-----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, LWOzwwgPHLsVAG0IdBvok8I1a77MxiexFnOfh7PjTA4uSUlHHytj65fLdZIWbbQs EP1O5KvPFLS7uPploofJHQ== 0000928816-07-001407.txt : 20070928 0000928816-07-001407.hdr.sgml : 20070928 20070928105804 ACCESSION NUMBER: 0000928816-07-001407 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 22 CONFORMED PERIOD OF REPORT: 20070731 FILED AS OF DATE: 20070928 DATE AS OF CHANGE: 20070928 EFFECTIVENESS DATE: 20070928 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEORGE PUTNAM FUND OF BOSTON CENTRAL INDEX KEY: 0000081259 IRS NUMBER: 046013677 STATE OF INCORPORATION: MA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-00058 FILM NUMBER: 071141036 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQ STREET 2: MAILSTOP A 14 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 8002252581 FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM EQUITY INCOME FUND/NEW DATE OF NAME CHANGE: 19940302 FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM GEORGE FUND OF BOSTON DATE OF NAME CHANGE: 19920703 0000081259 S000005597 GEORGE PUTNAM FUND OF BOSTON C000015264 Class A Shares PGEOX C000015265 Class B Shares PGEBX C000015266 Class C Shares PGPCX C000015267 Class M Shares PGEMX C000015268 Class R Shares PGPRX C000015269 Class Y Shares PGEYX N-CSR 1 a_georgeputnam.htm THE GEORGE PUTNAM FUND OF BOSTON a_georgeputnam.htm
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
 
  FORM N-CSR 
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED 
MANAGEMENT INVESTMENT COMPANIES 
 
Investment Company Act file number: (811- 00058)   
 
Exact name of registrant as specified in charter: The George Putnam Fund of Boston 
 
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 
 
Name and address of agent for service:  Beth S. Mazor, Vice President 
  One Post Office Square 
  Boston, Massachusetts 02109 
 
Copy to:  John W. Gerstmayr, Esq. 
  Ropes & Gray LLP 
  One International Place 
  Boston, Massachusetts 02110 
 
Registrant’s telephone number, including area code:    (617) 292-1000 

Date of fiscal year end: July 31, 2007

Date of reporting period: August 1, 2006— July 31, 2007

Item 1. Report to Stockholders:

The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:




What makes
Putnam different?

A time-honored tradition in money management

Since 1937, our values have been rooted in a profound sense of responsibility for the money entrusted to us.

A prudent approach to investing

We use a research-driven team approach to seek consistent, dependable, superior investment results over time, although there is no guarantee a fund will meet its objectives.

Funds for every investment goal

We offer a broad range of mutual funds and other financial products so investors and their financial representatives can build diversified portfolios.

A commitment to doing what’s right for investors

With a focus on investment performance, below-average expenses, and in-depth information about our funds, we put the interests of investors first and seek to set the standard for integrity and service.

Industry-leading service

We help investors, along with their financial representatives, make informed investment decisions with confidence.


In 1830, Massachusetts Supreme Judicial Court Justice Samuel Putnam established The Prudent Man Rule, a legal foundation for responsible money management.

THE PRUDENT MAN RULE

All that can be required of a trustee to invest is that he shall conduct himself faithfully and exercise a sound discretion. He is to observe how men of prudence, discretion, and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital to be invested.


The George
Putnam Fund
of Boston

7| 31| 07

Annual Report

Message from the Trustees  1 
About the fund  2 
Performance and portfolio snapshots  4 
Report from the fund managers  5 
Performance in depth  10 
Expenses  13 
Portfolio turnover  15 
Risk  15 
Your fund’s management  16 
Terms and definitions  17 
Trustee approval of management contract  18 
Other information for shareholders  21 
Financial statements  22 
Federal tax information  70 
Brokerage commissions  70 
Shareholder meeting results  71 
About the Trustees  72 
Officers  76 

Cover photograph: © White-Packert Photography


Message from the Trustees

Dear Fellow Shareholder:

We are pleased to announce that Marsh & McLennan Companies, Inc. recently completed the sale of its ownership interest in Putnam Investments Trust, the parent company of Putnam Management and its affiliates, to Great-West Lifeco Inc. Great-West Lifeco is a financial services holding company with operations in Canada, the United States, and Europe and is a member of the Power Financial Corporation group of companies. With this sale, Putnam becomes part of a successful organization with a long-standing commitment to high-quality investment management and financial services. Please know that the change in ownership is not expected to affect the Putnam funds, the way Putnam manages money, or the funds’ management teams. Putnam will continue to operate as a separate company headquartered in Boston, and there will be no change in your funds’ fees or in the services your funds provide.

We would also like to take this opportunity to announce that Putnam President and Chief Executive Officer Ed Haldeman, one of your fund’s Trustees since 2004, was recently named President of the Funds, assuming this role from George Putnam, III. This change, together with the completion of the transaction with Great-West Lifeco, enables George Putnam to become an independent Trustee of the funds. Both George and Ed will continue serving on the Board of Trustees in our collective role of overseeing the Putnam funds on your behalf.

Lastly, we are pleased to inform you that a new independent Trustee, Robert J. Darretta, has joined your fund’s Board of Trustees. Mr. Darretta brings extensive leadership experience in corporate finance and accounting. He is a former Vice Chairman of the Board of Directors of Johnson & Johnson, one of the leading U.S. health-care and consumer products companies, where he also served as Chief Financial Officer, Executive Vice President, and Treasurer.

In the following pages, members of your fund’s management team discuss the fund’s performance and strategies for the fiscal year ended July 31, 2007, and provide their outlook for the months ahead. As always, we thank you for your support of the Putnam funds.



The George Putnam Fund of Boston: providing the benefits
of balanced investing for nearly 70 years

Your fund launched in 1937 when George Putnam, a Boston investment manager, decided to start a fund with an innovative approach — a balance of stocks to seek capital appreciation and bonds to help provide current income. The original portfolio featured industrial stocks, such as U.S. Smelting, Refining, & Mining Co., and railroad bonds.

This balanced approach made sense then, and we believe it continues to make sense now. In the late 1930s, the stock market experienced dramatic swings as businesses struggled to recover from the Great Depression and as the shadow of war began to spread across Europe and Asia. Today, global political and economic uncertainties also challenge investors.

Although the fund has experienced volatility at times, its balanced approach has kept it on course. When stocks were weak, the fund’s bonds helped results. Similarly, stocks have often provided leadership when bonds were hurt by rising interest rates or inflation.

In a letter to shareholders dated July 12, 1938, George Putnam articulated the balanced strategy: “Successful investing calls not so much for some clairvoyant ability to read the future as for the courage to stick to tested, common sense policies in the face of the unreliable emotional stresses and strains that constantly sweep the market place.” Putnam remains committed to this prudent approach to investing today.

The fund may invest a portion of its assets in small and/or midsize companies. Such investments increase the risk of greater price fluctuations.

The use of derivatives involves special risks and may result in losses.

The fund may have a significant portion of its holdings in bonds. Mutual funds that invest in bonds are subject to certain risks including interest-rate risk, credit risk, and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds are more exposed to interest-rate risk than short-term bonds. Unlike bonds, bond funds have ongoing fees and expenses.

Value investing seeks underpriced stocks, but there is no guarantee that a stock’s price will rise.

Over seven eventful decades,
the fund’s balance of stocks
and bonds has served share-
holders by providing income
and building wealth.



Performance and portfolio snapshots

The George Putnam Fund of Boston


Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will fluctuate, and you may have a gain or a loss when you sell your shares. Performance of class A shares assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart do not reflect a sales charge. See pages 10–12 for additional performance information. For a portion of the periods, this fund may have limited expenses, without which returns would have been lower. A 1% short-term trading fee may apply. To obtain the most recent month-end performance, visit www.putnam.com.

* The benchmark and Lipper group were not in existence at the time of the fund’s inception. The George Putnam Blended Index commenced 6/30/95. The Lipper average commenced 12/31/59.

“Relative to the equity benchmark, we ended the
period with an underweight to the financials
sector. In our opinion, the sector may be
starting to work out the difficulties stemming
from the collapse of the subprime mortgage
market. We are monitoring the situation closely
with an eye toward future opportunities.”

Jeanne Mockard, Portfolio Leader, The George Putnam Fund of Boston


Allocations calculated in terms of the market value of the fund’s equity holdings. Holdings and allocations may vary over time.

4


Report from the fund managers

The year in review


The George Putnam Fund of Boston’s performance for its 2007 fiscal year, which ended July 31, 2007, was driven primarily by the strength of holdings in the transportation, manufacturing, and energy sectors. Results were also buoyed by the appreciation of several holdings that were targeted for acquisition or merger. While the fund’s performance was solid on an absolute basis, it lagged the average for its Lipper peer group and its custom blended benchmark (which is made up of 60% S&P 500/Citigroup Value Index and 40% Lehman Aggregate Bond Index and is intended to provide a suitable performance target for a balanced fund). We attribute this relative underperformance to several unfavorable stock selection decisions, including the decision to avoid certain stocks included in the benchmark index when others seemed more attractive. The fund’s allocation to bonds, which was somewhat higher than the peer group average during the period, may also have contributed to the underperformance, since bonds did not perform as well as stocks during the period. However, we believe the fund’s balanced approach and defensive strategy helped keep its share price relatively stable as volatility in both the stock and bond markets began to increase in the second half of the year.

Market overview

Although financial markets delivered overall gains for the fiscal year, periodic bouts of volatility interrupted this progress. Volatility heightened during the second half of the year as the fallout from defaults in the subprime mortgage market began to affect other fixed-income sectors. Pools of higher-risk mortgage loans that had been packaged together and resold lost value. The resulting selloff by hedge funds, insurance companies, real estate investment trusts, and other types of investors sent a wave of volatility throughout world markets. Stocks from the financials sector bore the brunt of this exodus while sectors more tied to the industrial and global economy, such as basic materials, communications services, energy, and capital goods, experienced healthy gains. Continued demand from China, India, and other emerging markets boosted performance in these sectors, as did healthy levels of corporate spending. In the United States, larger-capitalization stocks were stronger than small caps, growth stocks significantly outpaced value stocks, and stocks outperformed bonds. International stocks continued to outpace domestic issues.

Market sector and fund performance

This comparison shows your fund’s performance in the context of different market sectors for the 12 months ended 7/31/07. See the previous page and pages 10–12 for additional fund performance information. Index descriptions can be found on page 17.


5


Strategy overview

The fund maintained its target allocation, 60% stocks and 40% bonds, throughout the second half of its fiscal year. Within the stock portfolio, we continued to emphasize sectors and industries that we believed would benefit from corporate capital spending. Our focus has been on basic materials, capital goods, energy, and transportation. This strategy was effective, and we do not anticipate any major shifts in this approach in the near term.

In our opinion, the financials sector may be starting to work out the difficulties stemming from the collapse of the subprime mortgage market and the subsequent troubles that surfaced in the wider credit markets. We also believe that consumer spending had been fueled largely by home equity loans and rising real estate values. With equity lenders under such pressure, we had been anticipating a falloff in consumer discretionary spending. Accordingly, we were cautious in the areas of financials and consumer cyclical stocks and took underweight positions.

The fund’s bond portfolio had been positioned to benefit from a steeper yield curve. (The yield curve is a graphical representation of the yield differences across a range of bond maturities.) In the second half of the fund’s fiscal year, yields on longer-term bonds rose more than yields on shorter-term securities, which caused the curve to steepen and boosted fund returns. Other strategy decisions that benefited the fund’s fixed-income holdings included an overweight position in manufactured housing bonds, a preference for non-Treasuries versus Treasury securities, and strong performance from the collateralized mortgage obligations (CMOs) in the portfolio. It is worth noting that in the period from 2003 to 2005, the fund was well rewarded for its positions in securities connected with subprime mortgages. However, in late 2005, we became concerned about underwriting standards and excessive leverage and we repositioned the portfolio away from what we considered an increasingly risky area. As a result,

Portfolio composition comparison

This chart shows how the fund’s weightings have changed over the last six months. Weightings are shown as a percentage of net assets. Holdings will vary over time.


6


in its bond portfolio the fund was not directly exposed to the companies and securities that were most affected by the mortgage defaults.

Your fund’s holdings

The portfolio’s top contributors for the second half of the fiscal year illustrate the effectiveness of our focus on companies we considered likely to benefit from corporate capital spending, as well as the steady demand from China, India and other emerging markets. Relative to the benchmark, the fund maintained overweight positions in each of these holdings, which boosted relative returns.

Indiana-based Cummins Inc. is in the business of designing, building, and distributing several types of engines and power generation systems, as well as all the component parts that make up these systems. It sells and rents equipment and also provides regular servicing and repairs. As the stock appreciated during the period, we trimmed the position somewhat to take profits. We believe the stock continues to offer upside potential.

Huntsman Corporation manufactures a wide variety of chemicals in its 63 facilities located throughout the world. From surfactants to epoxy-based polymers, pigments, and other performance products, it addresses the needs of consumers and industrial customers alike. News of a proposed takeover helped the stock appreciate to the point that we believed it was fully valued, so we sold the fund’s position and reinvested the proceeds elsewhere.

Freeport-McMoRan Copper & Gold operates mines and refineries in Indonesia and Spain, and had benefited from heightened demand for copper and gold. During the period, rumors that the company might be acquired sent share prices higher. We took advantage of the opportunity to sell some shares and realize some gains, but still hold a substantial position.

Shares of long-time fund holding Marathon Oil advanced as the price of oil edged significantly higher between January and July 2007. We trimmed the fund’s position to lock in profits and succeeded in doing so before the price of oil fell in July.

Squeezed by high fuel costs, the airline industry fell into a slump. We took the opportunity to build a position in United Airlines when, in our view, share prices had reached very compelling valuations. Some airlines, United among them, addressed the period’s challenge by reducing capacity. They flew fewer fights, held back on discounted fares, and streamlined operations. These strategies were successful; shares of UAL have advanced dramatically in the past six months, making the stock one of the fund’s top contributors for the period.

Top equity holdings

This table shows the fund’s top holdings, and the percentage of the fund’s net assets that each represented, as of 7/31/07. The fund’s holdings will change over time.

Holding  Percent of fund’s net assets  Industry 

Citigroup, Inc.  2.4%  Financial 

Bank of America Corp.  2.4%  Banking 

AT&T, Inc.  1.9%  Telephone 

JPMorgan Chase & Co.  1.6%  Financial 

General Electric Co.  1.6%  Conglomerates 

Hewlett-Packard Co.  1.5%  Computers 

ConocoPhillips  1.3%  Oil and gas 

Verizon Communications, Inc.  1.2%  Regional Bells 

Wachovia Corp.  1.0%  Banking 

Microsoft Corp.  0.9%  Software 


7


Not owning shares of oil services company Schlumberger Ltd. detracted from the fund’s relative performance. This company offers a multitude of informational services to oil companies, including project management, technical solutions, measuring, imaging, and monitoring of oil wells for the purposes of exploration and production. We had focused on other companies in this industry that we considered more attractive; while those companies did deliver gains, they did not perform as well as Schlumberger did.

The fund’s overweight position in Lennar Corp., a homebuilding company, dampened performance relative to the benchmark. Shares of Lennar lagged, reflecting the softening in the U.S. housing market. However, we believe Lennar is uniquely positioned to weather a period of weak demand for housing. The company’s strong balance sheet has ample liquidity that may enable it to acquire assets that less savvy homebuilding companies will be forced to sell. Even though the mortgage market is still unraveling, we think that homebuilders, as a group, may have hit their bottom and valuations are, in our opinion, becoming attractive. Consequently, we expect to maintain the Lennar position and are emphasizing other companies from this area as well.

Shares of investment banker and broker/dealer Bear Stearns tumbled during the period, as two hedge funds it managed imploded under the weight of the subprime mortgage debacle. Over the longer term, brokers in general benefited greatly from their involvement in mortgage derivatives, leveraged buyout activity, private equity, and hedge fund trading. However, all of these areas concern us at this time, and we are reassessing our positions, based on recent data. During the period, we reduced the fund’s position in Bear Stearns to an underweight relative to the fund’s equity benchmark.

Another stock that did not meet our expectations during the period was Circuit City. For some time, we have exercised caution when selecting companies that rely upon consumer discretionary purchases, because we believed consumer spending would weaken. In our view, shares of Circuit City had become quite undervalued and were poised to turn around. We consequently established a position, but the stock price had not delivered any significant gains by the end of the period. We are currently maintaining this position because we believe the company has the potential to recover in the coming months.

Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future.

Of special interest

Effective in May 2007, The George Putnam Fund of Boston increased its quarterly dividend, from $0.1140 to $0.1180 per class A share. This change reflects the higher yields and greater interest income earned by the fund, particularly in its fixed-income portfolio.

8


The outlook for your fund

The following commentary reflects anticipated developments that could affect your fund over the next six months, as well as your management team’s plans for responding to them.

The market has experienced a great deal of volatility in recent months. As a reminder, The George Putnam Fund of Boston includes bonds to limit volatility within the portfolio, and value stocks, which take advantage of opportunities that arise when market volatility is high. For example, as contrarian value seekers, we have taken profits in the strongest areas of the market and are looking for entry points to buy stocks and bonds in market segments that have fallen out of favor. While we remain concerned about the financials sector, we are looking for opportune moments to increase exposure to banks and insurance companies that have been hurt by holding mortgage-related debt.

Although we have taken profits in outperforming sectors, we believe that the emerging markets will continue to drive demand for basic materials, machinery, energy, and capital goods, and so we have maintained the fund’s overweight positions in those areas. In our view, corporate balance sheets appear to be healthy and we anticipate capital spending will continue to be robust in coming months.

Another trend we are monitoring closely is a reduction in the supply of equity following record levels of privatization. Private equity buyers have scooped up publicly held companies, causing the biggest retirement of publicly-held corporate equity in 100 years. Under these conditions, we believe professional, active fund management is a valuable advantage, as are the benefits of experienced fundamental researchers and securities analysts.

As always, we are committed to helping you achieve your financial goals. The George Putnam Fund of Boston is a balanced fund with broad exposure to stocks and bonds. We adhere to a disciplined, conservative investment approach intended to limit volatility and provide the potential for attractive long-term total returns.

The views expressed in this report are exclusively those of Putnam Management. They are not meant as investment advice.

The fund may invest a portion of its assets in small and/or midsize companies. Such investments increase the risk of fluctuations in the value of your investment. This fund may have a significant portion of its holdings in bonds. Mutual funds that invest in bonds are subject to certain risks, including interest-rate risk, credit risk, and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds are more exposed to interest-rate risk than short-term bonds. Unlike bonds, bond funds have ongoing fees and expenses. Value investing seeks underpriced stocks, but there is no guarantee that a stock’s price will rise.

9


Your fund’s performance

This section shows your fund’s performance for periods ended July 31, 2007, the end of its fiscal year. In accordance with regulatory requirements for mutual funds, we also include performance as of the most recent calendar quarter-end and expense information taken from the fund’s current prospectus. Performance should always be considered in light of a fund’s investment strategy. Data represents past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. For the most recent month-end performance, please visit www.putnam.com or call Putnam at 1-800-225-1581. Class Y shares are generally only available to corporate and institutional clients and clients in other approved programs. See the Terms and Definitions section in this report for definitions of the share classes offered by your fund.

Fund performance Total return for periods ended 7/31/07

  Class A    Class B    Class C    Class M    Class R  Class Y 
(inception dates)  (11/5/37)    (4/27/92)    (7/26/99)    (12/1/94)    (1/21/03)  (3/31/94) 
  NAV  POP  NAV  CDSC  NAV  CDSC  NAV  POP  NAV  NAV 

 
Annual average                     
(life of fund)  9.36%  9.28%  8.33%  8.33%  8.54%  8.54%  8.61%  8.56%  9.09%  9.42% 

10 years  73.08  64.00  60.58  60.58  60.47  60.47  64.73  59.39  68.86  77.46 
Annual average  5.64  5.07  4.85  4.85  4.84  4.84  5.12  4.77  5.38  5.90 

5 years  51.65  43.71  46.03  44.03  45.99  45.99  47.97  43.16  49.82  53.61 
Annual average  8.68  7.52  7.87  7.57  7.86  7.86  8.15  7.44  8.42  8.96 

3 years  27.86  21.12  25.05  22.05  24.98  24.98  25.97  21.90  26.90  28.82 
Annual average  8.54  6.60  7.74  6.87  7.72  7.72  8.00  6.82  8.26  8.81 

1 year  10.99  5.15  10.15  5.18  10.16  9.17  10.42  6.81  10.76  11.24 


Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After sales charge returns (public offering price, or POP) for class A and M shares reflect a maximum 5.25% and 3.25% load, respectively. Class B share returns reflect the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declining to 1% in the sixth year, and is eliminated thereafter. Class C shares reflect a 1% CDSC for the first year and is eliminated thereafter. Class R and Y shares have no initial sales charge or CDSC. Performance for class B, C, M, R, and Y shares before their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and, except for class Y shares, the higher operating expenses for such shares.

For a portion of the periods, this fund may have limited expenses, without which returns would have been lower.

A 1% short-term trading fee may be applied to shares exchanged or sold within 7 days of purchase.


Past performance does not indicate future results. At the end of the same time period, a $10,000 investment in the fund’s class B and class C shares would have been valued at $16,058 and $16,047, respectively, and no contingent deferred sales charges would apply. A $10,000 investment in the fund’s class M shares ($9,675 after sales charge) would have been valued at $15,939 at public offering price. A $10,000 investment in the fund’s class R and class Y shares would have been valued at $16,886 and $17,746, respectively.

10


Comparative index returns For periods ended 7/31/07

      George Putnam Blended   
      Index (60% S&P 500/   
      Citigroup Value Index   
  S&P 500/Citigroup  Lehman Aggregate  and 40% Lehman  Lipper Balanced Funds 
  Value Index  Bond Index  Aggregate Bond Index)  category average† 

Annual average         
(life of fund)  —*  —*  —*  —* 

10 years  102.60%  76.11%  98.46%  75.29% 
Annual average  7.32  5.82  7.09  5.65 

5 years  96.11  24.06  65.70  54.28 
Annual average  14.42  4.41  10.63  9.01 

3 years  53.26  12.25  35.96  30.14 
Annual average  15.30  3.93  10.78  9.15 

1 year  15.82  5.58  11.78  12.07 


Index and Lipper results should be compared to fund performance at net asset value.

* The benchmarks were not in existence at the time of the fund’s inception. The S&P 500/Citigroup Value Index commenced 6/30/95. The Lehman Aggregate Bond Index commenced 12/31/75. The George Putnam Blended Index commenced 6/30/95. The Lipper Balanced Funds category average commenced 12/31/59.

† Over the 1-, 3-, 5-, and 10-year periods ended 7/31/07, there were 765, 581, 421, and 225 funds, respectively, in this Lipper category.

Fund price and distribution information For the 12-month period ended 7/31/07

Distributions  Class A    Class B  Class C  Class M    Class R  Class Y 

Number    4  4  4  4    4  4 

Income  $0.524  $0.375  $0.384  $0.431  $0.480  $0.571 

Capital gains                 

Long-term  1.242  1.242  1.242  1.242  1.242  1.242 

Short-term  0.291  0.291  0.291  0.291  0.291  0.291 

Total  $2.057  $1.908  $1.917  $1.964  $2.013  $2.104 
  
Share value:  NAV  POP  NAV  NAV  NAV  POP  NAV  NAV 

7/31/06  $18.21  $19.22  $18.02  $18.09  $18.02  $18.63  $18.15  $18.26 

7/31/07  18.10  19.10  17.90  17.97  17.89  18.49  18.04  18.15 
    
Current yield (end of period)                 

Current dividend rate1  2.61%  2.47%  1.79%  1.85%  2.12%  2.06%  2.37%  2.87% 

Current 30-day SEC yield2,3                 
(with expense limitation)  2.76  2.61  1.99  1.99  2.25  2.17  2.50  3.02 

Current 30-day SEC yield3                 
(without expense limitation)  2.75  2.61  1.98  1.98  2.24  2.17  2.49  3.01 


1 Most recent distribution, excluding capital gains, annualized and divided by NAV or POP at end of period.

2 For a portion of the period, this fund limited expenses, without which yields would have been lower.

3 Based only on investment income, calculated using SEC guidelines.

11


Fund performance as of most recent calendar quarter Total return for periods ended 6/30/07

  Class A    Class B    Class C    Class M    Class R  Class Y 
(inception dates)  (11/5/37)    (4/27/92)    (7/26/99)    (12/1/94)    (1/21/03)  (3/31/94) 
  NAV  POP  NAV  CDSC  NAV  CDSC  NAV  POP  NAV  NAV 

Annual average                     
(life of fund)  9.41%  9.33%  8.39%  8.39%  8.59%  8.59%  8.66%  8.61%  9.14%  9.47% 

10 years  86.42  76.65  72.97  72.97  72.91  72.91  77.55  71.80  81.86  91.23 
Annual average  6.43  5.85  5.63  5.63  5.63  5.63  5.91  5.56  6.16  6.70 

5 years  47.33  39.59  41.91  39.91  41.98  41.98  43.80  39.11  45.58  49.24 
Annual average  8.06  6.90  7.25  6.95  7.26  7.26  7.54  6.82  7.80  8.34 

3 years  29.41  22.62  26.57  23.57  26.58  26.58  27.52  23.38  28.46  30.38 
Annual average  8.97  7.03  8.17  7.31  8.17  8.17  8.44  7.25  8.71  9.25 

1 year  15.00  8.96  14.11  9.11  14.17  13.17  14.47  10.74  14.72  15.25 


Fund’s annual operating expenses For the fiscal year ended 7/31/06

  Class A  Class B  Class C  Class M  Class R  Class Y 

Total annual fund operating expenses  0.96%  1.71%  1.71%  1.46%  1.21%  0.71% 


Expense information in this table is taken from the most recent prospectus, is subject to change, and may differ from that shown in the next section and in the financial highlights of this report. Expenses are shown as a percentage of average net assets.

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Your fund’s expenses

As a mutual fund investor, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. In the most recent six-month period, your fund limited these expenses; had it not done so, expenses would have been higher. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial representative.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in The George Putnam Fund of Boston from February 1, 2007, to July 31, 2007. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

  Class A  Class B  Class C  Class M  Class R  Class Y 

Expenses paid per $1,000*  $ 4.82  $ 8.53  $ 8.53  $ 7.29  $ 6.06  $ 3.58 

Ending value (after expenses)  $1,004.20  $1,000.30  $1,000.00  $1,001.20  $1,002.90  $1,005.40 


* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 7/31/07. The expense ratio may differ for each share class (see the last table in this section). Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended July 31, 2007, use the calculation method below. To find the value of your investment on February 1, 2007, go to www.putnam.com and log on to your account. Click on the “Transaction History” tab in your Daily Statement and enter 02/01/2007 in both the “from” and “to” fields. Alternatively, call Putnam at 1-800-225-1581.


Compare expenses using the SEC’s method

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

  Class A  Class B  Class C  Class M  Class R  Class Y 

Expenses paid per $1,000*  $ 4.86  $ 8.60  $ 8.60  $ 7.35  $ 6.11  $ 3.61 

Ending value (after expenses)  $1,019.98  $1,016.27  $1,016.27  $1,017.50  $1,018.74  $1,021.22 


* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 7/31/07. The expense ratio may differ for each share class (see the last table in this section). Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

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Compare expenses using industry averages

You can also compare your fund’s expenses with the average of its peer group, as defined by Lipper, an independent fund-rating agency that ranks funds relative to others that Lipper considers to have similar investment styles or objectives. The expense ratio for each share class shown below indicates how much of your fund’s average net assets have been used to pay ongoing expenses during the period.

  Class A  Class B  Class C  Class M  Class R  Class Y 

Your fund’s annualized expense ratio*  0.97%  1.72%  1.72%  1.47%  1.22%  0.72% 

Average annualized expense ratio for Lipper peer group†  1.24%  1.99%  1.99%  1.74%  1.49%  0.99% 


* For the fund’s most recent fiscal half year; may differ from expense ratios based on one-year data in the financial highlights.

† Putnam is committed to keeping fund expenses below the Lipper peer group average expense ratio and will limit fund expenses if they exceed the Lipper average. The Lipper average is a simple average of front-end load funds in the peer group that excludes 12b-1 fees as well as any expense offset and brokerage service arrangements that may reduce fund expenses. To facilitate the comparison in this presentation, Putnam has adjusted the Lipper average to reflect the 12b-1 fees carried by each class of shares other than class Y shares, which do not incur 12b-1 fees. Investors should note that the other funds in the peer group may be significantly smaller or larger than the fund, and that an asset-weighted average would likely be lower than the simple average. Also, the fund and Lipper report expense data at different times and for different periods. The fund’s expense ratio shown here is annualized data for the most recent si x-month period, while the quarterly updated Lipper average is based on the most recent fiscal year-end data available for the peer group funds as of 6/30/07.

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Your fund’s portfolio turnover and Morningstar® Risk

Putnam funds are actively managed by teams of experts who buy and sell securities based on intensive analysis of companies, industries, economies, and markets. Portfolio turnover is a measure of how often a fund’s managers buy and sell securities for your fund. A portfolio turnover of 100%, for example, means that the managers sold and replaced securities valued at 100% of a fund’s assets within a one-year period. Funds with high turnover may be more likely to generate capital gains and dividends that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs, which may detract from performance.

Funds that invest in bonds or other fixed-income instruments may have higher turnover than funds that invest only in stocks. Short-term bond funds tend to have higher turnover than longer-term bond funds, because shorter-term bonds will mature or be sold more frequently than longer-term bonds. You can use the table below to compare your fund’s turnover with the average turnover for funds in its Lipper category.

Turnover comparisons

Percentage of holdings that change every year

  2007  2006  2005  2004  2003 

The George Putnam Fund of Boston  144%*  117%*  169%*  166%  121%†‡ 

Lipper Balanced Funds category average  68%  70%  72%  74%  81% 


Turnover data for the fund is calculated based on the fund’s fiscal-year period, which ends on July 31. Turnover data for the fund’s Lipper category is calculated based on the average of the turnover of each fund in the category for its fiscal year ended during the indicated year. Fiscal years vary across funds in the Lipper category, which may limit the comparability of the fund’s portfolio turnover rate to the Lipper average. Comparative data for 2007 is based on information available as of 7/31/07.

* Portfolio turnover excludes dollar roll transactions.

† Portfolio turnover excludes certain Treasury note transactions executed in connection with a short-term trading strategy.

‡ Portfolio turnover excludes the impact of assets received from the acquisition of Putnam Balanced Fund and Putnam Balanced Retirement Fund.

Your fund’s Morningstar® Risk

This risk comparison is designed to help you understand how your fund compares with other funds. The comparison utilizes a risk measure developed by Morningstar, an independent fund-rating agency. This risk measure is referred to as the fund’s Morningstar Risk.


Your fund’s Morningstar Risk is shown alongside that of the average fund in its Morningstar category. The risk bar broadens the comparison by translating the fund’s Morningstar Risk into a percentile, which is based on the fund’s ranking among all funds rated by Morningstar as of June 30, 2007. A higher Morningstar Risk generally indicates that a fund’s monthly returns have varied more widely.

Morningstar determines a fund’s Morningstar Risk by assessing variations in the fund’s monthly returns — with an emphasis on downside variations — over a 3-year period, if available. Those measures are weighted and averaged to produce the fund’s Morningstar Risk. The information shown is provided for the fund’s class A shares only; information for other classes may vary. Morningstar Risk is based on historical data and does not indicate future results. Morningstar does not purport to measure the risk associated with a current investment in a fund, either on an absolute basis or on a relative basis. Low Morningstar Risk does not mean that you cannot lose money on an investment in a fund. Copyright 2007 Morningstar, Inc. All Rights Reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accur ate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

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Your fund’s management

Your fund is managed by the members of the Putnam Large-Cap Value, Core Fixed-Income, and Global Asset Allocation teams. Jeanne Mockard is the Portfolio Leader of the fund. Geoffrey Kelley, Jeffrey Knight, and Raman Srivastava are Portfolio Members. The Portfolio Leader and Portfolio Members coordinate the teams’ management of the fund.

For a complete listing of the members of the Putnam Large-Cap Value, Core Fixed-Income, and Global Asset Allocation teams, including those who are not Portfolio Leaders or Portfolio Members of your fund, visit Putnam’s Individual Investor Web site at www.putnam.com.

Investment team fund ownership

The table below shows how much the fund’s current Portfolio Leader and Portfolio Members have invested in the fund and in all Putnam mutual funds (in dollar ranges). Information shown is as of July 31, 2007, and July 31, 2006.


Trustee and Putnam employee fund ownership

As of July 31, 2007, all of the Trustees of the Putnam funds owned fund shares. The table below shows the approximate value of investments in the fund and all Putnam funds as of that date by the Trustees and Putnam employees. These amounts include investments by the Trustees’ and employees’ immediate family members and investments through retirement and deferred compensation plans.

    Total assets in 
  Assets in the fund  all Putnam funds 

Trustees  $ 951,000  $ 92,000,000 

Putnam employees  $7,068,000  $446,000,000 


Other Putnam funds managed by the Portfolio Leader and Portfolio Members

Jeffrey Knight is also a Portfolio Leader of the three Putnam Asset Allocation Funds, Putnam Income Strategies Fund, and the ten Putnam RetirementReady® Funds.

Raman Srivastava is also a Portfolio Member of Putnam Global Income Trust and Putnam Income Fund.

Jeanne Mockard, Geoffrey Kelley, Jeffrey Knight, and Raman Srivastava may also manage other accounts and variable trust funds advised by Putnam Management or an affiliate.

Changes in your fund’s Portfolio Leader and Portfolio Members

Your Portfolio Leader and Portfolio Members did not change during the year ended July 31, 2007.

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Terms and definitions

Important terms

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.

Net asset value (NAV) is the price, or value, of one share of a mutual fund, without a sales charge. NAVs fluctuate with market conditions. NAV is calculated by dividing the net assets of each class of shares by the number of outstanding shares in the class.

Public offering price (POP) is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. POP performance figures shown here assume the 5.25% maximum sales charge for class A shares and 3.25% for class M shares.

Contingent deferred sales charge (CDSC) is generally a charge applied at the time of the redemption of class B or C shares and assumes redemption at the end of the period. Your fund’s class B CDSC declines from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. The CDSC for class C shares is 1% for one year after purchase.

Share classes

Class A shares are generally subject to an initial sales charge and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class B shares are not subject to an initial sales charge. They may be subject to a CDSC.

Class C shares are not subject to an initial sales charge and are subject to a CDSC only if the shares are redeemed during the first year.

Class M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class R shares are not subject to an initial sales charge or CDSC and are available only to certain defined contribution plans.

Class Y shares are not subject to an initial sales charge or CDSC, and carry no 12b-1 fee. They are only available to eligible purchasers, including eligible defined contribution plans or corporate IRAs.

Comparative indexes

George Putnam Blended Index is an unmanaged index administered by Putnam Management, 60% of which is the Standard and Poor’s 500/Citigroup Value Index and 40% of which is the Lehman Aggregate Bond Index.

Lehman Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.

Merrill Lynch 91-Day Treasury Bill Index is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.

S&P 500 Index is an unmanaged index of common stock performance.

S&P 500/Citigroup Value Index is an unmanaged capitalization-weighted index of large-cap stocks chosen for their value orientation.

Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index.

Lipper is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category averages reflect performance trends for funds within a category.

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Trustee approval of management contract

General conclusions

The Board of Trustees of the Putnam funds oversees the management of each fund and, as required by law, determines annually whether to approve the continuance of your fund’s management contract with Putnam Investment Management (“Putnam Management”). In this regard, the Board of Trustees, with the assistance of its Contract Committee consisting solely of Trustees who are not “interested persons” (as such term is defined in the Investment Company Act of 1940, as amended) of the Putnam funds (the “Independent Trustees”), requests and evaluates all information it deems reasonably necessary under the circumstances. Over the course of several months ending in June 2007, the Contract Committee met several times to consider the information provided by Putnam Management and other information developed with the assistance of the Board’s independent counsel and independent staff. The Contract Committee revie wed and discussed key aspects of this information with all of the Independent Trustees. The Contract Committee recommended, and the Independent Trustees approved, the continuance of your fund’s management contract, effective July 1, 2007.

In addition, in anticipation of the sale of Putnam Investments to Great-West Lifeco, at a series of meetings ending in March 2007, the Trustees reviewed and approved new management and distribution arrangements to take effect upon the change of control. Shareholders of all funds approved the management contracts in May 2007, and the change of control transaction was completed on August 3, 2007. Upon the change of control, the management contracts that were approved by the Trustees in June 2007 automatically terminated and were replaced by new contracts that had been approved by shareholders. In connection with their review for the June 2007 continuance of the Putnam funds’ management contracts, the Trustees did not identify any facts or circumstances that would alter the substance of the conclusions and recommendations they made in their review of the contracts to take effect upon the change of control.

The Independent Trustees’ approval was based on the following conclusions:

That the fee schedule in effect for your fund represented reasonable compensation in light of the nature and quality of the services being provided to the fund, the fees paid by competitive funds and the costs incurred by Putnam Management in providing such services, and

That this fee schedule represented an appropriate sharing between fund shareholders and Putnam Management of such economies of scale as may exist in the management of the fund at current asset levels.

These conclusions were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered these factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors. It is also important to recognize that the fee arrangements for your fund and the other Putnam funds are the result of many years of review and discussion between the Independent Trustees and Putnam Management, that certain aspects of such arrangements may receive greater scrutiny in some years than others, and that the Trustees’ conclusions may be based, in part, on their consideration of these same arrangements in prior years.

Management fee schedules and categories; total expenses

The Trustees reviewed the management fee schedules in effect for all Putnam funds, including fee levels and breakpoints, and the assignment of funds to particular fee categories. In reviewing fees and expenses, the Trustees generally focused their attention on material changes in circumstances — for example, changes in a fund’s size or investment style, changes in Putnam Management’s operating costs or responsibilities, or changes in competitive practices in the mutual fund industry — that suggest that consideration of fee changes might be warranted. The Trustees concluded that the circumstances did not warrant changes to the management fee structure of your fund, which had been carefully developed over the years, re-examined on many occasions and adjusted where appropriate. The Trustees focused on two areas of particular interest, as discussed further b elow:

Competitiveness. The Trustees reviewed comparative fee and expense information for competitive funds, which indicated that, in a custom peer group of competitive funds selected by Lipper Inc., your fund ranked in the 28th percentile in management fees and in the 17th percentile in total expenses (less any applicable 12b-1 fees) as of December 31, 2006 (the first percentile being the least expensive funds and the 100th percentile being the most expensive funds). (Because the fund’s custom peer group is

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smaller than the fund’s broad Lipper Inc. peer group, this expense information may differ from the Lipper peer expense information found elsewhere in this report.) The Trustees noted that expense ratios for a number of Putnam funds, which show the percentage of fund assets used to pay for management and administrative services, distribution (12b-1) fees and other expenses, had been increasing recently as a result of declining net assets and the natural operation of fee breakpoints.

The Trustees noted that the expense ratio increases described above were currently being controlled by expense limitations implemented in January 2004 and which Putnam Management had committed to maintain at least through 2007. In anticipation of the change of control of Putnam Investments, the Trustees requested, and received a commitment from Putnam Management and Great-West Lifeco, to extend this program through at least June 30, 2009. These expense limitations give effect to a commitment by Putnam Management that the expense ratio of each open-end fund would be no higher than the average expense ratio of the competitive funds included in the fund’s relevant Lipper universe (exclusive of any applicable 12b-1 charges in each case). The Trustees observed that this commitment to limit fund expenses has served shareholders well since its inception.

In order to ensure that the expenses of the Putnam funds continue to meet evolving competitive standards, the Trustees requested, and Putnam Management agreed, to extend for the twelve months beginning July 1, 2007, an additional expense limitation for certain funds at an amount equal to the average expense ratio (exclusive of 12b-1 charges) of a custom peer group of competitive funds selected by Lipper to correspond to the size of the fund. This additional expense limitation will be applied to those open-end funds that had above-average expense ratios (exclusive of 12b-1 charges) based on the custom peer group data for the period ended December 31, 2006. This additional expense limitation will not be applied to your fund because it had a below-average expense ratio relative to its custom peer group.

