-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ePFz9GZ/KM2ZPOs7j0OYrpfnIVmiOGWxerw1b6R15MaYHBpcd4SNvuhiuaAV112F 1xO+URmile03AQMB7l3bFQ== 0000357295-94-000005.txt : 19940701 0000357295-94-000005.hdr.sgml : 19940701 ACCESSION NUMBER: 0000357295-94-000005 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM HEALTH SCIENCES TRUST CENTRAL INDEX KEY: 0000357295 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 046471950 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 002-75863 FILM NUMBER: 94536082 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQ CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6172921000 497 1 DEFINITIVE INFORMATION PROSPECTUS - JANUARY 1, 1994 , AS REVISED JULY 1, 1994 PUTNAM HEALTH SCIENCES TRUST CLASS A AND B SHARES INVESTMENT STRATEGY: GROWTH This Prospectus explains concisely what you should know before investing in Class A or Class B shares of the Fund. Please read it carefully and keep it for future reference. You can find more detailed information about the Fund in the January 1, 1994 Statement of Additional Information, as amended from time to time. For a free copy of the Statement, call Putnam Investor Services at 1-800-225-1581. The Statement has been filed with the Securities and Exchange Commission and is incorporated into this Prospectus by reference. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUND (S) ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION , ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY , AND INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL . BOSTON * LONDON * TOKYO Putnam Health Sciences Trust (the "Fund") seeks capital appreciation by investing primarily in the common stocks of companies in the health sciences industries. The Fund is designed for investors who believe that these industries provide significant opportunities for capital appreciation. While ordinary "growth" funds may place some of their portfolios in the health sciences industries, the Fund focuses its investments on these industries. The concentration of the Fund's investments may involve certain risks more fully described in the section "How objective is pursued" on page . This Prospectus offers two classes of shares: Class A and Class B. Each class is sold pursuant to different sales arrangements and bears different expenses. For more information about the different sales arrangements, see "Alternative sales arrangements." For information about various expenses borne by each class, see "Expenses summary." ABOUT THE FUND Expenses summary ..........................................................4 Financial highlights ..........................................................5 Objective ..........................................................7 How objective is pursued ..........................................................7 How performance is shown ..........................................................12 How the Fund is managed ..........................................................13 Organization and history 13 ABOUT YOUR INVESTMENT Alternative sales arrangements .....................................................15 How to buy shares ..........................................................15 Distribution Plans ..........................................................19 How to sell shares ..........................................................21 How to exchange shares ..........................................................22 How the Fund values its shares ..........................................................23 How distributions are made; tax information 23 ABOUT PUTNAM INVESTMENTS, INC. 24 ABOUT THE FUND EXPENSES SUMMARY Expenses are one of several factors to consider when investing in the Fund. The following table summarizes your maximum transaction costs from investing in the Fund and expenses incurred by the Fund based on its most recent fiscal year. The Examples show the cumulative expenses attributable to a hypothetical $1,000 investment in the Fund over specified periods. CLASS A SHARES CLASS B SHARES SHAREHOLDER TRANSACTION EXPENSES Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) 5.75% NONE* Deferred Sales Charge (as a 5.0% in the percentage of the lower first year, of original purchase NONE** declining to, price or redemption 1.0% in the proceeds) sixth year and eliminated thereafter ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets) Management Fees 0.66% 0.66% 12b-1 Fees 0.25% 1.00% Other Expenses 0.24% 0.24% Total Fund Operating Expenses 1.15% 1.90% EXAMPLES Your investment of $1,000 would incur the following expenses, assuming 5% annual return and redemption at the end of each period: 1 3 5 10 year years years years Class A $69 $92 $117 $189 Class B $69 $90 $123 $203*** Your investment of $1,000 would incur the following expenses, assuming 5% annual return but no redemption: Class A $69 $92 $117 $189 Class B $19 $60 $103 $203*** The table is provided to help you understand the expenses of investing in the Fund and your share of the operating expenses which the Fund incurs. The 12b-1 fees for Class A shares reflect the amount to which the Trustees currently limit payments under the Class A Distribution Plan. Actual 12b-1 fees and total operating expenses for Class A shares for fiscal 1993 were 0.24% and 1.13%, respectively. The 12b-1 fees for Class B shares reflect the maximum amount payable under the Class B Distribution Plan. For Class B shares, management fees and "Other expenses" are based on the operating expenses for the Fund's Class A shares. The Examples do not represent past or future expense levels, and actual expenses may be greater or less than those shown. Federal regulations require the Examples to assume a 5% annual return, but actual annual return has varied. * Class B shares are sold without a front-end sales charge, but their 12b-1 fees may cause long-term shareholders to pay more than the economic equivalent of the maximum permitted front-end sales charge. ** A deferred sales charge of up to 1.00% is assessed on certain redemptions of Class A shares that were purchased without an initial sales charge as part of an investment of $1 million or more. See "How to buy shares--Class A shares." *** Reflects conversion of Class B shares to Class A shares (which pay lower ongoing expenses) approximately eight years after purchase. See "How to buy shares -- Class B shares -- Conversion of Class B shares." FINANCIAL HIGHLIGHTS The table on the following page presents per share financial information for the Fund's ten most recent fiscal years. This information has been audited and reported on by the Fund's independent accountants. The Report of Independent Accountants and financial statements included in the Fund's Annual Report to Shareholders for the 1993 fiscal year are incorporated by reference into this Prospectus. The Fund's Annual Report, which contains additional unaudited performance information, is available without charge upon request. FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD) (Table