-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R83LjF0WK5BYvSXClfRIGr/VkKsdUUGtsryODJzAr9sCjOm04oroZ5Mt+s2jiNlb 6z3tZDlqz9eFqBGZUmE+gQ== 0000928816-96-000137.txt : 19960529 0000928816-96-000137.hdr.sgml : 19960529 ACCESSION NUMBER: 0000928816-96-000137 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960528 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM MONEY MARKET FUND CENTRAL INDEX KEY: 0000081248 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046386436 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-02608 FILM NUMBER: 96572831 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQ STREET 2: MAILSTOP A-14 LEGAL DEPARTMENT CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6172921141 MAIL ADDRESS: STREET 1: MAILSTOP A-14 LEGAL DEPARTMENT STREET 2: ONE POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM DAILY DIVIDEND TRUST DATE OF NAME CHANGE: 19920703 N-30D 1 PUTNAM MONEY MARKET FUND Putnam Money Market Fund SEMIANNUAL REPORT March 31, 1996 [LOGO: BOSTON * LONDON * TOKYO] Fund highlights * "Should the interest rate environment change, our strategy will include focusing on maximizing income while maintaining a very high-quality portfolio of securities." -- Lindsey C. Strong, Manager Putnam Money Market Fund CONTENTS 4 Report from Putnam Management 7 Fund performance summary 10 Portfolio holdings 13 Financial statements [GRAPHIC OMMITTED: photo of George Putnam] (copyright) Karsh, Ottawa From the Chairman Dear Shareholder: For most of the first half of Putnam Money Market Fund's current fiscal year, the six months ended March 31, 1996, bonds enjoyed one of the most vibrant markets in recent memory, only to turn abruptly downward toward the end of the period. The bond market was reacting to concern over a pickup in inflation resulting from economic overheating. Fund Manager Lindsey C. Strong, foreseeing the potential for such volatility, had earlier shifted your fund's portfolio to shorter maturities. This move gave the fund a considerable advantage over many other funds. With the portfolio concentrated in high-quality corporate issues and shorter-term government agency securities, Lindsey believes share price and income stream should be preserved in a market environment that may remain somewhat unsettled over the next few months. She provides a full discussion of your fund's performance and outlook in the report that follows. Respectfully yours, /S/George Putnam George Putnam Chairman of the Trustees May 15, 1996 Report from the Fund Manager Lindsey C. Strong For the six months ended March 31, 1996, Putnam Money Market Fund continued to provide a competitive total return, while focusing on capital preservation and maintaining a stable $1.00 share price. Throughout the period, we maintained the fund's conservative investment strategy, which emphasizes short-term instruments of the highest quality in its pursuit of current income. * PORTFOLIO MATURITIES ADJUSTED IN A SHIFTING ECONOMY During the semiannual period, the economic environment in which your fund was managed shifted from one of slow economic growth and declining interest rates to one of stronger growth and uncertainty about the direction of interest rates. Because money market funds mainly invest in short-term government and corporate debt, their yields rise and fall with the short-term interest rates that are controlled by the Federal Reserve Board. The slow-growth, low-inflation environment that persisted throughout 1995 prompted the Fed to trim short-term interest rates by one quarter of a percentage point in December 1995 and again in January 1996. In this declining interest rate environment, our strategy emphasized extending the fund's average maturity in order to lock in higher yields. However, early in 1996, stronger-than-expected economic growth began to raise concerns that inflation might rise faster than had been previously thought. February's employment gain figures were twice what analysts had forecast, fueling these concerns. March employment statistics were also robust. While the Fed took no action in February and March, many analysts believe that the strong economic news makes additional interest rate declines unlikely. Because of the uncertainty of this investment climate, we have adopted a more neutral strategy. We began to reduce the fund's average maturity so we would be in a position to take advantage of incrementally higher yields, should interest rates begin to rise. * CREDIT ANALYSIS AND DIVERSIFICATION REMAIN ESSENTIAL Maintaining the fund's superior quality and stable $1.00 share price have always been two of our highest priorities. The money market instruments for the fund must be rated in one of the two highest categories by at least two nationally recognized rating services at the time of purchase. If only one rating service has evaluated the security, it must be rated in one of the two highest categories by that service. If the securities are unrated, they must be judged by Putnam Management to be of equivalent quality. We believe this stringent investment policy of including only the highest-quality securities in the portfolio has led to your fund's consistent and positive results. Your fund's manager also takes care to build and maintain a prudently diversified portfolio. In today's complex economic environment, we believe diversification is especially important. We diversify the fund by investing in a variety of traditional money market securities such as commercial paper, U.S. government and agency obligations, bank notes, certificates of deposit, and repurchase agreements. * OUR OUTLOOK We are cautiously optimistic in our outlook for the economy and interest rates. Rising long-term interest rates, a weak bond market, and strong employment data suggest that more robust economic growth and possibly higher inflation may be ahead. We believe short-term interest rates could