Economies of scale. Your fund currently has the benefit of breakpoints in its management fee that provide shareholders with significant economies of scale, which means that the effective management fee rate of a fund (as a percentage of fund assets) declines as a fund grows in size and crosses specified asset thresholds. Conversely, as a fund shrinks in size — as has been the case for many Putnam funds in recent years — these breakpoints result in increasing fee levels. In recent years, the Trustees have examined the operation of the existing breakpoint structure during periods of both growth and decline in asset levels. The Trustees concluded that the fee schedules in effect for the funds represented an appropriate sharin g of economies of scale at current asset levels. In reaching this conclusion, the Trustees considered the Contract Committee’s stated intent to continue to work with Putnam Management to plan for an eventual resumption in the growth of assets, and to consider the potential economies that might be produced under various growth assumptions.

In connection with their review of the management fees and total expenses of the Putnam funds, the Trustees also reviewed the costs of the services to be provided and profits to be realized by Putnam Management and its affiliates from the relationship with the funds. This information included trends in revenues, expenses and profitability of Putnam Management and its affiliates relating to the investment management and distribution services provided to the funds. In this regard, the Trustees also reviewed an analysis of Putnam Management’s revenues, expenses and profitability with respect to the funds’ management contracts, allocated on a fund-by-fund basis.

Investment performance

The quality of the investment process provided by Putnam Management represented a major factor in the Trustees’ evaluation of the quality of services provided by Putnam Management under your fund’s management contract. The Trustees were assisted in their review of the Putnam funds’ investment process and performance by the work of the Investment Process Committee of the Trustees and the Investment Oversight Committees of the Trustees, which had met on a regular monthly basis with the funds’ portfolio teams throughout the year. The Trustees concluded that Putnam Management generally provides a high-quality investment process — as measured by the experience and skills of the individuals assigned to the management of fund portfolios, the resources made available to such personnel, and in general the ability of Putnam Management to attract and retain hi gh-quality personnel — but also recognized that this does not guarantee favorable investment results for every fund in every time period. The Trustees considered the investment performance of each fund over multiple time periods and considered information comparing each fund’s performance with various benchmarks and with the performance of competitive funds.

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The Trustees noted the satisfactory investment performance of many Putnam funds. They also noted the disappointing investment performance of certain funds in recent years and discussed with senior management of Putnam Management the factors contributing to such underperformance and actions being taken to improve performance. The Trustees recognized that, in recent years, Putnam Management has made significant changes in its investment personnel and processes and in the fund product line to address areas of underperformance. In particular, they noted the important contributions of Putnam Management’s leadership in attracting, retaining and supporting high-quality investment professionals and in systematically implementing an investment process that seeks to merge the best features of fundamental and quantitative analysis. The Trustees indicated their intention to continue to monitor performance trends to assess the effectiveness of t hese changes and to evaluate whether additional changes to address areas of underperformance are warranted.

In the case of your fund, the Trustees considered that your fund’s class A share cumulative total return performance at net asset value was in the following percentiles of its Lipper Inc. peer group (Lipper Balanced Funds) for the one-, three- and five-year periods ended March 31, 2007 (the first percentile being the best-performing funds and the 100th percentile being the worst-performing funds):

One-year period  Three-year period  Five-year period 

8th  46th  42nd 

(Because of the passage of time, these performance results may differ from the performance results for more recent periods shown elsewhere in this report. Over the one-, three- and five-year periods ended March 31, 2007, there were 729, 560, and 405 funds, respectively, in your fund’s Lipper peer group.* Past performance is no guarantee of future returns.)

As a general matter, the Trustees concluded that cooperative efforts between the Trustees and Putnam Management represent the most effective way to address investment performance problems. The Trustees noted that investors in the Putnam funds have, in effect, placed their trust in the Putnam organization, under the oversight of the funds’ Trustees, to make appropriate decisions regarding the management of the funds. Based on the responsiveness of Putnam Management in the recent past to Trustee concerns about investment performance, the Trustees concluded that it is preferable to seek change within Putnam Management to address performance shortcomings. In the Trustees’ view, the alternative of terminating a management contract and engaging a new investment adviser for an underperforming fund would entail significant disruptions and would not provide any greater assurance of improved investment performance.

Brokerage and soft-dollar allocations; other benefits

The Trustees considered various potential benefits that Putnam Management may receive in connection with the services it provides under the management contract with your fund. These include benefits related to brokerage and soft-dollar allocations, whereby a portion of the commissions paid by a fund for brokerage may be used to acquire research services that may be useful to Putnam Management in managing the assets of the fund and of other clients. The Trustees indicated their continued intent to monitor the potential benefits associated with the allocation of fund brokerage to ensure that the principle of seeking “best price and execution” remains paramount in the portfolio trading process. The Trustees’ annual review of your fund’s management contract also included the review of its distributor’s contract and distribution plan with Putnam Retail M anagement Limited Partnership and the custodian agreement and investor servicing agreement with Putnam Fiduciary Trust Company (“PFTC”), each of which provides benefits to affiliates of Putnam Management. In the case of the custodian agreement, the Trustees considered that, effective January 1, 2007, the Putnam funds had engaged State Street Bank and Trust Company as custodian and began to transition the responsibility for providing custody services away from PFTC.

* The percentile rankings for your fund’s class A share annualized total return performance in the Lipper Balanced Funds category for the one-, five- and ten-year periods ended June 30, 2007 were 38%, 60%, and 49%, respectively. Over the one-, five- and ten-year periods ended June 30, 2007, the fund ranked 284th out of 763, 247th out of 415, and 107th out of 220 funds, respectively. Note that this more recent information was not available when the Trustees approved the continuance of your fund’s management contract.

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Comparison of retail and institutional fee schedules

The information examined by the Trustees as part of their annual contract review has included for many years information regarding fees charged by Putnam Management and its affiliates to institutional clients such as defined benefit pension plans, college endowments, etc. This information included comparison of such fees with fees charged to the funds, as well as a detailed assessment of the differences in the services provided to these two types of clients. The Trustees observed, in this regard, that the differences in fee rates between institutional clients and the funds are by no means uniform when examined by individual asset sectors, suggesting that differences in the pricing of investment management services to these types of clients reflect to a substantial degree historical competitive forces operating in separate market places. The Trustees considered the fact that fee rates across all asset sectors are higher on average for funds than for institutional clients, as well as the differences between the services that Putnam Management provides to the Putnam funds and those that it provides to institutional clients of the firm, but did not rely on such comparisons to any significant extent in concluding that the management fees paid by your fund are reasonable.

Other information for shareholders

Putnam’s policy on confidentiality

In order to conduct business with our shareholders, we must obtain certain personal information such as account holders’ addresses, telephone numbers, Social Security numbers, and the names of their financial advisors. We use this information to assign an account number and to help us maintain accurate records of transactions and account balances. It is our policy to protect the confidentiality of your information, whether or not you currently own shares of our funds, and in particular, not to sell information about you or your accounts to outside marketing firms. We have safeguards in place designed to prevent unauthorized access to our computer systems and procedures to protect personal information from unauthorized use. Under certain circumstances, we share this information with outside vendors who provide services to us, such as mailing and proxy solicitation. In t hose cases, the service providers enter into confidentiality agreements with us, and we provide only the information necessary to process transactions and perform other services related to your account. We may also share this information with our Putnam affiliates to service your account or provide you with information about other Putnam products or services. It is also our policy to share account information with your financial advisor, if you’ve listed one on your Putnam account. If you would like clarification about our confidentiality policies or have any questions or concerns, please don’t hesitate to contact us at 1-800-225-1581, Monday through Friday, 8:30 a.m. to 7:00 p.m., or Saturdays from 9:00 a.m. to 5:00 p.m. Eastern Time.

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2007, are available on the Putnam Individual Investor Web site, www.putnam.com/individual, and on the SEC’s Web site, www.sec.gov. If you have questions about finding forms on the SEC’s Web site, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.

Fund portfolio holdings

The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain the fund’s Forms N-Q on the SEC’s Web site at www.sec.gov. In addition, the fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC’s Web site or the operation of the Public Reference Room.

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Financial statements

These sections of the report, as well as the accompanying Notes, preceded by the Report of Independent Registered Public Accounting Firm, constitute the fund’s financial statements.

The fund’s portfolio lists all the fund’s investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.

Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and non-investment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)

Statement of operations shows the fund’s net investment gain or loss. This is done by first adding up all the fund’s earnings — from dividends and interest income — and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings — as well as any unrealized gains or losses over the period — is added to or subtracted from the net investment result to determine the fund’s net gain or loss for the fiscal year.

Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, by distributions to shareholders, and by changes in the number of the fund’s shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned.

Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlight table also includes the current reporting period.

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Report of Independent Registered Public Accounting Firm

To the Trustees and Shareholders of
The George Putnam Fund of Boston:

In our opinion, the accompanying statement of assets and liabilities, including the fund’s portfolio, 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 The George Putnam Fund of Boston (the “fund”) at July 31, 2007, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the fund’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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 investments owned at July 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
September 12, 2007

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The fund’s portfolio 7/31/07

COMMON STOCKS (57.2%)*       
  Shares    Value 

  
Banking (5.8%)       
Bank of America Corp. (S)  2,133,900  $  101,189,538 
BB&T Corp.  134,000    5,014,280 
Marshall & Ilsley Corp.  118,900    4,899,869 
National City Corp.  283,400    8,329,126 
PNC Financial Services Group  501,600    33,431,640 
U.S. Bancorp  290,200    8,691,490 
Wachovia Corp. (S)  900,600    42,517,326 
Washington Mutual, Inc. (S)  127,800    4,796,334 
Wells Fargo & Co.  1,080,400    36,485,108 
      245,354,711 

 
Basic Materials (3.6%)       
Bemis Co., Inc.  160,000    4,715,200 
Cabot Corp.  148,200    5,984,316 
Dow Chemical Co. (The)  535,400    23,279,192 
E.I. du Pont de Nemours & Co. (S)  187,300    8,752,529 
Freeport-McMoRan Copper &       
Gold, Inc. Class B (S)  170,592    16,032,236 
Lubrizol Corp. (The)  179,900    11,272,534 
Nucor Corp.  402,300    20,195,460 
Rohm & Haas Co.  160,100    9,048,852 
Sonoco Products Co.  676,300    24,799,921 
Steel Dynamics, Inc. (S)  252,900    10,604,097 
United States Steel Corp. (S)  181,800    17,869,122 
      152,553,459 

 
Capital Goods (4.3%)       
Autoliv, Inc. (Sweden)  46,200    2,583,966 
Boeing Co. (The) (S)  150,000    15,514,500 
Caterpillar, Inc.  264,800    20,866,240 
Cummins, Inc.  46,800    5,555,160 
Eaton Corp.  59,900    5,821,082 
General Dynamics Corp.  87,500    6,874,000 
L-3 Communications Holdings, Inc.  146,000    14,243,760 
Lockheed Martin Corp. (S)  351,400    34,605,872 
Northrop Grumman Corp.  229,700    17,480,170 
Pactiv Corp. †  482,400    15,248,664 
Parker-Hannifin Corp.  101,700    10,035,756 
Raytheon Co.  443,900    24,574,304 
Waste Management, Inc.  243,300    9,252,699 
      182,656,173 

 
Communication Services (4.2%)       
ALLTEL Corp.  168,600    11,119,170 
AT&T, Inc.  2,054,182    80,441,767 
CenturyTel, Inc.  320,400    14,696,748 
Embarq Corp.  237,700    14,687,483 
Qwest Communications       
International, Inc. †  721,000    6,150,130 
Verizon Communications, Inc.  1,150,000    49,013,000 
      176,108,298 

 
Conglomerates (2.6%)       
Danaher Corp.  153,000    11,426,040 
General Electric Co. (S)  1,764,800    68,403,648 
Honeywell International, Inc.  308,100    17,718,831 
Tyco International, Ltd.  295,412    13,970,033 
      111,518,552 


COMMON STOCKS (57.2%)* continued       

  Shares    Value 
Consumer Cyclicals (4.0%)       
AutoZone, Inc. †  43,400  $  5,503,554 
Barnes & Noble, Inc.  257,100    8,625,705 
Big Lots, Inc. † (S)  415,800    10,752,588 
Black & Decker Manufacturing Co.  52,700    4,562,239 
Carnival Corp. (S)  175,300    7,767,543 
Circuit City Stores-Circuit City Group  712,200    8,475,180 
Gannett Co., Inc. (S)  258,700    12,909,130 
Gap, Inc. (The)  293,600    5,049,920 
KB Home (S)  231,900    7,376,739 
Lennar Corp. (S)  399,300    12,242,538 
Macy’s, Inc.  236,000    8,512,520 
Mattel, Inc.  209,700    4,804,227 
NVR, Inc. † (S)  39,409    22,797,318 
OfficeMax, Inc.  95,000    3,123,600 
Regal Entertainment Group Class A (S)  883,400    18,895,926 
Sears Holdings Corp. †  61,600    8,426,264 
Walt Disney Co. (The)  632,900    20,885,700 
      170,710,691 

 
Consumer Staples (4.0%)       
Altria Group, Inc.  417,100    27,724,637 
Anheuser-Busch Cos., Inc.  65,700    3,204,189 
Clorox Co.  164,300    9,933,578 
Colgate-Palmolive Co.  218,700    14,434,200 
General Mills, Inc.  332,900    18,515,898 
H.J. Heinz Co.  268,000    11,727,680 
Kimberly-Clark Corp.  79,400    5,341,238 
Kraft Foods, Inc. Class A  288,643    9,453,058 
Kroger Co.  234,300    6,082,428 
Loews Corp. - Carolina Group  42,600    3,228,654 
McDonald’s Corp.  66,400    3,178,568 
Newell Rubbermaid, Inc.  448,300    11,857,535 
Pepsi Bottling Group, Inc. (The)  429,400    14,367,724 
Procter & Gamble Co. (The)  250,000    15,465,000 
Time Warner, Inc. (S)  659,700    12,705,822 
      167,220,209 

 
Energy (3.5%)       
Chevron Corp. (S)  284,800    24,282,048 
ConocoPhillips  682,900    55,205,636 
Devon Energy Corp.  75,500    5,633,055 
ENSCO International, Inc.  102,000    6,229,140 
Exxon Mobil Corp.  127,300    10,837,049 
Marathon Oil Corp.  267,100    14,743,920 
Pride International, Inc. †  272,900    9,565,145 
Sunoco, Inc.  61,400    4,096,608 
Tesoro Corp. (S)  117,000    5,826,600 
Valero Energy Corp. (S)  186,600    12,504,066 
      148,923,267 

 
Financial (5.7%)       
AMBAC Financial Group, Inc.  42,600    2,860,590 
Chubb Corp. (The)  156,000    7,863,960 
Citigroup, Inc. #  2,181,100    101,573,827 
Hospitality Properties Trust (R) (S)  189,900    7,284,564 
HRPT Properties Trust (R)  710,400    6,642,240 
JPMorgan Chase & Co.  1,574,700    69,302,547 
Lehman Brothers Holdings, Inc. (S)  137,700    8,537,400 

24


COMMON STOCKS (57.2%)* continued       
  Shares    Value 

 
Financial continued       
Lincoln National Corp.  213,900  $  12,902,448 
MetLife, Inc.  184,700    11,122,634 
Radian Group, Inc.  113,800    3,836,198 
Travelers Cos., Inc. (The)  166,500    8,454,870 
      240,381,278 

 
Health Care (4.7%)       
Aetna, Inc.  115,200    5,537,664 
AmerisourceBergen Corp.  302,900    14,269,619 
Boston Scientific Corp. †  587,500    7,725,625 
Bristol-Myers Squibb Co.  179,900    5,110,959 
Coventry Health Care, Inc. †  127,600    7,121,356 
Covidien, Ltd. (Bermuda) †  295,412    12,097,121 
King Pharmaceuticals, Inc. †  418,400    7,116,984 
McKesson Corp.  418,200    24,155,232 
Merck & Co., Inc.  756,000    37,535,400 
Pfizer, Inc.  1,380,800    32,462,608 
WellCare Health Plans, Inc. †  226,100    22,894,886 
WellPoint, Inc. †  311,600    23,407,392 
      199,434,846 

 
Insurance (1.1%)       
Allstate Corp. (The)  231,300    12,293,595 
Everest Re Group, Ltd. (Barbados)  41,000    4,028,250 
Genworth Financial, Inc. Class A  355,560    10,851,691 
Hartford Financial Services       
Group, Inc. (The)  46,554    4,276,916 
Prudential Financial, Inc.  128,600    11,397,818 
W.R. Berkley Corp.  178,800    5,260,296 
      48,108,566 

 
Investment Banking/Brokerage (1.8%)       
Bear Stearns Cos., Inc. (The)  21,600    2,618,352 
Goldman Sachs Group, Inc. (The)  109,900    20,698,566 
Merrill Lynch & Co., Inc. (S)  302,600    22,452,920 
Morgan Stanley  492,100    31,430,427 
      77,200,265 

 
Real Estate (0.8%)       
Apartment Investment &       
Management Co. Class A (R)  94,700    4,001,075 
CBL & Associates Properties (R)  362,000    11,544,180 
General Growth       
Properties, Inc. (R) (S)  170,800    8,194,984 
Taubman Centers, Inc. (R)  175,600    8,444,604 
      32,184,843 

 
Technology (6.3%)       
Accenture, Ltd. Class A (Bermuda)  558,500    23,529,605 
Apple Computer, Inc. †  108,600    14,309,136 
Applied Materials, Inc. (S)  786,600    17,336,664 
Atmel Corp. †  1,515,500    8,168,545 
Computer Sciences Corp. † (S)  186,100    10,362,048 
Convergys Corp. †  542,800    10,340,340 
Electronic Data Systems Corp.  710,700    19,181,793 
Hewlett-Packard Co.  1,369,500    63,038,085 
IBM Corp.  130,800    14,473,020 
Intel Corp.  368,300    8,699,246 

COMMON STOCKS (57.2%)* continued 

 

 

   
     
   Shares    Value 

 
Technology continued       
Lexmark International, Inc.       
Class A †  189,500  $  7,492,830 
Microsoft Corp.  1,325,600    38,429,144 
National Semiconductor Corp.  111,000    2,884,890 
Sun Microsystems, Inc. †  1,611,900    8,220,690 
Tyco Electronics, Ltd. †  295,412    10,581,658 
Xerox Corp. †  456,800    7,975,728 
      265,023,422 

 
Transportation (1.6%)       
AMR Corp. † (S)  464,400    11,461,392 
UAL Corp. †  511,100    22,559,954 
Union Pacific Corp.  53,800    6,409,732 
US Airways Group, Inc. †  909,000    28,188,090 
      68,619,168 

 
Utilities & Power (3.2%)       
Alliant Energy Corp. (S)  90,300    3,336,585 
DTE Energy Co.  136,900    6,349,422 
Duke Energy Corp. (S)  688,700    11,728,561 
Edison International  313,700    16,591,593 
Entergy Corp.  51,400    5,137,944 
FirstEnergy Corp.  440,800    26,778,600 
FPL Group, Inc.  90,400    5,218,792 
NiSource, Inc.  524,000    9,992,680 
Pepco Holdings, Inc. (S)  123,400    3,340,438 
PG&E Corp. (S)  641,750    27,473,318 
Progress Energy, Inc.  115,400    5,038,364 
Sempra Energy  87,000    4,586,640 
Wisconsin Energy Corp.  223,500    9,594,855 
      135,167,792 

 
Total common stocks (cost $2,106,310,852)    $  2,421,165,540 

U.S. GOVERNMENT AND AGENCY MORTGAGE OBLIGATIONS (17.8%)* 

     
  Principal amount  Value 

  
U.S. Government Guaranteed Mortgage Obligations (0.8%)     
Government National Mortgage     
Association Pass-Through Certificates     
6 1/2s, June 20, 2037 ##  $ 4,691,319   $ 4,773,967 
6 1/2s, TBA, September 1, 2037  12,000,000  12,185,626 
6 1/2s, TBA, August 1, 2037  16,800,000  17,086,124 
    34,045,717 

 
U.S. Government Agency Mortgage Obligations (17.0%)   
Federal Home Loan     
Mortgage Corporation     
8 3/4s, with due dates from     
May 1, 2009 to June 1, 2009  72,903    73,814 
Federal Home Loan Mortgage     
Corporation Pass-Through Certificates     
6s, with due dates from     
September 1, 2021 to March 1, 2035  67,915  67,922 
5 1/2s, with due dates from     
June 1, 2035 to June 1, 2035  2,272,263  2,204,365 
5 1/2s, July 1, 2016  363,609  364,466 

25


U.S. GOVERNMENT AND AGENCY MORTGAGE OBLIGATIONS (17.8%)* 
     
continued       
  Principal amount    Value 

U.S. Government Agency Mortgage Obligations continued   
Federal National Mortgage Association       
Pass-Through Certificates       
11s, with due dates from       
October 1, 2015 to       
March 1, 2016  $ 6,666      7,236 
9s, with due dates from       
January 1, 2027 to July 1, 2032  213,958    232,093 
8 3/4s, July 1, 2009  1,852    1,873 
8s, with due dates from       
August 1, 2026 to July 1, 2033  924,310    949,996 
7 1/2s, with due dates from       
October 1, 2025 to July 1, 2033  577,187    606,896 
7s, with due dates from       
February 1, 2033 to January 1, 2036  4,436,118    4,580,735 
7s, with due dates from November 1,       
2007 to February 1, 2017  772,782    794,177 
6 1/2s, December 1, 2034  16,256    16,511 
6 1/2s, with due dates from       
July 1, 2010 to May 1, 2011  174,023    177,046 
6 1/2s, TBA, August 1, 2037  122,300,000    123,551,667 
6s, with due dates from       
June 1, 2037 to July 1, 2037  146,644    145,344 
6s, with due dates from October 1,       
2011 to September 1, 2021  1,449,528    1,459,054 
6s, TBA, August 1, 2037  72,800,000    72,123,186 
5 1/2s, with due dates from       
April 1, 2036 to March 1, 2037  11,336,710    10,966,503 
5 1/2s, with due dates from       
April 1, 2009 to August 1, 2021  427,180    423,034 
5 1/2s, TBA, August 1, 2037  51,000,000    49,250,858 
5 1/2s, TBA, August 1, 2022  89,300,000    88,211,656 
5s, with due dates from       
June 1, 2021 to May 1, 2036  19,252,662    18,118,398 
5s, April 1, 2021  227,235    220,454 
4 1/2s, with due dates from       
April 1, 2020 to July 1, 2022  19,802,292    18,913,639 
4 1/2s, TBA, August 1, 2022  339,100,000    323,072,235 
4s, with due dates from       
May 1, 2019 to August 1, 2020  797,477    741,914 
      717,275,072 

 
Total U.S. government and agency       
mortgage obligations (cost $747,816,516)    $  751,320,789 

 
 
COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)*   

  Principal amount    Value 
 
Amresco Commercial       
Mortgage Funding I 144A       
Ser. 97-C1, Class G, 7s, 2029  $81,831  $  81,831 
Ser. 97-C1, Class H, 7s, 2029  664,000    662,005 
Asset Securitization Corp.       
Ser. 96-MD6, Class A7, 7.866s, 2029  2,119,000    2,252,043 
FRB Ser. 97-D5, Class A5,       
7.166s, 2043  325,000    345,277 

COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 

       
  Principal amount    Value 

  
Banc of America Commercial       
Mortgage, Inc.       
Ser. 01-1, Class G, 7.324s, 2036 $  950,000  $  988,492 
Ser. 06-4, Class A4, 5.634s, 2046  3,420,000    3,408,513 
Ser. 06-5, Class A4, 5.414s, 2047  4,233,000    4,150,384 
Ser. 04-3, Class A5, 5.303s, 2039  4,690,000    4,679,729 
FRB Ser. 05-1, Class A5, 5.12s, 2042  252,000    246,563 
Ser. 07-1, Class XW, Interest Only       
(IO), 0.292s, 2049  17,097,240    390,775 
Ser. 06-1, Class XC, IO, 0.046s, 2045  40,950,498    288,209 
Banc of America Commercial       
Mortgage, Inc. 144A       
Ser. 01-PB1, Class K, 6.15s, 2035  715,000    723,168 
Ser. 02-PB2, Class XC, IO,       
0.198s, 2035  9,241,881    168,592 
Ser. 04-4, Class XC, IO,       
0.135s, 2042  31,357,417    496,810 
Ser. 04-5, Class XC, IO,       
0.105s, 2041  49,210,442    647,537 
Ser. 05-1, Class XW, IO,       
0.087s, 2042  267,550,514    926,727 
Ser. 05-4, Class XC, IO,       
0.06s, 2045  82,811,640    594,137 
Ser. 06-5, Class XC, IO,       
0.049s, 2016  75,703,410    1,178,016 
Banc of America Large Loan       
FRB Ser. 04-BBA4, Class       
H, 6.27s, 2018  142,000    142,065 
FRB Ser. 04-BBA4, Class       
G, 6.02s, 2018  449,000    449,024 
Banc of America Large Loan 144A       
FRB Ser. 05-MIB1, Class K,       
7.32s, 2022  496,000    494,903 
FRB Ser. 05-MIB1, Class J,       
6.37s, 2022  1,400,000    1,401,512 
Ser. 03-BBA2, Class X1A, IO,       
0.175s, 2015 (F)  4,621,138     
Banc of America Mortgage Securities       
Ser. 04-D, Class 2A, IO,       
0.358s, 2034  12,728,176    39,280 
Ser. 05-E, Class 2, IO, 0.306s, 2035  34,071,990    184,377 
IFB Ser. 06-2, Class A4, IO,       
0.08s, 2036  2,560,360    23,930 
Banc of America Structured       
Security Trust 144A Ser. 02-X1,       
Class A3, 5.436s, 2033  1,692,777    1,691,489 
Bayview Commercial       
Asset Trust 144A       
FRB Ser. 05-1A, Class A1,       
5.62s, 2035  1,450,543    1,451,704 
Ser. 04-2, IO, 1.72s, 2034  6,990,005    464,180 
Ser. 05-1A, IO, 1.6s, 2035  6,174,948    446,478 
Ser. 04-3, IO, 1.6s, 2035  4,839,401    331,575 
Ser. 07-2A, IO, 1.3s, 2037  15,682,968    2,242,664 
Ser. 07-1, Class S, IO, 1.211s, 2037  13,704,675    1,761,033 
Ser. 06-4A, Class IO, IO,       
1.14s, 2036  2,286,689    316,249 
Ser. 06-2A, IO, 0.879s, 2036  3,120,849    280,339 
Ser. 05-3A, IO, 0.775s, 2035  18,490,270    1,493,485 

26


COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount  Value 

 
Bear Stearns Alternate Trust     
Ser. 04-9, Class 1A1, 5.432s, 2034   $  463,949   $ 462,365 
Bear Stearns Commercial Mortgage     
Securities, Inc.     
FRB Ser. 00-WF2, Class F,     
8.452s, 2032  456,000  497,744 
Ser. 04-PR3I, Class X1, IO,     
0.102s, 2041  14,680,908  292,664 
Ser. 05-PWR9, Class X1, IO,     
0.079s, 2042  41,136,538  407,169 
Bear Stearns Commercial Mortgage     
Securities, Inc. 144A     
Ser. 06-BBA7, Class X1A, IO,     
1.756s, 2019  28,155,600  151,243 
Ser. 06-PW14, Class XW, IO,     
0.691s, 2038  18,210,577  887,054 
Ser. 06-PW14, Class X1, IO,     
0.047s, 2038  19,583,850  351,133 
Ser. 07-PW15, Class X1, IO,     
0.043s, 2044  64,484,528  804,270 
Ser. 05-PW10, Class X1, IO,     
0.032s, 2040  64,056,501  289,625 
Ser. 07-PW16, Class X, IO,     
0.022s, 2040  143,955,665  165,117 
Bear Stearns Small Balance     
Commercial Trust 144A Ser. 06-1A,     
Class AIO, IO, 1s, 2034  9,307,000  147,966 
Chase Commercial Mortgage     
Securities Corp. Ser. 00-3,     
Class A2, 7.319s, 2032  553,000  577,141 
Chase Commercial     
Mortgage Securities Corp. 144A     
Ser. 98-1, Class F, 6.56s, 2030  4,600,000  4,727,505 
Ser. 98-1, Class G, 6.56s, 2030  1,171,000  1,209,784 
Ser. 98-1, Class H, 6.34s, 2030  1,761,000  1,547,010 
Citigroup Commercial     
Mortgage Trust 144A     
Ser. 05-C3, Class XC, IO,     
0.094s, 2043  116,943,465  1,224,252 
Ser. 06-C5, Class XC, IO,     
0.049s, 2049  123,267,747  1,791,234 
Citigroup/Deutsche Bank Commercial     
Mortgage Trust 144A     
Ser. 07-CD4, Class XW, IO,     
0.378s, 2049  26,715,000  729,445 
Ser. 06-CD2, Class X, IO,     
0.087s, 2046  76,465,214  439,063 
Ser. 07-CD4, Class XC, IO,     
0.041s, 2049  89,338,000  858,482 
Commercial Mortgage     
Acceptance Corp. 144A     
Ser. 98-C1, Class F, 6.23s, 2031  2,013,000  2,048,635 
Ser. 98-C2, Class F, 5.44s, 2030  3,255,000  3,228,750 
Commercial Mortgage     
Pass-Through Certificates 144A     
FRB Ser. 01-J2A, Class A2F,     
5.82s, 2034  1,590,000  1,590,000 
Ser. 06-CN2A, Class H, 5.57s, 2019  939,000  931,921 

COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 

     
  Principal amount  Value 

 
Commercial Mortgage       
Pass-Through Certificates 144A     
Ser. 06-CN2A, Class J, 5.57s, 2019   $  751,000   $ 743,050 
Ser. 03-LB1A, Class X1, IO,     
0.436s, 2038  8,976,513  353,800 
Ser. 05-C6, Class XC, IO, 0.059s,     
2044  67,213,962  475,203 
Ser. 05-LP5, Class XC, IO, 0.057s,     
2043  71,563,670  668,118 
Ser. 06-C8, Class XS, IO, 0.045s,     
2046  57,708,172  732,605 
Countrywide Alternative Loan Trust     
Ser. 06-OA10, Class XBI, IO,     
2.355s, 2046  6,534,929  236,891 
Ser. 05-24, Class IIAX, IO,     
1.893s, 2035  10,983,838  260,734 
Ser. 05-24, Class 1AX, IO, 1.217s,     
2035  13,351,807  237,462 
IFB Ser. 06-6CB, Class 1A3, IO,     
zero %, 2036  17,984,704  56,202 
Credit Suisse Mortgage Capital     
Certificates Ser. 06-C5,     
Class AX, IO, 0.066s, 2039  36,702,824  612,203 
Credit Suisse Mortgage     
Capital Certificates 144A     
Ser. 07-C2, Class AX, IO,     
0.11s, 2049  122,005,214  1,324,855 
Ser. 07-C1, Class AX, IO,     
0.052s, 2040  80,775,995  833,043 
Ser. 06-C3, Class AX, IO,     
0.024s, 2038  103,005,952  96,620 
CRESI Finance Limited     
Partnership 144A     
FRB Ser. 06-A, Class D, 6.12s, 2017  232,000  231,999 
FRB Ser. 06-A, Class C, 5.92s, 2017  688,000  687,791 
Criimi Mae Commercial Mortgage     
Trust 144A Ser. 98-C1, Class B,     
7s, 2033  3,385,000  3,390,755 
Crown Castle Towers, LLC 144A     
Ser. 05-1A, Class D, 5.612s, 2035  2,903,000  2,884,333 
CS First Boston Mortgage     
Securities Corp.     
Ser. 97-C2, Class F, 7.46s, 2035  1,239,000  1,340,183 
Ser. 04-C2, Class A2, 5.416s, 2036  5,070,000  4,943,808 
FRB Ser. 04-C3, Class A5,     
5.113s, 2036  92,000  88,002 
Ser. 04-C3, Class A3, 4.302s, 2036  196,000  191,310 
CS First Boston Mortgage     
Securities Corp. 144A     
FRB Ser. 05-TFLA, Class J,     
6.27s, 2020  259,000  258,998 
FRB Ser. 04-TF2A, Class J,     
6.27s, 2016  313,000  312,952 
FRB Ser. 05-TF2A, Class J,     
6.22s, 2020  1,237,000  1,237,096 
FRB Ser. 04-TF2A, Class H,     
6.02s, 2019  627,000  626,996 
Ser. 01-CK1, Class AY, IO,     
0.775s, 2035  67,907,000  1,350,182 

27


COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount    Value 

CS First Boston Mortgage       
Securities Corp. 144A       
Ser. 03-C3, Class AX, IO,       
0.762s, 2038  $    60,006,280  $  2,343,173 
Ser. 02-CP3, Class AX, IO,       
0.358s, 2035  20,895,854    805,533 
Ser. 04-C4, Class AX, IO,       
0.189s, 2039  11,693,544    264,017 
Ser. 05-C2, Class AX, IO,       
0.114s, 2037  76,082,278    1,120,464 
DLJ Commercial       
Mortgage Corp.       
Ser. 00-CF1, Class A1B, 7.62s, 2033  2,184,994    2,296,795 
Ser. 99-CG2, Class B3, 6.1s, 2032  1,752,000    1,749,532 
Ser. 99-CG2, Class B4, 6.1s, 2032  2,785,000    2,773,611 
Ser. 98-CF2, Class B3, 6.04s, 2031  814,188    822,876 
Fannie Mae       
Ser. 03-W6, Class PT1,       
10.031s, 2042  234,507    251,019 
IFB Ser. 06-70, Class SM,       
9.605s, 2036  399,269    431,069 
Ser. 02-T12, Class A4, 9 1/2s, 2042  209,969    220,771 
Ser. 02-T4, Class A4, 9 1/2s, 2041  1,178,321    1,237,962 
Ser. 02-T6, Class A3, 9 1/2s, 2041  425,307    446,284 
Ser. 04-T3, Class PT1, 9.136s, 2044  599,520    641,087 
IFB Ser. 06-62, Class PS, 7.98s, 2036  1,530,808    1,660,443 
IFB Ser. 05-37, Class SU, 7.92s,2035  2,686,823    2,862,641 
IFB Ser. 06-49, Class SE, 7.72s, 2036  2,660,031    2,818,303 
IFB Ser. 06-76, Class QB,       
7.68s, 2036  1,642,493    1,777,333 
IFB Ser. 06-79, Class PS, 7.68s, 2036  847,403    926,762 
IFB Ser. 06-48, Class TQ,       
7.68s, 2036  2,949,338    3,129,090 
IFB Ser. 06-60, Class AK,       
7.52s, 2036  1,282,605    1,329,756 
Ser. 02-26, Class A2, 7 1/2s, 2048  1,918,100    1,999,750 
Ser. 04-T3, Class 1A4, 7 1/2s, 2044  57,789    60,599 
Ser. 04-T2, Class 1A4, 7 1/2s, 2043  896,869    940,493 
Ser. 03-W1, Class 2A, 7 1/2s, 2042  1,702,245    1,772,983 
Ser. 02-T19, Class A3, 7 1/2s, 2042  1,252,860    1,307,172 
Ser. 02-T12, Class A3, 7 1/2s, 2042  343,741    357,152 
Ser. 02-14, Class A2, 7 1/2s, 2042  689,311    717,706 
Ser. 01-T10, Class A2, 7 1/2s, 2041  2,137,780    2,219,568 
Ser. 02-T4, Class A3, 7 1/2s, 2041  374,351    388,836 
Ser. 01-T12, Class A2, 7 1/2s, 2041  1,855,527    1,924,496 
Ser. 01-T3, Class A1, 7 1/2s, 2040  318,811    330,979 
Ser. 01-T1, Class A1, 7 1/2s, 2040  695,567    721,421 
Ser. 99-T2, Class A1, 7 1/2s, 2039  195,415    205,066 
Ser. 03-W10, Class 1A1,       
7 1/2s, 2032  819,469    853,009 
Ser. 02-T1, Class A3, 7 1/2s, 2031  567,151    590,363 
Ser. 00-T6, Class A1, 7 1/2s, 2030  1,664,677    1,731,410 
Ser. 01-T5, Class A3, 7 1/2s, 2030  198,565    206,237 
Ser. 01-T4, Class A1, 7 1/2s, 2028  3,928,080    4,127,489 
IFB Ser. 06-63, Class SP, 7.38s, 2036  1,786,338    1,891,080 
IFB Ser. 06-60, Class TK, 7.32s, 2036  870,686    899,319 
IFB Ser. 06-104, Class GS,       
7.046s, 2036  1,086,604    1,135,067 

COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 

       

  Principal amount    Value 
Fannie Mae       
Ser. 02-26, Class A1, 7s, 2048  $     1,234,154  $  1,272,320 
Ser. 04-T3, Class 1A3, 7s, 2044  567,647    588,027 
Ser. 03-W3, Class 1A2, 7s, 2042  578,556    596,762 
Ser. 02-T16, Class A2, 7s, 2042  1,184,389    1,221,470 
Ser. 02-14, Class A1, 7s, 2042  108,276    111,448 
Ser. 02-T4, Class A2, 7s, 2041  681,707    701,072 
Ser. 01-W3, Class A, 7s, 2041  419,510    433,194 
Ser. 04-W1, Class 2A2, 7s, 2033  5,944,398    6,155,193 
IFB Ser. 06-104, Class ES,       
6.85s, 2036  2,037,536    2,128,025 
Ser. 371, Class 2, IO, 6 1/2s, 2036  18,319,110    4,848,120 
IFB Ser. 07-1, Class NK,       
6.49s, 2037  4,161,373    4,356,562 
IFB Ser. 07-81, Class SC,       
5.88s, 2037  1,361,000    1,332,100 
IFB Ser. 06-104, Class CS,       
5.76s, 2036  2,128,831    2,057,094 
IFB Ser. 05-74, Class SK,       
5 1/2s, 2035  2,856,762    2,822,460 
IFB Ser. 05-74, Class CS,       
5.39s, 2035  1,767,602    1,732,185 
IFB Ser. 06-115, Class ES,       
5.28s, 2036  1,660,692    1,680,474 
IFB Ser. 05-74, Class CP,       
5.243s, 2035  1,549,929    1,540,749 
IFB Ser. 07-30, Class FS,       
5.187s, 2037  4,039,307    3,844,539 
IFB Ser. 05-57, Class CD,       
5.175s, 2035  1,387,735    1,375,625 
IFB Ser. 06-8, Class PK, 5.12s, 2036  2,827,842    2,670,192 
IFB Ser. 06-27, Class SP, 5.06s, 2036  2,143,000    2,122,885 
IFB Ser. 06-8, Class HP, 5.06s, 2036  2,433,015    2,389,108 
IFB Ser. 06-8, Class WK, 5.06s, 2036  3,840,082    3,741,859 
IFB Ser. 05-106, Class US,       
5.06s, 2035  3,730,521    3,689,575 
IFB Ser. 05-99, Class SA,       
5.06s, 2035  1,844,949    1,810,470 
IFB Ser. 05-115, Class NQ,       
4.988s, 2036  880,648    835,365 
IFB Ser. 05-114, Class SP,       
4.95s, 2036  1,065,174    1,006,323 
IFB Ser. 05-45, Class DA,       
4.913s, 2035  2,922,760    2,854,144 
IFB Ser. 05-74, Class DM,       
4.877s, 2035  3,553,445    3,446,040 
IFB Ser. 05-45, Class DC,       
4.803s, 2035  2,279,722    2,216,847 
IFB Ser. 06-60, Class CS,       
4.583s, 2036  797,470    721,651 
IFB Ser. 05-57, Class DC,       
4.485s, 2034  2,422,566    2,386,502 
IFB Ser. 05-45, Class PC,       
4.29s, 2034  1,268,742    1,243,167 
IFB Ser. 05-95, Class CP,       
4.089s, 2035  283,241    274,208 
IFB Ser. 05-95, Class OP,       
3.923s, 2035  1,046,000    937,468 