appears on pages ) (THE TABLE IS INCORPORATED BY REFERENCE FROM POST-EFFECTIVE AMENDMENT NO. 12 TO THE FUND'S REGISTRATION STATEMENT, FILE NO. 2-75863.) OBJECTIVE THE FUND SEEKS CAPITAL APPRECIATION BY INVESTING AT LEAST 80% OF ITS ASSETS (OTHER THAN U.S. GOVERNMENT SECURITIES, SHORT-TERM DEBT OBLIGATIONS, AND CASH OR MONEY MARKET INSTRUMENTS) IN COMMON STOCKS AND OTHER SECURITIES OF COMPANIES IN THE HEALTH SCIENCES INDUSTRIES, EXCEPT WHEN PUTNAM INVESTMENT MANAGEMENT , INC., THE FUND'S INVESTMENT MANAGER ("PUTNAM MANAGEMENT"), BELIEVES ALTERNATIVE STRATEGIES ARE APPROPRIATE TO PROTECT THE FUND AGAINST A MARKET DECLINE. The Fund concentrates its investments in a limited group of industries and is not intended to be a complete investment program. There is no assurance the Fund will achieve its objective. HOW OBJECTIVE IS PURSUED BASIC INVESTMENT STRATEGY THE FUND INVESTS MAINLY IN COMMON STOCKS OF COMPANIES IN THE HEALTH SCIENCES INDUSTRIES, BUT MAY ALSO INVEST A PORTION OF ITS ASSETS IN OTHER INDUSTRIES AND MAY INVEST IN FIXED-INCOME SECURITIES. The Fund seeks to purchase securities that will rise in value; current income is only a minor consideration. The Fund invests primarily in common stocks, but may also purchase convertible bonds, convertible preferred stocks, warrants, preferred stocks and debt securities if Putnam Management believes they would help achieve the Fund's objective of capital appreciation. The Fund may hold a portion of its assets in cash and money market instruments. At times Putnam Management may judge that conditions in the securities markets make pursuing the Fund's basic investment strategy inconsistent with the best interests of its shareholders. At such times Putnam Management may temporarily use alternative strategies, primarily designed to reduce fluctuations in the value of the Fund's assets. In implementing these "defensive" strategies, the Fund may invest without limit in debt securities or preferred stocks of companies in any industry, or increase the portion of its assets held in cash or money market instruments, or invest in other securities Putnam Management considers consistent with such defensive strategies. It is impossible to predict when, or for how long, the Fund will use such alternative strategies. THE HEALTH SCIENCES INDUSTRIES THE FUND PROVIDES INVESTORS WITH A DIVERSIFIED PORTFOLIO OF COMPANIES IN THE HEALTH SCIENCES INDUSTRIES. The health sciences industries include companies that Putnam Management considers to be principally engaged in the development, production or distribution of products or services related to the treatment or prevention of diseases, disorders or other medical conditions. The following examples illustrate the wide range of products and services provided by these industries: o PHARMACEUTICALS, including ethical (prescription) and proprietary (nonprescription) drugs, drug administration products, and chemical or biological components used in diagnostic testing. o HEALTH CARE SERVICES, including hospitals, clinical test laboratories, convalescent and mental health care facilities, rehabilitation centers, and products and services for home health care. o APPLIED RESEARCH AND DEVELOPMENT, including scientific research toward developing drugs, processes and technologies with possible commercial applications. o MEDICAL EQUIPMENT AND SUPPLIES, including sophisticated electronic equipment used in chemical analysis and diagnostic testing, surgical and medical instruments, and other special products. Putnam Management deems a particular company to be "principally engaged" in the health sciences industries if at the time of investment Putnam Management determines that at least 50% of the company's assets, revenues or profits are derived from those industries. Under normal market conditions, the Fund will invest at least 65% of its assets in securities of issuers meeting at least one of these criteria. Putnam Management also deems a company "principally engaged" in these industries if it considers that the company has potential for capital appreciation primarily as a result of particular products, technology, patents or other market advantages in these industries. The Fund does not anticipate that these latter companies will represent more than 15% of the Fund's investments in the health sciences industries. FOREIGN INVESTMENTS THE FUND MAY INVEST UP TO 20% OF ITS ASSETS IN SECURITIES PRINCIPALLY TRADED IN FOREIGN MARKETS. The Fund may also purchase Eurodollar certificates of deposit without regard to the 20% limit. Since foreign securities are normally denominated and traded in foreign currencies, the values of the Fund's assets may be affected favorably or unfavorably by currency exchange rates and exchange control regulations. There may be less information publicly available about a foreign company than about a U.S. company, and foreign companies 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 companies are less liquid and at times more volatile than securities of comparable U.S. companies. 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 domestic investments. In addition, there may be a possibility of nationalization or expropriation of assets, imposition of currency exchange controls, confiscatory taxation, political or financial instability and diplomatic developments which could affect the value of the Fund's investments in certain foreign countries. 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 located in those foreign countries. Special tax considerations apply to foreign securities. The Fund may buy or sell foreign currencies, foreign currency forward contracts and call options on foreign currencies for hedging purposes in connection with its foreign investments. A MORE DETAILED EXPLANATION OF FOREIGN INVESTMENTS, AND THE RISKS AND SPECIAL TAX CONSIDERATIONS ASSOCIATED WITH THEM, IS INCLUDED IN THE STATEMENT OF ADDITIONAL INFORMATION. PORTFOLIO TURNOVER The length of time the Fund has held a particular security is not generally a consideration in investment decisions. A change in the securities held by the Fund is known as "portfolio turnover." 