Putnam
            Diversified Income Trust, Putnam
            Preferred Income Fund and Putnam
Money Market Fund)  

0.25%                    Putnam Preferred Income Fund                 

0.15%                         Putnam Money Market Fund                

INVESTOR SERVICES                                                               

SHAREHOLDER INFORMATION                                                         

Each time shareholders buy or sell shares, they will receive a                  
statement confirming the transaction and listing their current                  
share balance.  (Under certain investment plans, a statement may                
only be sent quarterly.)  Shareholders will receive a statement                 
confirming reinvestment of distributions in additional fund                     
shares (or in shares of other Putnam funds for Dividends Plus                   
accounts) promptly following the quarter in which the                           
reinvestment occurs.  To help shareholders take full advantage of               
their Putnam investment, they will receive a Welcome Kit and a                  
periodic publication covering many topics of interest to                        
investors.  The fund also sends annual and semiannual reports                   
that keep shareholders informed about its portfolio and                         
performance, and year-end tax information to simplify their                     
recordkeeping.  Easy-to-read, free booklets on special subjects                 
such as the Exchange Privilege and IRAs are available from Putnam               
Investor Services.  Shareholders may call Putnam Investor                       
Services toll-free weekdays at 1-800-225-1581 between 8:30 a.m.                 
and 7:00 p.m. Boston time for more information, including account               
balances.                                                                       

YOUR INVESTING ACCOUNT                                                          

The following information provides more detail concerning the                   
operation of a Putnam Investing Account.  For further information               
or assistance, investors should consult Putnam Investor Services.               
Shareholders who purchase shares through a defined contribution                 
plan should note that not all of the services or features                       
described below may be available to them, and they should contact               
their employer for details.                                                     

A shareholder may reinvest a cash distribution without a front-                 
end sales charge or without the reinvested shares being subject                 
to a CDSC, as the case may be, by delivering to Putnam Investor                 
Services the uncashed distribution check, endorsed to the order                 
of the fund.  Putnam Investor Services must receive the properly                
endorsed check within 1 year after the date of the check.                       

The Investing Account also provides a way to accumulate shares of               
the fund.  In most cases, after an initial investment of $500, a                
shareholder may send checks to Putnam Investor Services for $50                 
or more, made payable to the fund, to purchase additional shares                
at the applicable public offering price next determined after                   
Putnam Investor Services receives the check.  Checks must be                    
drawn on a U.S. bank and must be payable in U.S. dollars.                       

Putnam Investor Services acts as the shareholder's agent whenever               
it receives instructions to carry out a transaction on the                      
shareholder's account.  Upon receipt of instructions that shares                
are to be purchased for a shareholder's account, shares will be                 
purchased through the investment dealer designated by the                       
shareholder.  Shareholders may change investment dealers at any                 
time by written notice to Putnam Investor Services, provided the                
new dealer has a sales agreement with Putnam Mutual Funds.                      

Shares credited to an account are transferable upon written                     
instructions in good order to Putnam Investor Services and may be               
sold to the fund as described under "How do I sell fund shares?"                
in the prospectus.  Money market funds and certain other funds                  
will not issue share certificates.  A shareholder may send to                   
Putnam Investor Services any certificates which have been                       
previously issued for safekeeping at no charge to the                           
shareholder.                                                                    

Putnam Mutual Funds, at its expense, may provide certain                        
additional reports and administrative material to qualifying                    
institutional investors with fiduciary responsibilities to assist               
these investors in discharging their responsibilities.                          
Institutions seeking further information about this service                     
should contact Putnam Mutual Funds, which may modify or terminate               
this service at any time.                                                       

Putnam Investor Services may make special services available to                 
shareholders with investments exceeding $1,000,000.  Contact                    
Putnam Investor Services for details.                                           

The fund pays Putnam Investor Services' fees for maintaining                    
Investing Accounts.                                                             

REINSTATEMENT PRIVILEGE                                                         

An investor who has redeemed shares of the fund may reinvest                    
(within 1 year) the proceeds of such sale in shares of the same                 
class of the fund, or may be able to reinvest (within 1 year) the               
proceeds in shares of the same class of one of the other                        
continuously offered Putnam funds (through the exchange privilege               
described in the prospectus), including, in the case of shares                  
subject to a CDSC, the amount of CDSC charged on the redemption.                
Any such reinvestment would be at the net asset value of the                    
shares of the fund(s) the investor selects, next determined after               
Putnam Mutual Funds receives a Reinstatement Authorization.  The                
time that the previous investment was held will be included in                  
determining any applicable CDSC due upon redemptions and, in the                
case of class B shares, the eight-year period for conversion to                 
class A shares.  Shareholders will receive from Putnam Mutual                   
Funds the amount of any CDSC paid at the time of redemption as                  
part of the reinstated investment, which may be treated as                      
capital gains to the shareholder for tax purposes.  Exercise of                 
the Reinstatement Privilege does not alter the federal income tax               
treatment of any capital gains realized on a sale of fund shares,               
but to the extent that any shares are sold at a loss and the                    
proceeds are reinvested in shares of the fund, some or all of the               
loss may be disallowed as a deduction.  Consult your tax adviser.               
Investors who desire to exercise the Reinstatement Privilege                    
should contact their investment dealer or Putnam Investor                       
Services.                                                                       

EXCHANGE PRIVILEGE                                                              

Except as otherwise set forth in this section, by calling Putnam                
Investor Services, investors may exchange shares valued up to                   
$500,000 between accounts with identical registrations, provided                
that no certificates are outstanding for such shares and no                     
address change has been made within the preceding 15 days.                      
During periods of unusual market changes and shareholder                        
activity, shareholders may experience delays in contacting Putnam               
Investor Services by telephone to exercise the Telephone Exchange               
Privilege.                                                                      

Putnam Investor Services also makes exchanges promptly after                    
receiving a properly completed Exchange Authorization Form and,                 
if issued, share certificates.  If the shareholder is a                         
corporation, partnership, agent, or surviving joint owner, Putnam               
Investor Services will require additional documentation of a                    
customary nature.  Because an exchange of shares involves the                   
redemption of fund shares and reinvestment of the proceeds in                   
shares of another Putnam fund, completion of an exchange may be                 
delayed under unusual circumstances if the fund were to suspend                 
redemptions or postpone payment for the fund shares being                       
exchanged, in accordance with federal securities laws.  Exchange                
Authorization Forms and prospectuses of the other Putnam funds                  
are available from Putnam Mutual Funds or investment dealers                    
having sales contracts with Putnam Mutual Funds.  The prospectus                
of each fund describes its investment objective(s) and policies,                
and shareholders should obtain a prospectus and consider these                  
objectives and policies carefully before requesting an exchange.                
Shares of certain Putnam funds are not available to residents of                
all states.  The fund reserves the right to change or suspend the               
Exchange Privilege at any time.  Shareholders would be notified                 
of any change or suspension.  Additional information is available               
from Putnam Investor Services.                                                  

Shareholders of other Putnam funds may also exchange their shares               
at net asset value for shares of the fund, as set forth in the                  
current prospectus of each fund.                                                

For federal income tax purposes, an exchange is a sale on which                 
the investor generally will realize a capital gain or loss                      
depending on whether the net asset value at the time of the                     
exchange is more or less than the investor's basis.  The Exchange               
Privilege may be revised or terminated at any time.  Shareholders               
would be notified of any such change or suspension.                             

DIVIDENDS PLUS                                                                  

Shareholders may invest the fund's distributions of net                         
investment income or distributions combining net investment                     
income and short-term capital gains in shares of the same class                 
of another continuously offered Putnam fund (the "receiving                     
fund") using the net asset value per share of the receiving fund                
determined on the date the fund's distribution is payable.  No                  
sales charge or CDSC will apply to the purchased shares unless                  
the fund paying the distribution is a money market fund.  The                   
prospectus of each fund describes its investment objective(s) and               
policies, and shareholders should obtain a prospectus and                       
consider these objective(s) and policies carefully before                       
investing their distributions in the receiving fund.  Shares of                 
certain Putnam funds are not available to residents of all                      
states.                                                                         

The minimum account size requirement for the receiving fund will                
not apply if the current value of your account in the fund paying               
the distribution is more than $5,000.                                           

Shareholders of other Putnam funds (except for money market                     
funds, whose shareholders must pay a sales charge or become                     
subject to a CDSC) may also use their distributions to purchase                 
shares of the fund at net asset value.                                          

For federal tax purposes, distributions from the fund which are                 
reinvested in another fund are treated as paid by the fund to the               
shareholder and invested by the shareholder in the receiving fund               
and thus, to the extent comprised of taxable income and deemed                  
paid to a taxable shareholder, are taxable.                                     

The Dividends PLUS program may be revised or terminated at any                  
time.                                                                           

PLANS AVAILABLE TO SHAREHOLDERS                                                 

The plans described below are fully voluntary and may be                        
terminated at any time without the imposition by the fund or                    
Putnam Investor Services of any penalty.  All plans provide for                 
automatic reinvestment of all distributions in additional shares                
of the fund at net asset value.  The fund, Putnam Mutual Funds or               
Putnam Investor Services may modify or cease offering these plans               
at any time.                                                                    

AUTOMATIC CASH WITHDRAWAL PLAN ("ACWP").  An investor who owns or               
buys shares of the fund valued at $10,000 or more at the current                
public offering price may open an ACWP plan and have a designated               
sum of money ($50 or more) paid monthly, quarterly, semi-annually               
or annually to the investor or another person.  (Payments from                  
the fund can be combined with payments from other Putnam funds                  
into a single check through a designated payment plan.)  Shares                 
are deposited in a plan account, and all distributions are                      
reinvested in additional shares of the fund at net asset value                  
(except where the plan is utilized in connection with a                         
charitable remainder trust).  Shares in a plan account are then                 
redeemed at net asset value to make each withdrawal payment.                    
Payment will be made to any person the investor designates;                     
however, if shares are registered in the name of a trustee or                   
other fiduciary, payment will be made only to the fiduciary,                    
except in the case of a profit-sharing or pension plan where                    
payment will be made to a designee.  As withdrawal payments may                 
include a return of principal, they cannot be considered a                      
guaranteed annuity or actual yield of income to the investor.                   
The redemption of shares in connection with a plan generally will               
result in a gain or loss for tax purposes.  Some or all of the                  
losses realized upon redemption may be disallowed pursuant to the               
so-called wash sale rules if shares of the same fund from which                 
shares were redeemed are purchased (including through the                       
reinvestment of fund distributions) within a period beginning 30                
days before, and ending 30 days after, such redemption.  In such                
a case, the basis of the replacement shares will be increased to                
reflect the disallowed loss.  Continued withdrawals in excess of                
income will reduce and possibly exhaust invested principal,                     
especially in the event of a market decline.  The maintenance of                
a plan concurrently with purchases of additional shares of the                  
fund would be disadvantageous to the investor because of the                    
sales charge payable on such purchases.  For this reason, the                   
minimum investment accepted while a plan is in effect is $1,000,                
and an investor may not maintain a plan for the accumulation of                 
shares of the fund (other than through reinvestment of                          
distributions) and a plan at the same time.  The cost of                        
administering these plans for the benefit of those shareholders                 
participating in them is borne by the fund as an expense of all                 
shareholders.  The fund, Putnam Mutual Funds or Putnam Investor                 
Services may terminate or change the terms of the plan at any                   
time.  A plan will be terminated if communications mailed to the                
shareholder are returned as undeliverable.                                      

Investors should consider carefully with their own financial                    
advisers whether the plan and the specified amounts to be                       
withdrawn are appropriate in their circumstances.  The fund and                 
Putnam Investor Services make no recommendations or                             
representations in this regard.                                                 

TAX QUALIFIED RETIREMENT PLANS; 403(B) AND SEP PLANS.  (NOT                     
OFFERED BY FUNDS INVESTING PRIMARILY IN TAX-EXEMPT SECURITIES.)                 
Investors may purchase shares of the fund through the following                 
Tax Qualified Retirement Plans, available to qualified                          
individuals or organizations:                                                   

Standard and variable profit-sharing (including 401(k))             
and money purchase pension plans; and                               

Individual Retirement Account Plans (IRAs).                         

Each of these Plans has been qualified as a prototype plan by the               
Internal Revenue Service.  Putnam Investor Services will furnish                
services under each plan at a specified annual cost.  Putnam                    
Fiduciary Trust Company serves as trustee under each of these                   
Plans.                                                                          

Forms and further information on these Plans are available from                 
investment dealers or from Putnam Mutual Funds.  In addition,                   
specialized professional plan administration services are                       
available on an optional basis; contact Putnam Defined                          
Contribution Plan Services at 1-800-225-2465, extension 8600.                   