28


COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount  Value 

 
Fannie Mae     
IFB Ser. 05-106, Class JC,     
3.628s, 2035  $  729,800   $ 639,756 
IFB Ser. 05-72, Class SB,     
3.575s, 2035  1,863,444  1,714,838 
IFB Ser. 05-83, Class QP,     
3.562s, 2034  622,720  563,176 
IFB Ser. 02-36, Class QH, IO,     
2.73s, 2029  6,972  11 
IFB Ser. 07-W6, Class 6A2, IO,     
2.48s, 2037  2,353,189  157,363 
IFB Ser. 06-90, Class SE, IO,     
2.48s, 2036  2,243,114  230,036 
IFB Ser. 03-66, Class SA, IO,     
2.33s, 2033  3,088,257  241,769 
Ser. 03-W12, Class 2, IO,     
2.231s, 2043  8,104,589  484,260 
IFB Ser. 07-W6, Class 5A2, IO,     
1.97s, 2037  3,045,207  189,757 
IFB Ser. 07-W4, Class 4A2, IO,     
1.96s, 2037  13,915,861  851,871 
IFB Ser. 07-W2, Class 3A2, IO,     
1.96s, 2037  4,188,652  254,037 
Ser. 03-W10, Class 1, IO,     
1.934s, 2043  25,318,893  1,280,485 
Ser. 03-W10, Class 3, IO,     
1.931s, 2043  6,366,405  327,626 
IFB Ser. 05-113, Class AI, IO,     
1.91s, 2036  722,004  51,518 
IFB Ser. 05-113, Class DI, IO,     
1.91s, 2036  23,321,701  1,487,333 
IFB Ser. 05-52, Class DC, IO,     
1.88s, 2035  1,780,462  173,932 
IFB Ser. 06-60, Class SI, IO,     
1.83s, 2036  4,063,201  306,907 
IFB Ser. 04-24, Class CS, IO,     
1.83s, 2034  4,297,925  298,464 
IFB Ser. 03-122, Class SA, IO,     
1.78s, 2028  5,711,021  283,050 
IFB Ser. 03-122, Class SJ, IO,     
1.78s, 2028  6,011,674  303,371 
IFB Ser. 06-60, Class DI, IO,     
1 3/4s, 2035  2,142,020  124,777 
IFB Ser. 04-60, Class SW, IO,     
1.73s, 2034  8,000,379  600,393 
IFB Ser. 05-65, Class KI, IO,     
1.68s, 2035  15,902,095  909,182 
Ser. 03-W8, Class 12, IO,     
1.637s, 2042  25,919,046  1,234,835 
IFB Ser. 07-39, Class PI, IO,     
1.44s, 2037  2,607,434  145,974 
IFB Ser. 07-30, Class WI, IO,     
1.44s, 2037  22,373,131  1,179,767 
IFB Ser. 07-W4, Class 3A2, IO,     
1.43s, 2037  13,477,485  653,215 
IFB Ser. 07-28, Class SE, IO,     
1.43s, 2037  2,745,947  186,480 
IFB Ser. 07-W2, Class 2A2, IO,     
1.43s, 2037  5,602,171  295,027 

COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 

       
  Principal amount  Value 

Fannie Mae     
IFB Ser. 06-128, Class SH, IO,     
1.43s, 2037  $  3,267,841   $ 177,771 
IFB Ser. 06-56, Class SM, IO,     
1.43s, 2036  8,052,899  440,310 
IFB Ser. 06-12, Class SD, IO,     
1.43s, 2035  11,645,475  746,475 
IFB Ser. 05-73, Class SI, IO,     
1.43s, 2035  1,715,921  89,081 
IFB Ser. 05-17, Class ES, IO,     
1.43s, 2035  3,539,664  211,990 
IFB Ser. 05-17, Class SY, IO,     
1.43s, 2035  1,625,541  97,604 
IFB Ser. 07-W5, Class 2A2, IO,     
1.42s, 2037  1,297,002  54,495 
IFB Ser. 07-30, Class IE, IO,     
1.42s, 2037  7,222,965    515,995 
IFB Ser. 06-123, Class CI, IO,     
1.42s, 2037  6,257,436  406,577 
IFB Ser. 06-123, Class UI, IO,     
1.42s, 2037  2,750,075  167,216 
IFB Ser. 05-82, Class SY, IO,     
1.41s, 2035  7,208,170  365,013 
IFB Ser. 05-45, Class SR, IO,     
1.4s, 2035  9,889,830  497,562 
IFB Ser. 07-15, Class BI, IO,     
1.38s, 2037  4,646,053  277,077 
IFB Ser. 06-23, Class SC, IO,     
1.38s, 2036  3,747,391  229,528 
IFB Ser. 05-95, Class CI, IO,     
1.38s, 2035  3,912,671  239,242 
IFB Ser. 05-84, Class SG, IO,     
1.38s, 2035  6,600,873  419,622 
IFB Ser. 05-54, Class SA, IO,     
1.38s, 2035  7,049,139  348,051 
IFB Ser. 05-23, Class SG, IO,     
1.38s, 2035  5,267,932  316,813 
IFB Ser. 05-104, Class NI, IO,     
1.38s, 2035  4,551,286  270,802 
IFB Ser. 05-17, Class SA, IO,     
1.38s, 2035  4,583,054  276,276 
IFB Ser. 05-17, Class SE, IO,     
1.38s, 2035  4,949,228  294,924 
IFB Ser. 05-57, Class DI, IO,     
1.38s, 2035  10,814,326  580,198 
IFB Ser. 05-83, Class QI, IO,     
1.37s, 2035  1,044,826  72,017 
IFB Ser. 05-83, Class SL, IO,     
1.35s, 2035  11,685,610  639,873 
Ser. 06-116, Class ES, IO,     
1.33s, 2036  1,948,462  102,881 
IFB Ser. 07-63, Class SB, IO,     
1.33s, 2037  19,179,882  982,739 
IFB Ser. 06-114, Class IS, IO,     
1.33s, 2036  3,228,628  182,619 
IFB Ser. 06-115, Class GI, IO,     
1.32s, 2036  2,781,381  169,997 
IFB Ser. 06-115, Class IE, IO,     
1.32s, 2036  2,380,071  136,614 

29


COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount  Value 

 
Fannie Mae     
IFB Ser. 06-117, Class SA, IO,     
1.32s, 2036  $  3,656,214   $ 206,902 
IFB Ser. 06-121, Class SD, IO,     
1.32s, 2036  6,096,395  353,967 
IFB Ser. 06-109, Class SG, IO,     
1.31s, 2036  4,307,733  246,528 
IFB Ser. 06-104, Class IM, IO,     
1.3s, 2036  895,536  50,097 
IFB Ser. 06-104, Class SY, IO,     
1.3s, 2036  2,087,701  108,540 
IFB Ser. 06-109, Class SH, IO,     
1.3s, 2036  3,028,593  201,040 
Ser. 06-104, Class SG, IO, 1.28s,     
2036  4,037,233  204,656 
IFB Ser. 07-W6, Class 4A2, IO,     
1.28s, 2037  11,752,363  561,395 
IFB Ser. 06-128, Class SC, IO,     
1.28s, 2037  10,385,078  554,563 
IFB Ser. 06-44, Class IS, IO,     
1.28s, 2036  4,385,061  234,276 
IFB Ser. 06-45, Class SM, IO,     
1.28s, 2036  4,965,936  244,041 
IFB Ser. 06-8, Class JH, IO,     
1.28s, 2036  11,164,702  638,009 
IFB Ser. 05-95, Class OI, IO,     
1.27s, 2035  582,916  40,330 
IFB Ser. 06-92, Class JI, IO,     
1.26s, 2036  2,156,466  118,000 
IFB Ser. 06-96, Class ES, IO,     
1.26s, 2036  3,969,508  221,809 
IFB Ser. 06-99, Class AS, IO,     
1.26s, 2036  2,569,454  138,237 
IFB Ser. 06-85, Class TS, IO,     
1.24s, 2036  5,728,026  292,456 
IFB Ser. 06-61, Class SE, IO,     
1.23s, 2036  5,558,847  258,597 
IFB Ser. 07-76, Class SA, IO,     
1.22s, 2037  3,653,033  186,195 
Ser. 06-94, Class NI, IO, 1.18s, 2036  1,973,979  96,581 
FRB Ser. 03-W17, Class 12, IO,     
1.151s, 2033  7,937,337  305,193 
IFB Ser. 07-30, Class JS, IO,     
1.12s, 2037  9,943,880  530,849 
IFB Ser. 07-30, Class LI, IO,     
1.12s, 2037  9,658,888  539,608 
IFB Ser. 07-W2, Class 1A2, IO,     
1.11s, 2037  15,018,159  704,894 
IFB Ser. 07-W4, Class 2A2, IO,     
1.1s, 2037  15,498,336  643,181 
IFB Ser. 07-54, Class IA, IO, 1.09s,     
2037  3,339,510  180,088 
IFB Ser. 07-54, Class IB, IO,     
1.09s, 2037  3,339,510  180,088 
IFB Ser. 07-54, Class IC, IO,     
1.09s, 2037  3,339,510  180,088 
IFB Ser. 07-54, Class ID, IO,     
1.09s, 2037  3,339,510  180,088 

COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 

   
  Principal amount    Value 

 
Fannie Mae       
IFB Ser. 07-54, Class IE, IO,       
1.09s, 2037  $  3,339,510   $ 180,088 
IFB Ser. 07-54, Class IF, IO,       
1.09s, 2037  4,968,899    267,955 
IFB Ser. 07-54, Class UI, IO,       
1.09s, 2037  3,875,116    221,641 
IFB Ser. 07-15, Class CI, IO,       
1.06s, 2037  11,480,117    630,202 
IFB Ser. 06-123, Class BI, IO,       
1.06s, 2037  15,196,631    785,975 
IFB Ser. 06-115, Class JI, IO,       
1.06s, 2036  8,371,254    440,238 
IFB Ser. 06-123, Class LI, IO,       
1s, 2037  5,626,988    275,390 
Ser. 03-T2, Class 2, IO,       
0.821s, 2042  37,198,163    842,632 
IFB Ser. 07-39, Class AI, IO,       
0.8s, 2037  5,899,276    248,681 
IFB Ser. 07-32, Class SD, IO,       
0.79s, 2037  3,971,736    185,444 
IFB Ser. 07-33, Class SD, IO,       
0.79s, 2037  11,227,486    424,399 
IFB Ser. 07-30, Class UI, IO,       
0.78s, 2037  3,295,002    146,341 
IFB Ser. 07-32, Class SC, IO,       
0.78s, 2037  5,273,324    244,550 
IFB Ser. 07-1, Class CI, IO,       
0.78s, 2037  3,860,123    160,810 
IFB Ser. 05-74, Class SE, IO,       
0.78s, 2035  14,587,281    505,958 
IFB Ser. 05-82, Class SI, IO,       
0.78s, 2035  13,651,219    488,589 
IFB Ser. 07-W4, Class 1A2, IO,       
0.77s, 2037  45,161,415    1,599,569 
IFB Ser. 07-W5, Class 1A2, IO,       
0.76s, 2037  7,003,757    208,881 
Ser. 03-W6, Class 51, IO,       
0.683s, 2042  10,979,932    182,795 
Ser. 03-W3, Class 2IO1, IO,       
0.683s, 2042  3,446,632    66,927 
IFB Ser. 05-58, Class IK, IO,       
0.68s, 2035  4,317,620    208,447 
Ser. 06-W3, Class 1AS, IO,       
0.662s, 2046  13,802,959    444,283 
Ser. 01-T12, Class IO, 0.564s, 2041  22,011,434    277,192 
Ser. 03-W2, Class 1, IO,       
0.47s, 2042  19,925,056    229,023 
Ser. 02-T4, IO, 0.453s, 2041  7,937,757    78,934 
Ser. 03-W3, Class 1, IO,       
0.442s, 2042  26,369,301    231,936 
Ser. 02-T1, Class IO, IO,       
0.425s, 2031  21,163,349    211,211 
Ser. 03-W6, Class 3, IO,       
0.366s, 2042  14,646,190    148,965 
Ser. 03-W6, Class 23, IO,       
0.352s, 2042  15,718,747    154,659 
Ser. 01-79, Class BI, IO,       
0.337s, 2045  4,081,445    32,113 

30


COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount    Value 

 
Fannie Mae       
Ser. 03-W4, Class 3A, IO,       
0.333s, 2042  $ 14,071,694  $  134,638 
FRB Ser. 06-115, Class SN,       
zero %, 2036  1,301,884    1,425,627 
FRB Ser. 06-104, Class EK,       
zero %, 2036  363,718    371,075 
Ser. 06-84, Class OP, Principal       
Only (PO), zero %, 2036  50,523    48,002 
Ser. 372, Class 1, PO, zero %, 2036  20,057,719    14,630,481 
Ser. 367, Class 1, PO, zero %, 2036  1,109,127    776,355 
Ser. 363, Class 1, PO, zero %, 2035  12,947,845    9,087,757 
Ser. 04-38, Class AO, PO,       
zero %, 2034  4,260,599    2,996,832 
Ser. 04-61, Class CO, PO,       
zero %, 2031  3,065,000    2,375,903 
Ser. 07-31, Class TS, IO,       
zero %, 2009  9,669,085    61,437 
Ser. 07-15, Class IM, IO,       
zero %, 2009  3,737,309    26,605 
Ser. 07-16, Class TS, IO,       
zero %, 2009 †  15,292,921    96,621 
FRB Ser. 05-65, Class ER,       
zero %, 2035  2,573,758    2,542,494 
FRB Ser. 05-57, Class UL,       
zero %, 2035  2,493,799    2,550,217 
FRB Ser. 05-36, Class QA,       
zero %, 2035  487,606    455,252 
FRB Ser. 05-65, Class CU,       
zero %, 2034  343,030    469,277 
FRB Ser. 05-81, Class DF,       
zero %, 2033  289,593    332,174 
FRB Ser. 06-1, Class HF,       
zero %, 2032  274,258    272,108 
IFB Ser. 06-75, Class FY,       
zero %, 2036  633,409    730,145 
Federal Home Loan Mortgage Corp.       
Structured Pass-Through Securities       
Ser. T-42, Class A6, 9 1/2s, 2042  218,803    228,234 
Ser. T-58, Class 4A, 7 1/2s, 2043  566,158    591,859 
Ser. T-51, Class 2A, 7 1/2s, 2042  587,218    610,818 
Ser. T-42, Class A5, 7 1/2s, 2042  925,171    952,834 
Ser. T-60, Class 1A2, 7s, 2044  4,026,114    4,170,996 
Ser. T-41, Class 2A, 7s, 2032  93,612    96,331 
Ser. T-56, Class A, IO, 0.531s, 2043  9,386,743    135,991 
Ser. T-56, Class 3, IO, 0.376s, 2043  11,329,768    26,058 
Ser. T-56, Class 1, IO, 0.284s, 2043  14,398,330    20,158 
Ser. T-56, Class 2, IO, 0.031s, 2043  13,114,808    10,492 
FFCA Secured Lending Corp. 144A       
Ser. 00-1, Class A2, 7.77s, 2027  4,767,183    5,039,471 
First Union National Bank-Bank       
of America Commercial Mortgage       
144A Ser. 01-C1, Class 3, IO,       
1.685s, 2033  30,826,937    1,488,760 
First Union-Lehman Brothers       
Commercial Mortgage Trust II       
Ser. 97-C2, Class F, 7 1/2s, 2029  2,726,000    2,901,512 
Ser. 97-C2, Class G, 7 1/2s, 2029  832,000    899,093 

COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 

     
  Principal amount    Value 

 
First Union-Lehman Brothers-Bank       
of America 144A Ser. 98-C2,       
Class G, 7s, 2035  $ 3,410,000  $  3,574,021 
Freddie Mac       
IFB Ser. 3202, Class PS, 7.32s, 2036  1,051,410    1,109,753 
IFB Ser. 3182, Class PS, 7.32s, 2032  2,311,147    2,471,399 
IFB Ser. 3349, Class SA, 7.08s, 2037  5,074,000    5,164,912 
IFB Ser. 3331, Class SE, 7.08s, 2037  1,288,750    1,299,962 
IFB Ser. 3202, Class HM,       
6.65s, 2036  682,548    706,907 
IFB Ser. 3153, Class SX,       
6.65s, 2036  897,743    928,047 
IFB Ser. 3081, Class DC,       
5.22s, 2035  1,470,788    1,419,844 
IFB Ser. 3316, Class KS,       
5.187s, 2037  2,128,581    2,006,218 
IFB Ser. 3114, Class GK,       
5.12s, 2036  953,353    919,945 
IFB Ser. 2976, Class KL,       
4.877s, 2035  2,713,459    2,610,235 
IFB Ser. 2990, Class DP,       
4.767s, 2034  2,329,258    2,240,486 
IFB Ser. 2979, Class AS,       
4.767s, 2034  663,901    631,540 
IFB Ser. 3153, Class UT,       
4.51s, 2036  523,373    482,566 
IFB Ser. 3065, Class DC, 3.9s, 2035  2,307,862    2,079,446 
IFB Ser. 2990, Class LB,       
3.348s, 2034  2,863,391    2,559,994 
IFB Ser. 2990, Class WP,       
3.302s, 2035  1,756,104    1,655,432 
IFB Ser. 2927, Class SI, IO,       
3.18s, 2035  3,945,267    429,759 
IFB Ser. 2828, Class GI, IO,       
2.18s, 2034  4,502,609    381,024 
IFB Ser. 2869, Class SH, IO,       
1.98s, 2034  2,197,216    127,403 
IFB Ser. 2869, Class JS, IO,       
1.93s, 2034  10,475,942    594,002 
IFB Ser. 2815, Class PT, IO,       
1.73s, 2032  4,464,166    282,905 
IFB Ser. 2828, Class TI, IO,       
1.73s, 2030  2,109,671    126,392 
IFB Ser. 3297, Class BI, IO,       
1.44s, 2037  10,046,769    655,706 
IFB Ser. 3284, Class IV, IO,       
1.43s, 2037  2,529,818    181,042 
IFB Ser. 3287, Class SD, IO,       
1.43s, 2037  4,012,302    244,353 
IFB Ser. 3281, Class BI, IO,       
1.43s, 2037  1,968,214    122,788 
IFB Ser. 3028, Class ES, IO,       
1.43s, 2035  11,468,527    713,919 
IFB Ser. 2922, Class SE, IO,       
1.43s, 2035  5,599,836    283,492 
IFB Ser. 3045, Class DI, IO,       
1.41s, 2035  19,030,495    974,060 
Ser. 3236, Class ES, IO, 1.38s, 2036  3,762,781    203,566 

31


   
COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
  Principal amount  Value 

 
Freddie Mac       
IFB Ser. 3136, Class NS, IO,     
1.38s, 2036  $  6,216,354   $ 325,961 
IFB Ser. 3118, Class SD, IO,     
1.38s, 2036  9,128,585  461,596 
IFB Ser. 3054, Class CS, IO,     
1.38s, 2035  2,341,480  108,066 
IFB Ser. 3107, Class DC, IO,     
1.38s, 2035  11,088,384  710,385 
IFB Ser. 3129, Class SP, IO,     
1.38s, 2035  4,495,213  228,074 
IFB Ser. 3066, Class SI, IO,     
1.38s, 2035  7,495,191  457,112 
IFB Ser. 2927, Class ES, IO,     
1.38s, 2035  3,139,409  145,870 
IFB Ser. 2950, Class SM, IO,     
1.38s, 2016  5,985,936  320,140 
IFB Ser. 3031, Class BI, IO,     
1.37s, 2035  2,131,897  145,345 
IFB Ser. 3244, Class SB, IO,     
1.34s, 2036  2,801,293  167,232 
IFB Ser. 3244, Class SG, IO,     
1.34s, 2036  3,263,321  193,105 
IFB Ser. 3326, Class GS, IO,     
1.33s, 2037  7,661,498  403,983 
IFB Ser. 3236, Class IS, IO,     
1.33s, 2036  5,274,729  305,719 
IFB Ser. 3147, Class SH, IO,     
1.33s, 2036  9,671,892  574,965 
IFB Ser. 2962, Class BS, IO,     
1.33s, 2035  13,029,391  659,398 
IFB Ser. 3114, Class TS, IO,     
1.33s, 2030  14,552,420  656,374 
IFB Ser. 3128, Class JI, IO,     
1.31s, 2036  6,644,904  400,460 
IFB Ser. 2990, Class LI, IO,     
1.31s, 2034  4,160,502  254,658 
IFB Ser. 3240, Class S, IO,     
1.3s, 2036  9,738,722  608,880 
IFB Ser. 3229, Class BI, IO,     
1.3s, 2036  754,829  39,148 
IFB Ser. 3065, Class DI, IO,     
1.3s, 2035  1,629,454  109,592 
IFB Ser. 3145, Class GI, IO,     
1.28s, 2036  5,398,226  340,889 
IFB Ser. 3114, Class GI, IO,     
1.28s, 2036  2,274,791  153,306 
IFB Ser. 3221, Class SI, IO,     
1.26s, 2036  4,288,240  233,709 
IFB Ser. 3153, Class UI, IO,     
1 1/4s, 2036  3,935,281  260,209 
IFB Ser. 3202, Class PI, IO,     
1.22s, 2036  11,698,373  632,111 
IFB Ser. 3201, Class SG, IO,     
1.18s, 2036  5,426,772  288,843 
IFB Ser. 3203, Class SE, IO,     
1.18s, 2036  4,851,012  255,729 
IFB Ser. 3152, Class SY, IO,     
1.16s, 2036  4,961,770  282,248 

COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 

     
  Principal amount    Value 

 
Freddie Mac       
IFB Ser. 3284, Class BI, IO,       
1.13s, 2037  $  3,180,341  $  165,453 
IFB Ser. 3199, Class S, IO,       
1.13s, 2036  2,711,635    149,037 
IFB Ser. 3284, Class LI, IO,       
1.12s, 2037  12,935,926    686,389 
IFB Ser. 3281, Class AI, IO,       
1.11s, 2037  11,571,383    653,768 
IFB Ser. 3311, Class IA, IO,       
1.09s, 2037  4,694,273    265,861 
IFB Ser. 3311, Class IB, IO,       
1.09s, 2037  4,694,273    265,861 
IFB Ser. 3311, Class IC, IO,       
1.09s, 2037  4,694,273    265,861 
IFB Ser. 3311, Class ID, IO,       
1.09s, 2037  4,694,273    265,861 
IFB Ser. 3311, Class IE, IO,       
1.09s, 2037  6,699,881    379,449 
IFB Ser. 3240, Class GS, IO,       
1.06s, 2036  5,922,662    319,068 
IFB Ser. 3288, Class SJ, IO,       
0.81s, 2037  5,273,200    224,232 
IFB Ser. 3284, Class CI, IO,       
0.8s, 2037  8,791,289    391,826 
IFB Ser. 3291, Class SA, IO,       
0.79s, 2037  5,714,607    210,298 
IFB Ser. 3016, Class SQ, IO,       
0.79s, 2035  4,493,030    147,367 
IFB Ser. 3284, Class WI, IO,       
0.78s, 2037  14,627,434    514,886 
IFB Ser. 3235, Class SA, IO,       
0.63s, 2036  2,509,997    89,066 
Ser. 246, PO, zero %, 2037  14,695,982    10,725,184 
FRB Ser. 3326, Class XF, zero %, 2037  1,606,621    1,759,730 
Ser. 3300, PO, zero %, 2037  2,573,983    1,884,243 
FRB Ser. 3326, Class YF, zero %, 2037  4,427,274    5,317,927 
Ser. 242, PO, zero %, 2036  45,558,740    33,363,781 
Ser. 239, PO, zero %, 2036  9,060,518    6,549,909 
Ser. 236, PO, zero %, 2036  5,429,915    3,967,108 
FRB Ser. 3326, Class WF, zero %, 2035  2,333,984    2,461,972 
FRB Ser. 3263, Class TA, zero %, 2037  358,270    419,624 
FRB Ser. 3239, Class BF,       
zero %, 2036  1,462,801    1,910,132 
FRB Ser. 3231, Class XB,       
zero %, 2036  990,552    1,026,792 
FRB Ser. 3174, Class SF,       
zero %, 2036  637,331    756,539 
FRB Ser. 3149, Class XF,       
zero %, 2036  583,267    607,279 
FRB Ser. 3231, Class X,       
zero %, 2036  413,228    506,884 
FRB Ser. 3147, Class SF,       
zero %, 2036  1,659,052    1,830,932 
FRB Ser. 3117, Class AF,       
zero %, 2036  239,301    284,703 
FRB Ser. 3036, Class AS,       
zero %, 2035  200,943    231,485 
FRB Ser. 3003, Class XF,       
zero %, 2035  2,133,628    2,367,844 

32


COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount  Value 

 
GE Capital Commercial     
Mortgage Corp. 144A     
Ser. 05-C2, Class XC, IO,     
0.054s, 2043  $  86,057,276   $ 655,663 
Ser. 05-C3, Class XC, IO,     
0.05s, 2045  230,966,267  1,190,862 
Ser. 07-C1, Class XC, IO,     
0.042s, 2019  184,536,781  1,448,056 
GMAC Commercial Mortgage     
Securities, Inc.     
Ser. 99-C3, Class F, 7.814s, 2036  592,000  619,055 
Ser. 97-C1, Class X, IO,     
1.322s, 2029  5,993,614  239,745 
Ser. 05-C1, Class X1, IO,     
0.166s, 2043  98,705,898  1,268,568 
GMAC Commercial     
Mortgage Securities, Inc. 144A     
Ser. 99-C3, Class G, 6.974s, 2036  1,614,303  1,648,423 
Ser. 06-C1, Class XC, IO,     
0.056s, 2045  128,035,164  920,317 
Government National     
Mortgage Association     
IFB Ser. 07-26, Class WS,     
10.56s, 2037  3,535,538  4,360,619 
IFB Ser. 07-44, Class SP,     
8.661s, 2020  1,517,000  1,625,086 
IFB Ser. 06-34, Class SA,     
7.62s, 2036  385,907  396,812 
IFB Ser. 05-7, Class JM, 5.016s, 2034  2,813,256  2,728,397 
IFB Ser. 05-66, Class SP, 3.1s, 2035  1,395,698  1,239,883 
IFB Ser. 06-62, Class SI, IO,     
2.06s, 2036  4,183,169  298,929 
IFB Ser. 07-1, Class SL, IO,     
2.04s, 2037  1,916,131  142,119 
IFB Ser. 07-1, Class SM, IO,     
2.03s, 2037  1,916,131  141,479 
IFB Ser. 07-26, Class SG, IO,     
1.53s, 2037  5,289,399  330,392 
IFB Ser. 07-9, Class BI, IO,     
1 1/2s, 2037  12,704,864  719,633 
IFB Ser. 07-25, Class SA, IO,     
1.48s, 2037  4,490,918  256,431 
IFB Ser. 07-25, Class SB, IO,     
1.48s, 2037  8,758,525  500,112 
IFB Ser. 07-26, Class LS, IO,     
1.48s, 2037  10,990,540  703,054 
IFB Ser. 07-26, Class SA, IO,     
1.48s, 2037  12,534,692  679,017 
IFB Ser. 07-26, Class SD, IO,     
1.48s, 2037  6,253,786  377,228 
IFB Ser. 07-26, Class SL, IO,     
1.48s, 2037  261,740  12,981 
IFB Ser. 07-22, Class S, IO,     
1.48s, 2037  2,815,647  186,867 
IFB Ser. 06-69, Class SA, IO,     
1.48s, 2036  6,551,996  356,765 
IFB Ser. 06-38, Class SG, IO,     
1.33s, 2033  12,620,852  553,020 

COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 

     
  Principal amount  Value 

 
Government National     
Mortgage Association     
IFB Ser. 07-9, Class DI, IO,     
1.19s, 2037  $ 6,454,883   $ 301,421 
IFB Ser. 07-9, Class AI, IO,     
1.18s, 2037  4,928,062  250,198 
IFB Ser. 06-28, Class GI, IO,     
1.18s, 2035  4,405,019  201,600 
IFB Ser. 05-65, Class SI, IO,     
1.03s, 2035  5,086,280  218,030 
IFB Ser. 07-27, Class SD, IO,     
0.88s, 2037  3,196,573  113,254 
IFB Ser. 07-19, Class SJ, IO,     
0.88s, 2037  5,432,299  203,222 
IFB Ser. 07-21, Class S, IO,     
0.88s, 2037  6,651,972  271,447 
IFB Ser. 07-8, Class SA, IO,     
0.88s, 2037  13,682,589  574,477 
IFB Ser. 07-9, Class CI, IO,     
0.88s, 2037  8,415,113  307,948 
IFB Ser. 07-7, Class EI, IO,     
0.88s, 2037  5,525,626  198,875 
IFB Ser. 07-1, Class S, IO,     
0.88s, 2037  7,125,572  268,085 
IFB Ser. 07-3, Class SA, IO,     
0.88s, 2037  6,792,029  253,472 
IFB Ser. 07-43, Class SC, IO,     
0.78s, 2037  4,516,000  122,602 
FRB Ser. 98-2, Class EA, PO,     
zero %, 2028  112,957  90,253 
FRB Ser. 07-35, Class UF,     
zero %, 2037  461,985  492,191 
Greenpoint Mortgage Funding Trust     
Ser. 05-AR1, Class X1, IO, 1.36s, 2045  7,487,855  170,817 
Greenwich Capital     
Commercial Funding Corp.     
Ser. 07-GG9, Class A4,     
5.444s, 2039  2,106,000  2,027,025 
Ser. 05-GG5, Class XC, IO,     
0.051s, 2037  184,265,382  784,568 
Greenwich Capital     
Commercial Funding Corp. 144A     
Ser. 07-GG9, Class X, IO,     
0.512s, 2039  29,473,284  744,200 
Ser. 05-GG3, Class XC, IO,     
0.118s, 2042  126,163,707  2,050,160 
GS Mortgage Securities Corp. II     
Ser. 06-GG8, Class A4,     
5.56s, 2039  4,326,000  4,196,782 
Ser. 04-GG2, Class A6,     
5.396s, 2038  3,745,000  3,645,346 
Ser. 05-GG4, Class A4,     
4.761s, 2039  197,000  185,333 
GS Mortgage Securities Corp. II 144A     
FRB Ser. 03-FL6A, Class L,     
8.57s, 2015  565,000  559,350 
FRB Ser. 07-EOP, Class J,     
6.17s, 2009  428,000  423,720 

33


COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount  Value 

 
GS Mortgage Securities Corp. II 144A     
Ser. 98-C1, Class F, 6s, 2030  $  1,286,000   $ 1,280,444 
Ser. 03-C1, Class X1, IO,     
0.368s, 2040  28,428,055  473,684 
Ser. 05-GG4, Class XC, IO,     
0.179s, 2039  107,816,968  1,840,469 
Ser. 04-C1, Class X1, IO,     
0.16s, 2028  34,770,166  218,672 
Ser. 06-GG6, Class XC, IO,     
0.035s, 2038  52,874,684  179,691 
GSR Mortgage Loan Trust     
Ser. 05-AR2, Class 2A1, 4.84s, 2035  1,885,642  1,859,696 
JPMorgan Chase Commercial     
Mortgage Securities Corp.     
Ser. 97-C5, Class F, 7.561s, 2029  911,000  973,668 
Ser. 06-CB16, Class A4,     
5.552s, 2045  4,616,000  4,569,101 
Ser. 06-CB14, Class A4,     
5.471s, 2044  4,125,000  4,068,941 
Ser. 06-CB14, Class AM,     
5.381s, 2044  5,502,000  5,318,563 
FRB Ser. 04-PNC1, Class A4,     
5.542s, 2041  75,000  73,169 
Ser. 05-CB12, Class A4,     
4.895s, 2037  198,000  185,065 
Ser. 04-C3, Class A5, 4.878s, 2042  189,000  177,229 
Ser. 05-LDP2, Class AM,     
4.78s, 2042  1,990,000  1,873,439 
Ser. 06-CB17, Class X, IO,     
0.514s, 2043  42,942,044  1,677,316 
Ser. 06-LDP9, Class X, IO,     
0.456s, 2047  9,834,558  319,623 
Ser. 07-LDPX, Class X, IO,     
0.344s, 2049  54,593,848  1,296,604 
Ser. 06-LDP7, Class X, IO,     
0.009s, 2045  229,074,555  178,678 
JPMorgan Chase Commercial     
Mortgage Securities Corp. 144A     
Ser. 06-FL2A, Class X1, IO,     
0.758s, 2018  41,520,119  132,994 
Ser. 03-ML1A, Class X1, IO,     
0.622s, 2039  47,622,358  1,633,298 
Ser. 05-LDP2, Class X1, IO,     
0.113s, 2042  167,090,641  2,806,601 
Ser. 05-LDP1, Class X1, IO, 0.08s,     
2046  37,555,111  347,678 
Ser. 05-CB12, Class X1, IO,     
0.067s, 2037  54,712,455  564,222 
Ser. 05-LDP3, Class X1, IO,     
0.051s, 2042  82,082,096  631,648 
Ser. 05-LDP5, Class X1, IO,     
0.044s, 2044  345,907,078  1,567,391 
Ser. 06-LDP6, Class X1, IO,     
0.042s, 2043  68,541,431  369,481 
LB Commercial Conduit     
Mortgage Trust 144A     
Ser. 99-C1, Class F, 6.41s, 2031  715,303  721,190 
Ser. 99-C1, Class G, 6.41s, 2031  765,731  783,080 

       
COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
  Principal amount  Value 

 
LB Commercial Conduit     
Mortgage Trust 144A     
Ser. 98-C4, Class G, 5.6s, 2035   $  634,000  $  627,825 
Ser. 98-C4, Class H, 5.6s, 2035  1,074,000  998,252 
LB-UBS Commercial Mortgage Trust     
Ser. 01-C3, Class A2, 6.365s, 2028  67,000  68,714 
Ser. 04-C7, Class A6, 4.786s, 2029  1,733,000  1,653,477 
Ser. 07-C2, Class XW, IO,     
0.536s, 2040  11,771,648  458,729 
LB-UBS Commercial     
Mortgage Trust 144A     
Ser. 06-C7, Class XW, IO,     
0.719s, 2038  30,492,114  1,427,488 
Ser. 05-C3, Class XCL, IO,     
0.176s, 2040  67,083,147  1,434,282 
Ser. 05-C2, Class XCL, IO,     
0.146s, 2040  123,859,132  1,379,879 
Ser. 05-C5, Class XCL, IO,     
0.096s, 2020  69,998,031  993,365 
Ser. 05-C7, Class XCL, IO,     
0.081s, 2040  83,677,313  758,953 
Ser. 06-C1, Class XCL, IO,     
0.069s, 2041  66,857,715  735,418 
Ser. 07-C2, Class XCL, IO,     
0.065s, 2040  101,154,789  1,590,522 
Ser. 06-C7, Class XCL, IO,     
0.064s, 2038  22,164,549  382,981 
Lehman Brothers Floating Rate     
Commercial Mortgage Trust 144A     
FRB Ser. 04-LLFA, Class H,     
6.27s, 2017  733,000  733,801 
FRB Ser. 05-LLFA, 6.12s, 2018  423,000  421,943 
Lehman Mortgage Trust     
IFB Ser. 06-7, Class 1A9, 9s, 2036  869,552  943,376 
IFB Ser. 07-5, Class 4A3,     
8.16s, 2036  2,262,918  2,344,833 
FRB Ser. 07-5, Class 4A2,     
5.64s, 2037  4,176,372  4,129,505 
IFB Ser. 06-9, Class 3A2, IO,     
1.91s, 2037  2,573,401  154,291 
IFB Ser. 06-5, Class 2A2, IO,     
1.83s, 2036  7,859,557  392,163 
IFB Ser. 07-2, Class 2A13, IO,     
1.37s, 2037  5,648,524  306,678 
IFB Ser. 07-1, Class 2A3, IO,     
1.31s, 2037  6,795,741  365,262 
Ser. 06-9, Class 2A3, IO, 1.3s, 2036  8,432,669  442,144 
IFB Ser. 06-9, Class 2A2, IO,     
1.3s, 2037  5,961,611  313,590 
IFB Ser. 06-7, Class 2A4, IO,     
1.23s, 2036  12,198,999  481,440 
IFB Ser. 06-7, Class 2A5, IO,     
1.23s, 2036  10,942,269  538,164 
IFB Ser. 06-6, Class 1A3, IO,     
1.18s, 2036  6,277,229  285,669 
IFB Ser. 06-6, Class 1A2, IO,     
1.18s, 2036  4,559,433  181,252 
IFB Ser. 06-5, Class 1A3, IO,     
0.08s, 2036  2,118,561  13,003 

34


COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount    Value 

  
Lehman Mortgage Trust     
IFB Ser. 06-4, Class 1A3, IO,     
0.08s, 2036  $  1,782,246   $ 15,740 
IFB Ser. 06-7, Class 1A3, IO,     
0.03s, 2036  5,078,068  22,851 
IFB Ser. 06-9, Class 1A6, IO,     
zero %, 2037  4,364,455  19,777 
IFB Ser. 06-7, Class 4A2, IO,     
2.43s, 2036  3,798,668  220,442 
Ser. 07-1, Class 3A2, IO,     
1.93s, 2037  4,009,821  259,093 
MASTR Adjustable Rate     
Mortgages Trust     
Ser. 04-7, Class 2A1, 7.265s, 2034  363,399  369,418 
Ser. 04-13, Class 3A6, 3.786s, 2034  2,253,000  2,183,672 
Ser. 06-OA1, Class X, IO,     
2.09s, 2046  4,831,168  152,484 
Ser. 04-03, Class 4AX, IO,     
1.417s, 2034  2,338,737  34,146 
Ser. 05-2, Class 7AX, IO,     
0.168s, 2035  6,259,242  17,604 
Merrill Lynch Capital Funding Corp.     
Ser. 06-4, Class XC, IO, 0.062s, 2049  89,644,464  1,325,842 
Merrill Lynch Floating Trust 144A     
Ser. 06-1, Class X1TM, IO,     
6.166s, 2022  10,040,000  71,770 
FRB Ser. 06-1, Class TM,     
5.82s, 2022  1,020,000  1,023,095 
Ser. 06-1, Class X1A, IO,     
1.393s, 2022  33,518,116  387,134 
Merrill Lynch Mortgage Investors, Inc.     
Ser. 98-C3, Class E, 6.914s, 2030  644,000  679,607 
FRB Ser. 05-A9, Class 3A1,     
5.28s, 2035  3,886,348  3,832,910 
Merrill Lynch Mortgage Trust     
FRB Ser. 04-BPC1, Class A5,     
4.855s, 2041  193,000  184,583 
FRB Ser. 05-MCP1, Class A4,     
4.747s, 2043  187,000  173,429 
Ser. 05-MCP1, Class XC, IO,     
0.107s, 2043  71,272,975  974,435 
Merrill Lynch Mortgage Trust 144A     
Ser. 05-LC1, Class X, IO,     
0.236s, 2044  37,759,871  328,924 
Ser. 04-KEY2, Class XC, IO,     
0.181s, 2039  16,514,904  349,006 
Merrill Lynch/Countrywide     
Commercial Mortgage Trust 144A     
Ser. 06-1, Class X, IO, 0.134s, 2039  30,420,000  154,477 
Ser. 07-7, Class X, IO, 0.02s, 2050  192,887,000  776,069 
Mezz Cap Commercial     
Mortgage Trust 144A     
Ser. 04-C1, Class X, IO,     
7.798s, 2037  3,077,724  947,362 
Ser. 04-C2, Class X, IO,     
6.004s, 2040  2,508,217  743,843 
Ser. 05-C3, Class X, IO,     
5.555s, 2044  2,885,562  831,403 
Ser. 06-C4, Class X, IO,     
5.095s, 2016  8,768,000  2,904,065 
COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount  Value 