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 generally involves some expense to the Fund, including brokerage commissions or dealer mark-ups and other transaction costs on the sale of securities and reinvestment in other securities. Such transactions may result in realization of taxable capital gains. Portfolio turnover rates for the ten most recent fiscal years of the Fund are shown in the section "Financial highlights. " RISK FACTORS WHILE THE FUND'S PORTFOLIO WILL NORMALLY INCLUDE SECURITIES OF ESTABLISHED SUPPLIERS OF TRADITIONAL PRODUCTS AND SERVICES, THE FUND MAY ALSO INVEST IN SMALLER COMPANIES WHICH MAY BENEFIT FROM THE DEVELOPMENT OF NEW PRODUCTS AND SERVICES. While many major U.S. corporations are involved in the health sciences industries, smaller and less seasoned companies represent a substantial portion of this field, particularly in the area of emerging medical technologies. These smaller companies may present greater opportunities for capital appreciation, but may also involve greater risks. They may have limited product lines, markets or financial resources, or may depend on a limited management group. Their securities may trade less frequently and in more limited volume than the securities of larger, more established companies, and only in the over-the-counter market or on a regional securities exchange. As a result, the prices of these securities may fluctuate more erratically, and to a greater degree, than the prices of securities of other issuers. BECAUSE THE FUND'S INVESTMENTS ARE CONCENTRATED, THE VALUE OF ITS SHARES IS ESPECIALLY AFFECTED BY FACTORS PECULIAR TO THE HEALTH SCIENCES INDUSTRIES AND MAY FLUCTUATE MORE WIDELY THAN THE VALUE OF SHARES OF A PORTFOLIO WHICH INVESTS IN A BROADER RANGE OF INDUSTRIES. For example, many products and services are subject to risks of rapid obsolescence caused by technological and scientific advances. In addition, the health sciences industries are generally subject to greater government regulation than many other industries; therefore, changes in governmental policies may have a material effect on the demand for certain products and services. Regulatory approvals are generally required before new drugs and medical devices or procedures may be introduced and before the acquisition of additional facilities and equipment by health care providers. STOCK INDEX FUTURES AND OPTIONS THE FUND MAY BUY AND SELL STOCK INDEX FUTURES CONTRACTS FOR HEDGING PURPOSES. An "index future" is a contract to buy or sell units of a particular stock index at an agreed price on a specified future date. Depending on the change in value of the index between the time when the Fund enters into and terminates an index future transaction, the Fund realizes a gain or loss. The Fund may buy and sell call and put options on index futures or on stock indices in addition to or as an alternative to purchasing or selling index futures or, to the extent permitted by applicable law, to earn additional income. THE USE OF INDEX FUTURES AND OPTIONS INVOLVES CERTAIN SPECIAL RISKS. FUTURES AND OPTIONS TRANSACTIONS INVOLVE COSTS AND MAY RESULT IN LOSSES. Certain risks arise because of the possibility of imperfect correlations between movements in the prices of index futures and options and movements in the prices of the underlying stock index or of the common stocks in the Fund's portfolio that are the subject of a hedge. The successful use of the strategies described above further depends on Putnam Management's ability to forecast market movements correctly. Other risks arise from the Fund's potential inability to close out its index futures or options positions, and there can be no assurance that a liquid secondary market will exist for any index future or option at any particular time. Certain provisions of the Internal Revenue Code and certain regulatory requirements may limit the Fund's ability to engage in index futures and options transactions. A MORE DETAILED EXPLANATION OF INDEX FUTURES AND OPTIONS TRANSACTIONS, INCLUDING THE RISKS ASSOCIATED WITH THEM, IS INCLUDED IN THE STATEMENT OF ADDITIONAL INFORMATION. OTHER INVESTMENT PRACTICES THE FUND MAY ALSO ENGAGE TO A LIMITED EXTENT IN THE FOLLOWING INVESTMENT PRACTICES, EACH OF WHICH INVOLVES CERTAIN SPECIAL RISKS. THE STATEMENT OF ADDITIONAL INFORMATION CONTAINS MORE DETAILED INFORMATION ABOUT THESE PRACTICES, INCLUDING LIMITATIONS DESIGNED TO REDUCE THESE RISKS. OPTIONS. The Fund may seek to increase its current return by writing covered call and put options on securities it owns or in which it may invest. The Fund receives a premium from writing a call or put option, which increases the Fund's return if the option expires unexercised or is closed out at a net profit. When the Fund writes a call option, it gives up the opportunity to profit from any increase in the price of a security above the exercise price of the option; when it writes a put option, the Fund takes the risk that it will be required to purchase a security from the option holder at a price above the current market price of the security. 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 may also buy and sell put and call options for hedging purposes. The Fund may also from time to time buy and sell combinations of put and call options on the same underlying security to earn additional income. The aggregate value of the securities underlying the options may not exceed 25% of the Fund's assets. The Fund's use of these strategies may be limited by applicable law. SECURITIES LOANS, REPURCHASE AGREEMENTS AND FORWARD COMMITMENTS. The Fund may lend portfolio securities amounting to not more than 25% of its assets to broker-dealers and may enter into repurchase agreements on up to 25% of its assets. These transactions must be fully collateralized at all times. The Fund may also purchase securities for future delivery, which may increase its overall investment exposure and involves a risk of loss if the value of the securities declines prior to the settlement date. These transactions involve some risk to the Fund if the other party should default on its obligation and the Fund is delayed or prevented from recovering the collateral or completing the transaction. LIMITING INVESTMENT RISK SPECIFIC INVESTMENT RESTRICTIONS HELP THE FUND LIMIT INVESTMENT RISKS FOR ITS SHAREHOLDERS. THESE RESTRICTIONS PROHIBIT THE FUND FROM: acquiring more than 10% of the voting securities of any one issuer* and investing more than: (a) (with respect to 75% of the Fund's total assets) 5% of its total assets in the securities of any one issuer (other than securities issued or guaranteed as to interest and principal by the U.S. government or its agencies or instrumentalities);* (b) 5% of its net assets in companies that, together with any predecessors, have been in operation less than three years and in equity securities (other than securities restricted as to resale) that do not have readily available market quotations; (c) 10% of its net assets in securities restricted as to resale;* (d) 25% of its total assets in any one industry, except the health sciences industries;* (e) 5% of its net assets in warrants or more than 2% of its net assets in warrants not listed on the New York or American Stock Exchanges; or (f) 15% of its net assets in any combination of securities that are not readily marketable, in securities restricted as to resale (excluding restricted securities that have been determined by the Trustees of the Fund (or the person designated by them to make such determinations) to be readily marketable), and in repurchase agreements maturing in more than seven days. Restrictions marked with an asterisk (*) above are summaries of fundamental policies. See the Statement of Additional Information for the full text of these policies and the Fund's other fundamental policies. Except for investment policies designated as fundamental in this Prospectus or the Statement, the investment policies described in this Prospectus