remain at current levels or edge upward. Given this projected environment, we plan to maintain the fund's average maturity at a neutral level. In our opinion, this should keep the fund sufficiently flexible to take advantage of buying opportunities that may arise, while protecting its income stream. The views expressed throughout the report are exclusively those of Putnam Management and are not meant as investment advice. Although the described holdings were viewed favorably as of 3/31/96, there is no guarantee the fund will continue to hold these securities in the future. PERFORMANCE COMPARISONS (3/31/96) Current return - ------------------------------------------------------------- Passbook savings account 2.00% - ------------------------------------------------------------- Taxable money market fund 7-day yield 4.79 - ------------------------------------------------------------- 3-month certificate of deposit (as of 4/1/96) 4.04 - ------------------------------------------------------------- Putnam Money Market Fund (7-day yield) - ------------------------------------------------------------- Class A 4.95 - ------------------------------------------------------------- Class B 4.45 - ------------------------------------------------------------- Class M 4.80 - ------------------------------------------------------------- The net asset value of money market mutual funds is uninsured and designed to be fixed, while distributions vary daily. Investment returns will fluctuate. The principal value on passbook savings and bank CDs are generally insured up to certain limits by state and federal agencies. CDs, unlike stocks which incur more risks, offer a fixed rate of return. Unlike money market funds, early withdrawals from bank CDs may be subject to substantial penalties. Sources: Bank of Boston (passbook savings), Bank Rate Monitor (3-month CDs), IBC/Donaghue's Money Fund Report (taxable money market fund 7-day yield). Performance summary Performance should always be considered in light of a fund's investment strategy. Putnam Money Market Fund is designed for investors seeking current income consistent with capital preservation, stable principal, and liquidity. This section provides, at a glance, information about your fund's performance. Total return shows how the value of the fund's shares changed over time, assuming you held the shares through the entire period and reinvested all distributions in the fund. TOTAL RETURN FOR PERIODS ENDED 3/31/96 Class A Class B Class M (inception date) (10/1/76) (4/27/92) (12/8/94) NAV NAV NAV - ----------------------------------------------------------------------- 6 months 2.63% 2.38% 2.54% - ----------------------------------------------------------------------- 1 year 5.43 4.90 5.26 - ----------------------------------------------------------------------- 5 years 22.09 -- -- Annual average 4.07 -- -- - ----------------------------------------------------------------------- 10 years 72.48 -- -- Annual average 5.60 -- -- - ----------------------------------------------------------------------- Life of class -- 13.88 7.08 Annual average -- 3.36 5.28 - ----------------------------------------------------------------------- COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 3/31/96 Lipper Money Market Consumer Fund Index Price Index - ----------------------------------------------------------------------- 6 months 2.58% 1.63% - ----------------------------------------------------------------------- 1 year 5.41 2.84 - ----------------------------------------------------------------------- 5 years 22.61 15.33 Annual average 4.16 2.89 - ----------------------------------------------------------------------- 10 years 74.53 43.11 Annual average 5.73 3.65 - ----------------------------------------------------------------------- Life of class B 16.25 11.61 Annual average 3.92 2.84 - ----------------------------------------------------------------------- Life of class M 7.29 4.01 Annual average 5.42 3.00 - ----------------------------------------------------------------------- Fund performance data do not take into account any adjustment for taxes payable on reinvested distributions. Performance data represent past results and are not indicative of future returns. Investment returns will fluctuate. An investment in the fund is neither insured nor guaranteed by the U.S. government. There can be no assurance that the fund will be able to maintain a stable net asset value of $1.00 per share. The fund's holdings do not match those in the Lipper Average. TERMS AND DEFINITIONS Class A shares generally are fund shares purchased with an initial sales charge. In the case of your fund, which has no sales charge, the reference is to shares purchased or acquired through the exchange of class A shares from another Putnam fund. Exchange of your fund's class A shares into another fund may involve a sales charge, however. Class B shares generally are fund shares purchased with no initial sales charge but subject to a contingent deferred sales charge (CDSC) upon redemption. However, class B shares of your fund can be acquired only through exchange of class B shares from another fund or purchased by certain systematic plan shareholders. A contingent deferred sales charge is a charge applied at the time of redemption of class B shares and assumes redemption at the end of the period. The CDSC schedule will vary depending on whether the shares were acquired through exchange or through a systematic investment plan purchase. Consult your prospectus for details. Class M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no sales charge on redemption. In the case of your fund, which has no sales charge, exchange of your fund's class M shares into another fund may involve a sales charge, however. Net asset value (NAV) is the value of all fund assets, minus liabilities, divided by the number of