 
Morgan Stanley Capital I 144A     
Ser. 05-RR6, Class X, IO,     
1.622s, 2043  $  10,521,652  $  549,758 
Ser. 05-HQ6, Class X1, IO,     
0.07s, 2042  76,363,296  798,060 
Morgan Stanley Capital I     
Ser. 07-HQ11, Class A4,     
5.447s, 2044  3,674,000  3,501,523 
Ser. 05-HQ6, Class A4A,     
4.989s, 2042  3,963,000  3,791,050 
Ser. 04-HQ4, Class A7, 4.97s, 2040  2,047,000  1,940,945 
Morgan Stanley Capital I 144A     
Ser. 98-HF1, Class F, 7.18s, 2030  482,000  484,080 
Ser. 04-RR, Class F5, 6s, 2039  1,000,000  881,138 
Ser. 04-RR, Class F6, 6s, 2039  1,700,000  1,424,422 
Ser. 05-HQ5, Class X1, IO,     
0.097s, 2042  22,852,598  178,095 
Morgan Stanley Mortgage Loan Trust     
Ser. 05-5AR, Class 2A1, 5.357s, 2035  4,756,165  4,732,502 
Mortgage Capital Funding, Inc. FRB     
Ser. 98-MC2, Class E, 7.081s, 2030  1,020,000  1,034,494 
Permanent Financing PLC FRB     
Ser. 8, Class 2C, 5.76s, 2042     
(United Kingdom)  2,054,000  2,055,386 
PNC Mortgage Acceptance     
Corp. 144A     
Ser. 99-CM1, Class B3, 7.1s, 2032  3,870,000  3,974,142 
Ser. 00-C1, Class J, 6 5/8s, 2010  456,000  414,458 
Ser. 00-C2, Class J, 6.22s, 2033  1,113,000  1,120,991 
Pure Mortgages 144A     
FRB Ser. 04-1A, Class F, 8.86s,     
2034 (Ireland)  2,645,000  2,645,000 
Ser. 04-1A, Class E, 6.61s,     
2034 (Ireland)  1,041,000  1,040,844 
Residential Asset Securitization     
Trust IFB Ser. 06-A7CB,     
Class 1A6, IO, 0.23s, 2036  1,238,126  11,753 
Residential Funding Mortgage     
Securities I Ser. 04-S5,     
Class 2A1, 4 1/2s, 2019  2,756,431  2,642,589 
Salomon Brothers Mortgage     
Securities VII 144A Ser. 02-KEY2,     
Class X1, IO, 0.795s, 2036  24,107,455  1,154,089 
SBA CMBS Trust 144A Ser. 05-1A,     
Class D, 6.219s, 2035  600,000  602,526 
STRIPS 144A     
Ser. 03-1A, Class L, 5s, 2018     
(Cayman Islands)  757,000  680,206 
Ser. 03-1A, Class M, 5s, 2018     
(Cayman Islands)  513,000  443,906 
Ser. 04-1A, Class L, 5s, 2018     
(Cayman Islands)  337,000  302,352 
Structured Adjustable Rate     
Mortgage Loan Trust     
Ser. 04-8, Class 1A3, 7.247s, 2034  20,229  20,563 
FRB Ser. 05-18, Class 6A1,     
5.247s, 2035  2,222,303  2,202,058 
Ser. 05-9, Class AX, IO,     
1.113s, 2035  24,452,758  351,508 

35


COLLATERALIZED MORTGAGE OBLIGATIONS (15.1%)* continued 
     
  Principal amount    Value 

 
Wachovia Bank Commercial       
Mortgage Trust       
Ser. 04-C15, Class A4, 4.803s, 2041 $   3,055,000  $  2,909,193 
Ser. 06-C28, Class XC, IO,       
0.381s, 2048  23,395,377    616,000 
Ser. 06-C29, IO, 0.372s, 2048  97,784,660    2,786,863 
Wachovia Bank Commercial       
Mortgage Trust 144A       
FRB Ser. 05-WL5A, Class L,       
8.62s, 2018  771,000    770,846 
Ser. 03-C3, Class IOI, IO,       
0.364s, 2035  17,187,883    519,368 
Ser. 07-C31, IO, 0.261s, 2047  91,789,053    1,843,124 
Ser. 06-C23, Class XC, IO,       
0.05s, 2045  90,609,438    548,187 
Ser. 06-C26, Class XC, IO,       
0.041s, 2045  35,040,604    130,001 
WAMU Commercial Mortgage       
Securities Trust 144A       
Ser. 07-SL2, Class X, IO, 0.852s, 2049  15,454,500    709,236 
Washington Mutual 144A       
Ser. 06-SL1, Class X, IO, 0.938s, 2043  7,702,506    402,002 
Washington Mutual Asset       
Securities Corp. 144A       
Ser. 05-C1A, Class G, 5.72s, 2036  222,000    206,496 
Washington Mutual Multi-Fam.,       
Mtge. 144A Ser. 01-1, Class B5,       
7.184s, 2031 (Cayman Islands)  1,305,000    1,311,252 
Wells Fargo Mortgage       
Backed Securities Trust       
Ser. 06-AR10, Class 3A1,       
5.281s, 2036  2,842,704    2,807,837 
Ser. 05-AR2, Class 2A1,       
4.545s, 2035  1,412,254    1,385,057 
Ser. 04-R, Class 2A1, 4.362s, 2034  1,448,279    1,419,313 
Ser. 05-AR9, Class 1A2,       
4.354s, 2035  1,889,507    1,859,472 
Ser. 05-AR12, Class 2A5,       
4.319s, 2035  21,411,000    20,905,120 
Ser. 05-AR10, Class 2A18, IO,       
0.61s, 2035  44,983,000    401,073 

 
Total collateralized mortgage obligations     
(cost $650,887,908)    $  640,263,258 

 
 
CORPORATE BONDS AND NOTES (5.4%)*     
  Principal amount    Value 

  
Basic Materials (0.1%)       
Dow Chemical Co. (The) Pass       
Through Trust 144A company       
guaranty 4.027s, 2009  $  1,510,000  $  1,465,243 
Georgia-Pacific Corp.       
debs. 9 1/2s, 2011  765,000    784,125 
Georgia-Pacific Corp.       
notes 8 1/8s, 2011  635,000    639,763 
Lafarge SA notes 6 1/2s, 2016 (France)  325,000    334,692 
Lubrizol Corp. (The) sr. notes       
5 1/2s, 2014  470,000    445,133 

CORPORATE BONDS AND NOTES (5.4%)* continued 

   
   
  Principal amount    Value 

Basic Materials continued       
Potash Corp. of Saskatchewan       
notes 5 7/8s, 2036 (Canada)  $  785,000  $  732,874 
Westvaco Corp. unsec.       
notes 7 1/2s, 2027  175,000    182,404 
Xstrata Finance Canada, Ltd. 144A       
company guaranty 5.8s, 2016 (Canada)  735,000    720,791 
      5,305,025 

 
Capital Goods (0.1%)       
L-3 Communications Corp. company       
guaranty Ser. B, 6 3/8s, 2015  595,000    547,400 
L-3 Communications Corp.       
sr. sub. notes 5 7/8s, 2015  435,000    395,850 
Legrand SA debs. 8 1/2s, 2025 (France)  860,000    980,400 
      1,923,650 

 
Communication Services (0.6%)       
Ameritech Capital Funding company       
guaranty 6 1/4s, 2009  200,000    202,800 
AT&T Wireless Services, Inc.       
sr. notes 8 3/4s, 2031  1,139,000    1,409,600 
Bellsouth Capital Funding unsecd.       
notes 7 7/8s, 2030  3,475,000    3,912,906 
France Telecom notes 8 1/2s,       
2031 (France)  180,000    225,518 
Nextel Communications, Inc.       
sr. notes Ser. E, 6 7/8s, 2013  600,000    576,000 
Nextel Communications, Inc.       
sr. notes Ser. F, 5.95s, 2014 (S)  2,655,000    2,462,513 
Rogers Wireless, Inc. sec.       
notes 6 3/8s, 2014 (Canada)  765,000    771,109 
Southwestern Bell Telephone       
debs. 7s, 2027  1,075,000    1,089,677 
Sprint Capital Corp. company       
guaranty 6.9s, 2019  715,000    702,291 
Sprint Capital Corp. company       
guaranty 6 7/8s, 2028  1,965,000    1,839,853 
Telecom Italia Capital SA company       
guaranty 7.2s, 2036 (Luxembourg)  350,000    350,543 
Telecom Italia Capital SA company       
guaranty 5 1/4s, 2015 (Luxembourg)  965,000    897,880 
Telecom Italia Capital SA company       
guaranty 5 1/4s, 2013 (Luxembourg)  515,000    489,703 
Telecom Italia Capital SA company       
guaranty 4s, 2010 (Luxembourg)  60,000    58,130 
Telefonica Emisones SAU company       
guaranty 7.045s, 2036 (Spain)  690,000    698,258 
Telefonica Emisones SAU company       
guaranty 6.421s, 2016 (Spain)  270,000    269,894 
Telefonica Emisones SAU company       
guaranty 6.221s, 2017 (Spain)  385,000    381,528 
Telefonica Europe BV company       
guaranty 8 1/4s, 2030 (Netherlands)  595,000    679,818 
Telus Corp. notes 8s, 2011 (Canada)  1,055,000    1,129,717 
Verizon Communications, Inc.       
sr. unsec. bond 6 1/4s, 2037  1,715,000    1,646,577 
Verizon Communications, Inc.       
sr. unsec. bond 5 1/2s, 2017 (S)  1,075,000    1,030,303 

36


CORPORATE BONDS AND NOTES (5.4%)* continued     
  Principal amount    Value 

 
Communication Services continued       
Verizon New England, Inc.       
sr. notes 6 1/2s, 2011  $  2,285,000  $  2,350,886 
Verizon New Jersey, Inc. debs. 8s, 2022  770,000    857,193 
Verizon Pennsylvania, Inc.       
debs. 8.35s, 2030  980,000    1,127,754 
      25,160,451 

 
Conglomerates (—%)       
Siemens Financieringsmaatschappij       
144A notes 5 3/4s, 2016 (Netherlands)  680,000    676,385 

 
Consumer Cyclicals (0.2%)       
D.R. Horton, Inc.       
sr. notes 7 7/8s, 2011  565,000    569,014 
D.R. Horton, Inc.       
sr. notes 5 7/8s, 2013  660,000    604,906 
DaimlerChrysler NA Holding Corp.       
company guaranty 7.2s, 2009  1,545,000    1,592,812 
DaimlerChrysler NA Holding Corp.       
company guaranty 6 1/2s, 2013  565,000    576,340 
DaimlerChrysler NA Holding Corp.       
notes Ser. MTN, 5 3/4s, 2011  1,730,000    1,728,019 
Ford Motor Credit Corp.       
notes 6 3/8s, 2008  980,000    959,900 
JC Penney Co., Inc. debs. 7.65s, 2016  110,000    119,162 
JC Penney Co., Inc. notes 6 7/8s, 2015  910,000    938,885 
JC Penney Co., Inc.       
sr. notes 6 3/8s, 2036  555,000    515,272 
Marriott International, Inc.       
notes 6 3/8s, 2017  926,000    927,256 
Office Depot, Inc. notes 6 1/4s, 2013  563,000    571,357 
Omnicom Group, Inc.       
sr. notes 5.9s, 2016  635,000    625,616 
Wyndham Worldwide Corp. sr. unsec.       
6s, 2016  755,000    715,190 
      10,443,729 

 
Consumer Staples (0.6%)       
Campbell Soup Co. debs. 8 7/8s, 2021  855,000    1,071,672 
Cox Communications, Inc.       
notes 7 1/8s, 2012  890,000    928,768 
Cox Communications, Inc. 144A       
bonds 6.45s, 2036  533,000    506,128 
Cox Communications, Inc. 144A       
notes 5 7/8s, 2016  537,000    520,828 
Cox Enterprises, Inc. 144A       
notes 7 7/8s, 2010  1,045,000    1,105,531 
CVS Caremark, Corp. sr. unsec. FRN       
6.302s, 2037  1,715,000    1,642,696 
CVS Caremark, Corp. 144A       
pass-through certificates 6.117s, 2013  2,042,721    2,089,081 
Delhaize Group 144A notes 6 1/2s,       
2017 (Belgium)  565,000    578,369 
Diageo PLC company guaranty       
8s, 2022  760,000    896,633 
Estee Lauder Cos Inc. (The)       
sr. unsec. 6s, 2037  1,040,000    991,464 

     
CORPORATE BONDS AND NOTES (5.4%)* continued     
  Principal amount    Value 

 
Consumer Staples continued       
Estee Lauder Cos Inc. (The)       
sr. unsec. 5.55s, 2017  $  280,000  $  275,827 
Kroger Co. company       
guaranty 6 3/4s, 2012  275,000    286,155 
News America Holdings, Inc.       
company guaranty 7 3/4s, 2024  1,045,000    1,139,528 
News America Holdings, Inc.       
debs. 7 3/4s, 2045  1,955,000    2,135,059 
TCI Communications, Inc. company       
guaranty 7 7/8s, 2026  2,170,000    2,374,911 
TCI Communications, Inc.       
debs. 9.8s, 2012  1,870,000    2,151,031 
TCI Communications, Inc.       
debs. 7 7/8s, 2013  1,240,000    1,351,686 
Time Warner Cable, Inc. 144A       
sr. unsec. 6.55s, 2037  690,000    648,979 
Time Warner Cable, Inc. 144A       
sr. unsec. 5.85s, 2017  475,000    458,676 
Time Warner Entertainment Co., LP       
debs. 8 3/8s, 2023  170,000    195,925 
Time Warner, Inc. company       
guaranty 6 1/2s, 2036  435,000    412,870 
Time Warner, Inc. company       
guaranty 5 7/8s, 2016  800,000    771,175 
Time Warner, Inc. debs. 9.15s, 2023  340,000    411,159 
Time Warner, Inc. debs. 9 1/8s, 2013  2,435,000    2,808,342 
Viacom, Inc. sr. notes 5 3/4s, 2011  610,000    607,873 
      26,360,366 

 
Energy (0.3%)       
Anadarko Petroleum Corp.       
sr. notes 6.45s, 2036  730,000    701,505 
Anadarko Petroleum Corp.       
sr. notes 5.95s, 2016  355,000    348,245 
Chesapeake Energy Corp.       
sr. unsecd. notes 7 5/8s, 2013  1,010,000    1,012,525 
Enterprise Products Operating LP       
company guaranty FRB 7.034s, 2068  55,000    50,287 
Enterprise Products Operating LP       
company guaranty FRN 8 3/8s, 2066  1,945,000    1,984,398 
Forest Oil Corp. sr. notes 8s, 2011  610,000    614,575 
Hess Corp. bonds 7 7/8s, 2029  1,160,000    1,323,384 
Motiva Enterprises, LLC 144A       
sr. notes 5.2s, 2012  530,000    522,830 
Newfield Exploration Co.       
sr. sub. notes 6 5/8s, 2016  650,000    607,750 
Nexen, Inc. bonds 6.4s, 2037 (Canada)  1,280,000    1,236,004 
Peabody Energy Corp.       
sr. notes 5 7/8s, 2016  805,000    700,350 
Premcor Refining Group, Inc.       
sr. notes 7 1/2s, 2015  1,330,000    1,372,867 
Sunoco, Inc. notes 4 7/8s, 2014  590,000    558,710 
Tesoro Corp. 144A       
sr. notes 6 1/2s, 2017  1,025,000    973,750 
Valero Energy Corp.       
sr. notes 6 1/8s, 2017  160,000    160,598 
Valero Energy Corp. sr. unsecd.       
notes 7 1/2s, 2032  745,000    810,655 

37


   
CORPORATE BONDS AND NOTES (5.4%)* continued     
  Principal amount    Value 

 
Energy continued       
Weatherford International, Inc.       
144A company guaranty 6.8s, 2037   $  245,000  $  250,363 
Weatherford International, Inc.       
144A company guaranty 6.35s, 2017  280,000    285,734 
Weatherford International, Ltd.       
company guaranty 6 1/2s, 2036  855,000    825,844 
Weatherford International, Ltd.       
sr. notes 5 1/2s, 2016  455,000    436,451 
      14,776,825 

 
Financial (2.0%)       
AGFC Capital Trust I company       
guaranty 6s, 2067  620,000    600,637 
American International Group, Inc.       
jr. sub. bond 6 1/4s, 2037  2,075,000    1,923,306 
Ameriprise Financial, Inc. jr.       
sub. FRN 7.518s, 2066  1,740,000    1,761,402 
Amvescap PLC company       
guaranty 5 5/8s, 2012       
(United Kingdom)  520,000    517,186 
Axa SA 144A sub. notes FRN 6.379s,       
2036 (France)  725,000    640,090 
Bank of America NA       
sub. notes 5.3s, 2017  2,015,000    1,914,707 
Barclays Bank PLC FRB 6.278s, 2049       
(United Kingdom)  1,110,000    982,949 
Block Financial Corp.       
notes 5 1/8s, 2014  760,000    704,670 
Bosphorus Financial Services, Ltd.       
144A sec. FRN 7.16s, 2012       
(Cayman Islands)  2,378,000    2,402,120 
Brandywine Operating Partnership       
LP sr. unsec. 5.7s, 2017 (R)  840,000    804,346 
Camden Property Trust notes 5.7s,       
2017 (R)  785,000    759,212 
Capital One Capital III company       
guaranty 7.686s, 2036  1,790,000    1,712,225 
Chubb Corp. (The) sr. notes 6s, 2037  670,000    640,669 
CIT Group, Inc. jr. sub. FRN 6.1s, 2067  3,330,000    2,867,235 
CIT Group, Inc. sr. notes 5.4s, 2013  155,000    150,683 
CIT Group, Inc. sr. notes 5s, 2015  780,000    713,342 
CIT Group, Inc. sr. notes 5s, 2014  1,515,000    1,411,853 
Citigroup, Inc. sub. notes 5s, 2014  1,105,000    1,049,655 
CNA Financial Corp. unsecd.       
notes 6 1/2s, 2016  730,000    728,843 
CNA Financial Corp. unsecd.       
notes 6s, 2011  730,000    735,722 
Colonial Properties Trust       
notes 6 1/4s, 2014 (R)  730,000    740,647 
Countrywide Capital III company       
guaranty Ser. B, 8.05s, 2027  1,035,000    1,129,671 
Credit Suisse Guernsey Ltd. jr.       
sub. FRN 5.86s, 2049 (Guernsey)  1,416,000    1,334,117 
Deutsche Bank Capital Funding       
Trust VII 144A FRB 5.628s, 2049  1,145,000    1,097,136 
Developers Diversified       
Realty Corp. unsecd.       
notes 5 3/8s, 2012 (R)  385,000    378,360 

CORPORATE BONDS AND NOTES (5.4%)* continued 

     
   
  Principal amount    Value 

 
Financial continued       
Dresdner Funding Trust I 144A       
bonds 8.151s, 2031  $ 1,410,000  $  1,615,726 
Equity One, Inc. notes 5 3/8s,       
2015 (R)  695,000    662,511 
ERP Operating LP notes 5 3/4s,       
2017 (R)  840,000    814,207 
Fleet Capital Trust V bank       
guaranty FRN 6.36s, 2028  935,000    934,976 
Fund American Cos., Inc.       
notes 5 7/8s, 2013  1,370,000    1,352,038 
GATX Financial Corp. notes       
5.8s, 2016  560,000    539,996 
General Motors Acceptance Corp.       
bonds 8s, 2031  845,000    793,523 
General Motors Acceptance Corp.       
notes 7s, 2012 (S)  845,000    787,585 
GMAC LLC unsub. notes FRN       
6.61s, 2009  2,920,000    2,808,158 
Health Care REIT, Inc.       
sr. notes 6s, 2013 (R)  385,000    386,245 
Highwood Properties, Inc.       
sr. unsec. bonds 5.85s, 2017 (R)  1,005,000    968,390 
Hospitality Properties Trust       
notes 6 3/4s, 2013 (R)  780,000    806,167 
HRPT Properties Trust       
bonds 5 3/4s, 2014 (R)  530,000    525,290 
HRPT Properties Trust       
notes 6 1/4s, 2016 (R)  525,000    528,442 
HSBC Finance Capital Trust IX FRN       
5.911s, 2035  3,300,000    3,181,514 
ILFC E-Capital Trust II 144A FRB       
6 1/4s, 2065  2,560,000    2,467,116 
iStar Financial, Inc. sr. unsecd.       
notes 5 7/8s, 2016 (R)  1,630,000    1,462,982 
JPMorgan Chase Capital XVIII       
bonds Ser. R, 6.95s, 2036  1,996,000    1,913,068 
JPMorgan Chase Capital XX jr.       
sub. bond Ser. T, 6.55s, 2036  565,000    517,823 
Kimco Realty Corp.       
sr. sub. notes 5.7s, 2017 (R)  600,000    580,990 
Lehman Brothers Holdings, Inc.       
sub. notes 5 3/4s, 2017  160,000    149,530 
Liberty Mutual Insurance 144A       
notes 7.697s, 2097  2,160,000    2,077,868 
Lincoln National Corp. FRB 7s, 2066  787,000    790,775 
Loews Corp. notes 5 1/4s, 2016  510,000    488,819 
MetLife, Inc. jr. sub. FRN 6.4s, 2036  1,515,000    1,354,795 
Nationwide Financial       
Services, Inc. notes 5 5/8s, 2015  465,000    460,830 
Nationwide Health Properties, Inc.       
notes 6 1/2s, 2011 (R)  650,000    668,067 
Nationwide Mutual Insurance Co.       
144A notes 8 1/4s, 2031  375,000    453,030 
NB Capital Trust IV company       
guaranty 8 1/4s, 2027  5,540,000    5,766,198 
Nuveen Investments, Inc.       
sr. notes 5 1/2s, 2015  505,000    426,341 

38


CORPORATE BONDS AND NOTES (5.4%)* continued     
  Principal amount    Value 

 
Financial continued       
OneAmerica Financial       
Partners, Inc. 144A bonds 7s, 2033   $  1,240,000  $  1,239,820 
PNC Bank NA notes 4 7/8s, 2017  1,030,000    945,199 
ProLogis Trust sr. notes 5 3/4s,       
2016 (R)  905,000    893,976 
Prudential Holdings LLC 144A       
bonds 8.695s, 2023  1,510,000    1,855,956 
QBE Capital Funding II LP 144A       
company guaranty FRN 6.797s,       
2049 (Jersey)  450,000    420,174 
RBS Capital Trust IV company       
guaranty FRN 6.16s, 2049  1,290,000    1,293,687 
Regency Centers LP sr. unsec.       
5 7/8s, 2017 (R)  650,000    644,592 
Rouse Co LP/TRC Co-Issuer Inc.       
144A sr. notes 6 3/4s, 2013 (R)  695,000    692,719 
Rouse Co. (The) notes 7.2s, 2012 (R)  645,000    658,554 
Royal Bank of Scotland Group PLC       
FRB 7.648s, 2049 (United Kingdom)  400,000    441,147 
Simon Property Group LP       
unsub. bonds 5 3/4s, 2015 (R)  371,000    365,908 
SLM Corp. notes Ser. MTNA,       
4 1/2s, 2010  1,285,000    1,201,656 
Sovereign Bancorp, Inc.       
sr. notes 4.8s, 2010  730,000    714,229 
Swiss Re Capital I LP 144A FRN       
6.854s, 2049 (United Kingdom)  850,000    847,998 
Travelers Cos., Inc. (The)       
sr. unsecd. notes 6 1/4s, 2037  730,000    685,242 
UBS AG/Jersey Branch FRN 8.36s,       
2008 (Jersey)  3,020,000    3,065,300 
Unitrin, Inc. sr. notes 6s, 2017  740,000    731,442 
Washington Mutual Bank/Henderson       
NV sub. notes Ser. BKNT, 5.95s, 2013  1,030,000    1,024,711 
Westfield Group sr. notes 5.7s,       
2016 (Australia)  875,000    858,191 
Westpac Capital Trust III 144A       
sub. notes FRN 5.819s, 2049 (Australia)  1,010,000    1,012,959 
Willis Group North America, Inc.       
company guaranty 6.2s, 2017  605,000    605,570 
ZFS Finance USA Trust I 144A       
bonds FRB 6 1/2s, 2037  2,130,000    2,009,939 
      86,192,752 

 
Health Care (0.1%)       
Bayer Corp. 144A FRB 6.2s, 2008  845,000    846,462 
Hospira, Inc. sr. notes 6.05s, 2017  560,000    551,112 
Hospira, Inc. sr. notes 5.55s, 2012  785,000    785,565 
Ventas Realty LP/Capital Corp.       
sr. notes 6 3/4s, 2017 (R)  470,000    439,450 
      2,622,589 

 
Technology (0.1%)       
Arrow Electronics, Inc.       
debs. 7 1/2s, 2027  760,000    773,235 
Avnet, Inc. notes 6s, 2015  765,000    744,945 
Xerox Corp. sr. notes 6.4s, 2016  1,030,000    1,021,587 
      2,539,767 

CORPORATE BONDS AND NOTES (5.4%)* continued 

 
   
  Principal amount    Value 

 
Transportation (0.2%)       
American Airlines, Inc.       
pass-through certificates       
Ser. 01-1, 6.817s, 2011  $  100,000  $  99,500 
American Airlines, Inc.       
pass-through certificates       
Ser. 01-2, 7.858s, 2011  525,000    555,188 
Continental Airlines, Inc.       
pass-through certificates       
Ser. 98-3, 6.32s, 2008  2,895,000    2,891,526 
Northwest Airlines Corp.       
pass-through certificates       
Ser. 00-1, 7.15s, 2019  1,570,917    1,671,063 
Ryder System, Inc. notes Ser. MTN,       
5.95s, 2011  450,000    455,583 
Union Pacific Corp. 144A       
pass-through certificates 5.214s, 2014  590,000    572,282 
United AirLines, Inc. pass-through       
certificates 6.636s, 2022  715,000    712,319 
      6,957,461 

 
Utilities & Power (1.1%)       
AEP Texas North Co.       
sr. notes Ser. B, 5 1/2s, 2013  905,000    891,158 
Appalachian Power Co.       
sr. notes 5.8s, 2035  510,000    467,400 
Arizona Public Services Co.       
notes 6 1/2s, 2012  1,040,000    1,068,757 
Atmos Energy Corp.       
sr. unsub. 6.35s, 2017  905,000    919,895 
Beaver Valley II Funding debs. 9s, 2017  1,436,000    1,617,123 
Boardwalk Pipelines LP company       
guaranty 5 7/8s, 2016  1,950,000    1,933,249 
Bruce Mansfield Unit 144A       
pass-through certificates 6.85s, 2034  1,820,000    1,870,960 
CenterPoint Energy Houston       
Electric, LLC general ref. mtge.       
Ser. M2, 5 3/4s, 2014  110,000    109,098 
CenterPoint Energy Resources Corp.       
notes 7 3/4s, 2011  1,060,000    1,127,514 
Cleveland Electric       
Illuminating Co. (The) 144A       
sr. notes Ser. D, 7.88s, 2017  550,000    624,861 
CMS Energy Corp.       
unsub. notes 6.55s, 2017  50,000    47,250 
Commonwealth Edison Co. 1st mtge.       
5.9s, 2036  1,145,000    1,056,712 
Consolidated Natural Gas Co.       
sr. notes 5s, 2014  530,000    502,693 
Dayton Power & Light Co. (The) 1st       
mtge. 5 1/8s, 2013  975,000    949,884 
Dominion Resources, Inc. jr.       
sub. notes FRN 6.3s, 2066  3,085,000    3,073,339 
El Paso Natural Gas Co. 144A       
sr. unsec. bond 5.95s, 2017  120,000    116,347 
Enbridge Energy Partners LP       
sr. unsec. notes 5 7/8s, 2016  750,000    731,565 
Entergy Gulf States, Inc. 1st       
mtge. 5 1/4s, 2015  985,000    922,909 

39


   
CORPORATE BONDS AND NOTES (5.4%)* continued     
  Principal amount    Value 

 
Utilities & Power continued       
Indianapolis Power & Light 144A       
1st mtge. 6.3s, 2013  $  515,000  $  528,889 
Indiantown Cogeneration LP 1st       
mtge. Ser. A-10, 9.77s, 2020  775,000    885,786 
Ipalco Enterprises, Inc. sec.       
notes 8 3/8s, 2008  280,000    280,700 
ITC Holdings Corp. 144A       
notes 5 7/8s, 2016  1,090,000    1,071,084 
Kansas Gas & Electric       
bonds 5.647s, 2021  395,000    381,783 
Kinder Morgan, Inc. notes 6s, 2017  545,000    540,128 
Kinder Morgan, Inc.       
sr. notes 6 1/2s, 2012  685,000    658,250 
MidAmerican Energy Holdings Co.       
bonds 6 1/8s, 2036 (S)  2,345,000    2,241,041 
National Fuel Gas Co.       
notes 5 1/4s, 2013  545,000    537,454 
Nevada Power Co. general ref.       
mtge. Ser. L, 5 7/8s, 2015  525,000    510,538 
Northwestern Corp. sec.       
notes 5 7/8s, 2014  1,090,000    1,058,706 
Oncor Electric Delivery Co.       
debs. 7s, 2022  675,000    705,359 
Oncor Electric Delivery Co. sec.       
notes 7 1/4s, 2033  820,000    887,807 
Pacific Gas & Electric Co.       
sr. unsub. 5.8s, 2037 (S)  775,000    720,584 
Potomac Edison Co. 144A 1st mtge.       
5.8s, 2016  1,085,000    1,094,473 
Power Receivable Finance, LLC 144A       
sr. notes 6.29s, 2012  949,186    964,373 
PPL Energy Supply LLC       
bonds Ser. A, 5.7s, 2015  640,000    620,642 
Progress Energy, Inc. sr. unsecd.       
notes 5 5/8s, 2016  970,000    947,756 
Public Service Co. of Colorado       
sr. notes Ser. A, 6 7/8s, 2009  375,000    385,003 
Public Service Co. of New Mexico       
sr. notes 4.4s, 2008  570,000    564,757 
Puget Sound Energy, Inc. jr.       
sub. FRN Ser. A, 6.974s, 2067  1,185,000    1,193,094 
Sierra Pacific Power Co. general       
ref. mtge. Ser. P, 6 3/4s, 2037  1,700,000    1,668,603 
Southern California Edison Co.       
notes 6.65s, 2029  1,030,000    1,081,442 
Southern California Edison Co.       
06-E 1st mtge. 5.55s, 2037  895,000    825,047 
Southern Natural Gas. Co. 144A       
notes 5.9s, 2017  460,000    442,749 
Spectra Energy Capital, LLC       
sr. notes 8s, 2019  780,000    882,449 
Teco Energy, Inc. notes 7.2s, 2011  1,070,000    1,091,406 
TEPPCO Partners LP company       
guaranty FRB 7s, 2067  595,000    553,925 
TransAlta Corp. notes 5 3/4s,       
2013 (Canada)  665,000    652,678 
TransCanada Pipelines, Ltd. jr.       
sub. FRN 6.35s, 2067 (Canada)  520,000    486,708 

CORPORATE BONDS AND NOTES (5.4%)* continued     
 
    Principal amount    Value 

Utilities & Power continued         
TXU Energy Co. 144A sr. unsec. FRN         
5.86s, 2008    $ 2,555,000  $  2,554,865 
Westar Energy, Inc. 1st mtge.         
5.15s, 2017    75,000    70,339 
Westar Energy, Inc. 1st mtge.         
5.1s, 2020    800,000    727,453 
        45,846,585 

 
Total corporate bonds and notes         
(cost $234,580,180)      $  228,805,585 

 
 
ASSET-BACKED SECURITIES (4.3%)*         
    Principal amount    Value 

 
Advanta Business Card Master Trust         
FRB Ser. 04-C1, Class C, 6.37s, 2013    $  210,000  $  210,657 
Aegis Asset Backed         
Securities Trust 144A         
Ser. 04-5N, Class Note, 5s, 2034    70,213    66,790 
Ser. 04-6N, Class Note,         
4 3/4s, 2035    60,504    57,478 
AFC Home Equity Loan Trust         
Ser. 99-2, Class 1A, 5.73s, 2029    2,562,406    2,569,610 
American Express Credit Account         
Master Trust 144A Ser. 04-C,         
Class C, 5.82s, 2012    3,298,535    3,305,791 
Ameriquest Mortgage         
Securities, Inc. FRB Ser. 06-R1,         
Class M10, 7.82s, 2036    902,000    712,580 
AMP CMBS 144A FRB Ser. 06-1A,         
Class A, 6.11s, 2047 (Cayman Islands)    1,910,000    1,910,000 
Arcap REIT, Inc. 144A         
Ser. 03-1A, Class E, 7.11s, 2038    1,283,000    1,285,477 
Ser. 04-1A, Class E, 6.42s, 2039    1,112,000    1,099,155 
Asset Backed Funding Certificates         
144A FRB Ser. 06-OPT3, Class B,         
7.82s, 2036    157,000    98,945 
Asset Backed Funding Corp. NIM         
Trust 144A FRB Ser. 05-OPT1,         
Class B1, 7.82s, 2035    407,000    298,056 
Asset Backed Securities Corp. Home         
Equity Loan Trust FRB         
Ser. 05-HE1, Class A3, 5.61s, 2035    10,707    10,708 
Aviation Capital Group Trust 144A         
FRB Ser. 03-2A, Class G1, 6.02s, 2033  904,601    908,417 
Bank One Issuance Trust FRB         
Ser. 03-C4, Class C4, 6.35s, 2011    210,000    211,321 
Bay View Auto Trust Ser. 05-LJ2,         
Class D, 5.27s, 2014    420,000    416,212 
Bayview Financial Acquisition Trust         
Ser. 04-B, Class A1, 5.82s, 2039    4,211,489    4,211,478 
FRB Ser. 04-D, Class A, 5.71s, 2044  1,578,180    1,578,426 
Ser. 05-B, Class A, IO, 4.466s, 2039    4,334,713    24,794 
Bayview Financial Acquisition         
Trust 144A FRN Ser. 04-B,         
Class M2, 7.22s, 2039    200,000    201,602 

40


ASSET-BACKED SECURITIES (4.3%)* continued     
    Principal amount    Value 

 
Bayview Financial Asset Trust 144A       
FRB Ser. 03-SSRA, Class M,         
6.67s, 2038    $   857,186  $  859,586 
FRB Ser. 03-SSRA, Class A,         
6.02s, 2038    722,975    724,277 
FRB Ser. 04-SSRA, Class A1,         
5.92s, 2039    949,105    950,054 
Bear Stearns Asset Backed         
Securities Trust IFB Ser. 07-AC5,         
Class A6, IO, 1.23s, 2037    12,666,923    457,691 
Bear Stearns Asset         
Backed Securities, Inc.         
FRB Ser. 06-EC1, Class M9,         
7.32s, 2035    698,000    314,100 
FRB Ser. 06-PC1, Class M9,         
7.07s, 2035    414,000    207,000 
FRB Ser. 03-3, Class A2,         
5.91s, 2043    2,197,474    2,196,788 
FRB Ser. 03-1, Class A1,         
5.82s, 2042    535,490    535,490 
FRB Ser. 05-3, Class A1,         
5.77s, 2035    609,382    609,382 
Bear Stearns Asset Backed         
Securities, Inc. 144A FRB         
Ser. 06-HE2, Class M10, 7.57s, 2036  251,000    125,500 
Capital Auto Receivables         
Asset Trust 144A         
Ser. 06-1, Class D, 7.16s, 2013    500,000    500,332 
Ser. 05-1, Class D, 6 1/2s, 2011  1,442,000    1,436,874 
Capital One Multi-Asset Execution       
Trust FRB Ser. 02-C1, Class C1,         
8.07s, 2010    570,000    571,737 
CARMAX Auto Owner Trust Ser. 04-2,       
Class D, 3.67s, 2011    143,538    141,996 
CARSSX Finance, Ltd. 144A         
FRB Ser. 04-AA, Class B4, 10.82s,       
2011 (Cayman Islands)    694,723    697,074 
FRB Ser. 04-AA, Class B3, 8.67s,       
2011 (Cayman Islands)    90,645    90,806 
Chase Credit Card Master Trust FRB       
Ser. 03-3, Class C, 6.4s, 2010    1,730,000    1,744,574 
Chase Funding Net Interest Margin       
144A Ser. 04-OPT1, Class Note,         
4.458s, 2034    124,409    122,757 
Citibank Credit Card Issuance         
Trust FRB Ser. 01-C1, Class C1,         
6.44s, 2010    1,060,000    1,063,727 
Conseco Finance Securitizations Corp.       
Ser. 02-2, Class A, IO, 8 1/2s, 2033  6,247,247    1,121,556 
Ser. 00-4, Class A6, 8.31s, 2032  8,597,000    7,608,345 
Ser. 00-5, Class A6, 7.96s, 2032  3,727,000    3,381,332 
Ser. 02-1, Class M1F, 7.954s, 2033  1,004,000    1,040,603 
Ser. 01-4, Class A4, 7.36s, 2033  5,440,891    5,595,309 
Ser. 00-6, Class A5, 7.27s, 2031  1,081,194    1,071,187 
Ser. 01-1, Class A5, 6.99s, 2032  2,544,164    2,438,240 
Ser. 01-3, Class A4, 6.91s, 2033  7,758,013    7,614,419 
Ser. 02-1, Class A, 6.681s, 2033  6,262,706    6,332,164 

 
ASSET-BACKED SECURITIES (4.3%)* continued     
    Principal amount    Value 

 
Countrywide Alternative Loan Trust       
IFB Ser. 07-23CB, Class A4, IO,         
1.18s, 2037    $  30,185,000  $  1,144,012 
Countrywide Asset Backed NIM         
Certificates 144A         
Ser. 04-BC1N, Class Note,         
5 1/2s, 2035    1,203    601 
Ser. 04-14N, 5s, 2036    40,550    36,496 
Countrywide Home Loans         
Ser. 06-0A5, Class X, IO,         
2.281s, 2046    10,909,577    392,063 
Ser. 05-9, Class 1X, IO,         
1.855s, 2035    10,609,465    182,350 
Ser. 05-2, Class 2X, IO,         
1.16s, 2035    11,864,004    235,427 
Countrywide Home Loans 144A         
IFB Ser. 05-R2, Class 2A3, 8s, 2035  1,129,531    1,182,051 
IFB Ser. 05-R1, Class 1AS, IO,         
0.799s, 2035    8,030,521    221,287 
IFB Ser. 05-R2, Class 1AS, IO,         
0.421s, 2035    7,573,581    192,839 
Crest, Ltd. 144A Ser. 03-2A, Class D2,       
6.723s, 2038 (Cayman Islands)    1,617,000    1,488,450 
CS First Boston Mortgage         
Securities Corp. 144A         
Ser. 04-FR1N, Class A, 5s, 2034    534,327    507,612 
DB Master Finance, LLC 144A         
Ser. 06-1, Class M1, 8.285s, 2031    373,000    379,426 
FHLMC Structured Pass Through         
Securities IFB Ser. T-56,         
Class 2ASI, IO, 2.78s, 2043    2,077,774    159,729 
Fieldstone Mortgage         
Investment Corp. FRB Ser. 05-1,         
Class M3, 5.86s, 2035    700,000    700,221 
Finance America NIM Trust 144A         
Ser. 04-1, Class A, 5 1/4s, 2034    78,556    80 
First Plus Home Loan Trust         
Ser. 97-3, Class B1, 7.79s, 2023    373,992    374,226 
Ford Credit Auto Owner Trust         
Ser. 04-A, Class C, 4.19s, 2009    650,000    640,162 
Fort Point CDO, Ltd. FRB         
Ser. 03-2A, Class A2, 6.41s, 2038         
(Cayman Islands)    616,000    592,222 
Foxe Basin, Ltd. 144A FRB Ser. 03-1A,       
Class A1, 5.86s, 2015 (Cayman Islands)  2,000,000    2,001,000 
Fremont NIM Trust 144A         
Ser. 04-3, Class B, 7 1/2s, 2034    201,495    1,793 
Ser. 04-3, Class A, 4 1/2s, 2034  5,626    81 
G-Star, Ltd. 144A FRB Ser. 02-2A,       
Class BFL, 7.32s, 2037 (Cayman Islands)  308,000    308,000 
GE Capital Credit Card Master Note       
Trust FRB Ser. 04-2, Class C,         
5.8s, 2010    1,903,750    1,905,825 