and in the Statement are not fundamental policies. The Trustees may change any non-fundamental investment policies without shareholder approval. As a matter of policy, the Trustees would not materially change the Fund's investment objective without shareholder approval. HOW PERFORMANCE IS SHOWN TOTAL RETURN DATA MAY FROM TIME TO TIME BE INCLUDED IN ADVERTISEMENTS ABOUT THE FUND. "Total return" for the one-, five- and ten-year periods (or since the commencement of the public offering of the shares of a class, if shorter) through the most recent calendar quarter represents the average annual compounded rate of return on an investment of $1,000 in the Fund at the maximum public offering price (in the case of Class A shares) or reflecting the deduction of any applicable contingent deferred sales charge (in the case of Class B shares). Total return may also be presented for other periods or based on investment at reduced sales charge levels. Any quotation of total return not reflecting the maximum initial sales charge or contingent deferred sales charge would be reduced if such sales charges were used. Quotations of total return for any period when an expense limitation was in effect will be greater than if the limitation had not been in effect. The Fund's performance may be compared to various indices. See the Statement of Additional Information. ALL DATA IS BASED ON THE FUND'S PAST INVESTMENT RESULTS AND DOES NOT PREDICT FUTURE PERFORMANCE. Investment performance, which will vary, is based on many factors, including market conditions, the composition of the Fund's portfolio, the Fund's operating expenses and which class of shares you purchase. Investment performance also often reflects the risks associated with the Fund's investment objective and policies. These factors should be considered when comparing the Fund's investment results to those of other mutual funds and other investment vehicles. HOW THE FUND IS MANAGED THE TRUSTEES OF THE FUND ARE RESPONSIBLE FOR GENERALLY OVERSEEING THE CONDUCT OF THE FUND'S 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. Joanne Soja, Senior Vice President of Putnam Management and Vice President of the Fund, has had primary responsibility for the day-to-day management of the Fund's portfolio since June, 1993. Ms. Soja has been employed by Putnam Management since June, 1993. Prior to June, 1993, Ms. Soja was a Portfolio Manager and Analyst at Chancellor Management and prior to July, 1990, an Analyst at Putnam Management. The Fund pays all expenses not assumed by Putnam Management, including Trustees' fees, auditing, legal, custodial, investor servicing and shareholder reporting expenses, and payments under its Distribution Plans (which are in turn allocated to the relevant class of shares). The Fund also reimburses Putnam Management for the compensation and related expenses of certain officers of the Fund and their staff who provide administrative services to the Fund. The total reimbursement is determined annually by the Trustees. Putnam Management places all orders for purchases and sales of the Fund's securities. In selecting broker-dealers, Putnam Management may consider research and brokerage services furnished to it and its affiliates. Subject to seeking the most favorable price and execution available, 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. ORGANIZATION AND HISTORY Putnam Health Sciences Trust is a Massachusetts business trust organized on January 28, 1982. 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, diversified management investment company with an unlimited number of authorized shares of beneficial interest. Shares of the Fund may, without shareholder approval, be divided into two or more classes of shares having such preferences and special or relative rights and privileges as the Trustees determine. The Fund's shares are currently divided into three classes, two of which are currently being offered. Each share has one vote, with fractional shares voting proportionally. Shares of each class will vote together as a single class except when 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 Declaration of Trust. If you own fewer shares than a minimum amount set by the Trustees (presently 20 shares), the Fund may choose to redeem your shares and pay you for them. You will receive at least 30 days' written notice before the Fund redeems your shares, and you may purchase additional shares at any time to avoid a redemption. The Fund may also redeem shares if you own shares above a maximum amount set by the Trustees. There is presently no maximum, but the Trustees may establish one at any time, which could apply to both present and future shareholders. THE FUND'S TRUSTEES: GEORGE PUTNAM,* CHAIRMAN. President of the Putnam funds. Chairman and Director of Putnam Management and Putnam Mutual Funds Corp. ("Putnam Mutual Funds"). Director, Marsh & McLennan Companies, Inc.; WILLIAM F. POUNDS, VICE CHAIRMAN. Professor of Management, Alfred P. Sloan School of Management, M.I.T. ; JAMESON A. BAXTER, President, Baxter Associates, Inc. ; HANS H. ESTIN, Vice Chairman, North American Management; JOHN A. HILL, Principal and Managing Director, First Reserve Corporation; ELIZABETH T. KENNAN, President, Mount Holyoke College; LAWRENCE J. LASSER,* Vice President of the Putnam funds. President, Chief Executive Officer and Director of Putnam Investments, Inc. and Putnam Management. Director, Marsh & McLennan Companies, Inc.; ROBERT E. PATTERSON, Executive Vice President, Cabot Partners Limited Partnership; DONALD S. PERKINS, Director of various corporations, including AT&T, K mart Corporation and Time Warner Inc.; GEORGE PUTNAM, III,* President, New Generation Research, Inc.; A.J.C. SMITH,* Chairman, Chief Executive Officer and Director, Marsh & McLennan Companies, Inc.; and W. NICHOLAS THORNDIKE, Director of various corporations and charitable organizations, including Providence Journal Co. Also, Trustee and President, Massachusetts General Hospital and Trustee of Eastern Utilities Associates. The Fund's Trustees are also Trustees of the other Putnam funds. Those marked with an asterisk (*) are "interested persons" of the Fund, Putnam Management or Putnam Mutual Funds. ABOUT YOUR INVESTMENT ALTERNATIVE SALES ARRANGEMENTS The Fund offers investors two classes of shares which bear sales charges in different forms and amounts and which bear different levels of expenses: CLASS A SHARES. An investor who purchases Class A shares pays a sales charge at the time of purchase. As a result, Class A shares are not subject to any charges when they are redeemed (except for sales at net asset value in excess of $1 million which are subject to a contingent deferred sales charge). Certain purchases of Class A shares qualify for reduced sales charges. Class A shares currently bear a 12b-1 fee at the annual rate of 0.25% of the Fund's average net assets attributable to Class A shares. See "How to buy shares - Class A shares." CLASS B SHARES. Class B shares are sold without an initial sales charge, but