-----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, mwBh74ls/Sh/ZICe6cFpXkKVPmaHVZD1gbucDKDhfAAp2XRVT2/lRbmVit0PK998 2rBs01IfEV/UNIUAjklklA== 0000950146-94-000001.txt : 19940113 0000950146-94-000001.hdr.sgml : 19940113 ACCESSION NUMBER: 0000950146-94-000001 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931031 FILED AS OF DATE: 19940106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM DAILY DIVIDEND TRUST CENTRAL INDEX KEY: 0000081248 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 046386436 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 40 SEC FILE NUMBER: 811-02608 FILM NUMBER: 94500513 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQ STREET 2: MAILSTOP A-14 LEGAL DEPARTMENT CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6172921536 MAIL ADDRESS: STREET 1: MAILSTOP A-14 LEGAL DEPARTMENT STREET 2: ONE POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 N-30D 1 PUTNAM DAILY DIVIDEND TRUST 1993 ANNUAL REPORT Putnam Daily Dividend Trust Annual Report October 31, 1993 For investors seeking current income consistent with capital preservation, stable principal and liquidity through a money market fund A member of the Putnam Family of Funds Contents 2 How your fund performed 3 From the Chairman 4 Report from Putnam Management Annual Report 6 Report of Independent Accountants 7 Portfolio of investments owned 10 Financial statements 18 Fund performance supplement 19 Your Trustees How your fund performed For periods ended October 31, 1993
Total return* Fund Lipper Class Class Money Market A B Fund Average - ------------------------------------------------ 1 year 2.49% 1.98% 2.62% 5 years 32.42 -- 32.52 annualized 5.78 -- 5.79 10 years 90.12 -- 90.35 annualized 6.64 -- 6.65 Life-of-class** -- 3.53 4.20 annualized -- 2.32 2.78 - ------------------------------------------------
- ------------------------------------------------------ Distributions 12 months Investment ended Number income Total - ------------------------------------------------------ Class A 12 $0.0246 $0.0246 Class B 12 $0.0195 $0.0195 - ------------------------------------------------------
- ----------------------------------------- Current returns at the end of the Class Class period A B - ----------------------------------------- Current 30-day yield 2.64% 2.13% Current 7-day yield 2.60 2.09 - -----------------------------------------
- ----------------------------------------------------------------------- Total return at end of most recent calendar quarter Class Class Periods ended September 30, 1993 A B 1 year 2.49% 1.98% 5 years 32.94 -- annualized 5.86 -- 10 years 91.11 -- annualized 6.69 -- Life-of-class -- 3.34 annualized -- 2.32 - -----------------------------------------------------------------------
*Performance data represent past results. Investment return will fluctuate. **Effective April 27, 1992, the fund began offering class B shares. Performance for those shares will differ. 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. However, since the fund's inception on 12/31/76, no investor has ever lost a penny of principal. Please see the fund performance supplement on page 18 for additional information about performance comparisons. Terms you need to know Total return is the change in value of an investment from the beginning to the end of a period, assuming the reinvestment of all distributions. Yield is the rate at which an investment earns interest income. The 7- and 30-day yields are the two most common gauges for measuring money market mutual fund performance. The yields are calculated in accordance with Securities and Exchange Commission guidelines. Contingent deferred sales charge (CDSC) is a charge applied at the time of the redemption of shares rather than the time of purchase. It generally declines and eventually disappears over a stated period. The CDSC charge applied reflects the CDSC of the fund from which the shares were exchanged. Class A shares generally refers to fund shares purchased with an initial sales charge. In the case of your fund, it refers to shares purchased or acquired through the exchange of class A shares from another Putnam fund, without a sales charge. Exchange of your fund's class A shares into another fund may involve a sales charge, however. Class B shares generally refers to fund shares purchased with no initial sales charge but subject to a CDSC. However, class B shares of your fund can be acquired only through exchange of class B shares from another Putnam fund. They are subject to the same CDSC schedule as the fund from which they were exchanged. From the Chairman [George Putnam photo] George Putnam Chairman of the Trustees (C) Karsh, Ottawa Dear Shareholder: During the fiscal year ended October 31, 1993, Putnam Daily Dividend Trust posted solid, competitive returns. Meeting its twin objectives of stability and income, your fund's total return was 2.49% for Class A shares and 1.98% for Class B Shares. During a period of rising stock and bond markets, it's easy to overlook the virtues of money market funds, especially in comparison to other more aggressive investments. But it's important not to lose sight of the role a money market fund can play in your investment portfolio. Money market funds can serve investors in several ways. By making regular investments in a money market fund, you can establish a stable, liquid account that earns current income. A money market fund can be the core account in your investment portfolio. It can be the account from which you invest in other types of mutual funds or in individual securities and the place to which you reinvest proceeds from the redemption or sale of mutual fund shares or securities. Because money market funds seek to maintain a stable $1.00 share price, they are excellent vehicles for short-term cash. If you anticipate making a big purchase in the near future, such as a house or car; or if you expect to be paying a large bill, such as tuition, a money market fund is an excellent place to earn current market rates on your cash until you're ready to use it. You can also use a money market fund to balance an aggressive investment portfolio. As the economy continues to improve and the financial markets reach historic highs, this might be an appropriate time to review your investment portfolio and the role your money market fund plays in your overall investment strategy. Respectfully yours, [George Putnam signature] George Putnam December 15, 1993 Report from Putnam Management For the fiscal year ended October 31, 1993, Putnam Daily Dividend Trust was managed against a backdrop of slow economic growth, low inflation and low interest rates. In this type of environment, there's a great deal of competition to obtain extra yield. Consequently, the market is under pressure to develop more sophisticated products than the normal bank CDs and commercial paper that are the staples of money market fund investments. While Putnam analysts survey the entire range of products in the marketplace, we avoid investments that fail our strict standards for quality and stability and those that do not fit the money market fund structure. Investing in the money market Money market mutual funds invest in short-term securities sold in the market, where large companies, banks and other institutions invest their surplus cash for short periods of time. Money market securities include Treasury bills, certificates of deposit of large banks, and commercial paper; that is, the short-term debt of large U.S. and foreign corporations. In the investment spectrum, these are generally the safest, most stable securities available. All money market investments are U.S. dollar-denominated, so when we refer to foreign debt, we mean debt of domestic subsidiaries of foreign banks and/or corporations issued in the United States. Sluggish economic growth and declining interest rates have been consistent themes for more than a year. During periods of declining interest rates, money market fund managers strive to lock in the highest yields for the longest amount of time by extending the average maturity of the portfolio. Two years ago, for example, the average maturity of your fund's holdings was 70-90 days. As interest rates hit their lows during the past year, we began to shorten the maturity of the portfolio. In October 1992, the average maturity was 81 days; by the end of the fiscal year, it was 50 days. While this is not a dramatic change, we have positioned the portfolio to be flexible enough to take advantage of higher yields if interest rates begin to rise. Cumulative total return on a $10,000 investment since 11/1/83
Daily Dividend Trust Class A shares (date/year) Lipper Money Market Average at NAV 11/1/83 10000 10000 10/31/84 11013 11020 10/31/85 11906 11921 10/31/86 12697 12709 10/31/87 13448 13450 10/31/88 14374 14358 10/31/89 15645 15631 10/31/90 16881 16868 10/31/91 17915 17908 10/31/92 18557 18549 10/31/93 19035 19009