41


 
ASSET-BACKED SECURITIES (4.3%)* continued     
    Principal amount    Value 

 
GE Corporate Aircraft         
Financing, LLC 144A         
FRB Ser. 05-1A, Class C,         
6.62s, 2019    $1,680,000  $  1,659,773 
Ser. 04-1A, Class B, 6.17s, 2018  105,148    105,801 
Gears Auto Owner Trust 144A         
Ser. 05-AA, Class E1, 8.22s, 2012    1,962,000    1,951,304 
GEBL 144A         
Ser. 04-2, Class D, 8.07s, 2032    638,976    630,082 
Ser. 04-2, Class C, 6.17s, 2032    239,422    238,823 
Granite Mortgages PLC         
FRB Ser. 01-1, Class 1C, 6.76s,         
2041 (United Kingdom)    1,430,000    1,436,536 
FRB Ser. 02-2, Class 1C, 6.61s,         
2043 (United Kingdom)    517,045    520,148 
Green Tree Financial Corp.         
Ser. 96-5, Class M1, 8.05s, 2027  512,386    479,206 
Ser. 99-5, Class A5, 7.86s, 2030  16,172,221    15,444,471 
Ser. 97-4, Class A7, 7.36s, 2029  570,575    586,284 
Ser. 95-8, Class B1, 7.3s, 2026    362,579    356,680 
Ser. 96-10, Class M1, 7.24s, 2028  972,000    972,000 
Ser. 98-4, Class A7, 6.87s, 2030  330,105    325,979 
Ser. 97-7, Class A8, 6.86s, 2029  392,041    397,106 
Ser. 99-3, Class A6, 6 1/2s, 2031  1,076,616    1,065,682 
Ser. 99-2, Class A7, 6.44s, 2030  1,250,910    1,218,934 
Ser. 99-1, Class A6, 6.37s, 2025  598,000    600,990 
Greenpoint Manufactured Housing       
Ser. 00-3, Class IA, 8.45s, 2031  3,264,610    3,126,184 
Ser. 99-5, Class M1A, 8.3s, 2026  488,000    458,056 
GS Auto Loan Trust 144A Ser. 04-1,       
Class D, 5s, 2011    1,156,849    1,155,784 
GSAMP Trust 144A Ser. 05-NC1,         
Class N, 5s, 2035    2,372    2,064 
GSMPS Mortgage Loan Trust         
Ser. 05-RP3, Class 1A4, 8 1/2s, 2035  289,705    306,615 
Ser. 05-RP3, Class 1A3, 8s, 2035  852,071    893,567 
Ser. 05-RP3, Class 1A2, 7 1/2s, 2035  777,590    805,024 
GSMPS Mortgage Loan Trust 144A       
Ser. 05-RP2, Class 1A3, 8s, 2035  1,042,909    1,093,584 
Ser. 05-RP1, Class 1A3, 8s, 2035  133,898    140,396 
Ser. 05-RP2, Class 1A2, 7 1/2s, 2035  1,192,684    1,235,836 
IFB Ser. 04-4, Class 1AS, IO,         
0.779s, 2034    12,869,029    442,922 
Guggenheim Structured         
Real Estate Funding, Ltd. 144A         
FRB Ser. 05-2A, Class D, 6.87s,       
2030 (Cayman Islands)    1,141,000    1,138,946 
FRB Ser. 05-1A, Class D, 6.85s,       
2030 (Cayman Islands)    503,089    474,789 
HASCO NIM Trust 144A Ser. 05-OP1A,       
Class A, 6 1/4s, 2035 (Cayman Islands)  560,596    420,447 
High Income Trust Securities 144A       
FRB Ser. 03-1A, Class A, 5.856s,         
2036 (Cayman Islands)    1,724,468    1,655,490 
Hyundai Auto Receivables Trust         
Ser. 04-A, Class D, 4.1s, 2011    349,983    347,535 

 
ASSET-BACKED SECURITIES (4.3%)* continued     
    Principal amount    Value 

 
JPMorgan Mortgage         
Acquisition Corp. FRB         
Ser. 05-OPT2, Class M11,         
7.57s, 2035    $  645,000  $  438,600 
Lehman Manufactured Housing         
Ser. 98-1, Class 1, IO, 0.807s, 2028  17,578,355    338,735 
LNR CDO, Ltd. 144A         
FRB Ser. 03-1A, Class EFL, 8.32s,       
2036 (Cayman Islands)    2,585,000    2,572,075 
FRB Ser. 02-1A, Class FFL, 8.07s,       
2037 (Cayman Islands)    5,220,000    5,012,242 
Madison Avenue         
Manufactured Housing Contract         
FRB Ser. 02-A, Class B1,         
8.57s, 2032    4,059,503    3,166,412 
FRB Ser. 02-A, Class M2,         
7.57s, 2032    278,000    271,787 
Ser. 02-A IO, 0.3s, 2032    138,443,353    1,461,657 
Marriott Vacation Club         
Owner Trust 144A         
Ser. 05-2, Class D, 6.205s, 2027  110,228    105,836 
FRB Ser. 02-1A, Class A1,         
6.02s, 2024    998,881    1,005,037 
Ser. 04-2A, Class D, 5.389s, 2026  100,688    97,931 
Ser. 04-2A, Class C, 4.741s, 2026  92,633    90,219 
MASTR Asset Backed Securities NIM       
Trust 144A Ser. 04-HE1A, Class Note,       
5.191s, 2034 (Cayman Islands)    7,599    3,040 
MASTR Reperforming         
Loan Trust 144A         
Ser. 05-2, Class 1A3, 7 1/2s, 2035  732,207    757,742 
Ser. 05-1, Class 1A4, 7 1/2s, 2034  1,812,144    1,875,781 
MBNA Credit Card Master Note Trust       
FRB Ser. 03-C5, Class C5, 6 1/2s, 2010  1,730,000    1,744,873 
Merit Securities Corp. 144A FRB         
Ser. 11PA, Class 3A1, 5.94s, 2027    5,259,060    4,996,107 
Merrill Lynch Mortgage         
Investors, Inc. 144A         
Ser. 05-WM1N, Class N1, 5s, 2035  12,636    12,535 
Ser. 04-HE2N, Class N1, 5s, 2035       
(Cayman Islands)    28,514    28,086 
Ser. 04-FM1N, Class N1, 5s, 2035       
(Cayman Islands) (In default) †    20,197    19,894 
Ser. 04-WM3N, Class N1, 4 1/2s,       
2035 (In default) †    44,508    43,173 
Ser. 04-WM1N, Class N1, 4 1/2s,       
2034 (In default) †    1,921    115 
Mid-State Trust         
Ser. 11, Class B, 8.221s, 2038    361,519    354,965 
Ser. 10, Class B, 7.54s, 2036    683,429    600,031 
Morgan Stanley Auto Loan Trust         
144A Ser. 04-HB2, Class E, 5s, 2012  110,763    109,655 
N-Star Real Estate CDO, Ltd. 144A       
FRB Ser. 04-2A, Class C1, 7.32s,         
2039 (Cayman Islands)    544,000    552,840 
Navigator CDO, Ltd. 144A FRB         
Ser. 03-1A, Class A1, 5.85s, 2015         
(Cayman Islands)    840,278    840,446 

42


ASSET-BACKED SECURITIES (4.3%)* continued     
  Principal amount    Value 

 
Navistar Financial Corp. Owner Trust       
Ser. 05-A, Class C, 4.84s, 2014   $  497,842  $  484,095 
Ser. 04-B, Class C, 3.93s, 2012  201,313    196,405 
New Century Home Equity Loan Trust       
Ser. 03-5, Class AI7, 5.15s, 2033  1,643,244    1,580,725 
Nomura Asset Acceptance Corp.       
Ser. 04-R3, Class PT, 7.82s, 2035  495,844    498,770 
Nomura Asset Acceptance Corp. 144A       
Ser. 04-R2, Class PT, 9.087s, 2034  436,332    446,717 
Oakwood Mortgage Investors, Inc.       
Ser. 01-D, Class A3, 5.9s, 2022  163,508    130,807 
Ser. 02-C, Class A1, 5.41s, 2032  3,985,038    3,567,992 
Oakwood Mortgage       
Investors, Inc. 144A       
Ser. 01-B, Class A4, 7.21s, 2030  590,320    522,112 
Ser. 01-B, Class A3, 6.535s, 2023  170,891    158,603 
Ocean Star PLC 144A       
FRB Ser. 04, Class D, 7.66s,       
2018 (Ireland)  623,000    629,230 
FRB Ser. 05-A, Class D, 6.86s,       
2012 (Ireland)  696,000    696,000 
Option One Mortgage Loan Trust FRB       
Ser. 05-4, Class M11, 7.82s, 2035  216,000    129,600 
Origen Manufactured Housing       
Ser. 04-B, Class A2, 3.79s, 2017  283,227    279,377 
Park Place Securities, Inc. FRB       
Ser. 04-WHQ2, Class A3A, 5.67s, 2035  265,662    265,705 
Park Place Securities, Inc. 144A       
FRB Ser. 04-MHQ1, Class M10,       
7.82s, 2034  415,000    332,000 
People’s Choice Net Interest       
Margin Note 144A Ser. 04-2,       
Class B, 5s, 2034  21,636    20,401 
Permanent Financing PLC FRB       
Ser. 3, Class 3C, 6.51s, 2042       
(United Kingdom)  1,300,000    1,308,336 
Pillar Funding PLC 144A       
FRB Ser. 04-1A, Class C1, 6.355s,       
2011 (United Kingdom)  657,000    656,955 
FRB Ser. 04-2A, Class C, 6.24s,       
2011 (United Kingdom)  912,000    905,052 
Providian Gateway Master Trust 144A       
FRB Ser. 04-EA, Class D,       
6 1/4s, 2011  701,000    702,459 
Ser. 04-FA, Class E, 5s, 2011  500,000    498,980 
Ser. 04-DA, Class D, 4.4s, 2011  944,000    941,640 
Residential Asset       
Securities Corp. 144A       
FRB Ser. 05-KS10, Class B,       
7.82s, 2035  1,165,000    233,000 
Ser. 04-NT12, Class Note,       
4.7s, 2035  6,301    6,157 
Ser. 04-NT, Class Note,       
4 1/2s, 2034  142,941    114,353 
Residential Asset Securitization       
Trust IFB Ser. 07-A3, Class 2A2,       
IO, 1.37s, 2037  13,434,185    706,662 
Saco I Trust FRB Ser. 05-10,       
Class 1A1, 5.58s, 2033  1,318,756    1,301,447 

ASSET-BACKED SECURITIES (4.3%)* continued     
    Principal amount    Value 

 
SAIL Net Interest         
Margin Notes 144A         
Ser. 03-3, Class A, 7 3/4s, 2033       
(Cayman Islands) (In default) †    $  22,036  $  68 
Ser. 03-BC2A, Class A, 7 3/4s,         
2033 (Cayman Islands)    133,867    5,355 
Ser. 04-4A, Class B, 7 1/2s, 2034       
(Cayman Islands) (In default) †    214,965    22 
Ser. 03-5, Class A, 7.35s, 2033         
(Cayman Islands)    8,257    243 
Ser. 03-8A, Class A, 7s, 2033         
(Cayman Islands) (In default) †    48,411    208 
Ser. 03-9A, Class A, 7s, 2033         
(Cayman Islands) (In default) †    65,758    106 
Ser. 03-6A, Class A, 7s, 2033         
(Cayman Islands) (In default) †    12,564    251 
Ser. 03-7A, Class A, 7s, 2033         
(Cayman Islands) (In default) †    19,639    98 
Sharps SP I, LLC Net Interest         
Margin Trust 144A Ser. 04-HE1N,         
Class Note, 4.94s, 2034         
(Cayman Islands) (In default) †    144,254     
Soundview Home Equity Loan Trust       
144A FRB Ser. 05-CTX1, Class B1,       
7.82s, 2035    466,000    342,510 
South Coast Funding 144A FRB         
Ser. 3A, Class A2, 6.557s, 2038         
(Cayman Islands)    470,000    432,400 
Structured Adjustable Rate         
Mortgage Loan Trust 144A         
Ser. 04-NP2, Class A, 5.67s, 2034  779,939    779,861 
Structured Asset Investment Loan         
Trust 144A FRB Ser. 05-HE3,         
Class M11, 6.156s, 2035    974,000    487,000 
Structured Asset Receivables Trust       
144A FRB Ser. 05-1, 5.86s, 2015    5,260,102    5,253,527 
Structured Asset Securities Corp.         
Ser. 07-4, Class 1A4, IO, 1s, 2037  57,220,000    1,792,049 
Ser. 07-4, Class 1A3, IO, 0.93s, 2037  57,220,000    2,063,442 
Structured Asset         
Securities Corp. 144A         
Ser. 98-RF3, Class A, IO, 6.1s, 2028  3,097,936    322,864 
Ser. 07-RF1, Class 1A, IO,         
0.488s, 2037    13,441,802    260,771 
Ser. 06-RF4, Class 1A, IO,         
0.356s, 2036    7,125,943    169,677 
TIAA Real Estate CDO, Ltd.         
Ser. 03-1A, Class E, 8s, 2038         
(Cayman Islands)    1,698,000    1,611,911 
WFS Financial Owner Trust         
Ser. 05-1, Class D, 4.09s, 2012    297,058    293,664 
Ser. 04-3, Class D, 4.07s, 2012    266,392    264,871 
Ser. 04-4, Class D, 3.58s, 2012    118,498    116,721 
Ser. 04-1, Class D, 3.17s, 2011    23,739    23,710 
Whinstone Capital Management, Ltd.       
144A FRB Ser. 1A, Class B3,         
6.26s, 2044 (United Kingdom)    1,313,075    1,313,075 

 
Total asset-backed securities (cost $188,559,917)  $  182,411,186 

43


PURCHASED OPTIONS OUTSTANDING (0.8%)*   
    
  Expiration     
  date/  Contract   
  strike price  amount  Value 

  
Option on an interest       
rate swap with JPMorgan       
Chase Bank, N.A. for the       
right to pay a fixed rate of       
5.34% versus the three       
month USD-LIBOR-BBA       
maturing on       
February 15, 2018.  Feb-08/5.34  $ 17,320,000  $  471,104 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to receive a       
fixed rate of 5.34%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
February 15, 2018.  Feb-08/5.34  17,320,000  214,422 
Option on an interest       
rate swap       
with Goldman Sachs,       
International for the       
right to pay a fixed       
rate swap of 4.965%       
versus the three month       
USD-LIBOR-BBA       
maturing April 29, 2013.  Apr-08/4.965  184,000,000  4,035,120 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to pay a fixed       
rate of 5.175% versus       
the three month       
USD-LIBOR-BBA       
maturing on       
April 29, 2018.  Apr-08/5.175  92,000,000  3,553,960 
Option on an interest       
rate swap with       
JPMorgan Chase       
Bank, N.A. for the       
right to pay a fixed       
rate of 5.315% versus       
the three month       
USD-LIBOR-BBA       
maturing on       
April 8, 2019.  Apr-09/5.315  54,984,000  2,512,219 
Option on an interest       
rate swap with       
Goldman Sachs,       
International for the       
right to pay a fixed       
rate swap of 5.325%       
versus the three       
month USD-LIBOR-BBA       
maturing April 8, 2019.  Apr-09/5.325  54,984,000  2,488,026 

PURCHASED OPTIONS OUTSTANDING (0.8%)* continued   
     
  Expiration     
  date/  Contract   
   strike price  amount  Value 

  
Option on an interest       
rate swap       
with Deutschbank for       
the right to pay a       
fixed rate swap       
of 5.385% versus the       
three month       
USD-LIBOR-BBA       
maturing       
April 16, 2019.  Apr-09/5.385 $ 43,245,000  $ 1,856,075 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to pay a fixed       
rate of 5.215% versus       
the three month       
USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.215  41,096,000  1,540,278 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to pay a fixed       
rate of 5.235% versus       
the three month       
USD-LIBOR-BBA       
maturing on       
May 8, 2018.  May-08/5.235  41,859,000  1,516,133 
Option on an interest       
rate swap       
with Goldman Sachs,       
International for the       
right to receive a       
fixed rate swap       
of 4.965% versus the       
three month       
USD-LIBOR-BBA       
maturing       
April 29, 2013.  Apr-08/4.965  184,000,000  1,365,280 
Option on an interest       
rate swap       
with Goldman Sachs,       
International for the       
right to receive a       
fixed rate swap       
of 5.325% versus the       
three month       
USD-LIBOR-BBA       
maturing       
April 8, 2019.  Apr-09/5.325  54,984,000  1,198,651 

44


PURCHASED OPTIONS OUTSTANDING (0.8%)*   

  Expiration     
  date/  Contract   
  strike price  amount  Value 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to receive a       
fixed rate of 5.315%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
April 8, 2019.  Apr-09/5.315  $54,984,000  $  1,184,355 
Option on an interest       
rate swap       
with Deutschbank for       
the right to receive       
a fixed rate swap       
of 5.385% versus the       
three month       
USD-LIBOR-BBA       
maturing       
April 16, 2019.  Apr-09/5.385  43,245,000  1,016,690 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to receive a       
fixed rate of 5.175%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
April 29, 2018.  Apr-08/5.175  92,000,000  999,120 
Option on an interest       
swap with Goldman       
Sachs International for       
the right to pay a fixed       
rate of 5.1975% versus       
the three month       
USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.198  21,602,000  828,653 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to pay a fixed       
rate of 5.22% versus       
the three month       
USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.22  21,602,000  804,242 

PURCHASED OPTIONS OUTSTANDING (0.8%)* continued   

  Expiration     
  date/  Contract   
  strike price  amount  Value 
Option on an interest       
rate swap with Lehman       
Brothers Special       
Financing, Inc. for       
the right to pay a       
fixed rate of 5.20%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.20  $20,548,000  $ 785,756 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to receive a       
fixed rate of 5.235%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
May 8, 2018.  May-08/5.235  41,859,000  523,656 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to receive a       
fixed rate of 5.215%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.215  41,096,000  501,782 
Option on an interest       
rate swap with Lehman       
Brothers Special       
Financing, Inc. for       
the right to pay a       
fixed rate of 5.21%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.21  8,219,000  310,103 
Option on an interest       
rate swap with JPMorgan       
Chase Bank, N.A. for       
the right to receive a       
fixed rate of 5.22%       
versus the three month       
USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.22  21,602,000  266,353 

45


PURCHASED OPTIONS OUTSTANDING (0.8%)*   
  Expiration     
  date/  Contract   
  strike price  amount  Value 

 
Option on an interest       
rate swap       
with Goldman Sachs       
International for the       
right to receive a       
fixed rate of 5.1975%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.198  $21,602,000  $  255,120 
Option on an interest       
rate swap with Lehman       
Brothers       
International       
(Europe) for the       
right to receive a       
fixed rate of 5.20%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.20  20,548,000  243,699 
Option on an interest       
rate swap with Lehman       
Brothers Special       
Financing, Inc. for       
the right to receive       
a fixed rate of 5.21%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
May 14, 2018.  May-08/5.21  8,219,000  99,368 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to pay a fixed       
rate of 5.39% versus       
the three month       
USD-LIBOR-BBA       
maturing on       
January 29, 2018.  Jan-08/5.39  59,599,000  1,420,840 
Option on an interest       
rate swap with Lehman       
Brothers       
International       
(Europe) for the       
right to pay a fixed       
rate swap of 5.3475%       
versus the three       
month USD-LIBOR-BBA       
maturing       
February 4, 2018.  Jan-08/5.348  44,811,000  1,172,256 

PURCHASED OPTIONS OUTSTANDING (0.8%)* continued   
  Expiration     
  date/  Contract   
  strike price  amount  Value 

 
Option on an interest       
rate swap       
with JPMorgan Chase       
Bank, N.A. for the       
right to receive a       
fixed rate of 5.39%       
versus the three       
month USD-LIBOR-BBA       
maturing on       
January 29, 2018.  Jan-08/ 5.39  $59,599,000   $780,151 
Option on an interest       
rate swap with Lehman       
Brothers Special       
Financing, Inc. for       
the right to receive       
a fixed rate       
of 5.3475% versus the       
three month       
USD-LIBOR-BBA       
maturing on       
February 4, 2018.  Jan-08/ 5.348  44,811,000  540,421 

 
Total purchased options outstanding     
(cost $28,229,036)      $ 32,483,833 

CONVERTIBLE BONDS AND NOTES (0.1%)* (cost $4,519,000) 

    Principal amount  Value 
 
Ford Motor Co. cv. sr. notes     
4 1/4s, 2036    $ 4,519,000  $5,230,743 
 
 
MUNICIPAL BONDS AND NOTES (0.1%)*     
  Rating**  Principal amount  Value 

  
MI Tobacco Settlement       
Fin. Auth. Rev.       
Bonds, Ser. A,       
7.309s, 6/1/34  Baa3  $  1,005,000  $1,023,924 
Tobacco Settlement       
Fin. Auth. Rev.       
Bonds, Ser. A,       
7.467s, 6/1/47  Baa3  1,460,000  1,470,395 

 
Total municipal bonds and notes     
(cost $2,464,671)      $ 2,494,319 

 
 
WARRANTS (—%)* † (cost $0)     
  Expiration date    Strike Price Warrants  Value 

  
Raytheon Co.   6/16/11   $37.50  29,195  $587,987 

46


SHORT-TERM INVESTMENTS (22.2%)*   
  Principal amount/shares  Value 

  
Short-term investments held as     
collateral for loaned securities     
with yields ranging from 5.29%     
to 5.53% and due dates ranging     
from August 1, 2007 to     
September 21, 2007 (d)  $   258,640,844  $  258,089,002 
Bryant Park Funding, LLC for an     
effective yield of 5.27%,     
maturity date August 20, 2007  50,000,000  49,860,931 
Falcon Asset Secur. Corp. for an     
effective yield of 5.27%,     
maturity date August 14, 2007  67,662,000  67,533,235 
Ranger Funding Co., LLC for an     
effective yield of 5.27%,     
maturity date August 13, 2007  50,000,000  49,912,167 

SHORT-TERM INVESTMENTS (22.2%)* continued   
Principal amount/shares    Value 

 
Thunder Bay Funding, Inc. for an     
effective yield of 5.27%,     
maturity date August 9, 2007  $46,208,000  $ 46,153,885 
Park Ave Receivables for an     
effective yield of 5.28%,     
maturity date August 7, 2007  50,000,000  49,956,000 
Putnam Prime Money Market Fund (e)  417,711,345  417,711,345 

Total short-term investments (cost $939,216,565)  $939,216,565 

 
TOTAL INVESTMENTS     
Total investments (cost $4,902,584,245)    $ 5,203,979,805 

* Percentages indicated are based on net assets of $4,232,094,017.

** The Moody’s or Standard & Poor’s ratings indicated are believed to be the most recent ratings available at July 31, 2007 for the securities listed. Ratings are generally ascribed to securities at the time of issuance. While the agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings do not necessarily represent what the agencies would ascribe to these securities at July 31, 2007. Securities rated by Putnam are indicated by “/P.” Securities rated by Fitch are indicated by “/F.” Ratings are not covered by the Report of Independent Registered Public Accounting Firm. Security ratings are defined in the Statement of Additional Information.

† Non-income-producing security.

# A portion of this security was pledged and segregated with the custodian to cover margin requirements for futures contracts and written options at July 31, 2007.

## Forward commitments (Note 1).

(d) See Note 1 to the financial statements.

(e) See Note 5 to the financial statements regarding investments in Putnam Prime Money Market Fund.

(F) Security is valued at fair value following procedures approved by the Trustees.

(R) Real Estate Investment Trust.

(S) Securities on loan, in part or in entirety, at July 31, 2007.

At July 31, 2007, liquid assets totaling $1,359,183,532 have been designated as collateral for open forward commitments, swap contracts and futures contracts.

144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

TBA after the name of a security represents to be announced securities (Note 1).

The rates shown on Floating Rate Bonds (FRB) and Floating Rate Notes (FRN) are the current interest rates at July 31, 2007.

The dates shown on debt obligations are the original maturity dates.

Inverse Floating Rate Bonds (IFB) are securities that pay interest rates that vary inversely to changes in the market interest rates. As interest rates rise, inverse floaters produce less current income. The interest rates shown are the current interest rates at July 31, 2007.

 
FUTURES CONTRACTS OUTSTANDING at 7/31/07         
        Unrealized 
  Number of    Expiration  appreciation/ 
  contracts  Value  date  (depreciation) 

  
Euro-Dollar 90 day (Long)  1,659  $394,261,350  Mar-08  $ (336,312) 
Euro-Dollar 90 day (Long)  817  193,935,375  Sep-09  (572,997) 
Euro-Dollar 90 day (Short)  3,138  746,569,425  Sep-08  1,318,377 
S&P 500 Index (Long)  1  365,475  Sep-07  (17,160) 
S&P 500 Index E-Mini (Short)  620  45,322,000  Sep-07  2,143,960 
U.S. Treasury Bond 20 yr (Short)  7  770,438  Sep-07  (5,428) 
U.S. Treasury Note 2 yr (Short)  2,391  490,005,563  Sep-07  (3,230,152) 
U.S. Treasury Note 5 yr (Short)  693  73,089,844  Sep-07  8,369 
U.S. Treasury Note 10 yr (Long)  4,610  495,214,844  Sep-07  8,551,507 

Total        $ 7,860,164 

47


WRITTEN OPTIONS OUTSTANDING at 7/31/07 (premiums received $20,599,166)       
  Contract  Expiration date/   
  amount    strike price  Value 

Option on an interest rate swap with Goldman Sachs International for the obligation       
to pay a fixed rate of 5.79% versus the three month USD-LIBOR-BBA maturing on       
January 16, 2018.  $205,784,000  Jan-08/5.79  $ 5,949,215 
Option on an interest rate swap with Lehman Brothers Special Financing, Inc. for the       
obligation to receive a fixed rate of 5.95% versus the three month USD-LIBOR-BBA       
maturing June 16, 2018.  204,503,000  Jun-08/5.95  2,539,927 
Option on an interest rate swap with Goldman Sachs International for the obligation       
to receive a fixed rate of 5.79% versus the three month USD-LIBOR-BBA maturing       
on January 16, 2018.  205,784,000  Jan-08/5.79  2,000,220 
Option on an interest rate swap with Lehman Brothers Special Financing, Inc. for the       
obligation to pay a fixed rate of 5.95% versus the three month USD-LIBOR-BBA       
maturing June 16, 2018.  204,503,000  Jun-08/5.95  8,233,291 
Option on an interest rate swap with Lehman Brothers International for the obligation       
to receive a fixed rate of 5.225% versus the three month USD-LIBOR-BBA maturing       
March 5, 2018.  32,581,000  Mar-08/5.225  1,102,215 
Option on an interest rate swap with Lehman Brothers International for the obligation       
to pay a fixed rate of 5.225% versus the three month USD-LIBOR-BBA maturing       
March 5, 2018.  32,581,000  Mar-08/5.225  333,955 
Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation       
to receive a fixed rate of 5.51% versus the three month USD-LIBOR-BBA maturing       
on May 14, 2022.  20,548,000  May-12/5.51  1,188,484 
Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation       
to pay a fixed rate of 5.51% versus the three month USD-LIBOR-BBA maturing on       
May 14, 2022.  20,548,000  May-12/5.51  714,540 
Option on an interest rate swap with Lehman Brothers Special Financing, Inc. for the       
obligation to receive a fixed rate of 5.515% versus the three month USD-LIBOR-BBA       
maturing on May 14, 2022.  10,274,000  May-12/5.515  581,827 
Option on an interest rate swap with Lehman Brothers Special Financing, Inc. for the       
obligation to pay a fixed rate of 5.515% versus the three month USD-LIBOR-BBA       
maturing on May 14, 2022.  10,274,000  May-12/5.515  356,837 
Option on an interest rate swap with Lehman Brothers Special Financing, Inc. for the       
obligation to pay a fixed rate of 5.52% versus the three month USD-LIBOR-BBA       
maturing on May 14, 2022.  4,109,500  May-12/5.52  143,237 
Option on an interest rate swap with Lehman Brothers Special Financing, Inc. for the       
obligation to receive a fixed rate of 5.52% versus the three month USD-LIBOR-BBA       
maturing on May 14, 2022.  4,109,500  May-12/5.52  232,031 

 
Total      $23,375,779 
     
 
 
TBA SALE COMMITMENTS OUTSTANDING at 7/31/07 (proceeds receivable $161,467,367)       
  Principal  Settlement   
   amount  date  Value 

  
FNMA, 6 1/2s, August 1, 2037  $ 4,700,000  8/14/07  $ 4,748,102 
FNMA, 6s, August 1, 2037  18,200,000  8/14/07  18,030,796 
FNMA, 5 1/2s, August 1, 2037  56,300,000  8/14/07  54,369,085 
FNMA, 4 1/2s, August 1, 2022  89,300,000  8/20/07  85,079,182 

Total      $162,227,165 

48


INTEREST RATE SWAP CONTRACTS OUTSTANDING at 7/31/07     
      Payments  Payments  Unrealized 
Swap counterparty /  Termination  made by  received by  appreciation/ 
Notional amount  date  fund per annum  fund per annum  (depreciation) 

 
Bank of America, N.A.         
$ 700,000  9/1/15  3 month USD-LIBOR-BBA  4.53%  $ (33,346) 

4,636,000  10/2/16  5.15631%  3 month USD-LIBOR-BBA  47,210 

53,000,000  10/21/15  4.943%  3 month USD-LIBOR-BBA  1,089,014 

3,720,000  6/24/15  4.39%  3 month USD-LIBOR-BBA  244,890 

3,070,000  6/23/15  4.45%  3 month USD-LIBOR-BBA  190,520 

7,440,000  6/23/15  4.466%  3 month USD-LIBOR-BBA  454,097 

20,610,000  6/17/15  4.555%  3 month USD-LIBOR-BBA  1,137,430 

84,900,000  4/6/10  4.6375%  3 month USD-LIBOR-BBA  10,500 

87,100,000  1/14/10  3 month USD-LIBOR-BBA  4.106%  (2,035,805) 

102,075,000  12/22/09  3.965%  3 month USD-LIBOR-BBA  2,620,682 

82,772,000  1/28/24  3 month USD-LIBOR-BBA  5.2125%  (3,952,476) 

Bear Stearns Bank plc         
63,600,000  4/24/12  5.027%  3 month USD-LIBOR-BBA  (178,788) 

Citibank, N.A.         
56,920,000  7/27/09  5.504%  3 month USD-LIBOR-BBA  (416,617) 

4,380,000  4/7/14  5.377%  3 month USD-LIBOR-BBA  (59,321) 

Credit Suisse First Boston International         
6,600,000  11/17/09  3.947%  3 month USD-LIBOR-BBA  185,013 

Credit Suisse International         
6,762,000  9/28/16  5.10886%  3 month USD-LIBOR-BBA  93,221 

80,000,000  1/9/09  3 month USD-LIBOR-BBA  5.145%  (27,056) 

3,843,000  3/21/16  3 month USD-LIBOR-BBA  5.20497%  (16,851) 

Goldman Sachs International         
4,968,000  5/3/16  5.565%  3 month USD-LIBOR-BBA  (35,699) 

34,600,000  7/25/09  5.327%  3 month USD-LIBOR-BBA  (137,902) 

13,380,000  4/7/14  5.33842%  3 month USD-LIBOR-BBA  (156,421) 

22,090,000  1/8/12  3 month USD-LIBOR-BBA  4.98%  (229,713) 

18,233,000  12/20/16  3 month USD-LIBOR-BBA  5.074%  (557,551) 

35,081,000  11/21/26  3 month USD-LIBOR-BBA  5.2075%  (1,986,087) 

158,394,000  11/21/08  5.0925%  3 month USD-LIBOR-BBA  285,935 

36,385,000  11/20/26  3 month USD-LIBOR-BBA  5.261%  (1,826,901) 

161,722,000  11/20/08  5.16%  3 month USD-LIBOR-BBA  136,100 

4,331,000  10/19/16  5.32413%  3 month USD-LIBOR-BBA  (7,575) 

17,771,000  9/29/16  3 month USD-LIBOR-BBA  5.1275%  (220,409) 

55,949,000  9/29/08  5.085%  3 month USD-LIBOR-BBA  (636,319) 

JPMorgan Chase Bank, N.A.         
47,810,000  10/21/15  4.916%  3 month USD-LIBOR-BBA  1,072,407 

81,200,000  8/4/16  3 month USD-LIBOR-BBA  5.5195%  1,375,160 

156,100,000  8/4/08  3 month USD-LIBOR-BBA  5.40%  2,307,306 

10,430,000  8/2/15  3 month USD-LIBOR-BBA  4.6570%  (421,099) 

63,370,000  6/29/15  3 month USD-LIBOR-BBA  4.296%  (4,555,592) 

4,470,000  6/24/15  4.387%  3 month USD-LIBOR-BBA  295,121 

17,930,000  6/16/15  4.538%  3 month USD-LIBOR-BBA  1,008,185 

20,829,000  9/28/16  3 month USD-LIBOR-BBA  5.1223%  (271,120) 

89,553,000  3/8/17  3 month USD-LIBOR-BBA  5.28%  (265,469) 

65,346,000  1/31/17  3 month USD-LIBOR-BBA  5.415%  (359,875) 

37,105,000  1/19/09  5.24%  3 month USD-LIBOR-BBA  (36,786) 

9,442,000  1/19/17  3 month USD-LIBOR-BBA  5.249%  (171,331) 

5,472,000  12/19/16  5.0595%  3 month USD-LIBOR-BBA  173,264 

170,000,000  3/30/08  3 month USD-LIBOR-BBA  5.163%  1,995,921 

94,000,000  3/30/16  3 month USD-LIBOR-BBA  5.2755%  113,631 

5,900,000  7/25/17  3 month USD-LIBOR-BBA  5.652%  62,893 

36,282,000  11/20/26  3 month USD-LIBOR-BBA  5.266%  (1,800,333) 


49


INTEREST RATE SWAP CONTRACTS OUTSTANDING at 7/31/07 continued     

    Payments  Payments  Unrealized 
Swap counterparty /  Termination  made by  received by  appreciation/ 
Notional amount    date  fund per annum  fund per annum  (depreciation) 

 
JPMorgan Chase Bank, N.A. continued         
$161,308,000  11/20/08  5.165%  3 month USD-LIBOR-BBA  $ 156,105 

61,990,000  10/10/13  5.09%  3 month USD-LIBOR-BBA  33,394 

44,550,000  10/10/13  5.054%  3 month USD-LIBOR-BBA  122,054 

76,820,000  7/5/17  3 month USD-LIBOR-BBA  4.55%  (5,671,919) 

61,200,000  6/27/17  3 month USD-LIBOR-BBA  5.712%  956,162 

126,500,000  3/7/15  3 month USD-LIBOR-BBA  4.798%  (3,223,151) 

65,551,000  9/28/08  5.096%  3 month USD-LIBOR-BBA  (753,176) 

4,639,000  9/18/16  5.291%  3 month USD-LIBOR-BBA  1,760 

183,000,000  1/17/16  4.946%  3 month USD-LIBOR-BBA  6,300,739 

57,486,000  8/15/11  5.412%  3 month USD-LIBOR-BBA  (1,177,428) 

40,500,000  4/23/17  5.186%  3 month USD-LIBOR-BBA  445,932 

Lehman Brothers International (Europe)         
86,483,000  3/15/09  4.9298%  3 month USD-LIBOR-BBA  (759,353) 

18,884,000  10/23/16  5.325%  3 month USD-LIBOR-BBA  (32,965) 

46,981,000  10/23/08  5.255%  3 month USD-LIBOR-BBA  (655,965) 

18,884,000  10/23/16  3 month USD-LIBOR-BBA  5.3275%  36,492 

46,981,000  10/23/08  3 month USD-LIBOR-BBA  5.26%  659,377 

267,010,000  8/3/16  5.5675%  3 month USD-LIBOR-BBA  (5,442,034) 

150,213,000  8/3/11  5.445%  3 month USD-LIBOR-BBA  (3,250,985) 

91,930,000  12/28/16  5.084%  3 month USD-LIBOR-BBA  2,747,154 

Lehman Brothers Special Financing, Inc.         
26,033,000  4/12/12  3 month USD-LIBOR-BBA  5.087%  143,619 

111,090,000  9/29/13  5.0555%  3 month USD-LIBOR-BBA  247,372 

135,710,000  9/8/16  5.3275%  3 month USD-LIBOR-BBA  (356,942) 

153,985,000  8/3/08  3 month USD-LIBOR-BBA  5.425%  2,326,516 

86,500,000  5/29/12  5.28%  3 month USD-LIBOR-BBA  (37,579) 

Morgan Stanley Capital Services, Inc.         
3,674,000  2/20/17  5.19%  3 month USD-LIBOR-BBA  37,510 

Total        $(12,645,253) 

TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 7/31/07     

 
    Fixed payments  Total return  Unrealized 
Swap counterparty /  Termination  received (paid) by  received by  appreciation/ 
Notional amount  date  fund per annum  or paid by fund  (depreciation) 

  
Bank of America, N.A.         
$55,310,000  5/2/08  5 bp plus change  Banc of America  $ (940,541) 
    in spread  Securities- CMBS   
    of Banc  AAA 10 year Index   
    of America     
    Securities AAA     
    10 yr Index     
    multiplied by     
    the modified     
    duration factor     

17,620,000  5/2/08  10 bp plus  Banc of America  (286,764) 
    change in spread  Securities- CMBS   
    of Banc  AAA 10 year Index   
    of America     
    Securities AAA     
    10 yr Index     
    multiplied by     
    the modified     
    duration factor     


50


TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 7/31/07 continued     
 
 
      Fixed payments  Total return  Unrealized 
Swap counterparty /  Termination  received (paid) by  received by  appreciation/ 
Notional amount  date  fund per annum  or paid by fund  (depreciation) 

  
Citibank, N.A.         
$16,550,000  5/2/08  12.5 bp plus  Banc of America  $ (312,794) 
    change in spread  Securities- CMBS   
    of Banc  AAA 10 year Index   
    of America     
    Securities AAA     
    10 yr Index     
    multiplied by     
    the modified     
    duration factor     

39,000,000  10/1/07  (7.5 bp plus  The spread  847,430 
    beginning  return of Lehman   
    of period nominal  Brothers AAA   
    spread of Lehman  8.5+ CMBS Index   
    Brothers AAA  adjusted by   
    8.5+ Commercial  modified   
    Mortgage Backed  duration factor   
    Securities Index)     

5,482,000  8/1/07  (7.5 bp plus  The spread  119,118 
    beginning  return of Lehman   
    of period nominal  Brothers AAA   
    spread of Lehman  8.5+ CMBS Index   
    Brothers AAA  adjusted by   
    8.5+ Commercial  modified   
    Mortgage Backed  duration factor   
    Securities Index)     

19,720,000  10/31/07  10 bp plus change  Banc of America  (375,959) 
    in spread  Securities- CMBS   
    of Banc  AAA 10 year Index   
    of America     
    Securities AAA     
    10 yr Index     
    multiplied by     
    the modified     
    duration factor     

18,440,000  11/2/07  15 bp plus  Banc of America  (358,568) 
    change in spread  Securities- CMBS   
    of Banc  AAA 10 year Index   
    of America     
    Securities AAA     
    10 yr Index     
    multiplied by     
    the modified     
    duration factor     

Goldman Sachs International         
21,110,000  5/1/08  10 bp plus  Banc of America   
    change in spread  Securities- CMBS   
    of Banc  AAA 10 year Index   
    of America     
    Securities AAA     
    10 yr Index     
    multiplied by     
    the modified     
    duration factor     

3,843,000  9/15/11  678 bp (1 month  Ford Credit Auto  56,205 
    USD-LIBOR-BBA)  Owner Trust   
      Series 2005-B   
      Class D   

34,650,000 (F)  1/1/08  (10 bp plus  The spread  803,291 
    beginning  return of Lehman   
    of period nominal  Brothers AAA   
    spread of Lehman  8.5+ CMBS Index   
    Brothers AAA  adjusted by   
    8.5+ Commercial  modified   
    Mortgage Backed  duration factor   
    Securities Index)     


51


TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 7/31/07 continued     
 
    Fixed payments  Total return  Unrealized 
Swap counterparty /  Termination  received (paid) by  received by  appreciation/ 
Notional amount  date  fund per annum  or paid by fund  (depreciation) 

  
JPMorgan Chase Bank, N.A.         
$11,440,000  10/1/07  17.5 bp plus  The spread  $ (245,851) 
    beginning  return of Lehman   
    of period nominal  Brothers AAA   
    spread of Lehman  8.5+ CMBS Index   
    Brothers AAA  adjusted by   
    8.5+ Commercial  modified   
    Mortgage Backed  duration factor   
    Securities Index     

Lehman Brothers International (Europe)         
31,105,000  1/1/08  (5 bp plus  The spread  590,836 
    beginning  return of Lehman   
    of period nominal  Brothers AAA   
    spread of Lehman  8.5+ CMBS Index   
    Brothers AAA  adjusted by   
    8.5+ Commercial  modified   
    Mortgage Backed  duration factor   
    Securities Index)     

34,650,000  1/1/08  (Beginning  The spread  710,446 
      of period nominal  return of Lehman   
    spread of Lehman  Brothers AAA   
    Brothers AAA  8.5+ CMBS Index   
    8.5+ Commercial  adjusted by   
    Mortgage Backed  modified   
    Securities Index)  duration factor   

34,650,000  1/1/08  (10 bp plus  The spread  706,406 
    beginning  return of Lehman   
    of period nominal  Brothers AAA   
    spread of Lehman  8.5+ CMBS Index   
    Brothers AAA  adjusted by   
    8.5+ Commercial  modified   
    Mortgage Backed  duration factor   
    Securities Index)     

Lehman Brothers Special Financing, Inc.         
25,390,000  10/1/07  10 bp plus  The spread  (480,902) 
    beginning  return of Lehman   
    of period nominal  Brothers AAA   
    spread of Lehman  8.5+ CMBS Index   
    Brothers AAA  adjusted by   
    8.5+ Commercial  modified   
    Mortgage Backed  duration factor   
    Securities Index     

52,070,000  12/2/07  8 bp plus  The spread  (1,130,336) 
    beginning  return of Lehman   
    of period nominal  Brothers Aaa   
    spread of Lehman  8.5+ CMBS Index   
    Brothers AAA  adjusted by   
    8.5+ Commercial  modified   
    Mortgage Backed  duration factor   
    Securities Index     

Morgan Stanley Capital Services Inc.         
10,400,000  10/31/07  10 bp plus  Banc of America  (212,056) 
    change in spread  Securities- CMBS   
    of Banc  AAA 10 year Index   
    of America     
    Securities AAA     
    10 yr Index     
    multiplied by     
    the modified     
    duration factor     

13,020,000  11/30/07  7.5 bp plus  The spread  (329,797) 
    beginning  return of Lehman   
    of period nominal  Brothers Aaa   
    spread of Lehman  8.5+ CMBS Index   
    Brothers AAA  adjusted by   
    8.5+ Commercial  modified   
    Mortgage Backed  duration factor   
    Securities Index     

 
Total        $ (839,836) 
 
(F) Security is valued at fair value following procedures approved by the Trustees.     