are subject to a contingent deferred sales charge of up to 5% if redeemed within six years. Class B shares also bear a higher 12b-1 fee than Class A shares, currently at the annual rate of 1.00% of the Fund's average net assets attributable to Class B shares. Class B shares will automatically convert into Class A shares, based on relative net asset value, approximately eight years after purchase. Class B shares provide an investor the benefit of putting all of the investor's dollars to work from the time the investment is made, but (until conversion) will have a higher expense ratio and pay lower dividends than Class A shares due to the higher 12b-1 fee. See "How to buy shares - Class B shares." WHICH ARRANGEMENT IS BETTER FOR YOU? The decision as to which class of shares provides a more suitable investment for an investor depends on a number of factors, including the amount and intended length of the investment. Investors making investments that qualify for reduced sales charges might consider Class A shares. Investors who prefer not to pay an initial sales charge might consider Class B shares. Orders for Class B shares for $250,000 or more will be treated as orders for Class A shares or declined. For more information about these sales arrangements, consult your investment dealer or Putnam Investor Services. Sales personnel may receive different compensation depending on which class of shares they sell. Shares may only be exchanged for shares of the same class of another Putnam fund. See "How to exchange shares". HOW TO BUY SHARES You can open a Fund account with as little as $500 and make additional investments at any time with as little as $50. You can buy Fund shares three ways - through most investment dealers, through Putnam Mutual Funds (at 1-800-225-1581), or through a systematic investment plan. If you do not have a dealer, Putnam Mutual Funds can refer you to one. BUYING SHARES THROUGH PUTNAM MUTUAL FUNDS. Complete an order form and return it with a check payable to the Fund to Putnam Mutual Funds, which will act as your agent in purchasing shares through your designated investment dealer. BUYING SHARES THROUGH SYSTEMATIC INVESTING. You can make regular investments of $25 or more per month through automatic deductions from your bank checking account. Application forms are available from your investment dealer or through Putnam Investor Services. Shares are sold at the public offering price based on the net asset value next determined after Putnam Investor Services receives your order. In most cases, in order to receive that day's public offering price, Putnam Investor Services must receive your order before the close of regular trading on the New York Stock Exchange. If you buy shares through your investment dealer, the dealer must receive your order before the close of regular trading on the New York Stock Exchange to receive that day's public offering price. CLASS A SHARES The public offering price of Class A shares is the net asset value plus a sales charge. The Fund receives the net asset value. The sales charge varies depending on the size of your purchase and is allocated between your investment dealer and Putnam Mutual Funds. The current sales charges are:
SALES CHARGE AMOUNT OF AS A PERCENTAGE OF: SALES CHARGE ------------------ REALLOWED NET TO DEALERS AMOUNT OF TRANSACTION AMOUNT OFFERING AS A PERCENTAGE AT OFFERING PRICE INVESTED PRICE OF OFFERING PRICE* - ------------------------------------------------------------------------------------- Less than $ 50,000 6.10% 5.75% 5.00% - ------------------------------------------------------------------------------------- $ 50,000 but less than 100,000 4.71 4.50 3.75 - ------------------------------------------------------------------------------------- 100,000 but less than 250,000 3.63 3.50 2.75 - ------------------------------------------------------------------------------------- 250,000 but less than 500,000 2.56 2.50 2.00 - ------------------------------------------------------------------------------------- 500,000 but less than 1,000,000 2.04 2.00 1.75 - ------------------------------------------------------------------------------------- /TABLE *At the discretion of Putnam Mutual Funds, however, the entire sales charge may at times be reallowed to dealers. The Staff of the Securities and Exchange Commission has indicated that dealers who receive more than 90% of the sales charge may be considered underwriters. There is no initial sales charge on purchases of Class A shares of $1 million or more. However, a contingent deferred sales charge ("CDSC") of 1.00% or 0.50%, respectively, is imposed on redemptions of such shares within the first or second year after purchase , based on the lower of the shares' cost and current net asset value . Any shares acquired by reinvestment of distributions will be redeemed without a CDSC. Shares purchased by participant-directed qualified retirement plans sponsored by employers with more than 750 employees or investing $1 million or more are not subject to the CDSC. In addition, shares purchased by certain investors investing $1 million or more that have made arrangements with Putnam Mutual Funds and whose dealer of record waived the commission described in the next paragraph are not subject to the CDSC. In determining whether a CDSC is payable, the Fund will first redeem shares not subject to any charge. Putnam Mutual Funds receives the entire amount of any CDSC you pay. See the Statement of Additional Information for more information about the CDSC. Except as stated below, Putnam Mutual Funds pays investment dealers of record commissions on sales of Class A shares of $1 million or more based on an investor's cumulative purchases during the one-year period beginning with the date of the initial purchase at net asset value and each subsequent one-year period beginning with the first purchase at net asset value following the end of the prior period. Such commissions are paid at the rates 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 participant-directed qualified retirement plan initially investing less than $20 million in Putnam funds and other investments managed by Putnam Management or its affiliates (including a plan sponsored by an employer with more than 750 employees), Putnam Mutual Funds pays commissions on cumulative purchases during the life of the account at the rates of 1.00% of the amount under $3 million and 0.50% thereafter. On sales at net asset value to all other participant-directed qualified retirement plans, Putnam Mutual Funds pays commissions on the initial investment and on subsequent net quarterly sales at the rate of 0.15%. YOU MAY BE ELIGIBLE TO BUY CLASS A SHARES AT REDUCED SALES CHARGES. Consult your investment dealer or Putnam Mutual Funds for details about Putnam's Combined Purchase Privilege, Cumulative Quantity Discount, Statement of Intention, Group Sales Plan, Employee Benefit Plans and other plans. Descriptions are also included in the order form and in the Statement of Additional