Past performance is no assurance of future results. Performance of Class B shares will vary from performance of Class A shares due to differences in sales charges and 12b-1 fees. Changing the allocation Investing in floating rate commercial paper is another way we can take advantage of interest rates that may be headed upward. These short-term securities have fixed maturities (one year, for example), but their yields are tied to a certain market index or formula. If interest rates rise, yields on these securities will also go up. We have seen many floating-rate securities come to market recently. As with other investment vehicles, we are scrutinizing their credit risk and quality before making a decision on whether or not to invest in them. Over the past year, we also changed our portfolio allocation between government securities and corporate bonds. Going into the fiscal year, 30% of the portfolio was in government securities, since the yield spreads between government and corporate debt were narrow and these investments carried less risk than corporate debt obligations. As the economy improved, however, yield spreads between government and corporate securities widened. Through our credit analysis process, we were able to identify companies with improving credit risk. Consequently, we progressively moved assets out of the government sector throughout the year, until about 90% of the portfolio's assets were invested in corporate debt and just over 10% in government securities. Performance comparisons (10/31/93)* Passbook savings 2.00% Taxable money market fund (7-day yield) 2.66% 3-month CD 2.55% Putnam Daily Dividend Trust Class A 2.60% (7-day yield) Class B 2.09% Looking ahead In general, we believe the economy will continue its slow but steady recovery. We believe interest rates have reached their lows, and we're starting to hear some concern that inflation may increase. While the Federal Reserve Board had adopted a neutral stance toward interest rates over the past year or so, it has made clear that its primary focus is on keeping inflation down. If economic growth is moderate, the Fed can continue to sit on the sidelines. But if it appears that inflation will pick up to a significant degree, we believe the Fed will tighten credit, and interest rates will rise. In this event, your fund should be in a position to take advantage of the resulting opportunities. *The principal value of money market mutual funds is uninsured and designed to be fixed while distributions vary daily. The principal value on passbook savings and bank CDs are generally insured up to certain limits by state and federal agencies. Unlike money market mutual funds, substantial penalties may apply to early withdrawals of bank CDs. Performance data represent past performance. Investment returns will fluctuate. Sources: Bank of Boston (passbook savings). Bank Rate Monitor (3-month CDs). IBC/Donoghue's Money Fund Report (taxable money market fund 7-day yield). Putnam Daily Dividend Trust Annual Report For the Fiscal Year Ended October 31, 1993 Report of Independent Accountants To the Trustees and Shareholders of Putnam Daily Dividend Trust In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments owned, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Putnam Daily Dividend Trust at October 31, 1993, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities owned at October 31, 1993 by correspondence with the custodian, provide a reasonable basis for the opinion expressed above. Price Waterhouse Boston, Massachusetts December 10, 1993 Portfolio of investments owned October 31, 1993
Commercial Paper (85.1%)(a) Maturity Principal Amount Date Value - --------------------------------------------------------------------------------------------------------------------------------- Domestic (49.2%) $10,000,000 AT&T Capital Corp. 3.18s 1/18/94 $ 9,930,216 10,000,000 Bankers Trust New York Corp. 3.2s 12/13/93 9,961,776 10,000,000 Bankers Trust New York Corp. 3.19s 2/16/94 9,904,300 24,380,000 Ciesco L.P. 3s 11/1/93 24,373,905 10,000,000 Corporate Receivables Corp. 3.15s 11/8/93 9,993,000 10,000,000 Corporate Receivables Corp. 3.1s 12/10/93 9,965,555 15,000,000 CS First Boston Group Inc. 3.12s 12/6/93 14,953,200 7,000,000 Delaware Funding Corp. 3.16s 11/4/93 6,997,542 15,000,000 Delaware Funding Corp. 3.1s 11/2/93 14,997,417 15,000,000 Ford Motor Credit Co. 3.16s 11/15/93 14,980,250 10,000,000 Ford Motor Credit Co. 3.08s 11/17/93 9,985,455 10,000,000 General Electric Capital Corp. 3.2s 11/19/93 9,983,111 10,000,000 General Electric Capital Corp. 3.16s 11/3/93 9,997,366 5,000,000 General Motors Acceptance Corp. 3.175s 11/29/93 4,987,211 7,000,000 General Motors Acceptance Corp. 3.175s 11/22/93 6,986,417 15,000,000 General Motors Acceptance Corp. 3.175s 11/8/93 14,989,417 10,000,000 Goldman Sachs Group LP 3.275s 2/15/94 