52


CREDIT DEFAULT CONTRACTS OUTSTANDING at 7/31/07           
  
  Upfront          Fixed payments  Unrealized 
Swap counterparty /  premium  Notional    Termination  received (paid) by  appreciation/ 
Referenced debt*  received (paid)**  amount    date  fund per annum  (depreciation) 

 
Bank of America, N.A.             
DJ ABX NA CMBX BBB Index  $—  $8,630,000    10/12/52  (134 bp)  $ 759,940 

DJ CDX NA IG Series 8             
Index  (17,052)  29,422,052  (F)  6/20/17  (60 bp)  279,938 

DJ CDX NA IG Series 8             
Index  (224,334)  61,829,334  (F)  6/20/17  (60 bp)  397,877 

L-3 Communications             
Corp. 7 5/8%, 6/15/12    295,000    6/20/11  (101 bp)  16,299 

Bear, Stearns International, Ltd.             
DJ ABX NA CMBX BBB Index    10,355,408    10/12/52  (134 bp)  914,189 

Citibank, N.A.             
CMS Energy Corp.,             
6.875%, 12/15/15    1,550,000    6/20/12  57 bp  (66,405) 

DJ CDX NA IG Series 6             
Index  11,681  11,343,319    6/20/13  (50 bp)  229,886 

DJ CDX NA IG Series 6             
Index 7-10% tranche    11,355,000    6/20/13  45.75 bp  (559,418) 

Credit Suisse International             
Sprint Capital Corp, 8             
3/8%, 3/15/12    2,655,000    6/20/12  (59 bp)  22,439 

Deutsche Bank AG             
DJ CDX NA IG Series 7  (1)  3,591,001    12/20/13  (50 bp)  97,375 

DJ CDX NA IG Series 7             
Index 7-10% tranche    3,591,000  (F)  12/20/13  55 bp  (158,932) 

DJ CDX NA IG Series 8             
Index 30-100% tranche    132,500,000    6/20/12  (8.5 bp)  142,463 

DJ CDX NA IG Series 8             
Index 7-10% tranche    3,278,000  (F)  6/20/12  22 bp  (87,665) 

France Telecom, 7.25%,             
1/28/13    1,870,000    6/20/16  70 bp  19,199 

Goldman Sachs International             
Any one of the             
underlying securities             
in the basket of BB             
CMBS securities    8,582,000    (a)  2.461%  51,902 

DJ CDX NA HY Series 8             
Index  (84,465)  5,384,210  (F)  6/20/10  275 bp  (235,777) 

DJ CDX NA IG Series 7             
Index  (2)  5,989,002    12/20/13  (50 bp)  78,564 

DJ CDX NA IG Series 7             
Index  9,321  13,829,679    12/20/13  (50 bp)  192,288 

DJ CDX NA IG Series 7             
Index 7-10% tranche    5,989,000    12/20/13  56 bp  (318,834) 

DJ CDX NA IG Series 7             
Index 7-10% tranche    13,839,000    12/20/13  48 bp  (776,921) 

DJ CDX NA IG Series 8             
Index  (23)  29,410,023  (F)  6/20/17  (60 bp)  641,115 

DJ CDX NA IG Series 8             
Index  (241,326)  57,576,326  (F)  6/20/17  (60 bp)  1,008,577 

Lehman Brothers             
Holdings, 6 5/8%,             
1/18/12    1,585,000    9/20/17  (67.8 bp)  29,197 

Lehman Brothers             
Holdings, 6 5/8%,             
1/18/12    1,585,000    9/20/12  55 bp  (19,218) 

Merrill Lynch & Co.,             
5%, 1/15/15    1,585,000    9/20/12  48 bp  (17,229) 

Merrill Lynch & Co.,             
5%, 1/15/15    1,585,000    9/20/17  (59.8 bp)  27,089 


53


CREDIT DEFAULT CONTRACTS OUTSTANDING at 7/31/07 continued         
 
 
  Upfront        Fixed payments  Unrealized 
Swap counterparty /  premium  Notional    Termination  received (paid) by  appreciation/ 
Referenced debt*  received (paid)**  amount    date  fund per annum  (depreciation) 

 
JPMorgan Chase Bank, N.A.             
DJ CDX NA CMBX AAA Index  $ —  $11,440,000    3/15/49  (7 bp)  $ 184,420 

Lehman Brothers Special Financing, Inc.           
Bear Stearns Co. Inc.,             
5.3%, 10/30/15    1,585,000    9/20/12  63.5 bp  (25,063) 

Bear Stearns Co. Inc.,             
5.3%, 10/30/15    1,585,000    9/20/17  (77 bp)  37,985 

CMS Energy Corp.,             
6.875%, 12/15/15    390,000    6/20/12  62 bp  (15,880) 

DJ ABX NA CMBX BBB Index    2,400,000  (F)  10/12/52  (134 bp)  194,255 

DJ CDX NA CMBX AAA Index    25,390,000    3/15/49  (7 bp)  497,643 

DJ CDX NA HY Series 8             
Index  30,420    1,997,580    6/20/10  (275 bp)  88,555 

DJ CDX NA HY Series 8             
Index 15-25% tranche    2,535,000  (F)  6/20/10  80 bp  (184,069) 

DJ CDX NA HY Series 8             
Index 35-60% tranche    132,500,000    6/20/12  275 bp  3 

DJ CDX NA HY Series 8             
Index 35-60% tranche    87,633,000    6/20/12  104 bp  (5,831,122) 

DJ CDX NA IG Series 7             
Index  3,381  5,696,619  (F)  12/20/13  (50 bp)  113,486 

DJ CDX NA IG Series 7             
Index 7-10% tranche    5,700,000  (F)  12/20/13  54.37 bp  (301,334) 

DJ CDX NA IG Series 8             
Index  333,720  17,236,280    6/20/14  45 bp   

DJ CDX NA IG Series 8             
Index 30-100% tranche    48,198,150    6/20/12  (3.125 bp)  202,558 

DJ CDX NA IG Series 8             
Index 30-100% tranche    39,434,850    6/20/12  (8 bp)  82,844 

DJ CDX NA IG Series 8             
Index 7-10% tranche    5,020,000    6/20/14  (152 bp)   

Goldman Sachs Group,             
Inc., 6.6%, 1/15/12    1,585,000    9/20/12  45.5 bp  (19,024) 

Goldman Sachs Group,             
Inc., 6.6%, 1/15/12    1,585,000    9/20/17  (58 bp)  29,243 

Hilton Hotels, 7 5/8%,             
12/1/12    1,465,000    6/20/13  94 bp  (160,964) 

Morgan Stanley Dean             
Witter, 6.6% 4/1/12    1,585,000    9/20/12  48 bp  (18,608) 

Morgan Stanley Dean             
Witter, 6.6% 4/1/12    1,585,000    9/20/17  (60.5 bp)  30,919 

Morgan Stanley Capital Services, Inc.             
DJ ABX NA CMBX BBB Index    3,602,500    10/12/52  (134 bp)  302,909 

DJ CDX NA HY Series 8             
Index  (6,179)  418,117  (F)  6/20/10  275 bp  (15,219) 

DJ CDX NA HY Series 8             
Index  (30,942)  2,093,717    6/20/10  275 bp  (89,836) 

DJ CDX NA HY Series 8             
Index  152,328  10,002,872    6/20/10  (275 bp)  442,267 

DJ CDX NA HY Series 8             
Index  667,044  34,448,956    6/20/14  45 bp   

DJ CDX NA HY Series 8             
Index  (16,683)  1,075,046    6/20/10  275 bp  (46,820) 

DJ CDX NA HY Series 8             
Index 0-15% tranche  (65,057)  699,757  (F)  6/20/10  0 bp  71,404 

DJ CDX NA HY Series 8             
Index 0-15% tranche  (12,833)  139,583  (F)  6/20/10  0 bp  14,418 

DJ CDX NA HY Series 8             
Index 0-25% tranche    12,694,000    6/20/10  79 bp  (924,684) 

DJ CDX NA IG Series 7             
Index  3,692  6,214,308  (F)  12/20/13  (50 bp)  123,803 


54


CREDIT DEFAULT CONTRACTS OUTSTANDING at 7/31/07 continued         
  
  Upfront        Fixed payments  Unrealized 
Swap counterparty /  premium  Notional    Termination  received (paid) by  appreciation/ 
Referenced debt*  received (paid)**    amount    date  fund per annum  (depreciation) 

Morgan Stanley Capital Services, Inc. continued           
DJ CDX NA IG Series 7             
Index, 7-10% tranche  $—  $ 6,218,000  (F)  12/20/13  53 bp  $ (333,171) 

DJ CDX NA IG Series 8             
Index    29,370,000  (F)  6/20/17  (60 bp)  296,637 

DJ CDX NA IG Series 8             
Index 7-10% tranche    40,130,000    6/20/14  (156 bp)   

Total            $(2,584,507) 

* Payments related to the reference debt are made upon a credit default event.

** Upfront premium is based on the difference between the original spread on issue and the market spread on day of execution.

(a) Terminating on the date on which the notional amount is reduced to zero or the date on which the assets securing the reference entity are liquidated.

(F) Security is valued at fair value following procedures approved by the Trustees.

The accompanying notes are an integral part of these financial statements.

55


Statement of assets and liabilities 7/31/07

ASSETS   

Investment in securities, at value, including $252,199,290 of securities on loan (Note 1):   
Unaffiliated issuers (identified cost $4,484,872,900)  $4,786,268,460 
Affiliated issuers (identified cost $417,711,345) (Note 5)  417,711,345 

Cash  13,855,321 

Dividends, interest and other receivables  10,633,617 

Receivable for shares of the fund sold  2,069,050 

Receivable for securities sold  26,316,503 

Receivable for sales of delayed delivery securities (Note 1)  161,841,737 

Receivable for custodian fees (Note 2)  30,697 

Unrealized appreciation on swap contracts (Note 1)  40,568,104 

Receivable for variation margin (Note 1)  4,662,484 

Premium paid on swap contracts (Note 1)  698,897 

Receivable for open swap contracts (Note 1)  966,862 

Receivable for closed swap contracts (Note 1)  5,055,220 

Total assets  5,470,678,297 
 
 
LIABILITIES   

 
Payable for securities purchased  36,474,156 

Payable for purchases of delayed delivery securities (Note 1)  682,802,221 

Payable for shares of the fund repurchased  6,401,842 

Payable for compensation of Manager (Notes 2 and 5)  5,424,007 

Payable for investor servicing (Note 2)  731,196 

Payable for Trustee compensation and expenses (Note 2)  521,616 

Payable for administrative services (Note 2)  9,966 

Payable for distribution fees (Note 2)  1,246,214 

Payable for closed swap contracts (Note 1)  2,890,423 

Written options outstanding, at value (premiums received $20,599,166) (Notes 1 and 3)  23,375,779 

Unrealized depreciation on swap contracts (Note 1)  56,637,700 

Premiums received on swap contracts (Note 1)  1,211,587 

TBA sales commitments, at value (proceeds receivable $161,467,367) (Note 1)  162,227,165 

Collateral on securities loaned, at value (Note 1)  258,089,002 

Other accrued expenses  541,406 

Total liabilities  1,238,584,280 

Net assets  $4,232,094,017 
 
REPRESENTED BY   

Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)  $3,654,894,761 

Undistributed net investment income (Note 1)  19,171,952 

Accumulated net realized gain on investments (Note 1)  268,377,587 

Net unrealized appreciation of investments  289,649,717 

Total — Representing net assets applicable to capital shares outstanding  $4,232,094,017 

(Continued on next page)

56


Statement of assets and liabilities (Continued)

COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE   
Net asset value and redemption price per class A share ($3,184,270,872 divided by 175,972,443 shares)  $18.10 

Offering price per class A share (100/94.75 of $18.10)*  $19.10 

Net asset value and offering price per class B share ($413,531,760 divided by 23,104,240 shares)**  $17.90 

Net asset value and offering price per class C share ($69,893,496 divided by 3,889,061 shares)**  $17.97 

Net asset value and redemption price per class M share ($176,992,968 divided by 9,892,212 shares)  $17.89 

Offering price per class M share (100/96.75 of $17.89)*  $18.49 

Net asset value, offering price and redemption price per class R share ($2,043,935 divided by 113,331 shares)  $18.04 

Net asset value, offering price and redemption price per class Y share ($385,360,986 divided by 21,232,007 shares)  $18.15 


* On single retail sales of less than $50,000. On sales of $50,000 or more the offering price is reduced.

** Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

The accompanying notes are an integral part of these financial statements.

57


Statement of operations Year ended 7/31/07

INVESTMENT INCOME   

 
Interest (including interest income of $14,801,846 from investments in affiliated issuers) (Note 5)  $ 102,172,691 

Dividends  57,469,772 

Securities lending  790,928 

Total investment income  160,433,391 
 
EXPENSES   

Compensation of Manager (Note 2)  22,129,635 

Investor servicing fees (Note 2)  8,712,790 

Custodian fees (Note 2)  401,310 

Trustee compensation and expenses (Note 2)  172,383 

Administrative services (Note 2)  74,521 

Distribution fees — Class A (Note 2)  8,184,368 

Distribution fees - Class B (Note 2)  5,340,309 

Distribution fees - Class C (Note 2)  719,741 

Distribution fees - Class M (Note 2)  1,416,043 

Distribution fees - Class R (Note 2)  9,391 

Other  1,043,286 

Non-recurring costs (Notes 2 and 6)  12,549 

Costs assumed by Manager (Notes 2 and 6)  (12,549) 

Fees waived and reimbursed by Manager (Note 5)  (269,766) 

Total expenses  47,934,011 

Expense reduction (Note 2)  (945,620) 

Net expenses  46,988,391 

Net investment income  113,445,000 

Net realized gain on investments (Notes 1 and 3)  456,034,769 

Net realized gain on swap contracts (Note 1)  17,549,992 

Net realized gain on futures contracts (Note 1)  7,883,868 

Net realized gain on written options (Notes 1 and 3)  6,029,127 

Net unrealized appreciation of assets and liabilities in foreign currencies during the year  46,409 

Net unrealized depreciation of investments, futures contracts, swap contracts, written options,   
and TBA sale commitments during the year  (121,525,410) 

Net gain on investments  366,018,755 

Net increase in net assets resulting from operations  $ 479,463,755 

The accompanying notes are an integral part of these financial statements.

58


Statement of changes in net assets

DECREASE IN NET ASSETS     
  Year ended  Year ended 
  7/31/07  7/31/06 

 
Operations:     
Net investment income  $ 113,445,000  $ 107,694,371 

Net realized gain on investments and foreign currency transactions  487,497,756  345,651,269 

Net unrealized depreciation of investments and assets and liabilities in foreign currencies  (121,479,001)  (276,612,677) 

Net increase in net assets resulting from operations  479,463,755  176,732,963 

Distributions to shareholders: (Note 1)     

From ordinary income     

Net investment income     

Class A  (91,249,673)  (90,591,899) 

Class B  (10,953,381)  (15,898,776) 

Class C  (1,475,085)  (1,499,446) 

Class M  (4,389,598)  (4,675,982) 

Class R  (46,016)  (25,114) 

Class Y  (14,027,385)  (17,912,483) 

Net realized short-term gain on investments     

Class A  (49,126,952)  (4,165,494) 

Class B  (8,659,988)  (1,042,091) 

Class C  (1,078,286)  (95,268) 

Class M  (2,920,573)  (264,982) 

Class R  (25,984)  (993) 

Class Y  (7,848,561)  (806,000) 

From net realized long-term gain on investments     

Class A  (209,675,856)  (64,836,816) 

Class B  (36,961,186)  (16,220,380) 

Class C  (4,602,171)  (1,482,867) 

Class M  (12,465,127)  (4,124,503) 

Class R  (110,903)  (15,451) 

Class Y  (33,497,980)  (12,545,570) 

Redemption fees (Note 1)  9,895  9,454 

Decrease from capital share transactions (Note 4)  (291,093,564)  (738,162,782) 

Total decrease in net assets  (300,734,619)  (797,624,480) 
 
NET ASSETS     

 
Beginning of year  4,532,828,636  5,330,453,116 

End of year (including undistributed net investment income of $19,171,952 and $15,088,106, respectively)  $4,232,094,017  $4,532,828,636 

The accompanying notes are an integral part of these financial statements.

59


Financial highlights (For a common share outstanding throughout the period)

INVESTMENT OPERATIONS:          LESS DISTRIBUTIONS:          RATIOS AND SUPPLEMENTAL DATA:     
      Net              Total      Ratio of net   
  Net asset    realized and  Total  From  From      Net asset  return  Net  Ratio of  investment   
  value,  Net  unrealized  from  net  net realized      value,  at net  assets,  expenses to  income (loss)  Portfolio 
  beginning  investment  gain (loss) on  investment  investment  gain on  Total  Redemption  end  asset  end of period  average net  to average  turnover 
Period ended  of period  income (loss)(a)  investments  operations  income  investments  distributions  fees  of period  value (%)(b)  (in thousands)  assets (%)(c)  net assets (%)  (%) 

 
CLASS A                             
July 31, 2007  $18.21  .48(d)  1.46  1.94  (.52)  (1.53)  (2.05)  (g)  $18.10  10.99  $3,184,271  .96(d)  2.61(d)  144.33(h) 
July 31, 2006  18.40  .42(d,e)  .27  .69  (.50)  (.38)  (.88)  (g)  18.21  3.89(e)  3,155,761  .90(d,e)  2.31(d,e)  117.11(h) 
July 31, 2005  16.91  .35(d,f)    1.47  1.82  (.33)    (.33)  (g)  18.40  10.89  3,458,405  .98(d)  1.97(d,f)    169.29(h) 
July 31, 2004  15.72  .32(d)  1.20  1.52  (.33)    (.33)  (g)  16.91  9.77  3,322,532  1.00(d)  1.90(d)  165.66 
July 31, 2003  15.02  .37  .81  1.18  (.48)    (.48)    15.72  8.06  3,784,601  .99  2.50  121.38(i,j) 

 
CLASS B                             
July 31, 2007  $18.02  .33(d)  1.46  1.79  (.38)  (1.53)  (1.91)  (g)  $17.90  10.15  $413,532  1.71(d)  1.82(d)  144.33(h) 
July 31, 2006  18.22  .28(d,e)  .26  .54  (.36)  (.38)  (.74)  (g)  18.02  3.05(e)  624,026  1.65(d,e)  1.58(d,e)  117.11(h) 
July 31, 2005  16.73  .21(d,f)    1.48  1.69  (.20)    (.20)  (g)  18.22  10.17  917,951  1.73(d)  1.22(d,f)    169.29(h) 
July 31, 2004  15.56  .19(d)  1.19  1.38  (.21)    (.21)  (g)  16.73  8.88  1,095,665  1.75(d)  1.16(d)  165.66 
July 31, 2003  14.87  .26  .80  1.06  (.37)    (.37)    15.56  7.25  1,308,605  1.74  1.75  121.38(i,j) 

 
CLASS C                             
July 31, 2007  $18.09  .34(d)  1.45  1.79  (.38)  (1.53)  (1.91)  (g)  $17.97  10.16  $69,893  1.71(d)  1.86(d)  144.33(h) 
July 31, 2006  18.30  .28(d,e)  .25  .53  (.36)  (.38)  (.74)  (g)  18.09  3.01(e)  70,192  1.65(d,e)  1.56(d,e)  117.11(h) 
July 31, 2005  16.81  .21(d,f)    1.48  1.69  (.20)    (.20)  (g)  18.30  10.14  77,024  1.73(d)  1.22(d,f)    169.29(h) 
July 31, 2004  15.63  .19(d)  1.20  1.39  (.21)    (.21)  (g)  16.81  8.92  75,185  1.75(d)  1.16(d)  165.66 
July 31, 2003  14.94  .26  .80  1.06  (.37)    (.37)    15.63  7.25  91,282  1.74  1.73  121.38(i,j) 

 
CLASS M                             
July 31, 2007  $18.02  .38(d)  1.45  1.83  (.43)  (1.53)  (1.96)  (g)  $17.89  10.42  $176,993  1.46(d)  2.10(d)  144.33(h) 
July 31, 2006  18.22  .33(d,e)  .26  .59  (.41)  (.38)  (.79)  (g)  18.02  3.34(e)  187,338  1.40(d,e)  1.81(d,e)  117.11(h) 
July 31, 2005  16.74  .26(d,f)    1.47  1.73  (.25)    (.25)  (g)  18.22  10.39  215,816  1.48(d)  1.47(d,f)    169.29(h) 
July 31, 2004  15.57  .23(d)  1.19  1.42  (.25)    (.25)  (g)  16.74  9.18  217,046  1.50(d)  1.40(d)  165.66 
July 31, 2003  14.87  .30  .80  1.10  (.40)    (.40)    15.57  7.58  239,662  1.49  2.02  121.38(i,j) 

 
CLASS R                             
July 31, 2007  $18.15  .44(d)  1.46  1.90  (.48)  (1.53)  (2.01)  (g)  $18.04  10.76  $2,044  1.21(d)  2.38(d)  144.33(h) 
July 31, 2006  18.36  .36(d,e)  .27  .63  (.46)  (.38)  (.84)  (g)  18.15  3.57(e)  1,525  1.15(d,e)  2.00(d,e)  117.11(h) 
July 31, 2005  16.89  .30(d,f)    1.48  1.78  (.31)    (.31)  (g)  18.36  10.63  726  1.23(d)  1.67(d,f)    169.29(h) 
July 31, 2004  15.70  .21(d)  1.29  1.50  (.31)    (.31)  (g)  16.89  9.60  127  1.25(d)  1.33(d)  165.66 
July 31, 2003 †  15.05  .17  .65  .82  (.17)    (.17)    15.70  5.52*  1  .65*  1.18*  121.38(i,j) 

 
CLASS Y                             
July 31, 2007  $18.26  .53(d)  1.46  1.99  (.57)  (1.53)  (2.10)  (g)  $18.15  11.24  $385,361  .71(d)  2.86(d)  144.33(h) 
July 31, 2006  18.46  .47(d,e)  .26  .73  (.55)  (.38)  (.93)  (g)  18.26  4.09(e)  493,985  .65(d,e)  2.59(d,e)  117.11(h) 
July 31, 2005  16.95  .40(d,f)    1.49  1.89  (.38)    (.38)  (g)  18.46  11.26  660,532  .73(d)  2.23(d,f)    169.29(h) 
July 31, 2004  15.76  .36(d)  1.21  1.57  (.38)    (.38)  (g)  16.95  10.03  848,161  .75(d)  2.16(d)  165.66 
July 31, 2003  15.05  .41  .82  1.23  (.52)    (.52)    15.76  8.38  880,435  .74  2.76  121.38(i,j) 


See notes to financial highlights at the end of this section.

The accompanying notes are an integral part of these financial statements.

60  61 


Financial highlights (Continued)

* Not annualized
For the period January 21, 2003 (commencement of operations) to July 31, 2003.

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

(b) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.

(c) Includes amounts paid through expense offset and brokerage service arrangements (Note 2).

(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Prime Money Market Fund during the period. As a result of such waivers, the expenses of each class reflect a reduction of the following amounts (Note 5):

  Percentage 
  of average 
  net assets 

July 31, 2007  <0.01% 

July 31, 2006  0.01 

July 31, 2005  0.01 

July 31, 2004  <0.01 


(e) Reflects a non-recurring reimbursement from Putnam Investments relating to the calculation of certain amounts paid by the fund to Putnam in previous years for transfer agent services, which amounted to $0.01 per share and 0.05% of average net assets for the period ended July 31, 2006.

(f) Reflects a non-recurring accrual related to Putnam Management’s settlement with the SEC regarding brokerage allocation practices, which amounted to the following amounts:

    Percentage 
    of average 
  Per share  net assets 

Class A  <$0.01  0.02% 

Class B  <0.01  0.02 

Class C  <0.01  0.02 

Class M  <0.01  0.02 

Class R  <0.01  0.02 

Class Y  <0.01  0.02 


(g) Amount represents less than $0.01 per share.

(h) Portfolio turnover excludes dollar roll transactions.

(i) Portfolio turnover excludes certain treasury note transactions executed in connection with a short-term trading strategy.

(j) Portfolio turnover excludes the impact of assets received from the acquisition of Putnam Balanced Fund and Putnam Balanced Retirement Fund.

The accompanying notes are an integral part of these financial statements.

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Notes to financial statements 7/31/07

Note 1: Significant accounting policies

The George Putnam Fund of Boston (the “fund”), a Massachusetts business trust, is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The fund seeks to provide a balanced investment comprised of a well-diversified portfolio of stocks and bonds, which will produce both capital growth and current income.

The fund offers class A, class B, class C, class M, class R and class Y shares. Class A and class M shares are sold with a maximum front-end sales charge of 5.25% and 3.25%, respectively, and generally do not pay a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, do not pay a front-end sales charge and are subject to a contingent deferred sales charge, if those shares are redeemed within six years of purchase. Class C shares have a one-year 1.00% contingent deferred sales charge and do not convert to class A shares. Class R shares, which are offered to qualified employee-benefit plans, are sold without a front-end sales charge or a contingent deferred sales charge. The expenses for class A, class B, class C, class M and class R shares may differ based on the distribution fee of each class, which is identified in Note 2. Class Y shares, which are sold at net asset value, ar e generally subject to the same expenses as class A, class B, class C, class M and class R shares, but do not bear a distribution fee. Class Y shares are sold to certain eligible purchasers including certain defined contribution plans (including corporate IRAs), bank trust departments, trust companies, other Putnam funds and products, and certain college savings plans.

Effective October 2, 2006, a 1.00% redemption fee may apply on any shares purchased on or after such date that are redeemed (either by selling or exchanging into another fund) within 7 days of purchase. The redemption fee is accounted for as an addition to paid-in-capital. Prior to October 2, 2006, a 2.00% redemption fee applied to any shares that were redeemed (either by selling or exchanging into another fund) within 5 days of purchase.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). 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.

In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund expects the risk of material loss to be remote.

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 accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

A) Security valuation Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets. If no sales are reported — as in the case of some securities traded over-the-counter — a security is valued at its last reported bid price. Market quotations are not considered to be readily available for certain debt obligations; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Investment Management, LLC (“Putnam Management”), the fund’s manager, an indirect wholly-owned subsidiary of Putnam, LLC. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market tran sactions for comparable securities and various relationships, generally recognized by institutional traders, between securities. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors, including movements in the U.S. securities markets. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. Certain investments, including certain restricted securities and derivatives, are also valued at fair value following proce dures approved by the Trustees. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security at a given point in time and does not reflect an actual market price, which may be different by a material amount.

B) Joint trading account Pursuant to an exemptive order from the Securities and Exchange Commission (the “SEC”), the fund may transfer uninvested cash balances, including cash collateral received under security lending arrangements, into a joint trading account along with the cash of other registered investment companies and certain other accounts managed by Putnam Management. These balances may be invested in issues of high-grade short-term investments having maturities of up to 397 days for collateral received under security lending arrangements and up to 90 days for other cash investments.

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. Collateral for certain tri-party repurchase agreements is held at the counterparty’s custodian in a segregated account for the benefit of the fund and the counterparty. Putnam Management 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.

63


D) Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.

Interest income is recorded on the accrual basis. Dividend income, net of applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain. All premiums/discounts are amortized/accreted on a yield-to-maturity basis.

Securities purchased or sold on a delayed delivery or a forward commitment basis may be settled a month or more after the trade date; interest income is accrued based on the terms of the securities. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

E) Stripped securities The fund may invest in stripped securities which represent a participation in securities that may be structured in classes with rights to receive different portions of the interest and principal. Interest-only securities receive all of the interest and principal-only securities receive all of the principal. If the interest-only securities experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, principal-only securities increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. The market value of these securities is highly sensitive to changes in interest rates.

F) Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities are recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions r epresent net realized exchange gains or losses on closed forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations, not present with domestic investments.

G) Forward currency contracts The fund may buy and sell forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to protect against a decline in value relative to the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of a currency in which securities a fund intends to buy are denominated, when a fund holds cash reserves and short term investments), or for other investment purposes. The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to mar ket daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Risks may exceed amounts recognized on the Statement of assets and liabilities. Forward currency contracts outstanding at period end, if any, are listed after the fund’s portfolio.

H) Futures and options contracts The fund may use futures and options contracts to hedge against changes in the values of securities the fund owns or expects to purchase, or for other investment purposes. The fund may also write options on swaps or securities it owns or in which it may invest to increase its current returns.

The potential risk to the fund is that the change in value of futures and options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, or if the counterparty to the contract is unable to perform. Risks may exceed amounts recognized on the Statement of assets and liabilities. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is re corded as a reduction to the cost of investments.

Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” Exchange traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. Futures and written option contracts outstanding at period end, if any, are listed after the fund’s portfolio.

I) Total return swap contracts The fund may enter into total return swap contracts, which are arrangements to exchange a market linked return for a periodic payment, both based on a notional principal amount. To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. Total return swap contracts are marked to

64


market daily based upon quotations from market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain total return swap contracts may include extended effective dates. Income related to these swap contracts is accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. Risk of loss may exceed amounts recognized on the Statement of assets and liabilities. Total return swap contracts outstanding at period end, if any, are listed after the fund’s portfolio.

J) Interest rate swap contracts The fund may enter into interest rate swap contracts, which are arrangements between two parties to exchange cash flows based on a notional principal amount, to manage the fund’s exposure to interest rates. Interest rate swap contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain interest rate swap contracts may include extended effective dates. Income related to these swap contracts is accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or if the counterparty defaults on its obligation to perform. Risk of loss may exceed amounts re cognized on the Statement of assets and liabilities. Interest rate swap contracts outstanding at period end, if any, are listed after the fund’s portfolio.

K) Credit default contracts The fund may enter into credit default contracts where one party, the protection buyer, makes an upfront or periodic payment to a counterparty, the protection seller, in exchange for the right to receive a contingent payment. The maximum amount of the payment may equal the notional amount, at par, of the underlying index or security as a result of a related credit event. Payments are made upon a credit default event of the disclosed primary referenced obligation or all other equally ranked obligations of the reference entity. An upfront payment received by the fund, as the protection seller, is recorded as a liability on the fund’s books. An upfront payment made by the fund, as the protection buyer, is recorded as an asset on the fund’s books. Periodic payments received or paid by the fund are recorded as realized gains or losses . The credit default contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made as a result of a credit event or termination of the contract are recognized, net of a proportional amount of the upfront payment, as realized gains or losses. In addition to bearing the risk that the credit event will occur, the fund could be exposed to market risk due to unfavorable changes in interest rates or in the price of the underlying security or index, the possibility that the fund may be unable to close out its position at the same time or at the same price as if it had purchased comparable publicly traded securities or that the counterparty may default on its obligation to perform. Risks of loss may exceed amounts recognized on the Statement of assets and liabilities. Credit default contracts outstanding at period end, if any, are listed after the fund’s portfolio.

L) TBA purchase commitments The fund may enter into “TBA” (to be announced) commitments to purchase securities for a fixed unit price at a future date beyond customary settlement time. Although the unit price has been established, the principal value has not been finalized. However, the amount of the commitments will not significantly differ from the principal amount. The fund holds, and maintains until settlement date, cash or high-grade debt obligations in an amount sufficient to meet the purchase price, or the fund may enter into offsetting contracts for the forward sale of other securities it owns. Income on the securities will not be earned until settlement date. TBA purchase commitments may be considered securities themselves, and involve a risk of loss if the value of the security to be purchased declines prior to the settlement date, which risk is in addition to the risk of decline in the value of the fund’s other assets. Unsettled TBA purchase commitments are valued at fair value of the underlying securities, according to the procedures described under “Security valuation” above. The contract is marked to market daily and the change in market value is recorded by the fund as an unrealized gain or loss.

Although the fund will generally enter into TBA purchase commitments with the intention of acquiring securities for its portfolio or for delivery pursuant to options contracts it has entered into, the fund may dispose of a commitment prior to settlement if Putnam Management deems it appropriate to do so.

M) TBA sale commitments The fund may enter into TBA sale commitments to hedge its portfolio positions or to sell mortgage-backed securities it owns under delayed delivery arrangements. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, equivalent deliverable securities or an offsetting TBA purchase commitment deliverable on or before the sale commitment date, are held as “cover” for the transaction.

Unsettled TBA sale commitments are valued at the fair value of the underlying securities, generally according to the procedures described under “Security valuation” above. The contract is marked to market daily and the change in market value is recorded by the fund as an unrealized gain or loss. If the TBA sale commitment is closed through the acquisition of an offsetting purchase commitment, the fund realizes a gain or loss. If the fund delivers securities under the commitment, the fund realizes a gain or a loss from the sale of the securities based upon the unit price established at the date the commitment was entered into. TBA sale commitments outstanding at period end, if any, are listed after the fund’s portfolio.

N) Dollar rolls To enhance returns, the fund may enter into dollar rolls (principally using TBAs) in which the fund sells securities for delivery in the current month and simultaneously contracts to purchase similar securities on a specified future date. During the period between the sale and subsequent purchase, the fund will not be entitled to receive income and principal payments on the securities sold. The fund will, however, retain the difference between the initial sales price and the forward price for the future purchase. The fund will also be able to earn interest on the cash proceeds that are received from the initial sale. The fund may be exposed to market or credit risk if the price of the security changes unfavorably or the counterparty fails to perform under the terms of the agreement.

O) Securities lending The fund may lend securities, through its agents, to qualified borrowers in order to earn additional income. The loans are collateralized by cash and/or securities in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is

65


allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agents; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending is included in investment income on the Statement of operations. At July 31, 2007, the value of securities loaned amounted to $252,199,290. The fund received cash collateral of $258,089,002 which is pooled with collateral of other Putnam funds into 55 issues of short-term investments. The fund also received high-quality, highly-rated securities of $1,669,850 in non-cash collateral.

P) 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 of 1986 (the “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 Code, as amended. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains.

At July 31, 2007, the fund had a capital loss carryover of $23,801,180 available to the extent allowed by the Code to offset future net capital gain, if any. The amount of the carryover and the expiration dates are:

Loss Carryover  Expiration 

 
$17,850,860  July 31, 2010 

5,950,320  July 31, 2011 

Q) Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. 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. These differences include temporary and/or permanent differences of losses on wash sale transactions, unrealized gains and losses on certain futures contracts, income on swap contracts, and interest only securities. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. For the year ended July 31, 2007, the fund r eclassified $12,779,984 to increase undistributed net investment income and $208,319 to decrease paid-in-capital, with a decrease to accumulated net realized gains of $12,571,665.

The tax basis components of distributable earnings and the federal tax cost as of July 31, 2007 were as follows:

Unrealized appreciation  $ 421,488,534 
Unrealized depreciation  (146,650,860) 
  ——————— 
Net unrealized appreciation  274,837,674 
Undistributed ordinary income  11,682,981 
Undistributed short-term gain  130,680,489 
Undistributed long-term gain  195,926,958 
Capital loss carryforward  (23,801,180) 
Cost for federal income tax purposes  $4,929,142,131 

Note 2: Management fee, administrative services and other transactions

Putnam Management is paid for management and investment advisory services quarterly based on the average net assets of the fund. Such fee is based on the following annual rates: 0.65% of the first $500 million of average net assets, 0.55% of the next $500 million, 0.50% of the next $500 million, 0.45% of the next $5 billion, 0.425% of the next $5 billion, 0.405% of the next $5 billion, 0.39% of the next $5 billion and 0.38% thereafter.

Putnam Management has agreed to waive fees and reimburse expenses of the fund through June 30, 2009 to the extent necessary to ensure that the fund’s expenses do not exceed the simple average of the expenses of all front-end load funds viewed by Lipper Inc. as having the same investment classification or objective as the fund. The expense reimbursement is based on a comparison of the fund’s expenses with the average annualized operating expenses of the funds in its Lipper peer group for each calendar quarter during the fund’s last fiscal year, excluding 12b-1 fees and without giving effect to any expense offset and brokerage service arrangements that may reduce fund expenses. For the year ended July 31, 2007, Putnam Management did not waive any of its management fee from the fund.

Effective August 3, 2007, Marsh & McLennan Companies, Inc. sold its ownership interest in Putnam Management, its parent companies and affiliates to a wholly-owned subsidiary of Great-West Lifeco, Inc. The fund’s shareholders have approved a new management contract for the fund that became effective upon the sale.

For the year ended July 31, 2007, Putnam Management has assumed $12,549 of legal, shareholder servicing and communication, audit and Trustee fees incurred by the fund in connection with certain legal and regulatory matters (including those described in Note 6).

In July 2006, questions arose regarding a potential misidentification of the characteristics of certain securities then in the fund’s portfolio, and the value of these securities was adjusted. The fund currently expects to be reimbursed for losses relating to this matter by Putnam. The amount of such reimbursement has not yet been determined, but is not expected to be material to the fund.

The fund reimburses Putnam Management an allocated amount 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.

Custodial functions for the fund’s assets were provided by Putnam Fiduciary Trust Company (“PFTC”), a subsidiary of Putnam, LLC, and by State Street Bank and Trust Company. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes. Putnam Investor Services, a division of PFTC, provided investor servicing agent functions to the fund. Putnam Investor Services received fees for investor servicing, subject to certain limitations, based on the number of shareholder accounts in the fund and the level of defined contribution plan assets in the fund. During the year ended July 31, 2007, the fund incurred $9,061,610 for custody and investor servicing agent functions provided by PFTC.

The fund has entered into arrangements with PFTC and State Street Bank and Trust Company whereby PFTC’s and State Street Bank and Trust Company’s fees are reduced by credits allowed on cash balances. The fund also reduced expenses through brokerage service arrangements For the year ended July 31, 2007, the fund’s expenses were reduced by $945,620 under these arrangements.

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Each independent Trustee of the fund receives an annual Trustee fee, of which $1,101, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees receive additional fees for attendance at certain committee meetings and industry seminars and for certain compliance-related matters. Trustees also are reimbursed for expenses they incur relating to their services as Trustees. George Putnam, III, who was not an independent Trustee during the period, also receives the foregoing fees for his services as Trustee.

The fund has adopted a Trustee Fee Deferral Plan (the “Deferral 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 invested in certain Putnam funds until distribution in accordance with the Deferral Plan.

The fund has adopted an unfunded noncontributory defined benefit pension plan (the “Pension Plan”) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted distribution plans (the “Plans”) with respect to its class A, class B, class C, class M and class R shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management, a wholly-owned subsidiary of Putnam, LLC and Putnam Retail Management GP, Inc., for services provided and expenses incurred in distributing shares of the fund. The Plans provide for payments by the fund to Putnam Retail Management at an annual rate of up to 0.35%, 1.00%, 1.00%, 1.00% and 1.00% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively. The Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00%, 1.00%, 0.75% and 0.50% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively.