A 403(b) Retirement Plan is available for employees of public                   
school systems and organizations which meet the requirements of                 
Section 501(c)(3) of the Internal Revenue Code.  Forms and                      
further information on the 403(b) Plan are also available from                  
investment dealers or from Putnam Mutual Funds.  Shares of the                  
fund may also be used in simplified employee pension (SEP) plans.               
For further information on the Putnam prototype SEP plan, contact               
an investment dealer or Putnam Mutual Funds.                                    

Consultation with a competent financial and tax adviser regarding               
these Plans and consideration of the suitability of fund shares                 
as an investment under the Employee Retirement Income Security                  
Act of 1974, or otherwise, is recommended.                                      

SIGNATURE GUARANTEES                                                            

Redemption requests for shares having a net asset value of                      
$100,000 or more must be signed by the registered owners or their               
legal representatives and must be guaranteed by a bank,                         
broker/dealer, municipal securities dealer or broker, government                
securities dealer or broker, credit union, national securities                  
exchange, registered securities association, clearing agency,                   
savings association or trust company, provided such institution                 
is acceptable under and conforms with Putnam Fiduciary Trust                    
Company's signature guarantee procedures.  A copy of such                       
procedures is available upon request.  If you want your                         
redemption proceeds sent to an address other than your address as               
it appears on Putnam's records, you must provide a signature                    
guarantee.  Putnam Investor Services usually requires additional                
documentation for the sale of shares by a corporation,                          
partnership, agent or fiduciary, or a surviving joint owner.                    
Contact Putnam Investor Services for details.                                   

SUSPENSION OF REDEMPTIONS                                                       

The fund may not suspend shareholders' right of redemption, or                  
postpone payment for more than seven days, unless the Exchange is               
closed for other than customary weekends or holidays, or if                     
permitted by the rules of the Securities and Exchange Commission                
during periods when trading on the Exchange is restricted or                    
during any emergency which makes it impracticable for the fund to               
dispose of its securities or to determine fairly the value of its               
net assets, or during any other period permitted by order of the                
Commission for protection of investors.                                         

SHAREHOLDER LIABILITY                                                           

Under Massachusetts law, shareholders could, under certain                      
circumstances, be held personally liable for the obligations of                 
the fund.  However, the Agreement and Declaration of Trust                      
disclaims shareholder liability for acts or obligations of the                  
fund and requires that notice of such disclaimer be given in each               
agreement, obligation, or instrument entered into or executed by                
the fund or the Trustees.  The Agreement and Declaration of Trust               
provides for indemnification out of fund property for all loss                  
and expense of any shareholder held personally liable for the                   
obligations of the fund.  Thus, the risk of a shareholder                       
incurring financial loss on account of shareholder liability is                 
limited to circumstances in which the fund would be unable to                   
meet its obligations.  The likelihood of such circumstances is                  
remote.                                                                         

STANDARD PERFORMANCE MEASURES                                                   

Yield and total return data for the fund may from time to time be               
presented in Part I of this SAI and in advertisements.  In the                  
case of funds with more than one class of shares, all performance               
information is calculated separately for each class.  The data is               
calculated as follows.                                                          

Total return for one-, five- and ten-year periods (or for such                  
shorter periods as the fund has been in operation or shares of                  
the relevant class have been outstanding) is determined by                      
calculating the actual dollar amount of investment return on a                  
$1,000 investment in the fund made at the beginning of the                      
period, at the maximum public offering price for class A shares                 
and class M shares and net asset value for other classes of                     
shares, and then calculating the annual compounded rate of return               
which would produce that amount.  Total return for a period of                  
one year is equal to the actual return of the fund during that                  
period.  Total return calculations assume deduction of the fund's               
maximum sales charge or CDSC, if applicable, and reinvestment of                
all fund distributions at net asset value on their respective                   
reinvestment dates.                                                             

The fund's yield is presented for a specified thirty-day period                 
(the "base period").  Yield is based on the amount determined by                
(i) calculating the aggregate amount of dividends and interest                  
earned by the fund during the base period less expenses for that                
period, and (ii) dividing that amount by the product of (A) the                 
average daily number of shares of the fund outstanding during the               
base period and entitled to receive dividends and (B) the per                   
share maximum public offering price for class A shares or class M               
shares, as appropriate, and net asset value for other classes of                
shares on the last day of the base period.  The result is                       
annualized on a compounding basis to determine the yield.  For                  
this calculation, interest earned on debt obligations held by the               
fund is generally calculated using the yield to maturity (or                    
first expected call date) of such obligations based on their                    
market values (or, in the case of receivables-backed securities                 
such as the Government National Mortgage Association ("GNMAs"),                 
based on cost).  Dividends on equity securities are accrued daily               
at their stated dividend rates.  The amount of expenses used in                 
determining the fund's yield includes, in addition to expenses                  
actually accrued by the fund, an estimate of the amount of                      
expenses that the fund would have incurred if brokerage                         
commissions had not been used to reduce such expenses.                          

If the fund is a money market fund, yield is computed by                        
determining the percentage net change, excluding capital changes,               
in the value of an investment in one share over the seven-day                   
period for which yield is presented (the "base period"), and                    
multiplying the net change by 365/7 (or approximately 52 weeks).                
Effective yield represents a compounding of the yield by adding 1               
to the number representing the percentage change in value of the                
investment during the base period, raising that sum to a power                  
equal to 365/7, and subtracting 1 from the result.                              

If the fund is a tax-exempt fund, the tax-equivalent yield during               
the base period may be presented for shareholders in one or more                
stated tax brackets.  Tax-equivalent yield is calculated by                     
adjusting the tax-exempt yield by a factor designed to show the                 
approximate yield that a taxable investment would have to earn to               
produce an after-tax yield equal, for that shareholder, to the                  
tax-exempt yield.  The tax-equivalent yield will differ for                     
shareholders in other tax brackets.                                             

At times, Putnam Management may reduce its compensation or assume               
expenses of the fund in order to reduce the fund's expenses.  The               
per share amount of any such fee reduction or assumption of                     
expenses during the fund's past five fiscal years (or for the                   
life of the fund, if shorter) is set forth in the footnotes to                  
the table in the section entitled "Financial highlights" in the                 
prospectus.  Any such fee reduction or assumption of expenses                   
would increase the fund's yield and total return for periods                    
including the period of the fee reduction or assumption of                      
expenses.                                                                       

All data are based on past performance and do not predict future                
results.                                                                        

COMPARISON OF PORTFOLIO PERFORMANCE                                             

Independent statistical agencies measure the fund's investment                  
performance and publish comparative information showing how the                 
fund, and other investment companies, performed in specified time               
periods.  Three agencies whose reports are commonly used for such               
comparisons are set forth below.  From time to time, the fund may               
distribute these comparisons to its shareholders or to potential                
investors.   THE AGENCIES LISTED BELOW MEASURE PERFORMANCE BASED                
ON THEIR OWN CRITERIA RATHER THAN ON THE STANDARDIZED PERFORMANCE               
MEASURES DESCRIBED IN THE PRECEDING SECTION.                                    

LIPPER ANALYTICAL SERVICES, INC. distributes mutual fund            
rankings monthly.  The rankings are based on total return           
performance calculated by Lipper, generally reflecting              
changes in net asset value adjusted for reinvestment of             
capital gains and income dividends.  They do not reflect            
deduction of any sales charges.  Lipper rankings cover a            
variety of performance periods, including year-to-date, 1-          
year, 5-year, and 10-year performance.  Lipper classifies           
mutual funds by investment objective and asset category.            

MORNINGSTAR, INC. distributes mutual fund ratings twice a           
month.  The ratings are divided into five groups:                   
highest, above average, neutral, below average and lowest.          
They represent a fund's historical risk/reward ratio                
relative to other funds in its broad investment class as            
determined by Morningstar, Inc.  Morningstar ratings cover          
a variety of performance periods, including 1-year, 3-              
year, 5-year, 10-year and overall performance.  The                 
performance factor for the overall rating is a weighted-            
average assessment of the fund's 1-year, 3-year, 5-year,            
and 10-year total return performance (if available)                 
reflecting deduction of expenses and sales charges.                 
Performance is adjusted using quantitative techniques to            
reflect the risk profile of the fund.  The ratings are              
derived from a purely quantitative system that does not             
utilize the subjective criteria customarily employed by             
rating agencies such as Standard & Poor's and Moody's               
Investor Service, Inc.                                              

CDA/WIESENBERGER'S MANAGEMENT RESULTS publishes mutual              
fund rankings and is distributed monthly.  The rankings             
are based entirely on total return calculated by                    
Weisenberger for periods such as year-to-date, 1-year, 3-           
year, 5-year and 10-year.  Mutual funds are ranked in               
general categories (e.g., international bond,                       
international equity, municipal bond, and maximum capital           
gain).  Weisenberger rankings do not reflect deduction of           
sales charges or fees.                                              

Independent publications may also evaluate the fund's                           
performance.  The fund may from time to time refer to results                   
published in various periodicals, including Barrons, Financial                  
World, Forbes, Fortune, Investor's Business Daily, Kiplinger's                  
Personal Finance Magazine, Money, U.S. News and World Report and                
The Wall Street Journal.                                                        

Independent, unmanaged indexes, such as those listed below, may                 
be used to present a comparative benchmark of fund performance.                 
The performance figures of an index reflect changes in market                   
prices, reinvestment of all dividend and interest payments and,                 
where applicable, deduction of foreign withholding taxes, and do                
not take into account brokerage commissions or other costs.                     
Because the fund is a managed portfolio, the securities it owns                 
will not match those in an index.  Securities in an index may                   
change from time to time.                                                       

THE CONSUMER PRICE INDEX, prepared by the U.S. Bureau of            
Labor Statistics, is a commonly used measure of the rate            
of inflation.  The index shows the average change in the            
cost of selected consumer goods and services and does not           
represent a return on an investment vehicle.                        

THE DOW JONES INDUSTRIAL AVERAGE is an index of 30 common           
stocks frequently used as a general measure of stock                
market performance.                                                 

THE DOW JONES UTILITIES AVERAGE is an index of 15 utility           
stocks frequently used as a general measure of stock                
market performance.                                                 

CS FIRST BOSTON HIGH YIELD INDEX is a market-weighted               
index including publicly traded bonds having a rating               
below BBB by Standard & Poor's and Baa by Moody's.                  

THE LEHMAN BROTHERS AGGREGATE BOND INDEX is an index                
composed of securities from The Lehman Brothers                     
Government/Corporate Bond Index, The Lehman Brothers                
Mortgage-Backed Securities Index and The Lehman Brothers            
Asset-Backed Securities Index and is frequently used as a           
broad market measure for fixed-income securities.                   

THE LEHMAN BROTHERS ASSET-BACKED SECURITIES INDEX is an             
index composed of credit card, auto, and home equity                
loans.  Included in the index are pass-through, bullet              
(noncallable), and controlled amortization structured debt          
securities; no subordinated debt is included.  All                  
securities have an average life of at least one year.               

THE LEHMAN BROTHERS CORPORATE BOND INDEX is an index of             
publicly issued, fixed-rate, non-convertible investment-            
grade domestic corporate debt securities frequently used            
as a general measure of the performance of fixed-income             
securities.                                                         

THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX is an           
index of publicly issued U.S. Treasury obligations, debt            
obligations of U.S. government agencies (excluding                  
mortgage-backed securities), fixed-rate, non-convertible,           
investment-grade corporate debt securities and U.S. dollar-         
denominated, SEC-registered non-convertible debt issued by          
foreign governmental entities or international agencies             
used as a general measure of the performance of fixed-              
income securities.                                                  

THE LEHMAN BROTHERS INTERMEDIATE TREASURY BOND INDEX is an          
index of publicly issued U.S. Treasury obligations with             
maturities of up to ten years and is used as a general              
gauge of the market for intermediate-term fixed-income              
securities.                                                         

THE LEHMAN BROTHERS LONG-TERM TREASURY BOND INDEX is an             
index of publicly issued U.S. Treasury obligations                  
(excluding flower bonds and foreign-targeted issues) that           
are U.S. dollar-denominated and have maturities of 10               
years or greater.                                                   

THE LEHMAN BROTHERS MORTGAGE-BACKED SECURITIES INDEX                
includes 15- and 30-year fixed rate securities backed by            
mortgage pools of the Government National Mortgage                  
Association, Federal Home Loan Mortgage Corporation, and            
Federal National Mortgage Association.                              

