Statement of Additional Information Supplement               210912  1/04

dated January 14, 2004 to Statements of Additional Information of:
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Putnam Classic Equity Fund                Putnam Equity Income Fund
Putnam Capital Appreciation Fund          Putnam Small Cap Growth Fund
Putnam Capital Opportunities Fund         Putnam Tax Smart Equity Fund

The first three paragraphs under the heading "MISCELLANEOUS INVESTMENTS,
INVESTMENT PRACTICES AND RISKS - Options on Securities - Writing Covered
Options" in Part II of the fund's Statement of Additional Information
are hereby deleted and replaced with the following:

Writing covered options.  The fund may write covered call options and
covered put options on optionable securities held in its portfolio or
that it has an absolute and immediate right to acquire without
additional cash consideration (or, if additional cash consideration is
required, cash or other assets determined to be liquid by Putnam in
accordance with procedures established by the Trustees, in such amount
are segregated by its custodian), 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) or have an
absolute and immediate right to acquire without additional cash
consideration (or, if additional cash consideration is required, cash or
other assets determined to be liquid by Putnam in accordance with
procedures established by the Trustees, in such amount are segregated by
its custodian).  In the case of put options, the fund will segregate
assets determined to be liquid by Putnam in accordance with procedures
established by the Trustees 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, if the fund holds the security, 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.  If the fund does not hold the underlying security,
the fund bears the risk that, if the market price exceeds the option
strike price, the fund will suffer a loss equal to the difference at the
time of exercise. 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.