For the year ended July 31, 2007, Putnam Retail Management, acting as underwriter, received net commissions of $140,998 and $1,700 from the sale of class A and class M shares, respectively, and received $436,895 and $4,809 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

A deferred sales charge of up to 1.00% and 0.65% is assessed on certain redemptions of class A and class M shares, respectively. For the year ended July 31, 2007, Putnam Retail Management, acting as underwriter, received $2,235 and no monies on class A and class M redemptions, respectively.

Note 3: Purchases and sales of securities

During the year ended July 31, 2007, cost of purchases and proceeds from sales of investment securities other than U.S. government securities and short-term investments aggregated $5,900,123,128 and $6,632,615,146, respectively. Purchases and sales of U.S. government securities aggregated $15,248,639 and $48,578,873, respectively.

Written option transactions during the year ended July 31, 2007 are summarized as follows:

  Contract  Premiums 
  Amounts  Received 

 
Written options outstanding     
at beginning of year  $ 218,802,000  $ 8,198,261 

Options opened  890,437,670  18,507,920 
Options exercised     
Options expired  (153,640,000)  (5,942,027) 
Options closed  (670)  (164,988) 

Written options outstanding     
at end of year  $ 955,599,000  $20,599,166 

Note 4: Capital shares

At July 31, 2007, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:

CLASS A  Shares  Amount 

 
Year ended 7/31/07:     
Shares sold  23,421,130  $ 433,162,178 

Shares issued in connection with     
reinvestment of distributions  18,272,904  327,594,319 

  41,694,034  760,756,497 

Shares repurchased  (39,049,327)  (721,568,081) 

Net increase  2,644,707  $ 39,188,416 
 
Year ended 7/31/06:     
Shares sold  26,056,673  $ 472,538,555 

Shares issued in connection with     
reinvestment of distributions  8,267,038  148,562,850 

  34,323,711  621,101,405 

Shares repurchased  (48,907,255)  (887,113,170) 

Net decrease  (14,583,544)  $(266,011,765) 
 
CLASS B  Shares  Amount 

Year ended 7/31/07:     
Shares sold  1,887,613  $ 34,439,247 

Shares issued in connection with     
reinvestment of distributions  3,010,636  53,337,927 

  4,898,249  87,777,174 

Shares repurchased  (16,425,410)  (301,276,907) 

Net decrease  (11,527,161)  $(213,499,733) 
 
Year ended 7/31/06:     
Shares sold  2,534,039  $ 45,555,631 

Shares issued in connection with     
reinvestment of distributions  1,744,635  31,032,061 

  4,278,674  76,587,692 

Shares repurchased  (20,039,885)  (359,943,585) 

Net decrease  (15,761,211)  $(283,355,893) 

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CLASS C  Shares  Amount 

Year ended 7/31/07:     
Shares sold  531,413  $ 9,727,607 

Shares issued in connection with     
reinvestment of distributions  355,895  6,334,457 

  887,308  16,062,064 

Shares repurchased  (877,503)  (16,137,789) 

Net increase/decrease  9,805  $ (75,725) 
 
Year ended 7/31/06:     
Shares sold  576,960  $ 10,389,241 

Shares issued in connection with     
reinvestment of distributions  153,025  2,732,848 

  729,985  13,122,089 

Shares repurchased  (1,060,812)  (19,144,461) 

Net decrease  (330,827)  $ (6,022,372) 

 
CLASS M  Shares  Amount 

Year ended 7/31/07:     
Shares sold  1,119,120  $ 20,403,582 

Shares issued in connection with     
reinvestment of distributions  1,102,506  19,543,155 

  2,221,626  39,946,737 

Shares repurchased  (2,724,559)  (49,604,364) 

Net decrease  (502,933)  $ (9,657,627) 
 
Year ended 7/31/06:     
Shares sold  1,197,570  $ 21,508,865 

Shares issued in connection with     
reinvestment of distributions  503,392  8,954,415 

  1,700,962  30,463,280 

Shares repurchased  (3,148,056)  (56,568,184) 

Net decrease  (1,447,094)  $(26,104,904) 

 
CLASS R  Shares  Amount 

Year ended 7/31/07:     
Shares sold  86,222  $ 1,563,590 

Shares issued in connection with     
reinvestment of distributions  10,185  182,106 

  96,407  1,745,696 

Shares repurchased  (67,100)  (1,193,503) 

Net increase  29,307  $ 552,193 
 
Year ended 7/31/06:     
Shares sold  68,286  $ 1,234,680 

Shares issued in connection with     
reinvestment of distributions  2,315  41,544 

  70,601  1,276,224 

Shares repurchased  (26,086)  (473,694) 

Net increase  44,515  $ 802,530 

CLASS Y  Shares  Amount 

Year ended 7/31/07:     
Shares sold  4,345,678  $ 80,647,628 

Shares issued in connection with     
reinvestment of distributions  3,083,571  55,373,926 

  7,429,249  136,021,554 

Shares repurchased  (13,254,383)  (243,622,642) 

Net decrease  (5,825,134)  $(107,601,088) 
 
Year ended 7/31/06:     
Shares sold  6,287,577  $ 114,028,313 

Shares issued in connection with     
reinvestment of distributions  1,735,510  31,261,000 

  8,023,087  145,289,313 

Shares repurchased  (16,756,758)  (302,759,691) 

Net decrease  (8,733,671)  $(157,470,378) 

Note 5: Investment in Putnam Prime Money Market Fund

The fund invests in Putnam Prime Money Market Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Prime Money Market Fund are valued at its closing net asset value each business day. Management fees paid by the fund are reduced by an amount equal to the management and administrative services fees paid by Putnam Prime Money Market Fund with respect to assets invested by the fund in Putnam Prime Money Market Fund. For the year ended July 31, 2007, management fees paid were reduced by $269,766 relating to the fund’s investment in Putnam Prime Money Market Fund. Income distributions earned by the fund are recorded as income in the Statement of operations and totaled $14,801,846 for the year ended July 31, 2007. During the year ended July 31, 2007, cost of purchases and proceeds of sales of investments in Putnam Prime Money Market Fund aggregated $1,324,756,404 and $1,355,064,970, respectiv ely.

Note 6: Regulatory matters and litigation

In late 2003 and 2004, Putnam Management settled charges brought by the Securities and Exchange Commission (the “SEC”) and the Massachusetts Securities Division in connection with excessive short-term trading in Putnam funds. Payments from Putnam Management will be distributed to certain open-end Putnam funds and their shareholders. These allegations and related matters have served as the general basis for certain lawsuits, including purported class action lawsuits against Putnam Management and, in a limited number of cases, some Putnam funds. Putnam Management believes that these lawsuits will have no material adverse effect on the funds or on Putnam Management’s ability to provide investment management services. In addition, Putnam Management has agreed to bear any costs incurred by the Putnam funds as a result of these matters.

Putnam Management and Putnam Retail Management are named as defendants in a civil suit in which the plaintiffs allege that the management and distribution fees paid by certain Putnam funds were excessive and seek recovery under the Investment Company Act of 1940. Putnam Management and Putnam Retail Management have contested the plaintiffs’ claims and the matter is currently pending in the U.S. District Court for the District of Massachusetts. Based on currently available information, Putnam

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Management believes that this action is without merit and that it is unlikely to have a material effect on Putnam Management’s and Putnam Retail Management’s ability to provide services to their clients, including the fund.

Note 7: New accounting pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (the “Interpretation”). The Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken by a filer in the filer’s tax return. The Interpretation is not expected to have a material effect on the fund’s financial statements. However, the conclusions regarding the Interpretation may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance expected from the FASB, and on-going analysis of tax laws, regulations and interpretations thereof.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (the “Standard”). The Standard defines fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. The Standard applies to fair value measurements already required or permitted by existing standards. The Standard is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Putnam Management is currently evaluating what impact the adoption of the Standard will have on the fund’s financial statements.

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Federal tax information and brokerage commissions (unaudited)

Federal tax information

Pursuant to Section 852 of the Internal Revenue Code, as amended, the fund hereby designates $288,114,461 as long-term capital gain, for its taxable year ended July 31, 2007.

The fund designated 19.02% of ordinary income distributions as qualifying for the dividends received deduction for corporations.

For its tax year ended July 31, 2007, the fund hereby designates 19.46%, or the maximum amount allowable, of its taxable ordinary income distributions as qualified dividends taxed at the individual net capital gain rates.

The Form 1099 you receive in January 2008 will show the tax status of all distributions paid to your account in calendar 2007.

Brokerage commissions

Brokerage commissions are paid to firms that execute trades on behalf of your fund. When choosing these firms, Putnam is required by law to seek the best execution of the trades, taking all relevant factors into consideration, including expected quality of execution and commission rate. Listed below are the largest relationships based upon brokerage commissions for your fund and the other funds in Putnam’s Large-Cap Value group for the year ended July 31, 2007. The other Putnam mutual funds in this group are Putnam Classic Equity Fund, Putnam Convertible Income-Growth Trust, Putnam Equity Income Fund, The Putnam Fund for Growth and Income, Putnam New Value Fund, Putnam VT Equity Income Fund, Putnam VT The George Putnam Fund of Boston, Putnam VT Growth and Income Fund, and Putnam VT New Value Fund.

The top five firms that received brokerage commissions for trades executed for the Large-Cap Value group are (in descending order) Merrill Lynch, Goldman Sachs, Morgan Stanley Dean Witter, UBS Warburg, and Citigroup Global Markets. Commissions paid to these firms together represented approximately 48% of the total brokerage commissions paid for the year ended July 31, 2007.

Commissions paid to the next 10 firms together represented approximately 36% of the total brokerage commissions paid during the period. These firms are (in alphabetical order) Bear Stearns & Company, Credit Suisse First Boston, Deutsche Bank Securities, JPMorgan Clearing, Lazard Freres & Co., Lehman Brothers, Pipeline, RBC Capital Markets, Sanford Bernstein, and Wachovia Securities.

Commission amounts do not include “mark-ups” paid on bond or derivative trades made directly with a dealer. Additional information about brokerage commissions is available on the Securities and Exchange Commission (SEC) Web site at www.sec.gov. Putnam funds disclose commissions by firm to the SEC in semiannual filings on Form N-SAR.

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Shareholder meeting
results (unaudited)

May 15, 2007 meeting

A proposal to approve a new management contract between the fund and Putnam Investment Management, LLC was approved as follows:

Votes for  Votes against  Abstentions 
143,838,706  4,438,754  7,032,986 

All tabulations rounded to the nearest whole number.     

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About the Trustees

Jameson A. Baxter (Born 1943), Trustee since 1994, Vice Chairman since 2005

Ms. Baxter is the President of Baxter Associates, Inc., a private investment firm.

Ms. Baxter serves as a Director of ASHTA Chemicals, Inc., Ryerson, Inc. (a metals service corporation), the Mutual Fund Directors Forum, and Advocate Health Care. She is Chairman Emeritus of the Board of Trustees, Mount Holyoke College, having served as Chairman for five years. Until 2007, she was a Director of Banta Corporation (a printing and supply chain management company). Until 2004, she was a Director of BoardSource (formerly the National Center for Nonprofit Boards), and until 2002, she was a Director of Intermatic Corporation (a manufacturer of energy control products).

Ms. Baxter has held various positions in investment banking and corporate finance, including Vice President and Principal of the Regency Group, and Vice President of and Consultant to First Boston Corporation. She is a graduate of Mount Holyoke College.

Charles B. Curtis (Born 1940), Trustee since 2001

Mr. Curtis is President and Chief Operating Officer of the Nuclear Threat Initiative (a private foundation dealing with national security issues) and serves as Senior Advisor to the United Nations Foundation.

Mr. Curtis is a member of the Council on Foreign Relations and serves as a Director of Edison International and Southern California Edison. Until 2006, Mr. Curtis served as a member of the Trustee Advisory Council of the Applied Physics Laboratory, Johns Hopkins University. Until 2003, Mr. Curtis was a member of the Electric Power Research Institute Advisory Council and the University of Chicago Board of Governors for Argonne National Laboratory. Prior to 2002, Mr. Curtis was a Member of the Board of Directors of the Gas Technology Institute and the Board of Directors of the Environment and Natural Resources Program Steering Committee, John F. Kennedy School of Government, Harvard University. Until 2001, Mr. Curtis was a member of the Department of Defense Policy Board and Director of EG&G Technical Services, Inc. (a fossil energy research and development support company).

From August 1997 to December 1999, Mr. Curtis was a Partner at Hogan & Hartson L.L.P., a Washington, D.C. law firm. Prior to May 1997, Mr. Curtis was Deputy Secretary of Energy and Under Secretary of the U.S. Department of Energy. He served as Chairman of the Federal Energy Regulatory Commission from 1977 to 1981 and has held positions on the staff of the U.S. House of Representatives, the U.S. Treasury Department, and the SEC.

Robert J. Darretta (Born 1946), Trustee since 2007

Mr. Darretta serves as Director of UnitedHealth Group, a diversified health-care conglomerate.

Until April 2007, Mr. Darretta was Vice Chairman of the Board of Directors of Johnson & Johnson, a diversified health-care conglomerate. Prior to 2007, Mr. Darretta held several accounting and finance positions with Johnson & Johnson, including Chief Financial Officer, Executive Vice President, and Treasurer.

Mr. Darretta received a B.S. in Economics from Villanova University.

Myra R. Drucker (Born 1948), Trustee since 2004

Ms. Drucker is Chair of the Board of Trustees of Commonfund (a not-for-profit firm specializing in asset management for educational endowments and foundations), Vice Chair of the Board of Trustees of Sarah Lawrence College, and a member of the Investment Committee of the Kresge Foundation (a charitable trust). She is also a director of New York Stock Exchange LLC, a wholly-owned subsidiary of the publicly-traded NYSE Group, Inc., a director of Interactive Data Corporation (a provider of financial market data, analytics, and related services to financial institutions and individual investors), and an advisor to RCM Capital Management (an investment management firm).

Ms. Drucker is an ex-officio member of the New York Stock Exchange (NYSE) Pension Managers Advisory Committee, having served as Chair for seven years.

Until August 31, 2004, Ms. Drucker was Managing Director and a member of the Board of Directors of General Motors Asset Management and Chief Investment Officer of General Motors Trust Bank. Ms. Drucker also served as a member of the NYSE Corporate Accountability and Listing Standards Committee and the NYSE/NASD IPO Advisory Committee.

Prior to joining General Motors Asset Management in 2001, Ms. Drucker held various executive positions in the investment management industry. Ms. Drucker served as Chief Investment Officer of Xerox Corporation (a technology and service company in the document industry), where she was responsible for the investment of the company’s pension assets. Ms. Drucker was also Staff Vice President and Director of Trust Investments for International Paper (a paper products, paper distribution, packaging and forest products company) and previously served as Manager of Trust Investments for Xerox Corporation. Ms. Drucker received a B.A. degree in Literature and Psychology from Sarah Lawrence College and pursued graduate studies in economics, statistics and portfolio theory at Temple University.

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John A. Hill (Born 1942), Trustee since 1985 and Chairman since 2000

Mr. Hill is Vice Chairman of First Reserve Corporation, a private equity buyout firm that specializes in energy investments in the diversified worldwide energy industry.

Mr. Hill is a Director of Devon Energy Corporation and various private companies controlled by First Reserve Corporation, as well as Chairman of TH Lee, Putnam Investment Trust (a closed-end investment company advised by an affiliate of Putnam Management). He is also a Trustee of Sarah Lawrence College. Until 2005, he was a Director of Continuum Health Partners of New York.

Prior to acquiring First Reserve Corporation in 1983, Mr. Hill held executive positions in investment banking and investment management with several firms and with the federal government, including Deputy Associate Director of the Office of Management and Budget and Deputy Director of the Federal Energy Administration. He is active in various business associations, including the Economic Club of New York, and lectures on energy issues in the United States and Europe. Mr. Hill holds a B.A. degree in Economics from Southern Methodist University and pursued graduate studies there as a Woodrow Wilson Fellow.

Paul L. Joskow (Born 1947), Trustee since 1997

Dr. Joskow is the Elizabeth and James Killian Professor of Economics and Management, and Director of the Center for Energy and Environmental Policy Research at the Massachusetts Institute of Technology.

Dr. Joskow serves as a Director of National Grid (a UK-based holding company with interests in electric and gas transmission and distribution and telecommunications infrastructure), a Director of TransCanada Corporation (an energy company focused on natural gas transmission and power services), a Director of Exelon Corporation (an energy company focused on power services), and a Member of the Board of Overseers of the Boston Symphony Orchestra. Prior to July 2006, he served as President of the Yale University Council and continues to serve as a Member of the Council. Prior to February 2005, he served on the board of the Whitehead Institute for Biomedical Research (a non-profit research institution). Prior to February 2002, he was a Director of State Farm Indemnity Company (an automobile insurance company), and prior to March 2000, he was a Director of New England Electric System (a public utility holding company).

Dr. Joskow has published six books and numerous articles on topics in industrial organization, government regulation of industry, and competition policy. He is active in industry restructuring, environmental, energy, competition and privatization policies — serving as an advisor to governments and corporations worldwide. Dr. Joskow holds a Ph.D. and M. Phil from Yale University and a B.A. from Cornell University.

Elizabeth T. Kennan (Born 1938), Trustee since 1992

Dr. Kennan is a Partner of Cambus-Kenneth Farm (thoroughbred horse and cattle breeding). She is President Emeritus of Mount Holyoke College.

Dr. Kennan served as Chairman and is now Lead Director of Northeast Utilities. She is a Trustee of the National Trust for Historic Preservation, of Centre College and of Midway College in Midway, Kentucky. Until 2006, she was a member of The Trustees of Reservations. Prior to 2001, Dr. Kennan served on the oversight committee of the Folger Shakespeare Library. Prior to June 2005, she was a Director of Talbots, Inc., and she has served as Director on a number of other boards, including Bell Atlantic, Chastain Real Estate, Shawmut Bank, Berkshire Life Insurance, and Kentucky Home Life Insurance. Dr. Kennan has also served as President of Five Colleges Incorporated, as a Trustee of Notre Dame University and is active in various educational and civic associations.

As a member of the faculty of Catholic University for twelve years, until 1978, Dr. Kennan directed the post-doctoral program in Patristic and Medieval Studies, taught history and published numerous articles. Dr. Kennan holds a Ph.D. from the University of Washington in Seattle, an M.S. from St. Hilda’s College at Oxford University and an A.B. from Mount Holyoke College. She holds several honorary doctorates.

Kenneth R. Leibler (Born 1949), Trustee since 2006

Mr. Leibler is a founding partner and former Chairman of the Boston Options Exchange, an electronic marketplace for the trading of listed derivative securities.

Mr. Leibler currently serves as a Trustee of Beth Israel Deaconess Hospital in Boston. He is also lead director of Ruder Finn Group, a global communications and advertising firm and a director of Northeast Utilities, which operates New England’s largest energy delivery system. Prior to December 2006, he served as a director of the Optimum Funds group. Prior to October 2006, he served as a director of ISO New England, the organization responsible for the operation of the electric generation system in the New England states. Prior to 2000, Mr. Leibler was a director of the Investment Company Institute in Washington, D.C.

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Prior to January 2005, Mr. Leibler served as Chairman and Chief Executive Officer of the Boston Stock Exchange. Prior to January 2000, he served as President and Chief Executive Officer of Liberty Financial Companies, a publicly traded diversified asset management organization. Prior to June 1990, he served as President and Chief Operating Officer of the American Stock Exchange, and is the youngest person in Exchange history to hold the title of President. Prior to serving as Amex President, he held the position of Chief Financial Officer and headed its management and marketing operations. Mr. Leibler graduated magna cum laude with a degree in economics from Syracuse University, where he was elected Phi Beta Kappa.

Robert E. Patterson (Born 1945), Trustee since 1984

Mr. Patterson is Senior Partner of Cabot Properties, L.P. and Chairman of Cabot Properties, Inc. (a private equity firm investing in commercial real estate).

Mr. Patterson serves as Chairman Emeritus and Trustee of the Joslin Diabetes Center. Prior to June 2003, he was a Trustee of Sea Education Association. Prior to December 2001, he was President and Trustee of Cabot Industrial Trust (a publicly traded real estate investment trust). Prior to February 1998, he was Executive Vice President and Director of Acquisitions of Cabot Partners Limited Partnership (a registered investment adviser involved in institutional real estate investments). Prior to 1990, he served as Executive Vice President of Cabot, Cabot & Forbes Realty Advisors, Inc. (the predecessor company of Cabot Partners).

Mr. Patterson practiced law and held various positions in state government and was the founding Executive Director of the Massachusetts Industrial Finance Agency. Mr. Patterson is a graduate of Harvard College and Harvard Law School.

George Putnam, III (Born 1951), Trustee since 1984

Mr. Putnam is Chairman of New Generation Research, Inc. (a publisher of financial advisory and other research services), and President of New Generation Advisers, Inc. (a registered investment advisor to private funds). Mr. Putnam founded the New Generation companies in 1986.

Mr. Putnam is a Director of The Boston Family Office, LLC (a registered investment adviser). He is a Trustee of St. Mark’s School. Until 2006, he was a Trustee of Shore Country Day School, and until 2002 was a Trustee of the Sea Education Association.

Mr. Putnam previously worked as an attorney with the law firm of Dechert LLP (formerly known as Dechert Price & Rhoads) in Philadelphia. He is a graduate of Harvard College, Harvard Business School and Harvard Law School.

W. Thomas Stephens (Born 1942), Trustee since 1997

Mr. Stephens is Chairman and Chief Executive Officer of Boise Cascade, L.L.C. (a paper, forest products and timberland assets company).

Mr. Stephens is a Director of TransCanadaPipelines, Ltd. Until 2004, Mr. Stephens was a Director of Xcel Energy Incorporated (a public utility company), Qwest Communications, and Norske Canada, Inc. (a paper manufacturer). Until 2003, Mr. Stephens was a Director of Mail-Well, Inc. (a diversified printing company). He served as Chairman of Mail-Well until 2001 and as CEO of MacMillan-Bloedel, Ltd. (a forest products company) until 1999.

Prior to 1996, Mr. Stephens was Chairman and Chief Executive Officer of Johns Manville Corporation. He holds B.S. and M.S. degrees from the University of Arkansas.

Richard B. Worley (Born 1945), Trustee since 2004

Mr. Worley is Managing Partner of Permit Capital LLC, an investment management firm.

Mr. Worley serves as a Trustee of the University of Pennsylvania Medical Center, The Robert Wood Johnson Foundation (a philanthropic organization devoted to health care issues), and the National Constitution Center. He is also a Director of The Colonial Williamsburg Foundation (a historical preservation organization) and the Philadelphia Orchestra Association. Mr. Worley also serves on the investment committees of Mount Holyoke College and World Wildlife Fund (a wildlife conservation organization).

Prior to joining Permit Capital LLC in 2002, Mr. Worley served as Chief Strategic Officer of Morgan Stanley Investment Management. He previously served as President, Chief Executive Officer and Chief Investment Officer of Morgan Stanley Dean Witter Investment Management and as a Managing Director of Morgan Stanley, a financial services firm. Mr. Worley also was the Chairman of Miller Anderson & Sherrerd, an investment management firm.

Mr. Worley holds a B.S. degree from the University of Tennessee and pursued graduate studies in economics at the University of Texas.

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Charles E. Haldeman, Jr.* (Born 1948), Trustee since 2004
and President of the Funds since 2007

Mr. Haldeman is President and Chief Executive Officer of Putnam, LLC (“Putnam Investments”) and President of the Putnam Funds. He is a member of Putnam Investments’ Executive Board of Directors and Advisory Council. Prior to November 2003, Mr. Haldeman served as Co-Head of Putnam Investments’ Investment Division.

Prior to joining Putnam Investments in 2002, Mr. Haldeman held executive positions in the investment management industry. He previously served as Chief Executive Officer of Delaware Investments and President and Chief Operating Officer of United Asset Management. Mr. Haldeman was also a partner and director of Cooke & Bieler, Inc. (an investment management firm).

Mr. Haldeman currently serves on the Board of Governors of the Investment Company Institute and as Chair of the Board of Trustees of Dartmouth College. He also serves on the Partners HealthCare Investment Committee, the Tuck School of Business and Dartmouth College Board of Overseers, and the Harvard Business School Board of Dean’s Advisors. He is a graduate of Dartmouth College, Harvard Law School and Harvard Business School. Mr. Haldeman is also a Chartered Financial Analyst (CFA) charterholder.

The address of each Trustee is One Post Office Square, Boston, MA 02109.

As of July 31, 2007, there were 104 Putnam Funds. All Trustees serve as Trustees of all Putnam funds.

Each Trustee serves for an indefinite term, until his or her resignation, retirement at age 72, death, or removal.

* Trustee who is or may be deemed to be an “interested person” (as defined in the Investment Company Act of 1940) of the fund, Putnam Management, and/or Putnam Retail Management. Mr. Haldeman is the President of your fund and each of the other Putnam funds, and is President and Chief Executive Officer of Putnam Investments.

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Charles E. Porter (Born 1938)
Executive Vice President, Principal Executive Officer, Associate
Treasurer, and Compliance Liaison
Since 1989

Jonathan S. Horwitz (Born 1955)
Senior Vice President and Treasurer
Since 2004
Prior to 2004, Managing Director,
Putnam Investments

Steven D. Krichmar (Born 1958)
Vice President and Principal Financial Officer
Since 2002
Senior Managing Director, Putnam Investments

Janet C. Smith (Born 1965)
Vice President, Principal Accounting Officer and Assistant Treasurer
Since 2007
Managing Director, Putnam Investments and Putnam Management

Susan G. Malloy (Born 1957)
Vice President and Assistant Treasurer
Since 2007
Managing Director, Putnam Investments

Beth S. Mazor (Born 1958)
Vice President
Since 2002
Managing Director, Putnam Investments

James P. Pappas (Born 1953)
Vice President
Since 2004
Managing Director, Putnam Investments and Putnam Management.
During 2002, Chief Operating Officer, Atalanta/Sosnoff
Management Corporation

Richard S. Robie, III (Born 1960)
Vice President
Since 2004
Senior Managing Director, Putnam Investments, Putnam Management
and Putnam Retail Management. Prior to 2003, Senior Vice President,
United Asset Management Corporation

Francis J. McNamara, III (Born 1955)
Vice President and Chief Legal Officer
Since 2004
Senior Managing Director, Putnam Investments, Putnam Management
and Putnam Retail Management. Prior to 2004, General Counsel,
State Street Research & Management Company

Robert R. Leveille (Born 1969)
Vice President and Chief Compliance Officer
Since 2007
Managing Director, Putnam Investments, Putnam Management,
and Putnam Retail Management. Prior to 2005, member of Bell
Boyd & Lloyd LLC. Prior to 2003, Vice President and Senior Counsel,
Liberty Funds Group LLC

Mark C. Trenchard (Born 1962)
Vice President and BSA Compliance Officer
Since 2002
Managing Director, Putnam Investments

Judith Cohen (Born 1945)
Vice President, Clerk and Assistant Treasurer
Since 1993

Wanda M. McManus (Born 1947)
Vice President, Senior Associate Treasurer and Assistant Clerk
Since 2005

Nancy E. Florek (Born 1957)
Vice President, Assistant Clerk, Assistant Treasurer
and Proxy Manager
Since 2005

The address of each Officer is One Post Office Square, Boston, MA 02109.

76


Fund information

Founded nearly 70 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage over 100 mutual funds in growth, value, blend, fixed income, and international.

Investment Manager  Officers  Mark C. Trenchard 
Putnam Investment  Charles E. Haldeman, Jr.  Vice President and BSA Compliance Officer 
Management, LLC  President 
One Post Office Square  Judith Cohen 
Boston, MA 02109  Charles E. Porter   Vice President, Clerk and Assistant Treasurer  
  Executive Vice President, Principal 
Marketing Services  Executive Officer, Associate Treasurer  Wanda M. McManus 
Putnam Retail Management  and Compliance Liaison  Vice President, Senior Associate Treasurer 
One Post Office Square  and Assistant Clerk  
Boston, MA 02109  Jonathan S. Horwitz  
  Senior Vice President and Treasurer  Nancy E. Florek 
Custodian  Vice President, Assistant Clerk, 
State Street Bank and Trust Company  Steven D. Krichmar  Assistant Treasurer and Proxy Manager  
Vice President and Principal Financial Officer 
Legal Counsel   
Ropes & Gray LLP  Janet C. Smith   
Vice President, Principal Accounting Officer 
Independent Registered Public  and Assistant Treasurer   
Accounting Firm   
PricewaterhouseCoopers LLP  Susan G. Malloy   
Vice President and Assistant Treasurer 
Trustees   
John A. Hill, Chairman  Beth S. Mazor   
Jameson Adkins Baxter, Vice Chairman  Vice President    
Charles B. Curtis   
Robert J. Darretta  James P. Pappas   
Myra R. Drucker  Vice President   
Charles E. Haldeman, Jr.   
Paul L. Joskow  Richard S. Robie, III   
Elizabeth T. Kennan  Vice President    
Kenneth R. Leibler   
Robert E. Patterson  Francis J. McNamara, III   
George Putnam, III  Vice President and Chief Legal Officer   
W. Thomas Stephens 
Richard B. Worley  Robert R. Leveille    
Vice President and Chief Compliance Officer    

This report is for the information of shareholders of The George Putnam Fund of Boston. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit www.putnam.com. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.




Item 2. Code of Ethics:

(a) The fund’s principal executive, financial and accounting officers are employees of Putnam Investment Management, LLC, the Fund's investment manager. As such they are subject to a comprehensive Code of Ethics adopted and administered by Putnam Investments which is designed to protect the interests of the firm and its clients. The Fund has adopted a Code of Ethics which incorporates the Code of Ethics of Putnam Investments with respect to all of its officers and Trustees who are employees of Putnam Investment Management, LLC. For this reason, the Fund has not adopted a separate code of ethics governing its principal executive, financial and accounting officers.

(c) None

Item 3. Audit Committee Financial Expert:

The Funds' Audit and Compliance Committee is comprised solely of Trustees who are "independent" (as such term has been defined by the Securities and Exchange Commission ("SEC") in regulations implementing Section 407 of the Sarbanes-Oxley Act (the "Regulations")). The Trustees believe that each of the members of the Audit and Compliance Committee also possess a combination of knowledge and experience with respect to financial accounting matters, as well as other attributes, that qualify them for service on the Committee. In addition, the Trustees have determined that each of Mr. Patterson, Mr. Stephens, Mr. Leibler, Mr. Hill and Mr. Darretta meets the financial literacy requirements of the New York Stock Exchange's rules and qualifies as an "audit committee financial expert" (as such term has been defined by the Regulations) based on their review of his pertinent experience and education. Certain other Trustees, although not on the Audit and Compliance Committee, would also qualify as "audit committee financial experts." The SEC has stated that the designation or identification of a person as an audit committee financial expert pursuant to this Item 3 of Form N-CSR does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Audit and Compliance Committee and the Board of Trustees in the absence of such designation or identification.

Item 4. Principal Accountant Fees and Services:

The following table presents fees billed in each of the last two fiscal years for services rendered to the fund by the fund’s independent auditor:

Fiscal    Audit-     
year  Audit  Related  Tax  All Other 
ended  Fees  Fees  Fees  Fees 
 
July 31, 2007  $261,656  $313  $9,550  $4,535* 
July 31, 2006  $255,386*  $1,262  $9,699  $5,050 

* Includes fees of $2,992 and $4,312 billed by the fund’s independent auditor to the fund for procedures necessitated by regulatory and litigation matters for the fiscal years ended July 31, 2007 and July 31, 2006, respectively. These fees were reimbursed to the fund by Putnam Investment Management, LLC (“Putnam Management”).

For the fiscal years ended July 31, 2007and July 31, 2006, the fund’s independent auditor billed aggregate non-audit fees in the amounts of $ 129,614 and $ 285,682 respectively, to the fund, Putnam Management and any entity controlling, controlled by or under common control with Putnam Management that provides ongoing services to the fund.

Audit Fees represent fees billed for the fund’s last two fiscal years.


Audit-Related Fees represent fees billed in the fund’s last two fiscal years for services traditionally performed by the fund’s auditor, including accounting consultation for proposed transactions or concerning financial accounting and reporting standards and other audit or attest services not required by statute or regulation.

Tax Fees represent fees billed in the fund’s last two fiscal years for tax compliance, tax planning and tax advice services. Tax planning and tax advice services include assistance with tax audits, employee benefit plans and requests for rulings or technical advice from taxing authorities.

All Other Fees represent fees billed for services relating to an analysis of recordkeeping fees.

Pre-Approval Policies of the Audit and Compliance Committee. The Audit and Compliance Committee of the Putnam funds has determined that, as a matter of policy, all work performed for the funds by the funds’ independent auditors will be pre-approved by the Committee itself and thus will generally not be subject to pre-approval procedures.

The Audit and Compliance Committee also has adopted a policy to pre-approve the engagement by Putnam Management and certain of its affiliates of the funds’ independent auditors, even in circumstances where pre-approval is not required by applicable law. Any such requests by Putnam Management or certain of its affiliates are typically submitted in writing to the Committee and explain, among other things, the nature of the proposed engagement, the estimated fees, and why this work should be performed by that particular audit firm as opposed to another one. In reviewing such requests, the Committee considers, among other things, whether the provision of such services by the audit firm are compatible with the independence of the audit firm.

The following table presents fees billed by the fund’s independent auditor for services required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.

Fiscal  Audit-    All  Total 
year  Related  Tax  Other  Non-Audit 
ended  Fees  Fees  Fees  Fees 
 
July 31,         
2007  $ -  $ 26,129  $ -  $ - 
July 31,         
2006  $ -  $153,160  $ -  $ - 

Item 5. Audit Committee of Listed Registrants

Not applicable


Item 6. Schedule of Investments:

The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.

Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:

Not applicable

Item 8. Portfolio Managers of Closed-End Investment Companies

Not Applicable


Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:

Not applicable

Item 10. Submission of Matters to a Vote of Security Holders:

Not applicable

Item 11. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 12. Exhibits:

(a)(1) The Code of Ethics of The Putnam Funds, which incorporates the Code of Ethics of Putnam Investments, is filed herewith.

(a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

The George Putnam Fund of Boston

By (Signature and Title):

/s/Janet C. Smith
Janet C. Smith
Principal Accounting Officer

Date: September 28, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):


/s/Charles E. Porter
Charles E. Porter
Principal Executive Officer

Date: September 28, 2007

By (Signature and Title):

/s/Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer

Date: September 28, 2007


EX-99.CERT 2 b_cert.htm EX-99.CERT b_cert.htm

Certifications

I, Charles E. Porter, the Principal Executive Officer of the funds listed on Attachment A, certify that:

1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:

2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;

3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant's internal control over financial reporting.

Date: September 27, 2007

/s/ Charles E. Porter
_______________________
Charles E. Porter
Principal Executive Officer


Certifications

I, Steven D. Krichmar, the Principal Financial Officer of the funds listed on Attachment A, certify that:

1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:

2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;

3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant’s internal control over financial reporting.

Date: September 27, 2007

/s/ Steven D. Krichmar
_______________________
Steven D. Krichmar
Principal Financial Officer



 
Attachment A
N-CSR
Period (s) ended July 31, 2007
 
   
073  Putnam Premier Income Trust 
2AQ  Putnam Research Fund 
003  Putnam Investors Fund 
007  Putnam Voyager Fund 
006  Putnam Vista Fund 
036  Putnam Tax Free High Yield Fund 
035  Putnam AMT-Free Insured Municipal Fund 
024  Putnam OTC & Emerging Growth Fund 
2AP  Putnam Growth Opportunities Fund 
001  The George Putnam Fund of Boston 
 
Putnam RetirementReady – Funds 
 
7CR  Putnam RetirementReady --2050 
40M  Putnam RetirementReady – 2045 
40F  Putnam RetirementReady --2040 
49Y  Putnam RetirementReady – 2035 
49R  Putnam RetirementReady – 2030 
49K  Putnam RetirementReady – 2025 
49D  Putnam RetirementReady --2020 
48W  Putnam RetirementReady – 2015 
48I  Putnam RetirementReady – 2010 
48P  Putnam RetirementReady --Maturity Fund 


EX-99.906 CERT 3 c_certnos.htm EX-99.906 CERT c_certnos.htm

Section 906 Certifications

I, Charles E. Porter, the Principal Executive Officer of the Funds listed on Attachment A, certify that, to my knowledge:

1. The form N-CSR of the Funds listed on Attachment A for the period ended July 31, 2007, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended July 31, 2007 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: September 27, 2007

/s/ Charles E. Porter
______________________
Charles E. Porter
Principal Executive Officer


Section 906 Certifications

I, Steven D. Krichmar, the Principal Financial Officer of the Funds listed on Attachment A, certify that, to my knowledge:

1. The form N-CSR of the Funds listed on Attachment A for the period ended July 31, 2007 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended July 31, 2007 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: September 27, 2007

/s/ Steven D. Krichmar
______________________
Steven D. Krichmar
Principal Financial Officer


  Attachment A 
  N-CSR 
  Period (s) ended July 31, 2007 
 
 
 
073  Putnam Premier Income Trust 
2AQ  Putnam Research Fund 
003  Putnam Investors Fund 
007  Putnam Voyager Fund 
006  Putnam Vista Fund 
036  Putnam Tax Free High Yield Fund 
035  Putnam AMT-Free Insured Municipal Fund 
024  Putnam OTC & Emerging Growth Fund 
2AP  Putnam Growth Opportunities Fund 
001  The George Putnam Fund of Boston 
 
Putnam RetirementReady – Funds 
 
7CR  Putnam RetirementReady --2050 
40M  Putnam RetirementReady – 2045 
40F  Putnam RetirementReady --2040 
49Y  Putnam RetirementReady – 2035 
49R  Putnam RetirementReady – 2030 
49K  Putnam RetirementReady – 2025 
49D  Putnam RetirementReady --2020 
48W  Putnam RetirementReady – 2015 
48I  Putnam RetirementReady – 2010 
48P  Putnam RetirementReady --Maturity Fund 


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M>G_VC8_\_EO_`-_5_P`:M44:A>';\?\`@%7^T;'_`)_+?_OZO^-']HV/_/Y; M_P#?U?\`&K5%&H7AV_'_`(!5_M&Q_P"?RW_[^K_C1_:-C_S^6_\`W]7_`!JU M11J%X=OQ_P"`5?[1L?\`G\M_^_J_XT?VC8_\_EO_`-_5_P`:M44:A>';\?\` M@%(ZA9?:$/VRWQM;GS5]1[T_^T;'_G\M_P#OZO\`C5JBC4+P[?C_`,`J_P!H MV/\`S^6__?U?\:/[1L?^?RW_`._J_P"-6J*-0O#M^/\`P"K_`&C8_P#/Y;_] M_5_QH_M&Q_Y_+?\`[^K_`(U:HHU"\.WX_P#`*O\`:-C_`,_EO_W]7_&C^T;' M_G\M_P#OZO\`C5JBC4+P[?C_`,`I#4++[0Y^V6^-J\^:OJ?>G_VC8_\`/Y;_ M`/?U?\:M44:A>';\?^`5?[1L?^?RW_[^K_C1_:-C_P`_EO\`]_5_QJU11J%X M=OQ_X!5_M&Q_Y_+?_OZO^-']HV/_`#^6_P#W]7_&K5%&H7AV_'_@%7^T;'_G M\M_^_J_XT?VC8_\`/Y;_`/?U?\:M44:A>';\?^`4AJ%E]H<_;+?&U>?-7U/O M3_[1L?\`G\M_^_J_XU:HHU"\.WX_\`J_VC8_\_EO_P!_5_QH_M&Q_P"?RW_[ M^K_C5JBC4+P[?C_P"K_:-C_S^6__`']7_&C^T;'_`)_+?_OZO^-6J*-0O#M^ M/_`*O]HV/_/Y;_\`?U?\:/[1L?\`G\M_^_J_XU:HHU"\.WX_\`I'4++[0A^V M6^-K<^:OJ/>G_P!HV/\`S^6__?U?\:M44:A>';\?^`5?[1L?^?RW_P"_J_XT M?VC8_P#/Y;_]_5_QJU11J%X=OQ_X!5_M&Q_Y_+?_`+^K_C1_:-C_`,_EO_W] M7_&K5%&H7AV_'_@%7^T;'_G\M_\`OZO^-']HV/\`S^6__?U?\:M44:A>';\? M^`4CJ%E]H0_;+?&UN?-7U'O3_P"T;'_G\M_^_J_XU:HHU"\.WX_\`J_VC8_\ M_EO_`-_5_P`:/[1L?^?RW_[^K_C5JBC4+P[?C_P"K_:-C_S^6_\`W]7_`!H_ MM&Q_Y_+?_OZO^-6J*-0O#M^/_`*O]HV/_/Y;_P#?U?\`&C^T;'_G\M_^_J_X MU:HHU"\.WX_\`I#4++[0Y^V6^-J\^:OJ?>G_`-HV/_/Y;_\`?U?\:M44:A>' M;\?^`5?[1L?^?RW_`._J_P"-']HV/_/Y;_\`?U?\:M44:A>';\?^`5?[1L?^ M?RW_`._J_P"-']HV/_/Y;_\`?U?\:M44:A>';\?^`5?[1L?^?RW_`._J_P"- M']HV/_/Y;_\`?U?\:M44:A>';\?^`10W,%QGR)HY=O78P./RHJ6BF2[=#__9 ` end EX-99.P CODE ETH 19 a_nf69mod5.htm a_nf69mod5.htm

Exhibit A

THE PUTNAM FUNDS

Code of Ethics

Each of The Putnam Funds (the “Funds”) has determined to adopt this Code of Ethics with respect to certain types of personal securities transactions by officers and Trustees of the Funds which might be deemed to create possible conflicts of interest and to establish reporting requirements and enforcement procedures with respect to such transactions.