THE LEHMAN BROTHERS MUNICIPAL BOND INDEX is an index of             
approximately 20,000 investment-grade, fixed-rate tax-              
exempt bonds.                                                       

THE LEHMAN BROTHERS TREASURY BOND INDEX is an index of              
publicly issued U.S. Treasury obligations (excluding                
flower bonds and foreign-targeted issues) that are U.S.             
dollar denominated, have a minimum of one year to                   
maturity, and are issued in amounts over $100 million.              

THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX is an          
index of approximately 1,482 equity securities listed on            
the stock exchanges of the United States, Europe, Canada,           
Australia, New Zealand and the Far East, with all values            
expressed in U.S. dollars.                                          

THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS           
INDEX is an index of approximately 1,100 securities                 
representing 20 emerging markets, with all values                   
expressed in U.S. dollars.                                          

THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS           
FREE INDEX is an index of approximately 1,003 securities            
available to non-domestic investors representing 26                 
emerging markets, with all values expressed in U.S.                 
dollars.                                                            

THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX is an           
index of approximately 1,045 equity securities issued by            
companies located in 18 countries and listed on the stock           
exchanges of Europe, Australia, and the Far East.  All              
values are expressed in U.S. dollars.                               

THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE INDEX is            
an index of approximately 627 equity securities issued by           
companies located in one of 13 European countries, with             
all values expressed in U.S. dollars.                               

THE MORGAN STANLEY CAPITAL INTERNATIONAL PACIFIC INDEX is           
an index of approximately 418 equity securities issued by           
companies located in 5 countries and listed on the                  
exchanges of Australia, New Zealand, Japan, Hong Kong,              
Singapore/Malaysia.  All values are expressed in U.S.               
dollars.                                                            

THE NASDAQ INDUSTRIAL AVERAGE is an index of stocks traded          
in The Nasdaq Stock Market, Inc. National Market System.            

THE RUSSELL 1000 INDEX is composed of the 1,000 largest             
companies in the Russell 3000 Index, representing                   
approximately 89% of the Russell 3000 total market                  
capitalization.  The Russell 3000 Index is composed of the          
3,000 largest U.S. companies ranked by total market                 
capitalization, representing approximately 98% of the U.S.          
investable equity market.                                           

THE RUSSELL 2000 INDEX is composed of the 2,000 smallest            
companies in the Russell 3000 Index, representing                   
approximately 11% of the Russell 3000 total market                  
capitalization.                                                     

THE RUSSELL 2000 GROWTH INDEX is composed of securities             
with greater-than-average growth orientation within the             
Russell 2000 Index.  Each security's growth orientation is          
determined by a composite score of the security's price-to-         
book ratio and forecasted growth rate. Growth stocks tend           
to have higher price-to-book ratios and forecasted growth           
rates than value stocks. This index is composed of                  
approximately 1,310 companies from the Russell 2000 Index,          
representing approximately 50% of the total market                  
capitalization of the Russell 2000 Index.                           

THE RUSSELL MIDCAP INDEX is composed of the 800 smallest            
companies in the Russell 1000 Index, representing                   
approximately 35% of the Russell 1000 total market                  
capitalization.                                                     

THE RUSSELL MIDCAP GROWTH INDEX is composed of securities           
with greater-than-average growth orientation within the             
Russell Midcap Index.  Each security's growth orientation           
is determined by a composite score of the security's price-         
to-book ratio and forecasted growth rate.  Growth stocks            
tend to have higher price-to-book ratios and forecasted             
growth rates than value stocks.  This index is composed of          
approximately 450 companies from the Russell 1000 Growth            
Index, representing 20% of the total market capitalization          
of the Russell 1000 Growth Index.                                   

THE SALOMON BROTHERS LONG-TERM HIGH-GRADE CORPORATE BOND            
INDEX is an index of publicly traded corporate bonds                
having a rating of at least AA by Standard & Poor's or Aa           
by Moody's and is frequently used as a general measure of           
the performance of fixed-income securities.                         

THE SALOMON BROTHERS LONG-TERM TREASURY INDEX is an index           
of U.S. government securities with maturities greater than          
10 years.                                                           

THE SALOMON BROTHERS WORLD GOVERNMENT BOND INDEX is an              
index that tracks the performance of the 14 government              
bond markets of Australia, Austria, Belgium Canada,                 
Denmark, France, Germany, Italy, Japan, Netherlands,                
Spain, Sweden, United Kingdom and the United States.                
Country eligibility is determined by market capitalization          
and investability criteria.                                         

THE SALOMON BROTHERS WORLD GOVERNMENT BOND INDEX (non               
$U.S.) is an index of foreign government bonds calculated           
to provide a measure of performance in the government bond          
markets outside of the United States.                               

STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX is an             
index of common stocks frequently used as a general                 
measure of stock market performance.                                

STANDARD & POOR'S 40 UTILITIES INDEX is an index of 40              
utility stocks.                                                     

STANDARD & POOR'S/BARRA VALUE INDEX is an index                     
constructed by ranking the securities in the Standard &             
Poor's 500 Composite Stock Price Index by price-to-book             
ratio and including the securities with the lowest price-           
to-book ratios that represent approximately half of the             
market capitalization of the Standard & Poor's 500                  
Composite Stock Price Index.                                        

In addition, Putnam Mutual Funds may distribute to shareholders                 
or prospective investors illustrations of the benefits of                       
reinvesting tax-exempt or tax-deferred distributions over                       
specified time periods, which may include comparisons to fully                  
taxable distributions.  These illustrations use hypothetical                    
rates of tax-advantaged and taxable returns and are not intended                
to indicate the past or future performance of any fund.                         

SECURITIES RATINGS                                                              

The ratings of securities in which the fund may invest will be                  
measured at the time of purchase and, to the extent a security is               
assigned a different rating by one or more of the various rating                
agencies,  Putnam Management will use the highest rating assigned               
by any agency.   Putnam Management will not necessarily sell an                 
investment if its rating is reduced.  The following rating                      
services describe rated securities as follows:                                  

MOODY'S INVESTORS SERVICE, INC.                                                 

BONDS                                                                           

AAA -- Bonds which are rated AAA are judged to be of the best                   
quality.  They carry the smallest degree of investment risk and                 
are generally referred to as "gilt edged."  Interest payments are               
protected by a large or by an exceptionally stable margin and                   
principal is secure.  While the various protective elements are                 
likely to change, such changes as can be visualized are most                    
unlikely to impair the fundamentally strong position of such                    
issues.                                                                         

AA -- Bonds which are rated AA are judged to be of high quality                 
by all standards.  Together with the AAA group they comprise what               
are generally known as high grade bonds.  They are rated lower                  
than the best bonds because margins of protection may not be as                 
large as in AAA securities or fluctuation of protective elements                
may be of greater amplitude or there may be other elements                      
present which make the long-term risk appear somewhat larger than               
the AAA securities.                                                             

A -- Bonds which are rated A possess many favorable investment                  
attributes and are to be considered as upper-medium-grade                       
obligations.  Factors giving security to principal and interest                 
are considered adequate, but elements may be present which                      
suggest a susceptibility to impairment sometime in the future.                  

BAA -- Bonds which are rated BAA are considered as medium grade                 
obligations, (i.e., they are neither highly protected nor poorly                
secured).  Interest payments and principal security appear                      
adequate for the present but certain protective elements may be                 
lacking or may be characteristically unreliable over any great                  
length of time. Such bonds lack outstanding investment                          
characteristics and in fact have speculative characteristics as                 
well.                                                                           

BA -- Bonds which are rated BA are judged to have speculative                   
elements; their future cannot be considered as well-assured.                    
Often the protection of interest and principal payments may be                  
very moderate, and thereby not well safeguarded during both good                
and bad times over the future.  Uncertainty of position                         
characterizes bonds in this class.                                              

B -- Bonds which are rated B generally lack characteristics of                  
the desirable investment.  Assurance of interest and principal                  
payments or of maintenance of other terms of the contract over                  
any long period of time may be small.                                           

CAA -- Bonds which are rated CAA are of poor standing.  Such                    
issues may be in default or there may be present elements of                    
danger with respect to principal or interest.                                   

CA -- Bonds which are rated CA represent obligations which are                  
speculative in a high degree.  Such issues are often in default                 
or have other marked shortcomings.                                              

C -- Bonds which are rated C are the lowest rated class of bonds,               
and issues so rated can be regarded as having extremely poor                    
prospects of ever attaining any real investment standing.                       

NOTES (FOR MONEY MARKET FUNDS ONLY)                                             

MIG 1/VMIG 1 -- This designation denotes best quality.  There is                
present strong protection by established cash flows, superior                   
liquidity support or demonstrated broad-based access to the                     
market for refinancing.                                                         

MIG 2/VMIG 2 -- This designation denotes high quality.  Margins                 
of protection are ample although not so large as in the preceding               
group.                                                                          

COMMERCIAL PAPER (FOR MONEY MARKET FUNDS ONLY)                                  

Issuers rated PRIME-1 (or supporting institutions) have a                       
superior ability for repayment of senior short-term debt                        
obligations.  Prime-1 repayment ability will often be evidenced                 
by the following characteristics:                                               

--     Leading market positions in well established industries.                 
--     High rates of return on funds employed.                                  
--     Conservative capitalization structure with moderate                      
reliance on debt and ample asset protection.                      
--     Broad margins in earnings coverage of fixed financial                    
charges and high internal cash generation.                        
--     Well established access to a range of financial markets                  
and assured sources of alternate liquidity.                       

Issuers rated PRIME-2 (or supporting institutions) have a strong                
ability for repayment of senior short-term debt obligations.                    
This will normally be evidenced by many of the characteristics                  
cited above to a lesser degree.  Earnings trends and coverage                   
ratios, while sound, may be more subject to variation.                          
Capitalization characteristics, while still appropriate, may be                 
more affected by external conditions.  Ample alternate liquidity                
is maintained.                                                                  

STANDARD & POOR'S                                                               

BONDS                                                                           

AAA -- An obligation rated AAA has the highest rating assigned by               
Standard  & Poor's.  The obligor's capacity to meet its financial               
commitment on the obligation is extremely strong.                               

AA  --  An  obligation  rated AA differs from  the  highest-rated               
obligations only in small degree.  The obligor's capacity to meet               
its financial commitment on the obligation is very strong.                      

A  --  An obligation rated A is somewhat more susceptible to  the               
adverse   effects  of  changes  in  circumstances  and   economic               
conditions than obligations in higher-rated categories.  However,               
the  obligor's capacity to meet its financial commitment  on  the               
obligation is still strong.                                                     

BBB  --  An  obligation  rated BBB exhibits  adequate  protection               
parameters.   However,  adverse economic conditions  or  changing               
circumstances are more likely to lead to a weakened  capacity  of               
the obligor to meet its financial commitment on the obligation.                 

Obligations  rated  BB, B, CCC, CC and C are regarded  as  having               
significant speculative characteristics.  BB indicates the lowest               
degree  of  speculation and C the highest. While such obligations               
will  likely  have  some quality and protective  characteristics,               
these are outweighed by large uncertainties or major exposures to               
adverse conditions.                                                             

BB  --  An  obligation rated BB is less vulnerable to  nonpayment               
than  other speculative issues.  However, it faces major  ongoing               
uncertainties  or  exposure to adverse  business,  financial,  or               
economic  conditions which could lead to the obligor's inadequate               
capacity to meet its financial commitment on the obligation.                    

B  -- An obligation rated B is more vulnerable to nonpayment than               
obligations rated BB, but the obligor currently has the  capacity               
to  meet  its  financial commitment on the  obligations.  Adverse               
business,  financial, or economic conditions will  likely  impair               
the  obligor's  capacity or willingness  to  meet  its  financial               
commitment on the obligation.                                                   

CCC  --  An  obligation  rated  CCC is  currently  vulnerable  to               
nonpayment, and is dependent upon favorable business,  financial,               
and  economic  conditions for the obligor to meet  its  financial               
commitment  on the obligation. In the event of adverse  business,               
financial, or economic conditions, the obligor is not  likely  to               
have  the  capacity  to  meet  its financial  commitment  on  the               
obligation.                                                                     

CC  --  An obligation rated CC is currently highly vulnerable  to               
nonpayment.                                                                     

C  --  The  C  rating  may be used to cover a situation  where  a               
bankruptcy  petition has been filed, or similar action  has  been               
taken, but payments on this obligation are being continued.                     