9,902,659 5,000,000 Goldman Sachs Group LP 3 1/4s 12/14/93 4,980,139 10,000,000 Goldman Sachs Group LP 3.2s 2/25/94 9,895,999 10,000,000 Household Finance Corp. 3.15s 11/18/93 9,984,250 15,000,000 Household Finance Corp. 3.15s 11/10/93 14,986,875 5,000,000 Merrill Lynch & Co. Inc. 3.27s 2/22/94 4,948,224 5,000,000 Merrill Lynch & Co. Inc. 3.22s 3/16/94 4,939,177 15,000,000 Merrill Lynch & Co. Inc. 3.15s 11/29/93 14,961,937 10,000,000 Preferred Receivables Funding Corp. 3.12s 11/29/93 9,974,866 15,000,000 Preferred Receivables Funding Corp. 3.12s 11/22/93 14,971,400 10,000,000 Republic New York Corp. 3.2s 1/14/94 9,933,332 7,500,000 USAA Capital Corp. 3.09s 11/9/93 7,494,206 - ------------------------------------------------------------------------------------------------------------------------------- $299,959,202 - ------------------------------------------------------------------------------------------------------------------------------- Foreign (35.9%)(b) 3,650,000 Abbey National PLC 3.22s 1/20/94 3,623,555 15,000,000 Abbey National PLC 3.21s 2/28/94 14,839,500 15,000,000 ABN-AMRO North America Finance Inc. 3.2s 1/21/94 14,890,666 9,500,000 AES Shady Point Inc. (Letter of Credit, Bank of Tokyo) 3.13s 11/22/93 9,481,828 12,600,000 Bombardier Capital Inc. (Letter of Credit, National West) 3.11s 11/2/93 12,597,823 20,000,000 BP Australia Finance 3.1s 11/16/93 19,972,444 3,000,000 Hartz 667 Commercial Paper Corp. (Letter of Credit, Mitsubishi Bank) 3.4s 2/7/94 2,971,950 5,000,000 Maguire/Thomas Partnership (Letter of Credit, Sumitomo Bank) 3.13s 12/2/93 4,986,088 8,000,000 Michelin Tire Corp. (Letter of Credit, Societe Generale) 3.24s 2/2/94 7,932,320 10,000,000 Mitsubishi Motor Credit of America (Letter of Credit, Bank of Tokyo) 3.15s 12/2/93 9,972,000 15,000,000 Mitsubishi Motor Credit of America (Letter of Credit, Bank of Tokyo) 3.15s 11/9/93 14,988,212 10,000,000 Orchard Funding Inc. (Letter of Credit, Sumitomo Bank) 3.16s 12/3/93 9,971,033 5,000,000 Pemex Capital Inc. (Letter of Credit, Swiss Bank) 3.12s 11/29/93 4,987,432 15,000,000 Pemex Capital Inc. (Letter of Credit, Swiss Bank) 3.12s 11/9/93 14,988,300 5,022,000 Queensland Alumina Ltd. (Letter of Credit, Credit Suisse) 3.12s 11/9/93 5,018,082 11,697,000 Queensland Alumina Ltd. (Letter of Credit, Credit Suisse) 3.1s 12/7/93 11,659,731 10,000,000 Rabobank Nederland 3.22s 3/16/94 9,878,355 15,000,000 Rabobank Nederland 3.2s 1/28/94 14,881,332 8,000,000 Rockefeller Center Properties (Letter of Credit, Credit Suisse) 3.12s 11/30/93 7,979,199 7,250,000 Societe General North America Inc. 3.1s 11/30/93 7,231,270 6,000,000 Southwest Gas Corp. (Letter of Credit, Union Bank of Switzerland) 3.1s 11/19/93 5,990,183 10,000,000 SRD Finance Inc. (Letter of Credit, Sumitomo Bank) 3.15s 11/2/93 9,998,250 - ------------------------------------------------------------------------------------------------------------------------------- $218,839,553 - ------------------------------------------------------------------------------------------------------------------------------- Total Commercial Paper (cost $518,798,755) $518,798,755 U.S. Government and Agency Obligations (10.9%) (a) $15,000,000 Federal National Mortgage Assn. Discount Notes, 3.24s 1/27/94 $ 14,881,200 10,000,000 Federal National Mortgage Assn. Discount Notes, 3.22s 6/30/94 9,783,544 12,000,000 Federal National Mortgage Assn. Discount Notes, 3.14s 3/31/94 11,841,953 10,000,000 Federal National Mortgage Assn. Discount Notes, 3.14s 11/1/93 9,999,127 10,000,000 Federal National Mortgage Assn. Discount Notes, 3.12s 12/2/93 9,972,266 10,000,000 Student Loan Marketing Assn., 3.62s 6/30/94 9,996,663 - ------------------------------------------------------------------------------------------------------------------------------- Total U.S. Government and Agency Obligations (cost $66,474,753) $ 66,474,753 Certificate of Deposit (3.3%) (a)(b) $10,000,000 Societe Generale North America Inc. 3.27s 1/24/94 $ 10,000,000 10,000,000 Union Bank of Switzerland 4.1s 12/2/93 10,002,931 - ------------------------------------------------------------------------------------------------------------------------------- Total Certificate of Deposit (cost $20,002,931) $ 20,002,931 Floating Rates Notes (1.6%) (a) (cost $9,998,000) $10,000,000 Corporate Asset Funding Co. Inc. 3.128s 5/15/94 $ 9,998,000 - ------------------------------------------------------------------------------------------------------------------------------- Total Investments (cost $615,274,439) (c) $615,274,439 - -------------------------------------------------------------------------------------------------------------------------------