Information. Shares may also be sold at net asset value to certain categories of investors , and the CDSC may be waived under certain circumstances . See "How to buy shares -- General" below. CLASS B SHARES Class B shares are sold without an initial sales charge, although a CDSC will be imposed if you redeem shares within six years of purchase. No sales charge is imposed on increases in net asset value above the initial purchase price. The following types of shares may be redeemed without charge at any time: (i) shares acquired by reinvestment of distributions and (ii) shares otherwise exempt from the CDSC, as described below. Subject to the foregoing exclusions, the amount of the charge is determined as a percentage of the lesser of the current market value or the cost of the shares being redeemed. Therefore when a share is redeemed, any increase in its value above the initial purchase price is not subject to any CDSC. The amount of the CDSC will depend on the number of years since you invested and the dollar amount being redeemed, according to the following table: CONTINGENT DEFERRED SALES CHARGE AS A PERCENTAGE OF YEARS SINCE PURCHASE DOLLAR AMOUNT PAYMENT MADE SUBJECT TO CHARGE - ----------------------------------------------------------------- 0-1 5.0% 1-2 4.0% 2-3 3.0% 3-4 3.0% 4-5 2.0% 5-6 1.0% 6 and thereafter None In determining whether a CDSC is payable on any redemption, the Fund will first redeem shares not subject to any charge, and then shares held longest during the six-year period. For information on how sales charges are calculated if you exchange your shares, see "How to exchange shares." Putnam Mutual Funds receives the entire amount of any CDSC you pay. CONVERSION OF CLASS B SHARES. Class B shares will automatically convert into Class A shares at the end of the month eight years after the purchase date, except as noted below. Class B shares acquired by exchange from 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 continuing availability of a ruling from the Internal Revenue Service or an opinion of counsel that such conversions will not constitute taxable events for federal tax purposes. There can be no assurance that such ruling or opinion will be available, and the conversion of Class B shares to Class A shares will not occur if such ruling or opinion is not available. In such event, Class B shares would continue to be subject to higher expenses than Class A shares for an indefinite period. GENERAL The Fund may sell Class A shares and Class B shares at net asset value without an initial sales charge or a CDSC to the Fund's current and retired Trustees (and their families), current and retired employees (and their families) of Putnam Management and affiliates, registered representatives and other employees (and their families) of broker-dealers having sales agreements with Putnam Mutual Funds, employees (and their families) of financial institutions having sales agreements with Putnam Mutual Funds (or otherwise having an arrangement with a broker-dealer or financial institution with respect to sales of Fund shares), financial institution trust departments investing an aggregate of $1 million or more in Putnam funds, clients of certain administrators of tax-qualified plans, employee benefit plans of companies with more than 750 employees, tax-qualified plans when proceeds from repayments of loans to participants are invested (or reinvested) in Putnam funds, "wrap accounts" for the benefit of clients of broker-dealers, financial institutions or financial planners adhering to certain standards established by Putnam Mutual Funds, and investors meeting certain requirements who sold shares of certain Putnam closed-end funds pursuant to a tender offer by the closed-end fund. In addition, the Fund may sell shares at net asset value without an initial sales charge or a CDSC in connection with the acquisition by the Fund of assets of an investment company or personal holding company, and the CDSC will be waived on redemptions of shares arising out of death or disability or in connection with certain withdrawals from IRA or other retirement plans. Up to 12% of the value of Class B shares subject to a Systematic Withdrawal Plan may also be redeemed each year without a CDSC. See the Statement of Additional Information. Shareholders of other Putnam funds may be entitled to exchange their shares for, or reinvest distributions from their funds in, shares of the Fund at net asset value. If you are considering redeeming or exchanging shares or transferring shares to another person shortly after purchase, you should pay for those shares with a certified check to avoid any delay in redemption, exchange or transfer. Otherwise the Fund may delay payment until the purchase price of those shares has been collected or, if you redeem by telephone, until 15 calendar days after the purchase date. To eliminate the need for safekeeping, the Fund will not issue certificates for your shares unless you request them. Putnam Mutual Funds may, at its expense, provide additional promotional incentives or payments to dealers that sell shares of the Putnam funds. In some instances, these incentives or payments may be offered only to certain dealers who have sold or may sell significant amounts of shares. Certain dealers may not sell all classes of shares. DISTRIBUTION PLANS CLASS A DISTRIBUTION PLAN. The purpose of the Class A Plan is to permit the Fund to compensate Putnam Mutual Funds for services provided and expenses incurred by it in promoting the sale of Class A shares of the Fund, reducing redemptions, or maintaining or improving services provided to shareholders by Putnam Mutual Funds or dealers. The Class A Plan provides for payments by the Fund to Putnam Mutual Funds at the annual rate of up to 0.35% of the Fund's average net assets attributable to Class A shares, subject to the authority of the Fund's Trustees to reduce the amount of payments or to suspend the Class A Plan for such periods as they may determine. Subject to these limitations, the amount of such payments and the specific purposes for which they are made shall be determined by the Trustees of the Fund. At present, the Trustees have approved payments under the Class A Plan at the annual rate of 0.25% of the Fund's average net assets attributable to Class A shares for the purpose of compensating Putnam Mutual Funds for services provided and expenses incurred by it as principal underwriter of the Fund's Class A shares, including payments made by it to dealers under the Service Agreements referred to below. Should the Trustees decide in the future to approve payments in excess of this amount, shareholders will be notified and this Prospectus will be revised. In order to compensate investment dealers (including, for this purpose, certain financial institutions) for services provided in connection with sales of Class A shares and the maintenance of shareholder accounts , Putnam Mutual Funds makes quarterly payments to qualifying dealers based on the average net asset value of Class