D  --  An obligation rated D is in payment default.  The D rating               
category is used when interest payments or principal payments are               
not  made on the date due even if the applicable grace period has               
not expired, unless Standard & Poor's believes that such payments               
will be made during such grace period.  The D rating also will be               
used upon the filing of a bankruptcy petition, or the taking of a               
similar action if payments on an obligation are jeopardized.                    

NOTES (FOR MONEY MARKET FUNDS ONLY)                                             

SP-1 -- Strong capacity to pay principal and interest.  Those                   
issues determined to possess overwhelming safety characteristics                
are given a plus (+) designation.                                               

SP-2 -- Satisfactory capacity to pay principal and interest.                    

SP-3 -- Speculative capacity to pay principal and interest.                     

COMMERCIAL PAPER (FOR MONEY MARKET FUNDS ONLY)                                  

A-1 -- This highest category indicates that the degree of safety                
regarding timely payment is strong.  Those issues determined to                 
possess extremely strong safety characteristics are denoted with                
a plus sign (+) designation.                                                    

A-2 -- Capacity for timely payment on issues with this                          
designation is satisfactory.  However, the relative degree of                   
safety is not as high as for issues designated `A-1'.                           

A-3 -- Issues carrying this designation have adequate capacity                  
for timely payment. They are, however, more vulnerable to the                   
adverse effects of changes in circumstances than obligations                    
carrying the higher designations.                                               

DUFF & PHELPS CORPORATION                                                       

LONG-TERM DEBT                                                                  

AAA -- Highest credit quality.  The risk factors are negligible,                
being only slightly more than for risk-free U.S. Treasury debt.                 

AA+, AA, AA- -- High credit quality.  Protection factors are                    
strong.  Risk is modest but may vary slightly from time to time                 
because of economic conditions.                                                 

A+, A, A- -- Protection factors are average but adequate.                       
However, risk factors are more variable and greater in periods of               
economic stress.                                                                

BBB+, BBB, BBB- -- Below-average protection factors but still                   
considered sufficient for prudent investment.  Considerable                     
variability in risk during economic cycles.                                     

BB+, BB, BB- -- Below investment grade but deemed likely to meet                
obligations when due.  Present or prospective financial                         
protection factors fluctuate according to industry conditions or                
company fortunes.  Overall quality may move up or down frequently               
within this category.                                                           

B+, B, B- -- Below investment grade and possessing risk that                    
obligations will not be met when due.  Financial protection                     
factors will fluctuate widely according to economic cycles,                     
industry conditions and/or company fortunes.  Potential exists                  
for frequent changes in the rating within this category or into a               
higher or lower rating grade.                                                   

CCC -- Well below investment-grade securities.  Considerable                    
uncertainty exists as to timely payment of principal, interest or               
preferred dividends.  Protection factors are narrow and risk can                
be substantial with unfavorable economic/industry conditions,                   
and/or with unfavorable company developments.                                   

DD -- Defaulted debt obligations.  Issuer failed to meet                        
scheduled principal and/or interest payments.                                   

FITCH INVESTORS SERVICE, INC.                                                   

AAA -- Bonds considered to be investment grade and of the highest               
credit quality.  The obligor has an exceptionally strong ability                
to pay interest and repay principal, which is unlikely to be                    
affected by reasonably foreseeable events.                                      

AA -- Bonds considered to be investment grade and of very high                  
credit quality.  The obligor's ability to pay interest and repay                
principal is very strong, although not quite as strong as bonds                 
rated AAA.                                                                      

A -- Bonds considered to be investment grade and of high credit                 
quality.  The obligor's ability to pay interest and repay                       
principal is considered to be strong, but may be more vulnerable                
to adverse changes in economic conditions and circumstances than                
bonds with higher ratings.                                                      

BBB -- Bonds considered to be investment grade and of                           
satisfactory credit quality.  The obligor's ability to pay                      
interest and repay principal is considered to be adequate.                      
Adverse changes in economic conditions and circumstances,                       
however, are more likely to have adverse impact on these bonds,                 
and therefore impair timely payment.  The likelihood that the                   
ratings of these bonds will fall below investment grade is higher               
than for bonds with higher ratings.                                             

BB -- Bonds considered to be speculative.  The obligor's ability                
to pay interest and repay principal may be affected over time by                
adverse economic changes.  However, business and financial                      
alternatives can be identified which could assist the obligor in                
satisfying its debt service requirements.                                       

B -- Bonds are considered highly speculative. Bonds in this class               
are lightly protected as to the obligor's ability to pay interest               
over the life of the issue and repay principal when due.                        

CCC -- Bonds have certain characteristics which, with passing of                
time, could lead to the possibility of default on either                        
principal or interest payments.                                                 

CC -- Bonds are minimally protected. Default in payment of                      
interest and/or principal seems probable.                                       

C -- Bonds are in actual or imminent default in payment of                      
interest or principal.                                                          

DDD -- Bonds are in default and in arrears in interest and/or                   
principal payments. Such bonds are extremely speculative and                    
should be valued only on the basis of their value in liquidation                
or reorganization of the obligor.                                               

DEFINITIONS                                                                     

"Putnam Management"             --   Putnam Investment                          
            Management, Inc., the fund's
   investment manager.

"Putnam Mutual Funds"           --   Putnam Mutual Funds Corp.,                 
    the fund's principal
underwriter.    

"Putnam Fiduciary Trust         --   Putnam Fiduciary Trust                     
Company,        
Company"                            the fund's custodian.                     

"Putnam Investor Services"      --   Putnam Investor Services, a                
            division of Putnam Fiduciary
         Trust Company, the fund's
         investor servicing agent.

PUTNAM CONVERTIBLE INCOME-GROWTH TRUST                                          

FORM N-1A                                                                       
PART C                                                                          

OTHER INFORMATION                                                               

Item 23. Exhibits                                                               

1. Agreement and Declaration of Trust, as amended November 9, 1992 --           
Incorporated by reference to Post-Effective Amendment No. 30 to the             
Registrant's Registration Statement.                                            

2. By-Laws, as amended through February 1, 1994 -- Incorporated by              
reference to Post-Effective Amendment No. 32 to the Registrant's                
Registration Statement.                                                         

3a. Portions of Agreement and Declaration of Trust Relating to                  
Shareholders' Rights -- Incorporated by reference to Post-Effective             
Amendment No. 31 to the Registrant's Registration Statement.                    

3b. Portions of By-Laws Relating to Shareholders' Rights -- Incorporated by     
reference to Post-Effective Amendment No. 32 to the Registrant's                
Registration Statement.                                                         

4. Management Contract dated February 20, 1997 -- Incorporated by reference     
to Post-Effective Amendment No. 34 to the Registrant's Registration             
Statement.                                                                      

5a. Distributors' Contract dated May 6, 1994 -- Incorporated by reference       
to Post-Effective Amendment No. 32 to the Registrant's Registration             
Statement.                                                                      

5b. Specimen Dealer Sales Contract -- Incorporated by reference to              
Post-Effective Amendment No. 29 to the Registrant's Registration Statement.     

5c. Specimen Financial Institution Sales Contract -- Incorporated by            
reference to Post-Effective Amendment No. 29 to the Registrant's                
Registration Statement.                                                         

6. Trustee Retirement Plan dated October 4, 1996 -- Incorporated by             
reference to Post-Effective Amendment No. 34 to the Registrant's                
Registration Statement.                                                         

7. Custodian Agreement with Putnam Fiduciary Trust Company dated May 3,         
1991, as amended July 13, 1992 -- Incorporated by reference to                  
Post-Effective Amendment No. 31 to the Registrant's Registration Statement.     

8. Investor Servicing Agreement dated June 3, 1991 with Putnam Fiduciary        
Trust Company -- Incorporated by reference to Post-Effective Amendment No.      
29 to the Registrant's Registration Statement.                                  

9. Opinion of Ropes & Gray, including consent -- Incorporated by reference      
to Post-Effective Amendment No. 34 to the Registrant's Registration             
Statement.                                                                      

10. Not applicable.                                                             

11. Not applicable.                                                             

12. Investment Letter from Putnam Investments, Inc. to the Registrant for       
Class A shares -- Incorporated by reference to Pre-Effective Amendment No.      
1 to the Registrant's Registration Statement.                                   

13a. Form of Class A Distribution Plan and Agreement -- Incorporated by         
reference to Post-Effective Amendment No. 28 to the Registrant's                
Registration Statement.                                                         

13b. Class B Distribution Plan and Agreement -- Incorporated by reference       
to Post-Effective Amendment No. 31 to the Registrant's Registration             
Statement.                                                                      

13c. Class C Distribution Plan and Agreement, dated July 16, 1999 -             
Exhibit 1.                                                                      

13d. Class M Distribution Plan and Agreement -- Incorporated by reference       
to Post-Effective Amendment No. 32 to the Registrant's Registration             
Statement.                                                                      

13e. Form of Specimen Dealer Service Agreement -- Incorporated by reference     
to Post-Effective Amendment No. 35 to the Registrant's Registration Statement.  

13f. Form of Specimen Financial Institution Service Agreement --                
Incorporated by reference to Post-Effective Amendment No. 35 to the             
Registrant's Registration Statement.                                            

14. Rule 18f-3(d) Plan, November 1, 1999 - Exhibit 2.                           

Item 24. Persons Controlled by or under Common Control with Registrant          

None.                                                                           

Item 25. Indemnification                                                        

The information required by this item is incorporated herein by reference       
to Post-Effective Amendment No. 35 from the Registrant's Registration           
Statement on Form N-1A under the Investment Company Act of 1940 (File No.       
811-2280).                                                                      

Item 26. Business and Other Connections of Investment Adviser                   

   Except as set forth below, the directors and officers of the Registrant's
investment adviser have been engaged during the past two fiscal years in no     
business, vocation or employment of a substantial nature other than as          
directors or officers of the investment adviser or certain of its corporate     
affiliates.  Certain officers of the investment adviser serve as officers of    
some or all of the Putnam funds.  The address of the investment adviser, its    
corporate affiliates and the Putnam Funds is one Post Office Square, Boston,    
Massachusetts 02109.                                                            

                                                        [Enlarge/Download Table]


Name                                     Non-Putnam business and other connections                   
----                                     -----------------------------------------                   
                                                                                                     
Pankaj Agrrawal                          Prior to April 1998, Quantitative Analyst, Vestek           
Vice President                           Systems, 388 Market St., Suite 700, San Francisco, CA       
                                         94111                                                       

Lauren Allansmith                        Prior to August 1999, Analyst, Loomis Sayles,               
Senior Vice President                    One Financial Center, Boston, MA 02111                      

Blake Anderson                           Trustee, Salem Female Charitable Society,                   
Managing Director                        Salem MA 01970                                              

Paul A. Aston                            Prior to June, 1999, Senior Quantitative                    
Vice President                           Strategist, Santander Global Advisors, 28 State             
                                         Street, Boston, MA 02109                                    

Jane N. Barlow                           Prior to January 2000, Office Management,                   
Assistant Vice President                 Distinction Resourcing Limited, 2/4 Great Eastern           
                                         Street, London, EC2A 3NT; Prior to January 1999,            
                                         Office Manager, D.E. Shaw Securities International,         
                                         Finsbury Dials, 20 Finsbury Street, London, EC3M            

Robert R. Beck                           Director, Charles Bridge Publishing, 85 Main St.,           
Senior Vice President                    Watertown, MA  02172; Board of Overseers, Beth Israel       
                                         Deaconess Medical Center, 330 Brookline Ave., Boston,       
                                         MA 02215                                                    

Kirsten A. Bjerklie                      Prior to June 1998, Assistant Vice President,               
Assistant Vice President                 Scudder, Stevens & Clark, Two International Place,          
                                         Boston, MA 02110                                            

Richard L. Block                         Prior to June 1998, Principal, Head International           
Senior Vice President                    Equity Trader, Morgan Stanley Asset Management, 1221        
                                         Avenue of the Americas, New York, NY 10036                  

Rob A. Bloemker                          Prior to September 1999, Managing Director,                 
Senior Vice President                    Lehman Brothers, 555 California St., 30th floor,            
                                         San Francisco, CA 94104                                     

Claudio Brocado                          Prior to August 1999, independent consultant by             
Vice President                           Stires, O'Donnell & Co. 12 East 44th St., New York,         
                                         NY 10017; Prior to January 1999, independent                
                                         consultant by Coast Partners, 601 California St.,           
                                         San Francisco, CA 94108; Prior to November 1997, Head       
                                         of Latin America Business Development, Dresdner RCM         
                                         Global Investors, Four Embarcadero Center,                  
                                         San Francisco, CA 94111                                     