outstanding shares. It does not include any initial or contingent deferred sales charge. COMPARATIVE BENCHMARKS Lipper Money Market Fund Index, used for performance comparison purposes, is an arithmetic average of the total return of all money market mutual funds tracked by Lipper Analytical Services (Lipper). Lipper is an independent rating organization for the mutual fund industry. Lipper rankings vary for other periods. Consumer Price Index (CPI) is a commonly used measure of inflation; it does not represent an investment return. PUTNAM GROWTH FUNDS Asia Pacific Growth Fund Capital Appreciation Fund Diversified Equity Trust Europe Growth Fund Global Growth Fund Health Sciences Trust International New Opportunities Fund Investors Fund Natural Resources Fund New Opportunities Fund OTC Emerging Growth Fund Overseas Growth Fund Vista Fund Voyager Fund Voyager Fund II PUTNAM GROWTH AND INCOME FUNDS Balanced Retirement Fund Convertible Income-Growth Trust Equity Income Fund The George Putnam Fund of Boston The Putnam Fund for Growth and Income Growth and Income Fund II New Value Fund Utilities Growth and Income Fund PUTNAM INCOME FUNDS American Government Income Fund Diversified Income Trust Diversified Income Trust II Federal Income Trust Global Governmental Income Trust High Yield Advantage Fund High Yield Trust Income Fund Intermediate U.S. Government Income Fund Preferred Income Fund U.S. Government Income Trust PUTNAM TAX-FREE INCOME FUNDS Municipal Income Fund Tax Exempt Income Fund Tax-Free High Yield Fund Tax-Free Insured Fund State tax-free income funds* Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio and Pennsylvania LIFESTAGE SM FUNDS Putnam Asset Allocation Funds--three investment portfolios that spread your money across a variety of stocks, bonds, and money market investments to help maximize your return and reduce your risk. The three portfolios: Putnam Asset Allocation: Balanced Portfolio Putnam Asset Allocation: Conservative Portfolio Putnam Asset Allocation: Growth Portfolio MOST CONSERVATIVE INVESTMENTS+ Putnam money market funds: California Tax Exempt Money Market Fund Money Market Fund New York Tax Exempt Money Market Fund Tax Exempt Money Market Fund CDs and savings accounts++ * Not available in all states. + Relative to above. ++ Not offered by Putnam Investments. Certificates of deposit offer a fixed rate of return and may be insured up to certain limits by federal/state agencies. Savings accounts may also be insured up to certain limits. Please call your financial advisor or Putnam at 1-800-225-1581 to obtain a prospectus for any Putnam fund. It contains more complete information, including charges and expenses. Please read it carefully before you invest or send money.
Portfolio of investments owned March 31, 1996 (Unaudited) COMMERCIAL PAPER (67.8%)* MATURITY PRINCIPAL AMOUNT DATE VALUE DOMESTIC (48.5%) - ----------------------------------------------------------------------------------------------------- $20,000,000 American Telephone & Telegraph Co. 5.48s 4/17/96 $19,942,156 30,000,000 American Telephone & Telegraph Co. 5.25s 4/2/96 29,982,500 20,000,000 Bank of America 5.30s 4/17/96 19,944,055 35,000,000 Bank of America 5.05s 7/29/96 34,401,014 50,000,000 Ciesco Inc. 5.23s 4/12/96 49,898,306 25,000,000 Corporate Asset Funding Co. Inc. 5.35s 5/2/96 24,873,681 30,000,000 Corporate Asset Funding Co. Inc. 5.0s 5/16/96 29,790,800 15,000,000 Delaware Funding Corp. 5.12s (acquired 2/1/96, cost $14,808,000) ++ 5/1/96 14,929,600 45,000,000 Dresdner U. S. Finance Inc. 4.925s 8/26/96 44,076,562 15,000,000 Falcon Asset Securitization Co. 5.25s (acquired 3/15/96, cost $14,794.375) ++ 6/17/96 14,825,000 40,000,000 Falcon Asset Securitization Co. 5.16s (acquired 2/23/96, cost $39,690,400) ++ 4/17/96 39,891,067 55,000,000 Fleet Mortgage Corp 5.26s 4/1/96 54,975,891 15,000,000 Ford Motor Credit Co. 5.35s 4/12/96 14,968,791 15,000,000 Ford Motor Credit Co. 5.32s 5/3/96 14,922,416 30,000,000 Ford Motor Credit Co. 5.00s 6/13/96 29,683,333 30,000,000 General Electric Capital Services 5.52s 4/11/96 29,940,200 30,000,000 General Electric Capital Services 5.36s 5/3/96 29,843,667 30,000,000 General Motors Acceptance Corp. 5.39s 4/22/96 29,892,199 25,000,000 General Motors Acceptance Corp. 5.36s 4/15/96 24,936,722 35,000,000 IBM Credit Corp. 5.27s 4/25/96 34,861,662 25,000,000 Metlife Fuding Inc. 5.25s 6/13/96 14,833,750 25,000,000 Morgan (J.P.) & Co., Inc. 5.22s 4/8/96 24,963,750 10,000,000 National Rural Utilities Cooperative Finance Corp. 5.28s 4/16/96 9,973,600 25,000,000 National Rural Utilities Cooperative Finance Corp. 5.27s 5/13/96 24,835,312 19,000,000 National Rural Utilities Cooperative Finance Corp. 5.15s 4/15/96 18,953,793 22,000,000 Nations Bank Florida 5.26s 7/1/96 21,668,912 55,000,000 New Center Asset Trust 5.55s 4/1/96 55,000,000 20,000,000 Preferred Receivables Funding Corp. 5.45s 4/11/96 19,960,638 10,000,000 Preferred Receivables Funding Corp. 5.25s 4/2/96 9,994,167 14,025,000 Preferred Receivables Funding Corp. 5.22s 4/4/96 14,012,797 10,000,000 Preferred Receivables Funding Corp. 5.15s 4/22/96 9,965,666 30,000,000 Sears Roebuck Acceptance Corp. 5.32s 5/10/96 29,813,800 25,000,000 Sears Roebuck Acceptance Corp. 5.30s 6/18/96 24,701,875 7,300,000 Sheffield Receivables Corp. 5.22s 4/15/96 7,282,005 27,000,000 Sheffield Receivables Corp. 5.20s (acquired 2/26/96, cost $26,808,900) ++ 4/15/96 26,933,700 15,000,000 Sheffield Receivables Corp. 5.17s 4/22/96 14,948,300 -------------- $914,421,687 FOREIGN (19.3%) - ----------------------------------------------------------------------------------------------------- $40,000,000 Abbey National North America Corp. 5.05s (United Kingdom) 7/26/96 $39,332,277 15,000,000 Abbey National North America Corp. 4.88s (United Kingdom) 8/23/96 14,701,100 40,000,000 ABN Amro North America Finance 5.57s (Netherlands) 4/5/96 39,956,677 15,000,000 