Notes (a) Percentages are based on total net assets of $609,697,958 which correspond to a net asset value per share of $1.00 for both Class A and Class B shares. (b) U.S. dollar-denominated. (c) The aggregate identified cost on a tax basis is the same. Rates shown on Floating Rate Notes are the current interest rates on October 31, 1993, which are subject to change based on the terms of the security. Percentage of total net assets invested in foreign countries at October 31, 1993: Japan 10.2% Switzerland 10.0 Netherlands 6.5 United Kingdom 5.1 France 4.1 Australia 3.3 Statement of assets and liabilities October 31, 1993 Assets Investments in securities, at amortized cost (Note 1) $615,274,439 Cash 6,025 Interest and other receivables 296,881 Receivable for shares of the Fund sold 2,461,575 -------------------------------------------------------------------------------------------------------- Total assets 618,038,920 Liabilities Payable for shares of the Fund repurchased $6,746,926 Payable for compensation of Manager (Note 2) 600,773 Payable for administrative services (Note 2) 1,158 Payable for compensation of Trustees (Note 2) 133 Payable for investor servicing and custodian (Note 2) 772,614 Payable for distribution fees (Note 2) 8,141 Other accrued expenses 211,217 -------------------------------------------------------------------------------------------------------- Total liabilities 8,340,962 -------------------------------------------------------------------------------------------------------- Net assets $609,697,958 -------------------------------------------------------------------------------------------------------- Represented by Paid-in capital (Note 4) $609,697,958 -------------------------------------------------------------------------------------------------------- Net asset value, offering and redemption price per Class A share ($586,920,462 divided by 586,920,462 shares)** $1.00 Net asset value and offering price per Class B share ($22,777,496 divided by 22,777,496 shares)** $1.00 --------------------------------------------------------------------------------------------------------
*Class A shares are offered at net asset value. **Class B shares are available only by exchange from Class B shares of other Putnam Funds. The applicable contingent deferred sales charge applied upon redemption will depend upon the Fund from which you exchanged. Statement of operations Year ended October 31, 1993 ======================================================================================================== Interest income $20,028,264 Expenses: Compensation of Manager (Note 2) 2,363,285 Investor servicing and custodian fees (Note 2) 1,677,616 Compensation of Trustees (Note 2) 21,083 Reports to shareholders 46,241 Auditing 37,213 Legal 13,956 Postage 54,196 Administrative services (Note 2) 20,098 Registration fees 92,044 Distribution fees--Class B (Note 2) 43,307 Other 30,599 -------------------------------------------------------------------------------------------------------- Total expenses 4,399,638 -------------------------------------------------------------------------------------------------------- Net investment income 15,628,626 -------------------------------------------------------------------------------------------------------- Net realized gain on investments (Notes 1 and 3) 1,728 -------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $15,630,354 --------------------------------------------------------------------------------------------------------
Statement of changes in net assets
Year ended October 31 1993 1992 ======================================================================================================== Increase Operations: (decrease) in net assets Net investment income $ 15,628,626 $ 24,052,787 Net realized gain on investments 1,728 12,500 -------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 15,630,354 24,065,287 Distributions to shareholders from: Net investment income Class A (15,452,211) (24,043,261) Class B (176,415) (9,526) Net realized gain on investments Class A (1,713) (12,498) Class B (15) (2) Increase (decrease) from capital share transactions (Note 4) (232,350,806) 157,061,890 -------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets (232,350,806) 157,061,890 Net assets Beginning of year 842,048,764 684,986,874 -------------------------------------------------------------------------------------------------------- End of year $ 609,697,958 $842,048,764 --------------------------------------------------------------------------------------------------------