Anna Bulkovshteyn                        Prior to July 1999, Quantitative Analyst, Sun Life          
Assistant Vice President                 Investment Management, 200 King Street West, Toronto,       
                                         Ontario M5H 3T4 Canada                                      

David N. Burnham                         Prior to July 1998, Director - Finance, Fidelity            
Vice President                           Investments, 82 Devonshire Street, Boston, MA 02109         

Richard P. Cervone                       Prior to August 1998, Equity Analyst, Loomis,               
Vice President                           Sayles & Co., One Financial Center, Boston, MA,             
                                         02216.                                                      

Christopher Ceruolo                      Prior to July 1998, Associate, Ropes & Gray,                
Assistant Vice President                 One International Place, Boston, MA 02110                   

Mark Chameih                             Prior to May 1999, Vice President, Chase Manhattan,         
Vice President                           125 London Wall, London, UK                                 

Bihua Chen                               Prior to July 1998, Research Associate, ProNeuron,          
Assistant Vice President                 Inc., 1531 E. Jefferson St., Rockville, MD 20847            

C. Beth Cotner                           Director, The Lyric Stage Theater, 140 Clarendon St.,       
Senior Vice President                    Boston, MA 02116                                            

Stephen P. Cotto                         Prior to March 1998, Facilities Supervisor,                 
Assistant Vice President                 Unicco Service Co., 4 Copley Place, Boston, MA 02116        

Lindsey L. Curley                        Prior to June 1999, Portfolio Analyst, Standish,            
Assistant Vice President                 Ayer & Wood, Inc., One Financial Center, Boston, MA         
                                         02110.  Prior to March, 1998,. Fixed-Income Research        
                                         Assistant, Invesco Management & Research, Inc., 101         
                                         Federal St., Boston, MA 02110                               

Joseph F. Cushing                        Prior to June 1998, Investment Analyst - Fixed              
Assistant Vice President                 Income, Metropolitan Life Insurance Company, 334            
                                         Madison Avenue, Convent Station, NJ 07961                   

John R.S. Cutler                         Member, Burst Media, L.L.C., 10 New England                 
Vice President                           Executive Park, Burlington, MA 01803                        

Kenneth Daly                             President, Andover River Rd. TMA, River Road                
Managing Director                        Transportation Management Association, 7 Shattuck           
                                         Rd., Andover, MA 01810                                      

Donna M. Daylor                          Prior to April 1998, Director of Training,                  
Vice President                           UniCare Life & Health Ins. Co., 1350 Main St.,              
                                         Springfield, MA                                             

John C. Delano                           Prior to July 1998, Senior Foreign Exchange                 
Assistant Vice President                 Trader, Nationsbank, 233 So. Wacker Drive, Chicago,         
                                         IL 60606                                                    

Ralph C. Derbyshire                      Board Member, MSPCC, 399 Boylston St.,                      
Senior Vice President                    Boston, MA; Board Member, Winchester After School           
                                         Program, Skillings Rd., Winchester, MA                      

Stephen P. Dexter                        Prior to June 1999, Senior Vice President and               
Senior Vice President                    Senior Portfolio Manger, Scudder Kemper, Inc. One           
                                         International Place, Boston, MA                             

Michael G. Dolan                         Chairman-Finance Council, St. Mary's Parish,                
Assistant Vice President                 44 Myrtle St., Melrose, MA  02176; Member, School           
                                         Advisory Board, St. Mary's School, 44 Myrtle St.,           
                                         Melrose, MA 02176                                           

Edward Driscoll                          Prior to September 1999, Equity Trader, Fidelity            
Vice President                           Research and Management, 82 Devonshire St., Boston,         
                                         MA 02109                                                    

Douglas Dunn                             Prior to November 1999, Director of Research,               
Vice President                           Brandywine Asset Management, 381 Brinton Lake Road,         
                                         Thornton, PA 19317; Prior to May 1998, Quantitative         
                                         Analyst, Westpeak Investment Advisors, 1011 Walnut          
                                         St., Suite 400, Boulder, CO 80303                           

Emily Durbin                             Board of Directors, Family Service, Inc.,                   
Vice President                           Lawrence, MA 01840                                          

Karnig H. Durgarian                      Board Member, EBRI, Suite 600, 2121 K St.,                  
Managing Director                        N.W., Washington, DC 20037-1896.  Trustee, American         
                                         Assembly, 122 C. St., N.W., Suite 350, Washington, DC       
                                         20001                                                       

Christine Durkee                         Prior to June 1998, Project Manager, Foundation             
Assistant Vice President                 Technologies, Inc., 78 4th Ave., Waltham, MA 02451          

Nathan Eigerman                          Trustee, Flower Hill Trust, 298 Marlborough St.,            
Senior Vice President                    #4, Boston, MA 02116                                        

Tony H. Elavia                           Prior to September 1999, Executive Vice President,          
Senior Vice President                    Voyageur Asset Management, 90 S. 7th Street, Minneapolis,   
                                         MN 55402                                                    

Lisa V. Emerick                          Prior to September 1998, Asian Sales Trader,                
Vice President                           BWZ Securities Asia, Inc., Citibank Tower, 3 Garden Road,   
                                         Hong Kong                                                   

Irene M. Esteves                         Board of Director Member, American Management               
Managing Director                        Association Finance council, 1601 Broadway, New York, NY;   
                                         Board of Director Member, First Night Boston, 20 Park       
                                         Plaza, Suite 927, Boston, MA; Board of Director Member,     
                                         SC Johnson Commercialmarkets, 8310 16th St., Stutevant,     
                                         WI 53177; Board of Director Member, Massachusetts           
                                         Taxpayers Foundation, 24 Province St., Boston, MA; Board    
                                         of Director Member, Mrs. Bairds Bakeries, 515 Jones St.,    
                                         Suite 200, Fort Worth, Texas 76102                          

Ian Ferguson                             Trustee, Park School, 171 Goddard Avenue, Brookline,        
Senior Managing Director                 MA 02146                                                    

John Ferry                               Prior to September 1998, Vice President,                    
Vice President                           Scudder Kemper Investments, 101 California St.,             
                                         San Francisco, CA 94111.                                    

Peter M. Fleisher                        Prior to July 1999, Senior Vice President, Fleet            
Senior Vice President                    National Bank, 75 State Street, Boston, MA 02109            

Henrietta Fraser                         Prior to October, 1998, Manager, Fleming Investment         
Vice President                           Management, 25 Copthall Ave., London EC2R 7DR               

Matthew R. Gage                          Prior to December, 1999, Audit Manager, Ernst               
Assistant Vice President                 & Young LLP, 200 Clarendon St., Boston, MA 02116            

Stephen C. Gibbs                         Prior to June 1998, Senior Financial Analyst,               
Vice President                           Fidelity Investments, 82 Devonshire St., Boston,            
                                         MA 02109                                                    

Ken S. Gordon                            Prior to July, 1998, Vice President, Union Bank             
Vice President                           of Switzerland, 2-2-2 Otemachi, Chiyoda-Ku, Tokyo,          
                                         Japan                                                       

Andrew Graham                            Prior to October 1999, Fund Manager, Scottish               
Senior Vice President                    Widows Investment Management, Port Hamilton, 67             
                                         Morrison St., Edinburgh Scotland                            

J. Peter Grant                           Trustee, The Dover Church, Dover, MA 02030                  
Senior Vice President                                                                                

Patrice Graviere                         Prior to March 1998, Regional Director for Latin            
Senior Vice President                    America, MFS International, LTD, Buenos Aires, Brazil       

Paul E. Haagensen                        Director, Haagensen Research Foundation, 630                
Senior Vice President                    West 168th St., New York, NY  10032                         

Andrew J. Hachey                         Prior to July 1998. Associate, Skadden, Arps,               
Assistant Vice President                 Slate, Meagher & Flom, LLP, One Beacon Street, Boston,      
                                         MA 02108                                                    

David E. Hamlin                          Prior to August 1998, Principal, The Vanguard Group,        
Senior Vice President                    100 Vanguard Blvd., Valley Forge, PA 19355                  

Deborah R. Healey                        Corporator, New England Baptist Hospital, 125               
Senior Vice President                    Parker Hill Ave., Boston, MA 02120; Director, NEB           
                                         Enterprises, 125 Parket Hill Ave., Boston, MA 02120         

Kim Heller                               Prior to April 1998, Senior Human Resources                 
Assistant Vice President                 Specialist, Fidelity Investments, 82 Devonshire St.,        
                                         Boston, MA 02109                                            

Jonathan S. Horwitz                      Prior to August 1998, Vice President - Corporate            
Senior Vice President                    Planning, Keystone Group, 200 Berkely St., Boston,          
                                         MA 02116                                                    

Ronald Hua                               Prior to August 1999, Quantitative Analyst,                 
Vice President                           Fidelity Investments, 82 Devonshire St., Boston,            
                                         MA 02109                                                    

Amrit Kanwal                             Prior to August 1999, Vice President, Corporate             
Managing Director                        Development and Strategy, Sequa Corporation, 200 Park       
                                         Avenue, New York, NY 10166                                  

Jeffrey Kaufman                          Prior to July 1998, Vice President and Portfolio            
Senior Vice President                    Manager, MFS Investment Management, 500 Boylston St.,       
                                         Boston, MA 02116                                            

Ira C. Kalus-Bystricky                   Prior to March 1998, Consultant, Arthur D. Little,          
Vice President                           25 Acorn Park, Cambridge, MA  02114                         

Hiroshi Kato                             Prior to August 1998, Manager, Senior Analyst,              
Vice President                           Daiwa Institute of Research, 15-6 Fuyuki, Koutou-ku,        
                                         Tokyo, 135-8460                                             

Kevin J. Keleher                         Prior to August 1998, Support Manager, Digital              
Assistant Vice President                 Equipment Co., 111 Powder Mill Rd., Maynard, MA 01754       

Richard T. Kircher                       Prior to April 1998, Assistant Vice President and           
Assistant Vice President                 Compliance Manager, T. Rowe Price Associates, Inc.,         
                                         100 E. Pratt Street, Baltimore, MD 21202                    

Deborah F. Kuenstner                     Director, Board of Pensions, Presbyterian Church,           
Managing Director                        1001 Market St., Philadelphia, PA                           

Lawrence J. Lasser                       Director, Marsh & McLennan Companies, Inc., 1221 Avenue     
President, Director and Chief Executive  of the Americas, New York, NY  10020; Board of Governors    
                                         and Executive Committee, Investment Company Institute,      
                                         1401 H. St., N.W. Suite 1200, Washington, DC 20005; Board   
                                         of Overseers, Museum of Fine Arts, 465 Huntington, Ave.,    
                                         Boston, MA 02115; Trustee, Beth Israel Deaconess Medical    
                                         Center, 330 Brookline Ave., Boston, MA; Member of the       
                                         Council on Foreign Relations, 58 East 68th St., New York,   
                                         NY 10021; Member of the Board of Directors of the United Way
                                         of Massachusetts Bay, 245 Summer St., Suite 1401, Boston, MA
                                         02110; Trustee of the Vineyard Open Land Foundation, RFD Box
                                         319X, Vineyard Haven, MA 02568                              

Gordon R. Lawrence                       Prior to July 1999, summer associate, J.P. Morgan Investment
Assistant Vice President                 Management, 522 Fifth Ave., New York, NY 10009, Prior to    
                                         July, 1997, Associate Lehman Brothers, 3 World Financial    
                                         Center, New York, NY 10285                                  

Maura W. Leddy                           Prior to October 1998, Bookkeeper, Davol/Taunton Printing,  
Vice President                           330 Winthrop Street Taunton, MA 02780.                      