ABN Amro North America Finance 5.35s (Netherlands) 4/9/96 14,975,479 40,000,000 Den Danske Bank 5.567s (Denmark) 4/29/96 39,808,248 19,000,000 Den Danske Bank 5.30s (Denmark) 7/31/96 18,653,144 40,000,000 Deutsche Bank Financial Inc. 4.92s (Germany) 7/2/96 39,480,666 14,000,000 Fletcher Challenge Finance U.S.A. (Credit Suisse (LOC)) 5.28s (Switzerland) 5/20/96 13,893,227 35,000,000 National Australia Funding 5.75s (Australia) 4/8/96 34,947,889 20,000,000 Royal Bank of Canada 5.48s (Canada) 4/26/96 19,914,755 25,000,000 Royal Bank of Canada 5.07s (Canada) 7/1/96 24,669,042 40,000,000 Toronto Dominion Holdings 5.37s (Canada) 4/3/96 39,970,166 25,000,000 Union Bank of Switzerland 5.43s (Switzerland) 4/1/96 25,000,000 -------------- $365,302,670 -------------- Total Commercial Paper (cost $279,724,357) $1,279,724,357 U.S. GOVERNMENT & AGENCY OBLIGATIONS (12.1%)* MATURITY PRINCIPAL AMOUNT DATE VALUE - ----------------------------------------------------------------------------------------------------- $40,000,000 Federal Home Loan Mortgage Corp. Discount Notes 4.99s 5/13/96 $39,750,500 25,000,000 Federal Home Loan Banks Discount Notes 4.93s 9/3/96 24,459,069 Federal National Mortgage Association Discount Notes 25,000,000 5.48s 4/12/96 24,946,735 55,000,000 5.20s 4/18/96 54,841,111 25,000,000 5.16s 5/3/96 24,874,583 10,245,000 5.12s 8/9/96 10,051,209 25,000,000 5.06s 10/30/96 24,244,514 26,000,000 4.88s 8/15/96 25,510,102 -------------- Total U.S. Government & Agency Obligations (cost $228,677,823) $228,677,823 BANK NOTES (6.1%)* MATURITY PRINCIPAL AMOUNT DATE VALUE - ----------------------------------------------------------------------------------------------------- $20,000,000 First National Bank of Boston 5.73s 4/24/96 $20,000,000 30,000,000 First National Bank of Boston 5.70s 4/17/96 30,000,000 25,000,000 Morgan Guaranty Trust Co. 5.75s 8/7/96 25,000,000 15,000,000 Nationsbank Texas 5.42s 4/10/96 15,000,000 25,000,000 Nationsbank Texas 5.15s 6/7/96 25,000,000 -------------- Total Bank Notes (cost $115,000,000) $115,000,000 CERTIFICATES OF DEPOSIT (8.5%)* MATURITY PRINCIPAL AMOUNT DATE VALUE - ----------------------------------------------------------------------------------------------------- $45,000,000 Bayerische Landesbank 5.75s (Germany) 4/30/96 $45,001,106 25,000,000 Bayerische Landesbank 5.06s (Germany) 7/8/96 25,003,100 50,000,000 Commerzbank AG 5.16s (Germany) 5/29/96 50,005,315 15,000,000 Societe General 5.75s (France) 4/22/96 15,000,000 25,000,000 Union Bank of Switzerland 5.10s (Switzerland) 8/21/96 25,000,000 -------------- Total Certificates of Deposit (cost $160,009,521) $160,009,521 REPURCHASE AGGREEMENT (5.9%)*(cost $111,462,600) PRINCIPAL AMOUNT VALUE - ----------------------------------------------------------------------------------------------------- $111,412,000 Interest in $337,282,000 joint repurchase agreement dated March 29, 1996 with Lehman Brothers Inc., due April 1, 1996 with respect to various U.S. Treasury obligations -- maturity value of $111,462,600 for an effective yield of 5.45% $111,462,600 - ----------------------------------------------------------------------------------------------------- Total Investments (cost $1,894,874,301)*** $1,894,874,301 - ----------------------------------------------------------------------------------------------------- * Percentages indicated are based on net assets of $1,886,564,513. *** The aggregate identified cost on a tax basis is the same. ++ Restricted as to public resale, excluding 144A securities. The total market value of restricted securities owned at March 31, 1996 was $96,579,367 or 5.1% of net assets. The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities March 31, 1996 (Unaudited) Assets - ------------------------------------------------------------------------------------ Investments in securities, at amortized cost (Note 1) $1,894,874,301 - ------------------------------------------------------------------------------------ Interest and other receivables 4,882,057 - ------------------------------------------------------------------------------------ Receivable for shares of the fund sold 29,373,654 - ------------------------------------------------------------------------------------ Total assets 1,929,130,012 Liabilities - ------------------------------------------------------------------------------------ Payable to subcustodian (Note 2) 579,100 - ------------------------------------------------------------------------------------ Distributions payable to shareholders 1,190,475 - ------------------------------------------------------------------------------------ Payable for shares of the fund repurchased 38,496,941 - ------------------------------------------------------------------------------------ Payable for compensation of Manager (Note 2) 1,381,271 - ------------------------------------------------------------------------------------ Payable for investor servicing and custodian fees (Note 2) 698,853 - ------------------------------------------------------------------------------------ Payable for compensation of Trustees (Note 2) 3,110 - ------------------------------------------------------------------------------------ Payable for administrative services (Note 2) 6,117 - ------------------------------------------------------------------------------------ Payable for distribution fees (Note 2) 155,835 - ------------------------------------------------------------------------------------ Other accrued expenses 53,797 - ------------------------------------------------------------------------------------ Total liabilities 42,565,499 - ------------------------------------------------------------------------------------ Net assets $1,886,564,513 Represented by - ------------------------------------------------------------------------------------ Paid-in-capital (Note 4) $1,886,564,513 - ------------------------------------------------------------------------------------ Net asset value, offering and redemption price per class A share ($1,504,946,725 divided by 1,504,946,725 shares)* $1.00 - ------------------------------------------------------------------------------------ Net asset value and offering price per class B share ($364,859,636 divided by 364,859,636 shares)** $1.00 - ------------------------------------------------------------------------------------ Net asset value, offering and redemption price per class M share ($16,758,152 divided by 16,758,152 shares)* $1.00 - ------------------------------------------------------------------------------------ * Offered at net asset value. ** Class B shares are available only by exchange of class B shares from other Putnam funds and to certain systematic investment plan investors. The applicable contingent deferred sales charge will depend upon the fund from which you exchanged. The accompanying notes are an integral part of these financial statements.
Statement of operations Six months ended March 31, 1996 (Unaudited) - ------------------------------------------------------------------------------------ Interest Income: $45,205,918 - ------------------------------------------------------------------------------------ Expenses: - ------------------------------------------------------------------------------------ Compensation of Manager (Note 2) $2,676,533 - ------------------------------------------------------------------------------------ Investor servicing and custodian fees (Note 2) 1,243,254 - ------------------------------------------------------------------------------------ Compensation of Trustees (Note 2) 20,616 - ------------------------------------------------------------------------------------ Administrative services (Note 2) 11,837 - ------------------------------------------------------------------------------------ Distribution fees -- Class B (Note 2) 750,654 - ------------------------------------------------------------------------------------ Distribution fees -- Class M (Note 2) 9,418 - ------------------------------------------------------------------------------------ Reports to shareholders 10,806 - ------------------------------------------------------------------------------------ Registration fees 133,122 - ------------------------------------------------------------------------------------ Auditing 17,143 - ------------------------------------------------------------------------------------ Legal 11,612 - ------------------------------------------------------------------------------------ Postage 93,332 - ------------------------------------------------------------------------------------ Other 12,023 - ------------------------------------------------------------------------------------ Total expenses 4,990,350 - ------------------------------------------------------------------------------------ Expense reduction (Note 2) (221,348) - ------------------------------------------------------------------------------------ Net expenses 4,769,002 - ------------------------------------------------------------------------------------ Net investment income 40,436,916 - ------------------------------------------------------------------------------------ Net increase in net assets resulting from operations $40,436,916 - ------------------------------------------------------------------------------------ The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets - ------------------------------------------------------------------------------------------------------ Six months ended Year ended March 31 September 30 1996* 1995 - ------------------------------------------------------------------------------------------------------ Increase in net assets - ------------------------------------------------------------------------------------------------------ Operations: - ------------------------------------------------------------------------------------------------------ Net investment income $40,436,916 $71,482,615 - ------------------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations 40,436,916 71,482,615 - ------------------------------------------------------------------------------------------------------ Distributions to shareholders - ------------------------------------------------------------------------------------------------------ From net investment income Class A (33,080,719) (59,886,945) - ------------------------------------------------------------------------------------------------------ Class B (7,040,384) (11,472,948) - ------------------------------------------------------------------------------------------------------ Class M (315,813) (122,722) - ------------------------------------------------------------------------------------------------------ Increase from capital share transactions (Note 4) 431,951,047 159,255,295 - ------------------------------------------------------------------------------------------------------ Total increase in net assets 431,951,047 159,255,295 - ------------------------------------------------------------------------------------------------------ Net assets - ------------------------------------------------------------------------------------------------------ Beginning of period 1,454,613,466 1,295,358,171 - ------------------------------------------------------------------------------------------------------ End of period $1,886,564,513 $1,454,613,466 - ------------------------------------------------------------------------------------------------------ * Unaudited The accompanying notes are an integral part of these financial statements.