Financial Highlights* (For a share outstanding throughout the period)
April 27, 1992 (commence- Year ment of ended operations) October to October 31 31 Year ended October 31 ------- ----------- --------------------------------------------------------------------------------- 1993 1992 1993 1992 1991 1990 1989 1988 1987 1986 - ------------------------------------------------------------------------------------------------------------------------------ Class B Class A - ------------------------------------------------------------------------------------------------------------------------------ Investment Operations Net Investment Income $ .0195 $ .0151 $ .0246 $ .0353 $ .0598 $ .0764 $ .0853 $ .0655 $ .0568 $ .0642 Net Realized and Unrealized Gain on Investments -- -- -- -- .0001 -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------ Total from Investment Operations .0195 .0151 .0246 .0353 .0599 .0764 .0853 .0655 .0568 .0642 - ------------------------------------------------------------------------------------------------------------------------------ Total Distributions $(.0195) $(.0151) $ (.0246) $ (.0353) $ (.0599) $ (.0764) $ (.0853) $ (.0655) $ (.0568) $ (.0642) - ------------------------------------------------------------------------------------------------------------------------------ Total Investment Return at Net Asset Value (%) (a) 1.98 2.98(b) 2.49 3.58 6.16 7.92 8.87 6.75 5.83 6.61 - ------------------------------------------------------------------------------------------------------------------------------ Net Assets, End of Period (in thousands) $22,777 $2,864 $586,920 $839,185 $684,987 $904,186 $797,395 $659,590 $775,954 $320,874 - ------------------------------------------------------------------------------------------------------------------------------ Ratio of Expenses to Average Net Assets (%) 1.20 1.37(b) .70 .86 .77 .74 .85 .91 1.01 .89 Ratio of Net Investment Income to Average Net Assets (%) 1.98 2.93(b) 2.48 3.56 6.04 7.63 8.51 6.67 5.65 6.32 ==============================================================================================================================
Ten months Year ended ended October December 31 31 ------- -------------------- 1985 1984 1983 - --------------------------------------------------- Class A - --------------------------------------------------- Investment Operations Net Investment Income $ .0633 $ .0983 $ .0837 Net Realized and Unrealized Gain on Investments .0001 .0003 -- - --------------------------------------------------- Total from Investment Operations .0634 .0986 .0837 - --------------------------------------------------- Total Distributions $ (.0634) $ (.0986) $ (.0837) - --------------------------------------------------- Total Investment Return at Net Asset Value (%) (a) 7.86(b) 10.32 8.70 - --------------------------------------------------- Net Assets, End of Period (in thousands) $275,901 $260,186 $282,335 - --------------------------------------------------- Ratio of Expenses to Average Net Assets (%) .85(b) .85 .85 Ratio of Net Investment Income to Average Net Assets (%) 7.56(b) 9.79 8.29 ===================================================
* Financial Highlights for periods ended through October 31, 1992 have been restated to conform with requirements issued by the SEC in April 1993. (a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) Annualized. Notes to financial statements October 31, 1993 Note 1 Significant accounting policies 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 institution industries. The Fund offers both Class A and Class B shares. The Fund commenced its public offering of Class B shares on April 27, 1992. Class A and Class B shares are sold without a front-end sales charge. Class B shares are offered only in exchanges for Class B shares of other Putnam funds. They 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 the other Putnam fund). In addition, the Trustees declare separate dividends on each class of shares. Each class bears expenses unique to that class (including the distribution fees applicable to Class B shares) and 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. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. 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) 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. (formerly known as The Putnam Management Company, Inc.), the Fund's Manager, a wholly- owned subsidiary of Putnam Investments, Inc. (formerly, The Putnam Companies, Inc.) and certain other accounts. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. C) 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 the resale price, including accrued interest. The Fund's Manager is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. D) Federal taxes It is the policy of the Fund to distribute all of its 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 income and excise taxes on income and capital gains. E) Interest income and dividends to shareholders Interest income is recorded on the accrual basis. Income dividends are declared daily by the Fund and are distributed monthly. 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 net assets of the Fund for the quarter. 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 to reduction in any year to the extent that expenses (exclusive of brokerage, interest and taxes) of the Fund exceed 2.5% of the first $30 million of average net assets, 2.0% of the next $70 million and 1.5% of any amount over $100 million and by the amount of certain brokerage commissions and fees (less expenses) received by affiliates of the Manager on the Fund's portfolio transactions. The Fund also reimburses the Manager 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. For the year ended October 31, 1993, the Fund paid $20,098 for these services. Trustees of the Fund receive an annual Trustee's fee of $1,340 and an additional fee for each Trustees' meeting attended. Trustees who are not interested persons of the Manager and who serve on committees of the Trustees receive additional fees for attendance at certain committee meetings. Custodial functions are being provided to the Fund by Putnam Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc. Investor servicing agent functions are currently provided by Putnam Investor Services, a division of PFTC. Fees paid for these investor servicing and custodial functions for the year ended October 31, 1993 amounted to $1,677,616. Investor servicing and custodian fees reported in the Statement of operations for the year ended October 31, 1993 have been reduced by credits allowed by PFTC. The Fund has adopted a distribution plan with respect to its Class B shares (the "Class B Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Class B Plan is to compensate Putnam Mutual Funds Corp., (formerly known as Putnam Financial Services, Inc.) a wholly-owned subsidiary of Putnam Investments, Inc. for services-provided and expenses incurred by it in distributing Class B shares. The Class B Plan provides payments currently limited by the Trustees to .50% of the Fund's average net assets attributable to Class B shares, but may increase with the Trustees approval to an amount not exceeding .75% of average net assets. For the year ended October 31, 1993, the Fund paid Putnam Mutual Funds Corp. distribution fees of $43,307 for Class B shares. A deferred sales charge of up to 1% is assessed on certain redemptions of Class A shares purchased as part of an investment of $1 million or more and were acquired by an exchange from another Putnam fund. For the year ended October 31, 1993, Putnam Mutual Funds Corp., acting as underwriter, received $83,377 on such redemptions. Putnam Mutual Funds Corp. also receives the proceeds on the contingent deferred sales charges on its Class B share redemptions. The charge is based on declining rates, which begin at 5.00% of the net asset value of the redeemed shares. Putnam Mutual Funds Corp. has informed the fund that it received contingent deferred sales charges of $86,763 from redemptions during the year ended October 31, 1993. Note 3 Purchases and sales of securities During the year ended October 31, 1993, purchases and sales (including maturities) of investment securities (all short-term obligations) aggregated $13,710,498,116 and $13,958,502,096, 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 October 31, 1993, there was an unlimited number of shares of beneficial interest authorized, divided into two classes, designated Class A and Class B capital stock. Transactions in capital stock were as follows:
Year ended October 31 ------------------------------ Class A 1993 1992 - ---------------------------------------------------------------- Shares sold 1,954,667,214 1,794,673,649 Shares issued in connection with reinvestment of distributions 16,002,778 23,561,701 - ---------------------------------------------------------------- 1,970,669,992 1,818,235,350 Shares repurchased (2,222,934,715) (1,664,037,039) - ---------------------------------------------------------------- Net increase (decrease) (252,264,723) 154,198,311 - ----------------------------------------------------------------