Richard Leibovitch                       Prior to February 1999, Managing Director, J.P. Morgan,     
Managing Director                        60 Wall St., New York, NY 10260                             

Mark G. Lohr                             Prior to March 1998, Senior Vice President, Fidelity        
Managing Director                        Investmetns, 82 Devonshire St., Boston, MA 02109            

Noboru Machida                           Prior to October 1998, Senior Analyst, The Nikko            
Vice President                           Research Center Ltd., Nihonbashi Kayabacho, Chuou-ku Tokyo, 
                                         Japan 103                                                   

Kevin Maloney                            Institutional Director, Financial Management Association,   
Managing Director                        University of South Florida, College of Business            
                                         Administration, Suite 3331, Tampa, FL 33620                 

Sarah Marshall                           Prior to August 1999, Associate, McKinsey & Company,        
Vice President                           Inc., 55 E. 52nd St., New York, NY 10010                    

Paul McHugh                              Prior to June, 1998, Principal, Robertson Stephens &        
Vice President                           Company, One International Place, Boston, MA 02110          

Nicholas J. Melhuish                     Prior to August 1999, Assistant Director of Schroder        
Vice President                           Investment Management, 31 Gresham St., London,England       
                                         ECZV8AQ                                                     

Krishna Memani                           Prior to September 1998, Principal, Morgan Stanley & Co.,   
Managing Director                        1585 Broadway, New York, NY 10039                           

Peter V. Meyer                           Prior to July 1999, Conseco Capital Management,             
Vice President                           11825 N. Pennsylvania Ave., Carmel, IN 46032                

Stacy M. Mills                           Prior to April 1999, Vice President, Manager-Financial      
Vice President                           Accounting and Internal Reporting, State Street             
                                         Corporation, 225 Franklin Street, Boston, MA 02110          

Reena Mithal                             Prior to July 1999, Vice President, Deutsche Bank           
Vice President                           Securities, 31 W. 52nd Street., New York, NY 10019          

Jeanne L. Mockard                        Trustee, The Bryn Mawr School, 109, W. Melrose              
Senior Vice President                    Avenue, Baltimore, MA 21210                                 

Dirk Morris                              Prior to October 1999, Vice President-Global Strategist,    
Managing Director                        Bankers Trust, Chifley Tower, Sydney NSW 2000 Australia     

Donald E. Mullin                         Corporate Representative and Board Member, Delta Dental     
Senior Vice President                    Plan of Massachusetts, 10 Presidents Landing, P.O.          
                                         Box 94104, Medford, MA 02155                                

Jennifer P. Murphy                       Prior to September 1999, Managing Director, Morgan          
Managing Director                        Stanley, 1585 Broadway, New York, NY 10036                  

Kenneth W. Murphy, Jr.                   Prior to May 1998, Senior Financial Analyst, Merck &        
Assistant Vice President                 Co., Inc., One Merck Drive, Whitehouse Station, NJ 08889    

Philip M. Murphy                         Prior to June 1999, Marketing and Client Relations          
Assistant Vice President                 Association, GE Investments, 3003 Summer Street, Stamford,  
                                         CT 06904.  Prior to March 1998, Analyst, McLagan Partners,  
                                         Inc., Four Stamford Plaza, Suite 400, 107 Elm Street,       
                                         Stamford, CT 06902                                          

Toshio Nagashima                         Prior to July 1999, General Manager, Product Dept.,         
Managing Director                        Investment Trust Preparation, Sumitomo Bank, 1-3-2-         
                                         Marunouchi, Chiyoda-ku, Tokyo 100-0005 Japan                

Maria Julia Nisbet                       Prior to May 1999, Project Manager, Cisalpina               
Assistant Vice President                 Gestioni, Via Boito, 10, Milan, Italy 20121                 

Nancy O'Brien                            Prior to September 1999, Manager Corporate Disbursements,   
Assistant Vice President                 Fidelity Investments, 82 Devonshire St., Boston, MA 02129   

Teresa O'Day                             Prior to April 1999, Operations Manager, Compaq Computer    
Vice President                           Corp., 334 South Street, Shrewsbury, MA 01545               

Stephen M. Oristaglio                    Prior to July 1998, Managing Director Global Head           
Senior Managing Director                 of Fixed Income, Swiss Bank Corp/UBS Organization, 222      
                                         Broadway, New York, NY 10022                                

Carlos Pampliega                         Prior to March 1998, Regional Manager, Massachusetts        
Vice President                           Financial Services, 500 Boylston St., Boston, MA 02116      

Jeffrey F. Peters                        Prior to June 1999, Principal, McKinsey & Company,          
Managing Director                        75 Park Plaza, Boston, MA 02116                             

Joseph P. Petitti                        Prior to May 1998, Senior Treasury Analyst, Liberty         
Vice President                           Mutual Insurance Co., 175 Berkely St., Boston, MA 02122     

Randolph Petralia                        Prior to May 1998, First Vice President, Lehman             
Senior Vice President                    Brothers, 3 World Financial Center, New York, NY 10285      

Keith Plapinger                          Chairman and Trustee, Advent School, 17 Brimmer St.,        
Vice President                           Boston, MA 02108                                            

Lisa M. Platia                           Prior toDecember 1999, Vice President, Windham              
Assistant Vice President                 Capital Management, 5 Revere St., Cambridge MA 02138        

James A. Polk                            Prior to June 1998, Investment Officer, Massachusetts       
Vice President                           Financial Services, 500 Boylston St., Boston, MA 02116      

Charles E. Porter                        Trustee, Anatolia College, 130 Bowdoin St., Suite 1201,     
Executive Vice President                 Boston, MA 02108; Governor, Handel & Hayden Society,        
                                         Horticulture Hall, 300 Massachusetts Ave., Boston, MA       
                                         02115                                                       

Quintin R.S. Price                       Prior to December 1998, Corporate Development Director,     
Managing Director                        The Boots Company PLC, Group Headquarters, Nottingham       
                                         NG2 3AA England; Prior to June 1998, Managing Director      
                                         of Pan European Equities and Global Head of Research,       
                                         HSBC Investment Bank PLC, Thames Exchange, 10 Queen St      
                                         Place, London, EC4R 1BL                                     

George Putnam                            Chairman and Director, Putnam Mutual Funds Corp.;           
Chairman and Director                    Director, The Boston Company, Inc., One Boston Place,       
                                         Boston, MA 02108; Director, Boston Safe Deposit and Trust   
                                         Company, One Boston Place, Boston, MA 02108; Director,      
                                         Freeport-McMoRan, Inc., 200 Park Avenue, New York,          
                                         NY 10166; Director, General Mills, Inc., 9200 Wayzata       
                                         Boulevard, Minneapolis, MN  55440; Director, Houghton       
                                         Mifflin Company, One Beacon Street, Boston, MA 02108;       
                                         Director, Marsh & McLennan Companies, Inc., 1221 Avenue of  
                                         the Americas, New York, NY  10020; Director, Rockefeller    
                                         Group, Inc., 1230 Avenue of the Americas, New York, NY      
                                         10020; Trustee, Massachusetts General Hospital, Fruit       
                                         Street, Boston, Ma 02114; McLean Hospital 115 Mill St.,     
                                         Belmont, MA 02178; The Colonial Williamsburg Foundation,    
                                         Post Office Box 1776, Williamsburg, VA 23187; The Museum    
                                         of Fine Arts, 465 Huntington Avenue, Boston, MA 02115;      
                                         WGBH Foundation, 125 Western Avenue, Boston, MA 02134; The  
                                         Nature Conservancy, Post Office Square Building, 79 Milk    
                                         St., Suite 300, Boston, MA 02109; Trustee, The Jackson      
                                         Laboratory, 600 Main St., Bar Harbor, ME                    

Nadine McQueen-Reed                      Prior to March, 1999, Key Account Executive, Fidelity       
Assistant Vice President                 Investments, 130 Tonbridge Road, Hildenborough, Kent,       
                                         England, TN11 9DZ                                           

Thomas V. Reilly                         Trustee, Knox College, 2 East South St., Galesburg,         
Managing Director                        IL 61401                                                    

Kevin J. Rogers                          Prior to September 1998, Managing Director-Portfolio        
Senior Vice President                    Manager, Invesco, NY Organization, 1066 Avenue of the       
                                         Americas, New York, NY 10036                                

Jeff B. Sacknowitz                       Investment Associate, Independence Investment Associates,   
Vice President                           53 State St., Boston, MA 02109                              

Paul D. Scanlon                          Prior to October 1999, Senior Vice President, Olympus       
Vice President                           Healthcare Group, 775 Trapelo Road, Waltham, MA 02452       

Saied Simozar                            Prior to March 1998, Manager, Portfolio Analytics,          
Senior Vice President                    DuPont Pension fund Investment, One Righter Parkway,        
                                         Suite 3200, Wilmington, DE 198903                           

Justin M. Scott                          Director, DSI Proprieties (Neja) Ltd., Epping Rd.,          
Managing Director                        Reydon, Essex CM19 5RD                                      

Denise D. Selden                         Prior to June 1998, Managing Director, Lehman Brothers,     
Senior Vice President                    260 Franklin St., Boston, MA 02110                          

Jean I. Sievert                          Prior to October 1998, Vice President, Salomon Smith        
Senior Vice President                    Barney, Seven World Trade Center, New York, NY 10048        

Gordon H. Silver                         Trustee, Wang Center for the Performing Arts, 270           
Managing Director                        Tremont St., Boston, MA 02116                               

David M. Silk                            Member of Board of Directors, Jobs for Bay State            
Senior Vice President                    Graduates, 451 Andover St., Suite 305, North Andover,       
                                         MA 01845                                                    

Steven Spiegel                           Director, Ultra Diamond and Gold Outlet, 29 East            
Senior Managing Director                 Madison St., Suite 1800, Chicago, IL 60602; Director,       
                                         FACES New York University Medical Center, 550 First         
                                         Avenue, New York, NY 10016; Trustee, Babson College, One    
                                         College Drive, Wellesley, MA 02157                          

Raman Srivastava                         Prior to July 1999, Market Risk Analyst, Bank of            
Assistant Vice President                 Nova Scotia, 20 King St., W., Toronto, ON                   

James St. John                           Prior to July 1998, Investment Analyst, University of       
Assistant Vice President                 Rochester, Rochester, NY 14627                              

Toshifumi Sugimoto                       Prior to October 1998, Portfolio Manager, Deputy            
Senior Vice President                    General Manager, Nikko Securities Investment Trust &        
                                         Management, Fixed Income Department, 4-3 Nihonbashi,        
                                         Hakozakicho, Chuou-ku, Tokyo, Japan, 103-0015               

William J. Sullivan                      Prior to June 1999, Executive Director, SBC Warburg         
Senior Vice President                    Dillion Read, 677 Washington Blvd, Stamford, CT, 06901      

John C. Talanian                         Member of Board of Directors, the Japan Society of          
Managing Director                        Boston, One Milk Street, Boston, MA 02109                   

Nicole J. Thorpe                         Prior to February 1999, President/Owner, Thorpe             
Assistant Vice President                 Resources, P.O. Box 1895, Brockton, MA 02301                

Robert J. Ullman                         Prior to September, 1998, Assistant Vice President,         
Assistant Vice President                 State Street Bank, Two International Place, Boston, MA      
                                         02109                                                       

Vincent Vliebergh                        Prior to May 1998, Senior Consultant, Garnett Consulting,   
Vice President                           30 Monument Square, Concord, MA 01742                       

Christopher C. Watt                      Prior to July 1999, Finance Manager, Procter &              
Vice President                           Gamble, 1 Procter & Gamble Plaza, Cincinnati, OH 45202      

Eric Wetlaufer                           President and Member of Board of Directors, The Boston      
Managing Director                        Security Analysts Society, Inc., 100 Boylston St., Suite    
                                         1050, Boston, MA 02110                                      

Edward F. Whalen                         Member of the Board of Directors, Hockomock Area YMCA,      
Senior Vice President                    300 Elmwood St., North Attleboro, MA 02760                  

Kelly A. Woolbert                        Prior to November 1999, Investment Analyst, MetLife         
Assistant Vice President                 Investment Services, 99 High Street, Boston, MA 02110       

Edmund F. Wright Jr.                     Prior to July 1998, Controller, CBE Technologies,           
Assistant Vice President                 Inc., 50 Redfield St., Boston, MA 02122                     

Richard P. Wyke                          Director, Salem YMCA, One Sewall St., Salem, MA 01970       
Senior Vice President                                                                                


Item 27.  Principal Underwriter                                                 

(a) Putnam Mutual Funds Corp. is the principal underwriter for each of the      
following investment companies, including the Registrant:                       

Putnam American Government Income Fund, Putnam Arizona Tax Exempt Income Fund,  
Putnam Asia Pacific Growth Fund, Putnam Asset Allocation Funds, Putnam Balanced 
Retirement Fund, Putnam California Tax Exempt Income Fund, Putnam California    
Tax Exempt Money Market Fund, Putnam Capital Appreciation Fund, Putnam          
Convertible Income-Growth Trust, Putnam Diversified Income Trust, Putnam Equity 
Income Fund, Putnam Europe Growth Fund, Putnam Florida Tax Exempt Income Fund,  
Putnam Funds Trust, The George Putnam Fund of Boston, Putnam Global Equity      
Fund, Putnam Global Governmental Income Trust, Putnam Global Growth Fund,       
Putnam Global Natural Resources Fund, The Putnam Fund for Growth and Income,    
Putnam Growth and Income Fund II, Putnam Health Sciences Trust, Putnam High     
Yield Trust, Putnam High Yield Advantage Fund, Putnam Income Fund, Putnam       
Intermediate U.S. Government Income Fund, Putnam International Growth Fund,     
Putnam Investment Funds, Putnam Investors Fund, Putnam Massachusetts Tax Exempt 
Income Fund, Putnam Michigan Tax Exempt Income Fund, Putnam Minnesota Tax       
Exempt Income Fund, Putnam Money Market Fund, Putnam Municipal Income Fund,     
Putnam New Jersey Tax Exempt Income Fund, Putnam New Opportunities Fund,        
Putnam New York Tax Exempt Income Fund, Putnam New York Tax Exempt Money Market 
Fund, Putnam New York Tax Exempt Opportunities Fund, Putnam Ohio Tax Exempt     
Income Fund, Putnam OTC & Emerging Growth Fund, Putnam Pennsylvania Tax Exempt  
Income Fund, Putnam Preferred Income Fund, Putnam Strategic Income Fund, Putnam 
Tax Exempt Income Fund, Putnam Tax Exempt Money Market Fund, Putnam Tax-Free    
Income Trust, Putnam Tax Smart Funds Trust, Putnam U.S. Government Income       
Trust, Putnam Utilities Growth and Income Fund, Putnam Variable Trust, Putnam   
Vista Fund, Putnam Voyager Fund, Putnam Voyager Fund II.                        