Financial highlights (For a share outstanding throughout the period) December 8, 1994 Six months (commencement Six months ended of operations) ended Year ended March 31 September 30 March 31 September 30 - ---------------------------------------------------------------------------------------------- 1996* 1995 1996* 1995 - ---------------------------------------------------------------------------------------------- Class M - ---------------------------------------------------------------------------------------------- Net investment income $0.0252 $0.0434 $0.0237 $0.0469 - ---------------------------------------------------------------------------------------------- Net realized gain on investments -- -- -- -- - ---------------------------------------------------------------------------------------------- Total from investment operations .0252 .0434 .0237 .0469 - ---------------------------------------------------------------------------------------------- Total distributions: (.0252) $(.0434) (.0237) $(.0469) - ---------------------------------------------------------------------------------------------- Total investment return at net asset value (%) (a) 2.54(c) 4.43(c) 2.38(c) 4.80 - ---------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $16,758 $8,440 $364,860 $256,533 - ---------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) .32(c) .67(c) .52(c) 1.12 - ---------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets (%) 2.52(c) 4.29(c) 2.35(c) 4.75 - ---------------------------------------------------------------------------------------------- Financial highlights (Continued) (For a share outstanding throughout the period) April 27, 1992 For the eleven Year (commencement Six months months ended ended of operations) ended of September 30 Ocotber 31 to October 30 March 31 - ---------------------------------------------------------------------------------------------- 1994 1993 1992 1996* - ---------------------------------------------------------------------------------------------- Class B - ---------------------------------------------------------------------------------------------- Net investment income $.0251 $.0195 $0.0151 $.0262 - ---------------------------------------------------------------------------------------------- Net realized gain on investments -- -- -- -- - ---------------------------------------------------------------------------------------------- Total from investment operations .0251 .0195 .0151 .0262 - ---------------------------------------------------------------------------------------------- Total distributions: $(.0251) $(.0195) $(.0151) $(.0262) - ---------------------------------------------------------------------------------------------- Total investment return at net asset value (%) (a) 2.54(c) 1.98 1.52(c) 2.63(c) - ---------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $194,187 $22,777 $2,864 $1,504,947 - ---------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) 1.03(c) 1.20 .70(c) .27(c) - ---------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets (%) 2.77(c) 1.98 1.50(c) 2.58(c) - ---------------------------------------------------------------------------------------------- Financial highlights (Continued) (For a share outstanding throughout the period) Year For the eleven Year ended months ended September 30 September 30 Year ended October 30 - ------------------------------------------------------------------------------------------------------ 1995 1994 1993 1992 1991 - ------------------------------------------------------------------------------------------------------ Class A - ------------------------------------------------------------------------------------------------------ Net investment income $0.0521 $.0299 $.0246 $0.353 $.0598 - ------------------------------------------------------------------------------------------------------ Net realized gain on investments -- -- -- -- .0001 - ------------------------------------------------------------------------------------------------------ Total from investment operations 0.0521 .0299 .0246 .0353 .0599 - ------------------------------------------------------------------------------------------------------ Total distributions: $(.0521) $(.0299) $(.0246) $(.0353) $(.0599) - ------------------------------------------------------------------------------------------------------ Total investment return at net asset value (%) (a) 5.33 3.03(c) 2.49 3.58 6.16 - ------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $1,189,640 $1,101,171 $586,920 $839,185 $684,987 - ------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) 0.62 .58(c) .70 .86 .77 - ------------------------------------------------------------------------------------------------------ Ratio of net investment income to average net assets (%) 5.23 3.03(c) 2.48 3.56 6.04 - ------------------------------------------------------------------------------------------------------ * Unaudited (a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) The ratio of expenses to average net assets for the periods ended September 30, 1995 and thereafter, includes amounts paid through expense offset arrangements. Prior period ratios exclude these amounts. (Note 2). (c) Not annualized.