A shares of the Fund which are attributable to shareholders for whom the dealers are designated as the dealer of record. This calculation excludes until one year after purchase shares purchased at net asset value after March 31, 1994 by shareholders investing $1 million or more and by participant- directed qualified retirement plans sponsored by employers with more than 750 employees ("NAV Shares"), except for shares owned by certain investors investing $1 million or more that have made arrangements with Putnam Mutual Funds and whose dealer of record waived the sales commission. Except as stated below, Putnam Mutual Funds makes such payments at the annual rate of 0.20% of such average net asset value for Class A shares outstanding as of December 31, 1989 and 0.25% of such average net asset value for shares acquired after that date (including shares acquired through reinvestment of distributions). For participant- directed qualified retirement plans initially investing less than $20 million in Putnam funds and other investments managed by Putnam Management or its affiliates, Putnam Mutual Funds' payments to qualifying dealers on NAV Shares are 100% of the rate stated above if average plan assets in Putnam funds (excluding money market funds) during the quarter are less than $20 million, 60% of the stated rate if average plan assets are at least $20 million but less than $30 million, and 40% of the stated rate if average plan assets are $30 million or more. For all other participant-directed qualified retirement plans purchasing NAV Shares, Putnam Mutual Funds makes quarterly payments to qualifying dealers at the annual rate of 0.10% of the average net asset value of such shares. CLASS B DISTRIBUTION PLAN. The Class B Plan provides for payments by the Fund to Putnam Mutual Funds at the annual rate of up to 1.00% of the Fund's average net assets attributable to Class B shares, subject to the authority of the Trustees to reduce the amount of payments or to suspend the Class B Plan for such periods as they may determine. Putnam Mutual Funds also receives the proceeds of any CDSC imposed on redemptions of such shares. Although Class B shares are sold without an initial sales charge, Putnam Mutual Funds pays a sales commission equal to 4.00% of the amount invested to dealers who sell Class B shares. These commissions are not paid on exchanges from other Putnam funds and sales to investors exempt from the CDSC. In addition, in order to further compensate dealers (including, for this purpose, certain financial institutions) for services provided in connection with sales of Class B shares and the maintenance of shareholder accounts, Putnam Mutual Funds makes quarterly payments to qualifying dealers based on the average net asset value of Class B shares which are attributable to shareholders for whom the dealers are designated as the dealer of record. Putnam Mutual Funds makes such payments at an annual rate of 0.25% of such average net asset value of such shares. GENERAL. Putnam Mutual Funds may suspend or modify the payments made to dealers described above, and such payments are subject to the continuation of the relevant Plan described above, the terms of Service Agreements between dealers and Putnam Mutual Funds, and any applicable limits imposed by the National Association of Securities Dealers, Inc. HOW TO SELL SHARES You can sell your shares to the Fund any day the New York Stock Exchange is open, either directly to the Fund or through your investment dealer. The Fund will only repurchase shares for which it has received payment. SELLING SHARES DIRECTLY TO THE FUND. Send a signed letter of instruction or stock power form to Putnam Investor Services, along with any certificates that represent shares you want to sell. The price you will receive is the next net asset value calculated after the Fund receives your request in proper form less any applicable CDSC. In order to receive that day's net asset value, Putnam Investor Services must receive your request before the close of regular trading on the New York Stock Exchange. If you sell shares having a net asset value of $100,000 or more, the signatures of registered owners or their legal representatives must be guaranteed by a bank, broker-dealer or certain other financial institutions. See the Statement of Additional Information for more information about where to obtain a signature guarantee. Stock power forms are available from your investment dealer, Putnam Investor Services and many commercial banks. If you want your redemption proceeds sent to an address other than your address as it appears on Putnam's records, a signature guarantee is required. 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. THE FUND GENERALLY SENDS YOU PAYMENT FOR YOUR SHARES THE BUSINESS DAY AFTER YOUR REQUEST IS RECEIVED. Under unusual circumstances, the Fund may suspend repurchases, or postpone payment for more than seven days, as permitted by federal securities law. You may use Putnam's Telephone Redemption Privilege to redeem shares valued up to $100,000 from your account, unless you have notified Putnam Investor Services of an address change within the preceding 15 days. Unless an investor indicates otherwise on the Account Application, Putnam Investor Services will be authorized to act upon redemption and transfer instructions received by telephone from a shareholder, or any person claiming to act as his or her representative, who can provide Putnam Investor Services with his or her account registration and address as it appears on Putnam Investor Services' records. Putnam Investor Services will employ these and other reasonable procedures to confirm that instructions communicated by telephone are genuine; if it fails to employ reasonable procedures, Putnam Investor Services may be liable for any losses due to unauthorized or fraudulent instructions. For information, consult Putnam Investor Services. During periods of unusual market changes and shareholder activity, you may experience delays in contacting Putnam Investor Services by telephone in which case you may wish to submit a written redemption request, as described above, or contact your investment dealer, as described below. The Telephone Redemption Privilege is not available if you were issued certificates for your shares which remain outstanding. The Telephone Redemption Privilege may be modified or terminated without notice. SELLING SHARES THROUGH YOUR INVESTMENT DEALER. Your dealer must receive your request before the close of regular trading on the New York Stock Exchange to receive that day's net asset value. Your dealer will be responsible for furnishing all necessary documentation to Putnam Investor Services, and may charge for its services. HOW TO EXCHANGE SHARES You can exchange your shares for shares of the same class of certain other Putnam funds at net asset value beginning 15 days after purchase. Not all Putnam funds offer more than one class of shares. If the other Putnam fund offers only one class of shares, only Class A shares