(b) The directors and officers of the Registrant's principal underwriter are    
listed below.  None of the officers are officers of the Registrant except:      

Name                       Position and Offices with Registrant                 

Richard Monaghan           Vice President                                       
George Putnam              Chairman and President                               
Gordon Silver              Vice President                                       

The principal business address of each person is One Post Office Square,        
Boston, MA 02109:                                                               

Name                                                   Position and             
                                            Offices with Underwriter
-----------------------------------------------------------------------------   
Adduci,John V.                                    Vice President                
Alberts,Richard W.                                Asst. Vice President          
Alden,Donald F.                                   Vice President                
Alexander,Michael R.                              Vice President                
Alpaugh,Christopher S.                            Vice President                
Altomare,Mario P.                                 Vice President                
Amisano,Paulette C.                               Vice President                
Arends,Michael K.                                 Senior Vice President         
Armon,Lori E.                                     Asst. Vice President          
Asher,Steven E.                                   Senior Vice President         
Avery,Scott A.                                    Senior Vice President         
Aymond,Christian E.                               Senior Vice President         
Aymond,Colin C.                                   Vice President                
Babcock III,Warren W.                             Senior Vice President         
Baltimore,Mark H.W.                               Asst. Vice President          
Barlow,Jane                                       Asst. Vice President          
Barnett,William E.                                Asst. Vice President          
Barrett,Thomas                                    Vice President                
Battit,Suzanne J                                  Vice President                
Beatty,Steven M.                                  Senior Vice President         
Bent,John J.                                      Senior Vice President         
Beringer,Thomas C.                                Vice President                
Boester,Eric C.                                   Asst. Vice President          
Boneparth,John F.                                 Managing Director             
Bouchard,Keith R.                                 Senior Vice President         
Boudreau,Stephen T.                               Asst. Vice President          
Bradford Jr.,Linwood E.                           Senior Vice President         
Bresnahan,Leslee R.                               Managing Director             
Brockelman,James D.                               Senior Vice President         
Brookman,Joel S.                                  Vice President                
Brown,Timothy K.                                  Senior Vice President         
Buckner,Gail D.                                   Senior Vice President         
Burnham,David N.                                  Vice President                
Burrill,Gregory J.                                Vice President                
Buzzell,Paul F.                                   Asst. Vice President          
Cabana,Susan D.                                   Vice President                
Cartwright,Patricia A.                            Asst. Vice President          
Casey,David M.                                    Vice President                
Castle Jr.,James R.                               Senior Vice President         
Chamieh,Mark                                      Vice President                
Chapman,Frederick                                 Vice President                
Chapman,Thomas E.                                 Vice President                
Chase,Mary Claire                                 Senior Vice President         
Chrostowski,Louis F.                              Senior Vice President         
Church,Daniel J.                                  Vice President                
Clark,Richard B.                                  Senior Vice President         
Clermont,Mary                                     Vice President                
Clinton,John C.                                   Asst. Vice President          
Cohen,Jeff M.                                     Asst. Vice President          
Collman,Kathleen M.                               Sr Managing Director          
Commane,Karen L.                                  Asst. Vice President          
Coneeny,Mark L.                                   Senior Vice President         
Connelly,Donald A.                                Senior Vice President         
Connolly,William T.                               Managing Director             
Cooper,John S.                                    Vice President                
Corbett,Dennis                                    Vice President                
Corvinus,F. Nicholas                              Senior Vice President         
Cote,Marie C.                                     Asst. Vice President          
Cotto,Stephen P                                   Asst. Vice President          
Cotton,Rick                                       Vice President                
Crane III,George H.                               Senior Vice President         
Cristo,Chad H.                                    Vice President                
Critchell Jr.,D.Alan                              Asst. Vice President          
Curran,Peter J.                                   Senior Vice President         
Dahill,Jessica E.                                 Vice President                
Daly,Kenneth L.                                   Managing Director             
Daylor,Donna M.                                   Vice President                
Days,Nancy M.                                     Asst. Vice President          
Deluse,Laura R.                                   Asst. Vice President          
deMont,Lisa M.                                    Vice President                
Diaz,Roger                                        Vice President                
Dirstine,Michael T.                               Vice President                
DiStasio,Karen E.                                 Vice President                
Divney,Kevin M.                                   Senior Vice President         
Dolan,Michael G.                                  Vice President                
Donaldson,Scott M.                                Vice President                
Dougherty,Thomas                                  Vice President                
Durbin,Emily J.                                   Vice President                
Durkee,Christine                                  Asst. Vice President          
Edlin,David B.                                    Managing Director             
Eidelberg,Kathleen E.                             Asst. Vice President          
Elder,Michael D.                                  Vice President                
Emhof,Joseph R.                                   Vice President                
English,James M.                                  Senior Vice President         
Esposito,Vincent                                  Managing Director             
Favaloro,Beth A.                                  Vice President                
Feldman,Susan H.                                  Senior Vice President         
Fisher,C. Nancy                                   Managing Director             
Fishman,Mitchell B.                               Senior Vice President         
Fiumara,Joseph C.                                 Vice President                
Flaherty,Patricia C.                              Senior Vice President         
Fleisher,Kate                                     Vice President                
Fleming,Ellen E.                                  Asst. Vice President          
Foley,Timothy P.                                  Vice President                
Foran,Carey L.                                    Vice President                
Frost,Karen T.                                    Senior Vice President         
Gage,Matthew R.                                   Asst. Vice President          
Gaudette,Marjorie B.                              Vice President                
Gibbs,Stephen C.                                  Vice President                
Gindel,Caroline E.                                Asst. Vice President          
Goodfellow,Mark D.                                Vice President                
Goodman,Robert                                    Managing Director             
Gould,Carol J.                                    Asst. Vice President          
Grace,Linda K.                                    Vice President                
Grant,Mitchell T.                                 Managing Director             
Graviere,Patrice                                  Senior Vice President         
Grey,Eric M.                                      Vice President                
Grossberg,Jill                                    Asst. Vice President          
Grove,Denise                                      Vice President                
Guerin,Donnalee                                   Vice President                
Hachey,Andrew J                                   Asst. Vice President          
Hadley,Christopher                                Asst. Vice President          
Halloran,James E.                                 Vice President                
Halloran,Thomas W.                                Senior Vice President         
Hansen,Christine M.                               Asst. Vice President          
Harring,Linda                                     Senior Vice President         
Harrington,Shannon W.                             Vice President                
Hartig,Robert                                     Vice President                
Hartigan,Craig W.                                 Vice President                
Hartley,Deborah M.                                Asst. Vice President          
Hayes-Castro,Deanna R.                            Vice President                
Hedstrom,Gayle A.                                 Asst. Vice President          
Heller,Kim G.                                     Asst. Vice President          
Holmes,Maureen A.                                 Vice President                
Hooley Jr.,Daniel F.                              Vice President                
Horwitz,Jonathan S.                               Senior Vice President         
Hotchkiss,Michael F.                              Senior Vice President         
Howes,Douglas E.                                  Asst. Vice President          
Hoyt,Paula J.                                     Asst. Vice President          
Hurley,William J.                                 Managing Director & CFO       
Hutcherson,Eric A.                                Asst. Vice President          
Hutchins,Robert B.                                Vice President                
Iino,Yoshiro                                      Vice President                
Jacobsen,Dwight D.                                Managing Director             
Kaminsky,Gregory C.                               Vice President                
Kanwal,Amrit                                      Managing Director             
Kapinos,Peter J.                                  Vice President                
Keleher,Kevin J.                                  Asst. Vice President          
Kelley,Brian J.                                   Vice President                
Kelly,David                                       Vice President                
Kennedy,Alicia C.                                 Asst. Vice President          
Kinsman,Anne                                      Senior Vice President         
Kircher,Richard T.                                Asst. Vice President          
Kirk,Deborah H.                                   Senior Vice President         
Koontz,Jill A.                                    Senior Vice President         
Kringdon,Joseph D.                                Senior Vice President         
Landers,Bruce M.                                  Vice President                
Lane,Linda L.                                     Asst. Vice President          
LaPierre,Christopher W                            Asst. Vice President          
Lathrop,James D.                                  Senior Vice President         
Lawlor,Stephanie T.                               Asst. Vice President          
Leary,Joan M.                                     Vice President                
Ledbetter,Charles C.                              Vice President                
Leddy,Maura W.                                    Vice President                
Leipsitz,Margaret                                 Asst. Vice President          
Lemire,Kevin                                      Vice President                
Levy,Eric S.                                      Senior Vice President         
Levy,Norman S.                                    Vice President                
Lewandowski Jr.,Edward V.                         Vice President                
Lewandowski,Edward V.                             Senior Vice President         
Lewis,Paul                                        Asst. Vice President          
Li,Mei                                            Asst. Vice President          
Lieberman,Samuel L.                               Senior Vice President         
Lifsitz,David M.                                  Vice President                
Lilien,David R.                                   Vice President                
Link,Christopher H.                               Asst. Vice President          
Linquata,Louis K.                                 Asst. Vice President          
Litant,Lisa M.                                    Vice President                
Lockwood,Maura A.                                 Senior Vice President         
Loew,Christopher R.                               Asst. Vice President          
Lohmeier,Andrew                                   Asst. Vice President          
Lohr,Mark G.                                      Managing Director             
Lomba,Rufino R.                                   Senior Vice President         
Lord,Caroline F.                                  Asst. Vice President          
Lucey,Robert F.                                   Director                      
Lucey,Thomas J.                                   Director                      
Luskin,James M.                                   Asst. Vice President          
Lyons,Robert F.                                   Asst. Vice President          
MacDonald,Richard A.                              Senior Vice President         
Maloof,Renee L.                                   Asst. Vice President          
Mancini,Dana                                      Asst. Vice President          
Mancini,Jane M.                                   Managing Director             
Manthorne,Heather M.                              Asst. Vice President          
Maravel,Alexi A.                                  Asst. Vice President          
Martens,Erwin W.                                  Managing Director             
Maxwell,Scott M.                                  Managing Director             
McAvoy,Bridget                                    Vice President                
McCafferty,Karen A.                               Vice President                
McCarthy,Anne B.                                  Asst. Vice President          
McConville,Paul D.                                Senior Vice President         
McCracken,Brian                                   Asst. Vice President          
McCutcheon,Bruce A                                Senior Vice President         
McDermott,Robert J.                               Vice President                
McKenna,Mark J.                                   Senior Vice President         
McNamara,Laura                                    Vice President                
McNamee,Mary G.                                   Vice President                
Meagher,Dorothy B.                                Vice President                
Mehta,Ashok                                       Vice President                
Metelmann,Claye A.                                Vice President                
Michejda,Marek A.                                 Vice President                
Miller,Bart D.                                    Senior Vice President         
Miller,Gregory T.                                 Vice President                
Miller,Jeffrey M.                                 Managing Director             
Mills,Ronald K.                                   Vice President                
Mills,Stacy M.                                    Vice President                
Minsk,Judith                                      Asst. Vice President          
Monaghan,Richard A.                               Director                      
Monahan,Kimberly A.                               Vice President                
Moody,Paul R.                                     Vice President                
Moret,Mitchell L.                                 Senior Vice President         
Morey,John P.                                     Senior Vice President         
Mosher,Barry L.                                   Vice President                
Mullen,Donald E.                                  Senior Vice President         
Munson,Brian D.                                   Vice President                
Murphy Jr.,Kenneth W.                             Asst. Vice President          
Murray,Brendan R.                                 Senior Vice President         
Nadherny,Robert                                   Senior Vice President         
Nagashima,Toshio                                  Managing Director             
Natale,Lisa A.                                    Asst. Vice President          
Nauen,Kimberly Page                               Vice President                
Neary,Ellen R.                                    Vice President                
Neher,Stacey P.                                   Asst. Vice President          
Nelson,Andrew E.                                  Vice President                
Newell,Amy Jane                                   Vice President                
Nickodemus,John P.                                Senior Vice President         
Nickse,Gail A.                                    Asst. Vice President          
Nicolazzo,Jon C.                                  Vice President                
Nisbet,M. Julia                                   Asst. Vice President          
O'Brien,Lois C.                                   Vice President                
O'Brien,Nancy M.                                  Asst. Vice President          
O'Connell,Gayle M.                                Vice President                
O'Connor,Brian P.                                 Vice President                
O'Connor,Matthew P.                               Asst. Vice President          
O'Day,Teresa S.                                   Vice President                
Orr,Kevin                                         Vice President                
Palmer,Patrick J.                                 Vice President                
Pampliega,Carlos                                  Vice President                
Panek,Raymond S.                                  Asst. Vice President          
Parker,Michael T.                                 Asst. Vice President          
Parr,Cynthia O.                                   Senior Vice President         
Patton,Robert J.                                  Vice President                
Perkins,Erin M.                                   Asst. Vice President          
Peters,Jeffrey F.                                 Managing Director             
Petitti,Joseph P.                                 Vice President                
Petralia,Randolph S.                              Senior Vice President         
Phoenix,John G.                                   Senior Vice President         
Phoenix,Joseph                                    Senior Vice President         
Pilibosian,George J.                              Vice President                
Plapinger,Keith                                   Senior Vice President         
Powers,Brian S.                                   Asst. Vice President          
Present,Howard B.                                 Senior Vice President         
Puddle,David G.                                   Senior Vice President         
Pulkrabek,Scott M.                                Vice President                
Putnam,George                                     Director                      
Quinn,Lisa F.                                     Asst. Vice President          
Reed,Nadine McQueen                               Asst. Vice President          
Rider,Wendy A.                                    Vice President                
Riley,Megan G.                                    Asst. Vice President          
Rodammer,Kris                                     Senior Vice President         
Rodts,Jennifer M.                                 Asst. Vice President          
Rogers,Deborah A.                                 Vice President                
Rowe,Robert B.                                    Vice President                
Ryan,Carolyn M.                                   Asst. Vice President          
Ryan,Deborah A.                                   Vice President                
Ryan,William M.                                   Vice President                
Saccocia,Cynthia M                                Asst. Vice President          
Saunders,Catherine A.                             Senior Vice President         
Saur,Karl W.                                      Vice President                
Scanlon,Michael M.                                Vice President                
Schlosberg,Alan R.                                Asst. Vice President          
Schofield,Shannon D.                              Senior Vice President         
Schultz,Mitchell D.                               Managing Director             
Scordato,Christine A.                             Senior Vice President         
Segers,Elizabeth R.                               Senior Vice President         
Selden,Denise D.                                  Senior Vice President         
Shamburg,John B.                                  Vice President                
Shanahan,Christopher W.                           Vice President                
Sharpless,Kathy G.                                Managing Director             
Shelby,Robert                                     Vice President                
Short,Jonathan D.                                 Senior Vice President         
Siebold,Mark J.                                   Asst. Vice President          
Siemon Jr.,Frank E.                               Asst. Vice President          
Silva,J. Paul                                     Vice President                
Silver,Gordon H.                                  Sr Managing Director          
Skistimas Jr,John J.                              Vice President                
Smeglin,Maryann C.                                Asst. Vice President          
Solan,Meenakshi S.                                Asst. Vice President          
Soule,Scott W.                                    Asst. Vice President          
Spiegel,Steven                                    Sr Managing Director          
Sprague,David L.                                  Vice President                
Starishevsky,Daniel                               Vice President                
Starr,Loren M.                                    Managing Director             
Statuta,Jason M.                                  Vice President                
Steinberg,Lauren B.                               Asst. Vice President          
Stern,Derek A.                                    Asst. Vice President          
Stickney,Paul R.                                  Senior Vice President         
Strumpf,Casey                                     Senior Vice President         
Sugimoto,Toshifumi                                Senior Vice President         
Sullivan,Brian L.                                 Senior Vice President         
Sullivan,Donna G                                  Vice President                
Sullivan,Elaine M.                                Senior Vice President         
Sullivan,Maryann                                  Asst. Vice President          
Suzuki,Toshimi                                    Senior Vice President         
Sweeney,Janet C.                                  Senior Vice President         
Talanian,John C.                                  Managing Director             
Tanner,B Iris                                     Vice President                
Tavares,April M.                                  Asst. Vice President          
Telling,John R.                                   Senior Vice President         
Tibbetts,Richard B.                               Managing Director             
Tirado,Patrice M.                                 Vice President                
Troped Blacker,Bonnie                             Senior Vice President         
Upham,Scott E.                                    Vice President                
Veale,David B.                                    Asst. Vice President          
Wallack,William F.                                Asst. Vice President          
Walsh,Stephen M.                                  Vice President                
Warde,Elizabeth A.                                Asst. Vice President          
Washburn,Andrew O.                                Vice President                
Waters,Mitchell J.                                Vice President                
Watt,Christopher C.                               Vice President                
Welch III,William A.                              Asst. Vice President          
Whalen,Brian                                      Vice President                
Whalen,Edward F.                                  Senior Vice President         
Whitaker,J. Greg                                  Vice President                
White,Patrick J.                                  Asst. Vice President          
Wolfson,Jane                                      Senior Vice President         
Woodlock,Ronald J.                                Asst. Vice President          
Woolbert,Kelly A.                                 Asst. Vice President          
Woolverton,William H.                             Managing Director             
Wright Jr.,Edmund F.                              Asst. Vice President          
Yan,Yanfang                                       Vice President                
Young,Jason P.                                    Vice President                
Zografos,Laura J.                                 Senior Vice President         
Zukowski,Virginia A.                              Senior Vice President         