Notes to financial statements March 31, 1996 (Unaudited) Note 1 Significant accounting policies Putnam Money Market Fund (the "fund"), is registered under the Investment Company Act of 1940, as amended as a diversified, open-end management investment company. The fund seeks current income consistent with preservation of capital and maintenance of liquidity. The fund achieves its objective by investing in a portfolio of high-grade short- term obligations. The fund may invest up to 100% of its assets in the banking industry and in commercial paper and short-term corporate obligations of issuers in the personal credit institution and business credit industries. The fund offers class A, class B and class M shares. Each class of shares is sold without a front-end sales charge. Class B shares are offered only in exchange for class B shares of other Putnam funds, or purchased by certain systematic investment plans. Shareholders are subject to the same contingent deferred sales charge schedule as the fund from which they were exchanged. Class B shares pay an ongoing distribution fee, and are subject to a contingent deferred sales charge if the shares are redeemed within six years of purchase (including any holding period of the shares in other Putnam funds). Class M shares pay an ongoing distribution fee lower than class B shares but are not subject to a contingent deferred sales charge. Expenses of the fund are borne pro-rata by the holders of each class of shares, except that each class bears expenses unique to that class (including the distribution fees applicable to class B and class M shares). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. Shares of each class would receive their pro-rata share of the net assets of the fund, if the fund were liquidated. In addition, the Trustees declare separate dividends on each class of shares. The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with generally accepted accounting principles and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates. A) Security valuation The valuation of the fund's portfolio instruments is determined by means of the amortized cost method as set forth in Rule 2a-7 under the Investment Company Act of 1940. The amortized cost of an instrument is determined by valuing it at cost originally and thereafter amortizing any discount or premium from its face value at a constant rate until maturity. B) Security transactions and related investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed). C) Joint trading account Pursuant to an exemptive order issued by the Securities and Exchange Commission, the fund may transfer uninvested cash balances into a joint trading account along with the cash of other registered investment companies managed by Putnam Investment Management, Inc. ("Putnam Management"), the fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc. and certain other accounts. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. D) Repurchase agreements The fund, or any joint trading account, through its custodian, receives delivery of the underlying securities, the market value of which at the time of purchase is required to be in an amount at least equal to 102% of the resale price, including accrued interest. Putnam Management is responsible for determining that the value of these underlying securities is at all times at least equal to 102% of the resale price, including accrued interest. E) Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Internal Revenue Code of 1986. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held and for excise tax on income and capital gains. F) Interest income and distributions to shareholders Interest is recorded on the accrual basis. Income dividends (and distributions of realized gains, if any) are recorded daily by the fund and are distributed monthly to the shareholders. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. Note 2 Management fee, administrative services, and other transactions Compensation of Putnam Management, for management and investment advisory services is paid quarterly based on the average nets assets of the fund. Such fee is based on the following annual rates: 0.5% of the first $100 million of average net assets 0.4% of the next $100 million, 0.35% of the next $300 million, 0.325% of the next $500 million, and 0.3% of any amount over $1 billion, subject under current law to reduction in any year by the amount of certain brokerage commissions and fees (less expenses) received by affiliates of Putnam Managment on the fund's portfolio transactions. The fund 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 aggregate amount of all such reimbursements is determined annually by the Trustees. Trustees of the fund receive an annual Trustees fee of $2,340 and an additional fee for each Trustee's 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. The fund adopted a Trustee Fee Deferral Plan (the "Plan") which allows the Trustees to defer the receipt of all or a portion of Trustees Fees payable on or after July 1, 1995. The deferred fees remain in the fund and are invested in the fund or in other Putnam funds until distribution in accordance with the Plan. Custodial functions for the fund's assets are provided by Putnam Fiduciary Trust Company (PFTC), a wholly owned subsidiary of Putnam Investments, Inc. Investor servicing agent functions are provided by Putnam Investor Services, a division of PFTC. For the six months ended March 31, 1996, fund expenses were reduced by $221,348 under expense offset arrangements with PFTC. Investor servicing and custodian fees reported in the Statement of operations exclude these credits. The fund could have invested the assets utilized in connection with the expense offset arrangements in an income producing asset if it had not entered into such arrangements. As part of the custodian contract between the subcustodian bank and PFTC, the subcustodian bank has a lien on the securities of the fund to the extent permitted by the funds investment restrictions to cover any advances made by the subcustodian bank for the settlement of securities purchased by the fund. At March 31, 1996, the payable to the subcustodian bank represents the amount due for cash advance for the settlement of a security purchased. The fund has adopted distribution plans (the "Plans") with respect to its class B shares and class M shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments Inc., for services provided and expenses incurred by it in distributing shares of the fund. The Plans provide for payments by the fund to Putnam Mutual Funds Corp. at an annual rate up to 0.75% and 1.00% of the average net assets attributable to class B and class M shares, respectively. The Trustees have approved payment by the