April 27, 1992 (commencement of Year ended operations) to October 31, October 31, Class B 1993 1992 - ----------------------------------------------------------------- Shares sold 66,254,392 5,549,492 Shares issued in connection with reinvestment of distributions 156,162 8,847 - ----------------------------------------------------------------- 66,410,554 5,558,339 Shares repurchased (46,496,637) (2,694,760) - ----------------------------------------------------------------- Net increase 19,913,917 2,863,579 - -----------------------------------------------------------------
Fund performance supplement Putnam Daily Dividend Trust is a portfolio managed for current income consistent with capital preservation, stable principal and liquidity by investing primarily in a diversified portfolio of High Quality short-term securities. The Lipper Money Market Fund Average, 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 is an independent rating organization for the mutual fund industry. Lipper rankings vary for other periods. The fund's holdings do not match those in the Lipper Average. The fund performance supplement has been prepared by Putnam Management to provide additional information about the fund and the indexes used for performance comparisons. The information is not part of the portfolio of investments owned or the financial statements. Federal tax information For federal income tax purposes, the distributions from net investment income, totaling $.0246 and $.0195 per share for Class A and Class B shares, respectively, for the fiscal year ended October 31, 1993, constitute "dividend income." None of the investment income qualifies for the dividends-received deduction for corporations. The Form 1099 you receive in January 1994 will show the tax status of all distributions paid to your account in calendar 1993. As required by law, your Fund reports to the Internal Revenue Service on a calendar year basis the amount of distributions paid to each shareholder. Your Trustees George Putnam Chairman Chairman and President, The Putnam Funds William F. Pounds Vice Chairman Professor of Management, Alfred P. Sloan School of Management, Massachusetts Institute of Technology Hans H. Estin Vice Chairman, North American Management Corporation John A. Hill Principal and Managing Director, First Reserve Corp. Elizabeth T. Kennan President, Mount Holyoke College Lawrence J. Lasser President and Chief Executive Officer, Putnam Investments, Inc. Robert E. Patterson Executive Vice President, Cabot Partners Limited Partnership Donald S. Perkins Director of various corporations George Putnam, III President, New Generation Research, Inc. A.J.C. Smith Chairman of the Board and Chief Executive Officer, Marsh & McLennan Companies, Inc. W. Nicholas Thorndike Director of various corporations Putnam Daily Dividend Trust 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 1-800-225-1581 Custodian Putnam Fiduciary Trust Company Legal counsel Ropes & Gray Independent accountants Price Waterhouse Putnam Investor Services has received the DALBAR award each year since the award's 1990 inception. In more than 10,000 tests of 38 shareholder service components, Putnam outperformed the industry standard in every category. Officers George Putnam President Charles E. Porter Executive Vice President Patricia C. Flaherty Senior Vice President Lawrence J. Lasser Vice President Gordon H. Silver Vice President John R. Verani Vice President Gary N. Coburn Vice President William McGue Vice President Lindsey Callen Vice President and Fund Manager William N. Shiebler Vice President John D. Hughes Vice President and Treasurer Paul O'Neil Vice President Beverly Marcus Clerk and Assistant Treasurer This report is for the information of shareholders of Putnam Daily Dividend Trust. 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. 9678-A0A/A50 PUTNAM INVESTMENTS The Putnam Funds One Post Office Square Boston, Massachusetts 02109 Bulk Rate U.S. Postage Paid Boston, MA Permit No. 53749 APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND EDGAR-FILED TEXTS: (1) Bold and italic typefaces are displayed in normal type. (2) Headers (e.g., the name of the fund) and footers (e.g., page numbers and "The accompanying notes are an integral part of these financial statements") are omitted. (3) Because the printed page breaks are not reflected, certain tabular and columnar headings and symbols are displayed differently in this filing. (4) Bullet points and similar graphic signals are omitted. (5) Page numbering is omitted. -----END PRIVACY-ENHANCED MESSAGE-----