Item 28. Location of Accounts and Records                                       

Persons maintaining physical possession of accounts, books and other            
documents required to be maintained by Section 31(a) of the Investment          
Company Act of 1940 and the Rules promulgated thereunder are Registrant's       
Associate Clerk,  Judith Cohen; Registrant's investment  advisor, Putnam        
Investment Management, Inc.; Registrant's principal underwriter, Putnam         
Mutual Funds Corp.; Registrant's custodian, Putnam Fiduciary Trust Company      
("PFTC"); and Registrant's transfer and dividend disbursing agent, Putnam       
Investor Services, a division of PFTC.  The address of the Associate Clerk,     
investment  advisor, principal underwriter, custodian and transfer and          
dividend disbursing agent is One Post Office Square, Boston, Massachusetts      
02109.                                                                          

Item 29. Management Services                                                    

None.                                                                           

Item 30. Undertakings                                                           

None.                                                                           

CONSENT OF INDEPENDENT ACCOUNTANTS                                              

The Board of Trustees and Shareholders                                          
Putnam Convertible Income-Growth Trust:                                         

We consent to the use of our report dated December 7, 1999, incorporated in     
this Registration Statement by reference, for the Putnam Convertible            
Income-Growth Trust and to the references to our firm under the captions        
"Financial Highlights" in the prospectuses and "INDEPENDENT ACCOUNTANTS AND     
FINANCIAL STATEMENTS" in the Statement of Additional Information.               

                                                  KPMG LLP
Boston, Massachusetts                                                           

February 23, 2000                                                               

CONSENT OF INDEPENDENT ACCOUNTANTS                                              

We consent to the incorporation by reference in the Prospectuses and            
Statement of Additional Information constituting parts of Post-Effective        
Amendment No.  37 to the Registration Statement of Putnam Convertible           
Income-Growth Trust on Form N-1A (File No. 2-43384) of our report dated         
December 11, 1998, on our audit of the financial statements and financial       
highlights of the Fund, which report is included in the Annual Report for       
Putnam Convertible Income-Growth Trust for the year ended October 31, 1998,     
which is incorporated by reference in the Registration Statement.               

We also consent to the  references to our firm under the caption                
"Independent Accountants and Financial Statements" in the Statement of          
Additional Information and under the heading "Financial highlights" in such     
Prospectuses.                                                                   

PricewaterhouseCoopers LLP                                                      
Boston, Massachusetts                                                           

February 23, 2000                                                               

NOTICE                                                                          

A copy of the Agreement and Declaration of Trust of Putnam Convertible          
Income-Growth Trust is on file with the Secretary of State of The               
Commonwealth of Massachusetts and notice is hereby given that this              
instrument is executed on behalf of the Registrant by an officer of the         
Registrant as an officer and not individually and the obligations of or         
arising out of this instrument are not binding upon any of the Trustees,        
officers or shareholders individually but are binding only upon the assets      
and property of the Registrant.                                                 

SIGNATURES                                                                      

Pursuant to the requirements of the Securities Act of 1933 and the              
Investment Company Act of 1940, the fund certifies that it meets all of the     
requirements for effectiveness of this Registration Statement under Rule        
485(b) under the Securities Act of 1933 and has duly caused this Amendment      
to its Registration Statement to be signed on its behalf by the                 
undersigned, duly authorized, in the City of Boston, and The Commonwealth       
of Massachusetts, on the   25th day of  February, 2000.                         

                            Putnam Convertible Income-Growth Trust

                          By: Gordon H. Silver, Vice President

Pursuant to the requirements of the Securities Act of 1933, this Amendment      
to the Registration Statement of Putnam Convertible Income-Growth Trust has     
been signed below by the following persons in the capacities and on the         
dates indicated:                                                                

Signature                Title                                                  

George Putnam            President and Chairman of the Board;                   
      Principal Executive Officer; Trustee

John D. Hughes           Senior Vice President; Treasurer and                   
Principal Financial Officer   

Paul G. Bucuvalas        Assistant Treasurer and                                
Principal Accounting Officer  

Jameson A. Baxter        Trustee                                                

Hans H. Estin            Trustee                                                

John A. Hill             Trustee                                                

Ronald J. Jackson        Trustee                                                

Paul L. Joskow           Trustee                                                

Elizabeth T. Kennan      Trustee                                                

Lawrence J. Lasser       Trustee                                                

John H. Mullin, III      Trustee                                                

Robert E. Patterson      Trustee                                                

William F. Pounds        Trustee                                                

George Putnam, III       Trustee                                                

A.J.C. Smith             Trustee                                                

W. Thomas Stephens       Trustee                                                

W. Nicholas Thorndike    Trustee                                                

By:  Gordon H. Silver,        
as Attorney-in-Fact           

February 25, 2000             

Exhibit Index                                                                   

Exhibit 1. Class C Distribution Plan and Agreement, dated July 16, 1999.        

Exhibit 2. Rule 18f-3(d) Plan, dated November 1, 1999.                          

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘485BPOS’ Filing		Date		Other Filings
		2/29/00
Filed on / Effective on:		2/28/00
		2/25/00
		2/23/00
		1/31/00
		12/31/99
		12/17/99		N-30D
		12/7/99
		11/1/99		497
		10/31/99		24F-2NT,  N-30D,  NSAR-B,  NSAR-B/A
		8/1/99
		7/26/99
		7/16/99
		1/1/99
		12/31/98
		12/30/98
		12/11/98
		10/31/98		24F-2NT,  N-30D,  NSAR-B
		8/31/98
		4/15/97		497
		2/20/97
		10/4/96
		3/13/95
		5/6/94
		2/1/94
		11/9/92
		7/13/92
				List all Filings

5 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/26/24  Putnam Conv Securities Fund       485BPOS     2/29/24   28:6.2M                                   McMunn Assocs Inc./FA
 2/28/23  Putnam Conv Securities Fund       485BPOS     2/28/23   22:4.9M                                   McMunn Assocs Inc./FA
 2/23/22  Putnam Conv Securities Fund       485BPOS     2/28/22   26:5.4M                                   McMunn Assocs Inc./FA
 2/26/21  Putnam Conv Securities Fund       485BPOS     2/28/21   23:4.1M                                   McMunn Assocs Inc./FA
 2/26/21  Putnam Conv Securities Fund       485BPOS     2/28/21   23:4.7M                                   McMunn Assocs Inc./FA