fund at an annual rate of 0.50% and 0.15% of the average net assets attributable to class B and class M shares, respectively. For the six months ended March 31, 1996, Putnam Mutual Funds Corp., acting as underwriter received $759,338 in contingent deferred sales charges from redemptions of class B shares. A deferred sales charge of up to 1% is assessed on certain redemptions of class A shares acquired through an exchange from another fund. For the six months ended March 31, 1996, Putnam Mutual Funds Corp., acting as underwriter received $52,520 on class A redemptions. Note 3 Purchases and sales of securities During the six months ended March 31, 1996, purchases and sales (including maturities) of investment securities (all short-term obligations) aggregated $19,729,250,835 and $19,362,043,328, respectively. In determining the net gain or loss on securities sold, the cost of securities has been determined on the identified cost basis. Note 4 Capital shares At March 31, 1996, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares at a constant net asset value of $1.00 per share were as follows: Six months ended Year ended March 31 September 30 - ---------------------------------------------------- Class A 1996 1995 - ---------------------------------------------------- Shares sold 3,740,012,721 4,779,510,741 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions 30,474,921 54,658,336 - ---------------------------------------------------- 3,770,487,642 4,834,169,077 Shares repurchased (3,455,180,499) (4,745,700,888) - ---------------------------------------------------- Net increase 315,307,143 88,468,189 - ---------------------------------------------------- Six months ended Year ended March 31 September 30 - ---------------------------------------------------- Class B 1996 1995 - ---------------------------------------------------- Shares sold 928,212,516 1,012,064,608 Shares issued in connection with reinvestment of distributions 6,157,913 9,599,944 - ---------------------------------------------------- 934,370,429 1,021,664,552 Shares repurchased (826,044,228) (959,317,895) - ---------------------------------------------------- Net increase 108,326,201 62,346,657 - ---------------------------------------------------- For the period December 8, 1994 (commencement of Six months ended operations) to March 31 September 30 - ---------------------------------------------------- Class M 1996 1995 - ---------------------------------------------------- Shares sold 47,144,469 16,449,326 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions 294,549 109,559 - ---------------------------------------------------- 47,439,018 16,558,885 Shares repurchased (39,121,315) (8,118,436) - ---------------------------------------------------- Net increase 8,317,703 8,440,449 - ---------------------------------------------------- Our commitment to quality service * CHOOSE AWARD-WINNING SERVICE Putnam Investor Services has won the DALBAR Quality Tested Service Seal for the past six years. In 1995, over 146,000 tests of 56 shareholder service components demonstrated that Putnam outperformed the industry standard in every category. * HELP YOUR INVESTMENT GROW Set up a systematic program for investing with as little as $25 a month from a Putnam money market fund or from your checking or savings account.* * SWITCH FUNDS EASILY You can move money from one account to another with the same class of shares without a service charge. (This privilege is subject to change or termination.) * ACCESS YOUR MONEY QUICKLY You can get checks sent regularly or redeem shares any business day at the then-current net asset value, which may be more or less than the original cost of the shares. For details about any of these or other services, contact your financial advisor or call the toll-free number shown below and speak with a helpful Putnam representative. To make an additional investment in this or any other Putnam fund, contact your financial advisor or call our toll-free number: 1-800-225- 1581. * Regular investing of course, does not guarantee a profit or protect against a loss in a declining market. 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 CUSTODIAN Putnam Fiduciary Trust Company LEGAL COUNSEL Ropes & Gray TRUSTEES George Putnam, Chairman William F. Pounds, Vice Chairman Jameson Adkins Baxter Hans H. Estin John A. Hill Elizabeth T. Kennan Lawrence J. Lasser Robert E. Patterson Donald S. Perkins George Putnam, III Eli Shapiro A.J.C. Smith W. Nicholas Thorndike OFFICERS George Putnam President Charles E. Porter Executive Vice President Patricia C. Flaherty Senior Vice President John D. Hughes Senior Vice President and Treasurer Lawrence J. Lasser Vice President Gordon H. Silver Vice President Gary N. Coburn Vice President William F. McGue Vice President Blake E. Anderson Vice President Lindsey C. Strong Vice President and Fund Manager William N. Shiebler Vice President John R. Verani Vice President Paul M. O'Neil Vice President Beverly Marcus Clerk and Assistant Treasurer This report is for the information of shareholders of Putnam Money Market Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, which gives details of sales charges, investment objectives, and operating policies of the fund, and the most recent copy of Putnam's Quarterly Performance Summary. For more information or to request a prospectus, call toll-free: 1-800-225-1581. Shares of mutual funds are not deposits or obligations of, or guaranteed or endorsed by, any financial institution, are not insured by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board or any other agency, and involve risk, including the possible loss of the principal amount invested. PUTNAM INVESTMENTS The Putnam Funds One Post Office Square Boston, Massachusetts 02109 Bulk Rate U.S. Postage PAID Putnam Investments 24538-010/879/534 5/96 -----END PRIVACY-ENHANCED MESSAGE-----