may be exchanged for such class. If you exchange shares subject to a CDSC, the transaction will not be subject to the CDSC. However, when you redeem the shares acquired through the exchange, the redemption may be subject to the CDSC, depending upon when you originally purchased the shares and using the schedule of any fund into or from which you have exchanged your shares that would result in your paying the highest CDSC applicable to your class of shares. For purposes of computing the CDSC, 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 exchange. To exchange your shares, simply complete an Exchange Authorization Form and send it to Putnam Investor Services. Exchange Authorization Forms are available by calling or writing Putnam Investor Services. For federal income tax purposes, an exchange is treated as a sale of shares and generally results in a capital gain or loss. A Telephone Exchange Privilege is currently available for amounts up to $500,000. Putnam Investor Services' procedures for telephonic transactions are described above under "How to sell shares." The Telephone Exchange Privilege is not available if you were issued certificates for shares which remain outstanding. Ask your investment dealer or Putnam Investor Services for prospectuses of other Putnam funds. Shares of certain Putnam funds are not available to residents of 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 the excessive exchange activity and in other circumstances where the Trustees or Putnam Management believes doing so would be in 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. Shareholders would be notified of any such action to the extent required by law. Consult Putnam Investor Services before requesting an exchange. See the Statement of Additional Information to find out more about the exchange privilege. HOW THE FUND VALUES ITS SHARES THE FUND CALCULATES THE NET ASSET VALUE OF A SHARE OF EACH CLASS BY DIVIDING THE TOTAL VALUE OF ITS ASSETS, LESS LIABILITIES, BY THE NUMBER OF ITS SHARES OUTSTANDING. Shares are valued as of the close of regular trading on the New York Stock Exchange each day the Exchange is open. Portfolio securities for which market quotations are readily available are stated at market value. Short-term investments that will mature in 60 days or less are stated at amortized cost, which approximates market value. All other securities and assets are valued at their fair value following procedures approved by the Trustees. HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION The Fund distributes any net investment income and any net realized capital gains at least annually. Distributions from net investment income, if any, are expected to be small. Distributions from capital gains are made after applying any available capital loss carryovers. Distributions paid by the Fund with respect to Class A shares will generally be greater than those paid with respect to Class B shares because expenses attributable to Class B shares will generally be higher. YOU CAN CHOOSE FROM THREE DISTRIBUTION OPTIONS: (1) reinvest all distributions in additional Fund shares without a sales charge; (2) receive distributions from net investment income in cash while reinvesting capital gains distributions in additional shares without a sales charge; or (3) receive all distributions in cash. You can change your distribution option by notifying Putnam Investor Services in writing. If you do not select an option when you open your account, all distributions will be reinvested. All distributions not paid in cash will be reinvested in shares of the class on which the distribution was paid. You 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. If a check representing a Fund distribution is not cashed within a specified period, Putnam Investor Services will notify you that you have the option of requesting another check or reinvesting the distribution in the Fund or in another Putnam fund. If Putnam Investor Services does not receive your election, the distribution will be reinvested in the Fund . Similarly, if 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. The Fund intends to qualify as a "regulated investment company" for federal income tax purposes and to meet all other requirements that are necessary for it to be relieved of federal taxes on income and gains it distributes to shareholders. The Fund will distribute substantially all of its ordinary income and capital gain net income on a current basis. All Fund distributions will be taxable to you as ordinary income, except that any distributions of net long-term capital gains will be taxed as such, regardless of how long you have held the shares. Distributions will be taxable as described above whether received in cash or in shares through the reinvestment of distributions. Early in each year the Fund will notify you of the amount and tax status of distributions paid to you by the Fund for the preceding year. The foregoing is a summary of certain federal income tax consequences of investing in the Fund. You should consult your tax adviser to determine the precise effect of an investment in the Fund on your particular tax situation (including possible liability for state and local taxes). ABOUT PUTNAM INVESTMENTS, INC. PUTNAM MANAGEMENT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1937. Putnam Mutual Funds is the principal underwriter of the Fund and of other Putnam funds. Putnam Fiduciary Trust Company is the Fund's custodian. Putnam Investor Services, a division of Putnam Fiduciary Trust Company, is the Fund's investor servicing and transfer agent. Putnam Management, Putnam Mutual Funds and Putnam Fiduciary Trust Company are subsidiaries of Putnam Investments, Inc., which is wholly-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. PUTNAM HEALTH SCIENCES TRUST One Post Office Square Boston, MA 02109 FUND INFORMATION: INVESTMENT MANAGER Putnam Investment Management, Inc. One Post Office Square Boston, MA 02109 MARKETING SERVICES Putnam Mutual Funds Corp. One Post Office Square Boston, MA 02109 INVESTOR SERVICING AGENT Putnam Investor Services Mailing address: P.O. Box 41203 Providence, RI 02940-1203 CUSTODIAN Putnam Fiduciary Trust Company One Post Office Square Boston, MA 02109 LEGAL COUNSEL Ropes & Gray One International Place Boston, MA 02110 INDEPENDENT ACCOUNTANTS Coopers & Lybrand One Post Office Square Boston, MA 02109 PUTNAMINVESTMENTS One Post Office Square Boston, Massachusetts 02109 Toll-free 1-800-225-1581 Differences between the typeset (printed) prospectus and the EDGAR filing version. 1. Each interior page of the prospectus includes the word "prospectus" at the bottom of the page. 2. Pagination is different in printed prospectus. 3. Section headings and subheadings in the printed prospectus are printed in boldface type with colored ink. 4. The first page of the printed prospectus contains an illustration of balanced scales, Putnam's logo. 5. The last page of the printed prospectus contains a graphic recyclable logo. -----END PRIVACY-ENHANCED MESSAGE-----