I. Rules Applicable to Officers and Trustees Affiliated with Putnam Investments Trust or Its Subsidiaries

A. Incorporation of Adviser’s Code of Ethics. The provisions of the Code of Ethics for employees of Putnam Investments Trust and its subsidiaries (the “Putnam Investments Code of Ethics”), which is attached as Appendix A hereto, are hereby incorporated herein as the Funds’ Code of Ethics applicable to officers and Trustees of the Funds who are employees of the Funds or officers, directors or employees of Putnam Investments Trust or its subsidiaries. A violation of the Putnam Investments’ Code of Ethics shall constitute a violation of the Funds’ Code.

B. Reports. Officers and Trustees of each of the Funds who are made subject to the Putnam Investments’ Code of Ethics pursuant to the preceding paragraph shall file the reports required by the Putnam Investments’ Code of Ethics with the Code of Ethics Officer designated therein. A report filed with the Code of Ethics Officer shall be deemed to be filed with each of the Funds of which the reporting individual is an officer or Trustee.

C. Review and Reporting.

(1) The Code of Ethics Officer shall cause the reported personal securities transactions to be compared with completed and contemplated portfolio transactions of each of the Funds to determine whether a violation of this Code may have occurred. Before making any determination that a violation has been committed by any person, the Code of Ethics Officer shall give such person an opportunity to supply additional explanatory material.

(2) If the Code of Ethics Officer determines that a violation of any provision of this Code has or may have occurred, he shall submit his written determination, together with any additional explanatory material, to the Audit and Compliance Committee of the Funds at its next meeting when Code of Ethics matters are discussed.

D. Sanctions. In addition to reporting violations of this Code to the Audit and Compliance Committee of the Funds as provided in Section I-C(2), the Code of Ethics Officer shall also report to such Committee any sanctions imposed with


Exhibit A

respect to such violations. The Committee reserves the right to impose such additional sanctions as it deems appropriate.

II. Rules Applicable to Unaffiliated Trustees

A. Definitions.

(1) “Beneficial ownership” shall be interpreted in the same manner as it would be in determining whether a person is subject to the provisions of Section 16 of the Securities Exchange Act of 1934 and the rules and regulations thereunder.

(2) “Control” means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company.

(3) “Interested Trustee” means a Trustee of a Fund who is an “interested person” of the Fund within the meaning of the Investment Company Act.

(4) “Purchase or sale of a security” includes, among other things, the writing of an option to purchase or sell a security.

(5) “Security” shall have the same meaning as that set forth in Section 2(a)(36) of the Investment Company Act (in effect, all securities) except that it shall not include securities issued by the Government of the United States or an agency thereof, bankers’ acceptances, bank certificates of deposit, commercial paper and high-quality short-term debt investments, including repurchase agreements, and shares of registered open-end investment companies, but shall include any security convertible into or exchangeable for a security.

(6) “Unaffiliated Trustee” means a Trustee who is not made subject to the Putnam Investments Code of Ethics pursuant to Part I hereof.

B. Prohibited Purchases and Sales. No Unaffiliated Trustee of any of the Funds shall purchase or sell, directly or indirectly, any security in which he has, or by reason of such transaction acquires, any direct or indirect beneficial ownership and which to his actual knowledge at the time of such purchase or sale:

(1) is being considered for purchase or sale by the Fund;

(2) is being purchased or sold by the Fund; or

(3) was purchased or sold by the Fund within the most recent five days if such person participated in the recommendation to, or the decision by, Putnam Investment Management to purchase or sell such security for the Fund.

- 2 -


Exhibit A

C. Exempted Transactions. The prohibitions of Section II-B of this Code shall not apply to:

(1) purchases or sales of securities effected in any account over which the Unaffiliated Trustee has no direct or indirect influence or control;

(2) purchases or sales of securities which are non-volitional on the part of either the Unaffiliated Trustee or the Fund;

(3) purchases of securities which are part of an automatic dividend reinvestment plan;

(4) purchases of securities effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired;

(5) purchases or sales of securities other than those exempted in (1) through (4) above which do not cause the Unaffiliated Trustee to gain improperly a personal benefit through his relationship with the Fund and are only remotely potentially harmful to a Fund because they would be very unlikely to affect a highly institutional market, and are previously approved by the Compliance Liaison of the Funds, in consultation with the Code of Ethics Officer, which approval shall be confirmed in writing.

D. Reporting.

(1) Whether or not one of the exemptions listed in Section II-C applies, every Unaffiliated Trustee of a Fund shall file with the Funds’ Compliance Liaison a report containing the information described in Section II-D(2) of this Code with respect to purchases or sales of any security in which such Unaffiliated Trustee has, or by reason of such transaction acquires, any direct or indirect beneficial ownership, if such Trustee, at the time of that transaction, knew or, in the ordinary course of fulfilling his official duties as a Trustee of the Fund, should have known that, during the 15-day period immediately preceding or after the date of the transaction by the Trustee:

(a) such security was or is to be purchased or sold by the Fund or

(b) such security was or is being considered for purchase or sale by the Fund;

provided, however, that an Unaffiliated Trustee shall not be required to make a report with respect to transactions effected for any account over which such person does not have any direct or indirect influence or control.

- 3 -


Exhibit A

(2) Every report shall be made not later than 10 days after the end of the calendar quarter in which the transaction to which the report relates was effected, and shall contain the following information:

(a) The date of the transaction, the title, the number of shares, the interest rate and maturity date (if applicable) and the principal amount of each security involved;

(b) The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);

(c) The price at which the transaction was effected;

(d) The name of the broker, dealer or bank with or through whom the transaction was effected; and

(e) the date that the report is submitted by each Unaffiliated Trustee.

(3) Every report concerning a purchase or sale prohibited under Section II-B hereof with respect to which the reporting person relies upon one of the exemptions provided in Section II-C shall contain a brief statement of the exemption relied upon and the circumstances of the transaction.

(4) Any such report may contain a statement that the report shall not be construed as an admission by the person making such report that he has any direct or indirect beneficial ownership in the security to which the report relates.

(5) Notwithstanding anything to the contrary contained herein, an Unaffiliated Trustee who is an “interested person” of the Funds shall file the reports required by Rule 17j-1(d)(1) under the Investment Company Act of 1940 with the Code of Ethics Officer of Putnam Investments. Such reports shall be reviewed by such Officer as provided in Section I-C(1) and any related violations shall be reported by him to the Audit and Compliance Committee as provided in Section I-C(2). The Committee may impose such additional sanctions as it deems appropriate.

E. Review and Reporting.

(1) The Compliance Liaison of the Funds, in consultation with the Code of Ethics Officer of Putnam Investments, shall cause the reported personal securities transactions that he receives pursuant to Section II-D(1) to be compared with completed and contemplated portfolio transactions of the Funds to determine whether any transaction (“Reviewable Transactions”) listed in Section II-B (disregarding exemptions provided by Section II-C(1) through (5)) may have occurred.

- 4 -


Exhibit A

(2) If the Compliance Liaison determines that a Reviewable Transaction may have occurred, he shall then determine whether a violation of this Code may have occurred, taking into account all the exemptions provided under Section II-C. Before making any determination that a violation has occurred, the Compliance Liaison shall give the person involved an opportunity to supply additional information regarding the transaction in question.

F. Sanctions. If the Compliance Liaison determines that a violation of this Code has occurred, he shall so advise the Funds’ Audit and Compliance Committee, and provide the Committee with a report of the matter, including any additional information supplied by such person. The Committee may impose such sanctions as it deems appropriate.

III. Miscellaneous

A. Amendments to the Putnam Investments’ Code of Ethics. Any amendment to the Putnam Investments’ Code of Ethics shall be deemed an amendment to Section I-A of this Code effective 30 days after written notice of such amendment shall have been received by the Chairman of the Funds, unless the Trustees of the Funds expressly determine that such amendment shall become effective at an earlier or later date or shall not be adopted.

B. Records. The Funds shall maintain records in the manner and to the extent set forth below, which records may be maintained on microfilm under the conditions described in Rule 31a-2(f)(1) under the Investment Company Act and shall be available for examination by representatives of the Securities and Exchange Commission.

(1) A copy of this Code and any other code which is, or at any time within the past five years has been, in effect shall be preserved in an easily accessible place;

(2) A record of any violation of this Code and of any action taken as a result of such violation shall be preserved in an easily accessible place for a period of not less than five years following the end of the fiscal year in which the violation occurs;

(3) A copy of each report made by an officer or Trustee pursuant to this Code shall be preserved for a period of not less than five years from the end of the fiscal year in which it is made, the first two years in an easily accessible place; and

(4) A list of all persons who are, or within the past five years have been, required to make reports pursuant to this Code shall be maintained in an easily accessible place.

- 5 -


Exhibit A

To the extent any record required to be kept by this section is also required to be kept by Putnam Investments pursuant to the Putnam Investments’ Code of Ethics, Putnam Investments shall maintain such record on behalf of the Funds as well.

C. Confidentiality. All reports of securities transactions and any other information filed with any Fund pursuant to this Code shall be treated as confidential, but are subject to review as provided herein and by personnel of the Securities and Exchange Commission.

D. Interpretation of Provisions. The Trustees may from time to time adopt such interpretations of this Code as they deem appropriate.

E. Delegation by Chairman. The Chairman of the Funds may from time to time delegate any or all of his responsibilities under this Code, either generally or as to specific instances, to such officer or Trustee of the Funds as he may designate.

As revised
[July 13, 2007]

- 6 -


EX-99.P CODE ETH 20 a_nf68mod7.htm a_nf68mod7.htm

working@PUTNAM

DECEMBER 2006


Putnam's Code of Ethics

Graphic Omitted: Portrait of Justice Samuel Putnam


Dear Putnam Employee,

Putnam’s Code of Ethics is an essential component of the “fiduciary mindset” and of our commitment to the maintenance of the highest professional standards. Taking care of other people’s money is a serious responsibility, and we need to ensure that our clients’ interests come first. Firms with a strong fiduciary culture are attractive to clients who are looking for superior money management, and Putnam’s Code is designed to ensure that Putnam preserves that trust.

The rules reflected in the Code are good business practices and were not created simply to meet regulatory standards. If, from time to time, the rules seem burdensome, I ask you to put yourself in the place of our shareholders and clients, who have entrusted us to manage their assets so that they may pursue the goals of saving for retirement or funding their children’s education. We have also provided a guide to use as quick reference to some of the Code’s key provisions.

If you have any questions or concerns at any time, however, I encourage you to contact one of the members of our Code of Ethics staff in the Legal and Compliance Department.

Graphic Omitted: Signature of Ed Haldeman


Ed Haldeman
President and Chief Executive Officer


Table of Contents   
 
 
Code of Ethics Overview  1 
Putnam’s Code Of Ethics  4 
Definitions  5 
Section I — Personal Securities Rules for All Employees  8 
A. Pre-clearance  8 
Rule 1: Pre-clearance Requirements  8 
Rule 2: Personal Trading Assistant (PTA) System and Restricted List  8 
Rule 3: Marsh & McLennan (MMC) Securities  11 
B. Prohibited Transactions  12 
Rule 1: Short-Selling Prohibition  12 
Rule 2: Initial Public Offerings Prohibition  13 
Rule 3: Private Placement Pre-approval Requirements  13 
Rule 4: Trading with Material Non-public Information  14 
Rule 5: No Personal Trading with Client Portfolios  14 
Rule 6: Holding Putnam Mutual Fund Shares  15 
Rule 7: Putnam Mutual Fund Employee Restrictions  16 
Rule 8: Special Orders  17 
Rule 9: Excessive Trading  17 
Rule 10: Spread Betting  18 
C. Discouraged Transaction  18 
Rule 1: Naked Options  18 
D. Exempted Transactions  19 
Rule 1: Involuntary Transactions  19 
Rule 2: Special Exemptions  19 
Section II — Additional Special Rules for Personal Securities Transactions  20 
A. Access Persons and Certain Investment Professionals  20 
Rule 1: 90-Day Short-Term Rule  20 
B. Certain Investment Professionals  20 
Rule 2: 7-Day Rule  20 
Rule 3: Blackout Rule  21 
Rule 4: Contra-Trading Rule  22 
Rule 5: No Personal Benefit  23 
Section III — General Rules for All Employees  24 
Rule 1: Compliance with All Laws, Regulations, and Policies  24 
Rule 2: Conflicts of Interest  24 
Rule 3: Gifts and Entertainment Policy  24 
Rule 4: Anti-bribery/Kickback Policy  27 
Rule 5: Political Activities, Contributions, Solicitations, and Lobbying Policy  27 
Rule 6: Confidentiality of Putnam Business Information  29 
Rule 7: Outside Business Affiliations  29 
Rule 8: Role as Trustee or Fiduciary Outside of Putnam Investments  30 
Rule 9: Investment Clubs  30 
Rule 10: Business Negotiations for Putnam Investments  30 
Rule 11: Accurate Records  31 
Rule 12: Family Members’ Conflict Policy  31 


Rule 13: Affiliated Entities  32 
Rule 14: Computer and Network Use Policy  32 
Rule 15: CFA Institute Code of Ethics and Standards of Professional Conduct  33 
Rule 16: Privacy Policy  33 
Rule 17: Anti-money Laundering Policy  34 
Rule 18: Record Retention  34 
Section IV — Reporting Requirements  35 
Reporting of Personal Securities Transactions  35 
Rule 1: Broker Confirmations and Statements  35 
Rule 2: Access Person — Quarterly Transaction Report  36 
Rule 3: Access Person — Initial/Annual Holdings Report  36 
Rule 4: Certifications  36 
Rule 5: Outside Business Affiliations  36 
Rule 6: Reporting of Irregular Activity  37 
Rule 7: Ombudsman  37 
Section V — Education Requirements  38 
Rule 1: Distribution of Code  38 
Rule 2: Annual Training Requirement  38 
Section VI — Compliance and Appeal Procedures  39 
Section VII — Sanctions  41 
Appendix A: Insider Trading Prohibitions Policy Statement  43 
Appendix A: Definitions: Insider Trading  44 
Appendix A — Section I: Rules Concerning Inside Information  45 
Rule 1: Inside Information  45 
Rule 2: Material Non-public Information  45 
Rule 3: Reporting of Material Non-public Information  45 
Appendix A — Section II: Overview of Insider Trading  47 
Appendix B: Policy Statement Regarding Employee Trades in Shares of Putnam Closed-End Funds  51 
Appendix C: Contra-Trading Rule Clearance Form  52 
Appendix D: CFA Institute Code of Ethics and Standards of Professional Conduct  53 
Appendix E: Inducement Policy for Putnam Investments Limited (PIL) Employees  57 


Code of Ethics Overview

This overview of Putnam’s Code of Ethics is not intended to substitute for a careful reading of the complete document. As a condition of continued employment, every Putnam employee is required to read, understand, and comply with all of the provisions of the Code of Ethics. Additionally, employees are expected to comply with the policies and procedures contained within the Putnam Employee Handbook, which is available online at www.ibenefitcenter.com.

It is the personal responsibility of every Putnam employee to avoid any conduct that could create a conflict, or even the appearance of a conflict, with our fund shareholders or other clients, or do anything that could damage or erode the trust our clients place in Putnam and its employees. This is the spirit of the Code of Ethics. In accepting employment at Putnam, every employee accepts the absolute obligation to comply with the letter and the spirit of the Code of Ethics. Failure to comply with the spirit of the Code of Ethics is just as much a violation of the Code as failure to comply with the written rules of the Code.

The rules of the Code cover activities, including personal securities transactions, of Putnam employees, certain family members of employees, and entities (such as corporations, trusts, or partnerships) that employees may be deemed to control or influence.

Sanctions will be imposed for violations of the Code of Ethics. Sanctions may include monetary fines, bans on personal trading, reductions in salary increases or bonuses, disgorgement of trading profits, suspension of employment, and termination of employment. The proceeds resulting from monetary sanctions will be given to a charity chosen by the Code of Ethics Officer.

Insider trading

Putnam employees are forbidden to buy or sell any security while either Putnam or the employee is in possession of material, non-public information (inside information) concerning the security or the issuer. A violation of Putnam’s insider trading policies may result in criminal and civil penalties, including imprisonment, disgorgement of profits, and substantial fines. An employee aware of or in possession of inside information must report it immediately to the Code of Ethics Officer. (See Appendix A: Insider Trading Prohibitions Policy Statement.)

Conflicts of interest

The Code of Ethics imposes limits on activities of Putnam employees where the activity may conflict with the interests of Putnam or its clients. These include limits on the receipt and solicitation of gifts and on service as a fiduciary for a person or entity outside of Putnam. For example, Putnam employees generally may not accept gifts over $100 in total value in a calendar year from any entity, or any supplier of goods or services to Putnam. In addition, a Putnam employee may not serve as a director of any corporation or other entity without prior approval of the Code of Ethics Officer.

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Confidentiality

Information about Putnam clients and Putnam investment activity and research is proprietary and confidential and may not be disclosed or used by any Putnam employee outside Putnam without a valid business purpose.

Putnam mutual funds

All employees and certain family members are subject to a minimum 90-day holding period for shares in Putnam’s open-end mutual funds. This restriction does not apply to Putnam’s Stable Value or money market funds. Except in limited circumstances, all employees must hold Putnam open-end fund shares in accounts at Putnam.

Portfolio managers and others with access to investment information (“Access Persons”) are subject to a minimum one-year holding period for holding Putnam open-end fund shares.

Personal securities trading

Putnam employees may not buy or sell any security for their own account without clearing the proposed transaction in advance. Clearance is facilitated through the Personal Trading Assistant (PTA), the online pre-clearance system for equity securities, and directly with the Code of Ethics Administrator for fixed-income securities and transactions in Putnam closed-end funds. Certain securities are exempted from this pre-clearance requirement (e.g., shares of open-end (not closed-end) mutual funds).

Putnam employees may not buy any securities in an initial public offering or in a private placement, except in limited circumstances when prior written authorization is obtained.

Clearance must be obtained in advance, between 9:00 a.m. and 4:00 p.m. Eastern Time (ET) on the day of the trade. A clearance is valid only for the day it is obtained. Putnam employees are strongly discouraged from engaging in excessive trading for their personal accounts. Employees are prohibited from making more than 10 trades in individual securities each calendar quarter.

Short selling

Putnam employees are prohibited from short selling any security, whether or not it is held in a Putnam client portfolio, although short selling against broad market indexes and “against the box” are permitted. Note, however, that short selling “against the box” or otherwise hedging an investment in shares of Marsh & McLennan (MMC) stock is prohibited.

Confirmations of trading and periodic account statements

All Putnam employees must have their brokers send copies of confirmations and statements of personal securities transactions to the Code of Ethics Administrator. This also applies to members of the immediate family who share the same household as the employee or for whom the employee has investment discretion. Employees must contact the Code of Ethics Administrator to (a) obtain an authorization [407] letter, (b) provide instructions to the broker in establishing a personal brokerage account, and (c) enter a broker account profile into PTA.

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Quarterly and annual reporting

Employees will be notified if the following requirements apply. Upon commencement of employment and thereafter on an annual basis, Access Persons must disclose in the PTA system all personal securities holdings (even those to which pre-clearance may not apply). On a quarterly basis, Access Persons must disclose all their securities transactions in Personal Trading Assistant (PTA) within 15 days after the end of the quarter.

Personal securities transactions by Access Persons
and certain investment professionals

The Code imposes several special restrictions on personal securities transactions by Access Persons and certain investment professionals, which are summarized as follows. (Refer to Section II for details):

· 90-Day Short-Term Rule. No Access Person shall purchase and then sell at a profit, or sell and then repurchase at a lower price, any security or related derivative security within 90 calendar days.

· 7-Day Rule. Before a portfolio manager places an order to buy a security for any portfolio he manages, he must sell from his personal account any such security or related derivative security purchased within the preceding seven calendar days, and disgorge any profit from the sale.

· Blackout Rule. No portfolio manager may sell any security or related derivative security for her personal account until seven calendar days after the most recent purchase of that security or related derivative security for any portfolio she manages. No portfolio manager may buy any security or related derivative security for her personal account until seven calendar days after the most recent sale of that security or related derivative security by any portfolio she manages.

Analysts are also subject to the 7-Day and Blackout rules in connection with a recommendation to buy/outperform or sell/underperform a security.

· Contra-Trading Rule. No portfolio manager may sell out of her personal account any security or related derivative security that is held in any portfolio she manages unless she has received the written approval of an appropriate CIO and the Code of Ethics Officer.

· No portfolio manager may cause a Putnam client to take action for the manager’s personal benefit.

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Putnam’s Code Of Ethics

Putnam Investments is required by law to adopt a Code of Ethics. The purposes of the law are to ensure that companies and their employees comply with all applicable laws and to prevent abuses in the investment advisory business that can arise when conflicts of interest exist between the employees of an investment advisor and its clients. By adopting and enforcing a Code of Ethics, we strengthen the trust and confidence reposed in us by demonstrating that at Putnam, client interests come first.

The Code that follows represents a balancing of important interests. On the one hand, as a registered investment advisor, Putnam owes a duty of undivided loyalty to its clients, and must avoid even the appearance of a conflict that might be perceived as abusing the trust they have placed in Putnam. On the other hand, Putnam does not want to prevent conscientious professionals from investing for their own account where conflicts do not exist or that are immaterial to investment decisions affecting Putnam clients.

When conflicting interests cannot be reconciled, the Code makes clear that, first and foremost, Putnam employees owe a fiduciary duty to Putnam clients. In most cases, this means that the affected employee will be required to forego conflicting personal securities transactions. In some cases, personal investments will be permitted, but only in a manner, which, because of the circumstances and applicable controls, cannot reasonably be perceived as adversely affecting Putnam client portfolios or taking unfair advantage of the relationship Putnam employees have to Putnam clients.

The Code contains specific rules prohibiting defined types of conflicts. Because every potential conflict cannot be anticipated, the Code also contains general provisions prohibiting conflict situations. In view of these general provisions, it is critical that any individual who is in doubt about the applicability of the Code in a given situation seeks a determination from the Code of Ethics Officer about the propriety of the conduct in advance. The procedures for obtaining such a determination are described in Section VI of the Code.

It is critical that the Code be strictly observed. Not only will adherence to the Code ensure that Putnam renders the best possible service to its clients, it will help to ensure that no individual is liable for violations of law.

It should be emphasized that adherence to this policy is a fundamental condition of employment at Putnam. Every employee is expected to adhere to the requirements of this Code of Ethics despite any inconvenience that may be involved. Any employee failing to do so may be subject to disciplinary action, including financial penalties and termination of employment, as determined by the Code of Ethics Officer, the Code of Ethics Oversight Committee, or the Chief Executive Officer of Putnam Investments.

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Definitions

The words below are defined specifically for the purpose of Putnam’s Code of Ethics.

Access Persons

Each employee will be informed if he or she is considered an Access Person. The Code of Ethics Officer maintains a list of all Access Persons, categorized as follows:

· All employees of Putnam’s Investment Division

· All employees of Global Operations Services

· All employees of Putnam Investments Limited (PIL) and those based in Europe

· All employees who have access to My Putnam (unless access is limited to the Wall Street Journal via Factiva)

· All members of Putnam’s Executive Board

· Senior Managing Directors and Managing Directors of the Transfer Agency

· Senior Managing Directors and Managing Directors of Enterprise Services

· Senior Managing Directors and Managing Directors of Putnam Retail Management (PRM) and Putnam Global Investment Management (PGIM)

· All directors and officers of a registered investment advisor affiliate, i.e., Putnam Investment Management, LLC, (PIM), The Putnam Advisory Company, LLC (PAC), or Putnam Investments Limited (PIL)

· Employees who have systems access to non-public information about any client’s purchase or sale of securities or to information regarding recommendations with respect to such purchases or sales

· Employees who have access to non-public information regarding the portfolio holdings of any Putnam-advised or sub-advised mutual fund

· Others as defined by the Legal and Compliance Department

Closed-end fund A fund with a fixed number of shares outstanding, and that does not redeem shares the way a typical mutual fund does. Closed-end funds typically trade like stocks on exchange.

Code of Ethics Administrator The individual designated by the Code of Ethics Officer to assume responsibility for day-to-day, nondiscretionary administration of this Code. The current Code of Ethics Administrator is Laura Rose, who can be reached at extension 11104.

Code of Ethics Officer The Putnam officer who has been assigned the responsibility of enforcing and interpreting this Code. The Code of Ethics Officer shall be the Chief Compliance Officer or such other person as is designated by the Chief Executive Officer of Putnam Investments. If the Code of Ethics Officer is unavailable, the Deputy Code of Ethics Officer shall act in his stead. The Code of Ethics Officer is Tony Ruys de Perez. The Deputy Code of Ethics Officer is Kathleen Griffin.

Code of Ethics Oversight Committee Has oversight responsibility for administering the Code of Ethics. Members include the Code of Ethics Officer and other members of Putnam’s senior management approved by the Chief Executive Officer of Putnam.

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Considered Securities Limited Sale Rule This rule permits a sale (but not a purchase) of a security up to 250 shares per day if the market capitalization of the security is $500 million to $5 billion.

Discretionary Account An account for which the holder gives his/her broker or investment advisor (but not an immediate family member) complete authority to make management decisions to buy and sell securities (also called controlled account or managed account).

Exchange Traded Fund (ETF) A fund that tracks an index, but can be traded like a stock. ETFs always bundle together the securities that are in an index. Examples include (but are not limited to): SPDRs, WEBs, QQQQs, iShares, and HLDRs.

NOTE:

Excluded from pre-clearance but not from reporting requirements are: exchange-traded index funds (ETFs) containing a portfolio of securities of 25 or more issuers (e.g., SPDRs, WEBs, QQQQs, iShares, and HLDRs), and any option on a broad-based market index or an exchange-traded futures contract or option. Country funds, as well as other funds that are not tied to an index, are considered closed-end funds and are subject to pre-clearance and reporting requirements. (See Section I.A, Rule 1: Pre-clearance Requirements for more information.)

Immediate family Spouse, domestic partner, minor children, or other relatives living in the same household as the Putnam employee. All pre-clearance and reporting rules apply to “immediate family members.”

Narrow-based derivative A future, swap, put or call option, or similar derivative instrument whose return is determined by reference to fewer than 25 underlying issuers. Single stock futures and ETFs based on less than 25 issuers are included.

Personal Trading Assistant (PTA) The Personal Trading Assistant (PTA) is an internet application designed for employees to manage personal trading activities, such as pre-clearance, reporting, and certifications, in accordance with regulatory requirements and Putnam’s Code of Ethics.

Policy statements The Insider Trading Prohibitions Policy Statement is attached to the Code as Appendix A and the Policy Statement Regarding Employee Trades in Shares of Putnam Closed-End Funds is attached to the Code as Appendix B.

Private placement Any offering of a security not offered to the public and not requiring registration with the relevant securities authorities.

Purchase or sale of a security Any acquisition or transfer of any interest in the security for direct or indirect consideration; this includes the writing of an option. This definition includes any transfer of a security by an employee as a gift to an individual or a charity.

Putnam Any or all of Putnam, LLC and its subsidiaries, any one of which shall be a Putnam company.

Putnam client Any of the Putnam mutual funds, or any advisor, trust, or other client for whom Putnam manages money.

Putnam employee (or employee) Any employee of Putnam.

Restricted list The list established in accordance with Rule 1 of Section I.A.

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Security The following instruments are defined as “securities” and require pre-clearance:

· Any type or class of equity or debt security, e.g., corporate or municipal bonds.

· Any rights relating to a security, such as warrants and convertible securities

· Closed-end funds

· Any narrow-based derivative, e.g., a put or call option on a single security Pre-clearance and reporting is not required (unless otherwise noted) for:

· Currencies, Treasuries (T-bills), and direct and indirect obligations of the U.S. government and its agencies

· Direct and indirect obligations of any member country in the Organization for Economic Co-Operation and Development (OECD), commercial paper, certificates of deposit (CDs), repurchase agreements, bankers’ acceptances, and other money market instruments

Selling Short The sale of a security that the investor does not own in order to take advantage of an anticipated decline in the price of the security. In order to sell short, the investor must borrow the security from his broker in order to make delivery to the buyer.

Selling Short Against the Box A short sale where the investor owns the security, but does not want to use the shares for delivery, so he borrows them from the brokerage firm.

Transaction for a personal account Securities transactions: (a) for the personal account of any employee; (b) for the account of a member of the immediate family of any employee; (c) for the account of a partnership in which a Putnam employee or immediate family member is a general partner or a partner with investment discretion; (d) for the account of a trust in which a Putnam employee or immediate family member is a trustee with investment discretion; (e) for the account of a closely held corporation in which a Putnam employee or immediate family member holds shares and for which he has investment discretion; and (f ) for any account other than a Putnam client account, which receives investment advice of any sort from the employee or immediate family member, or as to which the employee or immediate family member has investment discretion.

Rule of construction regarding time periods Unless the context indicates otherwise, time periods used in the Code of Ethics shall be measured inclusively, i.e., beginning on the date from which the measurement is made.

EXCEPTIONS

Unless the context indicates otherwise, there will be no exceptions to the rules.

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Section I — Personal Securities Rules for All Employees

A. Pre-clearance

Rule 1: Pre-clearance Requirements

Pre-clearance is required for the following securities:

· MMC Stock

· Any type or class of equity or debt security, including corporate and municipal bonds

· Any rights relating to a security, such as warrants and convertible securities

· Closed-end funds – including Putnam closed-end funds. Country funds as well as other funds that are not tied to an index are considered closed-end funds and are subject to pre-clearance and reporting requirements, e.g., India Fund (INF), Morgan Stanley Asia Pacific Fund (APF), Central Europe and Russia Fund (CEE). Certain closed-end funds which sometimes are referred to as closed-end ETFs, such as Blackrock (BKK), Western Asset Emerging (ESD), or Eaton Vance Muni Trust (EVN), are also subject to pre-clearance and reporting requirements.

· Any narrow-based derivative, e.g., a put or call option on a single security

· Any security donated as a gift to an individual or a charity

Pre-clearance is not required for:

· Open-end mutual funds

· Currencies, Treasuries (T-bills), and direct and indirect obligations of the U.S. government and its agencies

· Direct and indirect obligations of any member of the country of the Organization for Economic Co-Operation and Development (OECD), commercial paper, certificates of deposit (CDs), repurchase agreements, bankers’ acceptances, and other money market instruments

The following are excluded from pre-clearance but not from reporting requirements:

· Exchange-traded index funds (ETFs) containing a portfolio of securities of 25 or more issuers (e.g., SPDRs, WEBs, QQQQs, iShares, and HLDRs), and any option on a broad-based market index or an exchange-traded futures contract or option thereon.

Rule 2: Personal Trading Assistant (PTA) System and Restricted List

No Putnam employee shall purchase or sell for his personal account any security requiring pre-clearance under Rule 1 without prior clearance obtained through procedures set forth by the Code of Ethics Officer. Equity securities are pre-cleared through the PTA pre-clearance system (under the @Putnam tab at www.ibenefitcenter.com). Fixed-income securities must be pre-cleared by calling the Code of Ethics Administrator. There are special rules for trading in Putnam closed-end funds. (See Appendix B.) Subject to the limited exceptions below, no clearance will be granted for securities appearing on the Restricted List. Securities will be placed on the Restricted List in the following circumstances:

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(a) When orders to purchase or sell such security have been entered for any Putnam client or the security is being actively considered for purchase for any Putnam client, unless the security is a non-convertible investment-grade (rated at least BBB by S&P or Baa by Moody’s) fixed-income investment;

(b) When such a security is a voting security of a corporation in the banking, savings and loan, communications, public utilities, or gaming (i.e., casinos) industries, if holdings of Putnam clients in that corporation exceed 7%;

(c) When, in the judgment of the Code of Ethics Officer, other circumstances warrant restricting personal transactions of Putnam employees in a particular security;

(d) When required under the Policy Statement Concerning Insider Trading Prohibitions. (See Appendix A.)

IMPLEMENTATION

An employee wishing to trade any equity securities for his personal account shall first obtain clearance through the Personal Trading Assistant (PTA) system. The system may be accessed online either at www.ibenefitcenter.com by clicking on “Employee Essentials” under the @Putnam tab and selecting “Access PTA,” or at iworkplace. Employees may pre-clear securities between 9:00 a.m. and 4:00 p.m. ET. Requests to make personal securities transactions may not be made using the system or presented to the Code of Ethics Administrator before 9:00 a.m. or after 4:00 p.m. ET.

Pre-clearance must be made by calling the Code of Ethics Administrator for fixed-income (municipal and corporate bonds, including non-convertible investment-grade bonds rated BBB by S&P or Baa by Moody’s).

The PTA system will inform the employee whether the security may be traded and whether trading in the security is subject to the “Large Cap” limitation or the “Considered List –Limited Sale Exception.” The response of the pre-clearance system as to whether a security appears on the Restricted List and, if so, whether it is eligible for the exceptions set forth after this Rule shall be final, unless the employee appeals to the Code of Ethics Officer, using the procedure described in Section VI, regarding the request to trade a particular security.

A clearance is only valid for trading on the day it is obtained. Trades in any security by employees in Asian or European offices of Putnam or trades by any employee in securities listed on Asian or European stock exchanges, however, may be executed within one business day after pre-clearance is obtained.

If a security is not on the Restricted List, other classes of securities of the same issuer (e.g., preferred or convertible preferred stock) may be on the Restricted List. It is the employee’s responsibility to identify with particularity the class of securities for which permission is being sought for a personal investment.

If the PTA system does not recognize a security, or if an employee is unable to use the system or has any questions with respect to the system or pre-clearance, the employee may consult the Code of Ethics Administrator. The Code of Ethics Administrator shall not have authority to answer any questions about a security other than whether trading is permitted. The response of the Code of Ethics Administrator as to whether a security appears on the Restricted List and, if so, whether it is eligible for any applicable exceptions set forth after this Rule shall be final, unless the employee appeals to the Code of Ethics Officer, using the procedure described in Section VI, regarding the request to trade a particular security.

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EXCEPTIONS

A. Large Cap Exemption. If a security appearing on the Restricted List is an equity security for which the issuer has a market capitalization (defined as outstanding shares multiplied by current price per share) of over $5 billion, then upon clearance approval, the Putnam employee may not trade more than 1,000 shares of the security for the day.

B. Considered List – Limited Sale Rule. As the Putnam list of considered securities is broad and inclusive, employees will be permitted to make limited sales (250 shares) but not purchases of securities held in their accounts if trading is blocked solely by the Considered List of securities.

C. Pre-clearing Transactions Effected by Share Subscription. Trades of securities made by subscription rather than on an exchange are limited to issuers having a market capitalization of $5 billion or more and are subject to the 1,000 share limit. The following are procedures to comply with Rules 1 and 2 when effecting a purchase or sale of shares by subscription:

· The Putnam employee must pre-clear the trade on the day he or she submits a subscription to the issuer rather than on the actual day of the trade since the actual day of the trade typically will not be known to the employee who submits the subscription. The employee must contact the Code of Ethics Administrator at the time of pre-clearance and will be told whether the purchase is permitted (in the case of a corporation having a market capitalization of $5 billion or more) or not permitted (in the case of a smaller capitalization issuer).

· The subscription for any purchase or sale of shares must be reported on the Access Person’s quarterly personal securities transaction report, noting the trade was accomplished by subscription.

· Because no brokers are involved in the transaction, the confirmation requirement will be waived for these transactions, although the Putnam employee must provide the Legal and Compliance Department with any transaction summaries or statements sent by the issuer.

D. Trades in Approved Discretionary Brokerage Accounts. A transaction does not need to be pre-cleared if it takes place in an account that the Code of Ethics Officer has approved in writing as exempt from the pre-clearance requirement. In the sole discretion of the Code of Ethics Officer, accounts that will be considered for exclusion from the pre-clearance requirement are only those for which an employee’s securities broker or investment advisor has complete discretion (a discretionary account). Employees wishing to seek such an exemption must send a written request to the Code of Ethics Administrator and meet the following conditions: (i) the employee certifies annually in writing that the employee has no influence over the transactions in the discretionary account and is not aware of the transactions in the discretionary account prior to their execution; (ii) the compliance department of the emp loyee’s broker or investment advisor certifies annually in writing that the employee has no influence over the transactions in the discretionary account and is not aware of the transactions in the discretionary account prior to their execution; and (iii) each calendar quarter, the broker or investment advisor sends Putnam’s Code of Ethics Administrator copies of each quarterly statement for the discretionary account.

COMMENTS

· Pre-clearance. Subpart (a) of Rule 2 is designed to avoid the conflict of interest that might occur when an employee trades for his personal account a security that currently is being

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traded or is likely to be traded for a Putnam client. Such conflicts arise, for example, when the trades of an employee might have an impact on the price or availability of a particular security, or when the trades of the client might have an impact on price to the benefit of the employee. Thus, exceptions involve situations where the trade of a Putnam employee is unlikely to have an impact on the market.

· Regulatory Limits. Owing to a variety of federal statutes and regulations in the banking, savings and loan, communications, and gaming industries, it is critical that accounts of Putnam clients do not hold more than 10% of the voting securities (7% for public utilities) of any issuer in those industries. Subpart (b) of this rule limits employees’ personal trades to sales of shares in these areas because of the risk that the personal holdings of Putnam employees may be aggregated with Putnam holdings. Putnam’s so-called 7% rule will allow the regulatory limits to be observed.

· Options. For the purposes of this Code, options are treated like the underlying security. Thus, an employee may not purchase, sell, or “write” option contracts for a security that is on the Restricted List. The automatic exercise or assignment of an options contract (the purchase or writing of which was previously pre-cleared) does not have to be pre-cleared. Note, however, that the purchase or sale of securities obtained through the exercise of options must be pre-cleared.

· Involuntary Transactions. Involuntary personal securities transactions are exempted from the Code. Special attention should be paid to this exemption. (See Section I.D.)

· Tender Offers. This Rule does not prohibit an employee from tendering securities from his personal account in response to any and all tender offers, even if Putnam clients are also tendering securities. If tendering a security in response to a “partial tender offer,” an employee must pre-clear the trade on the day she submits instructions to her broker, and she will be prohibited from trading if Putnam clients are also tendering the same security.

· Gifts of Securities. Pre-clearance is required for securities donated as a gift to a charitable organization or to an individual. Employees are required to provide a gift transfer certificate of the transaction (if produced) to the Code of Ethics Administrator along with an account statement reflecting the gift transaction. Receipt of a securities gift should be reported on the Access Person’s Annual Holdings Report. Employees who receive a securities gift must report the gift to the Code of Ethics Administrator to make the necessary adjustments in PTA and Access Persons must disclose this holding in PTA.

Rule 3: Marsh & McLennan (MMC) Securities

All employees trading in MMC securities must be pre-cleared in the PTA system. MMC securities include stock, options, and any other securities such as debt. Trades in the MMC Employee Stock Purchase Plan and in all Putnam and MMC employee benefit and bonus plans, i.e., reallocating, rebalancing, or exchanging in and out of the 401(k)/Profit/Bonus Plan, etc., are included in this requirement.

Pre-clearance of MMC is required when, for example, you:

· Sell MMC out of the Stock Purchase Plan

· Exchange MMC shares into or out of your 401(k)/Profit Sharing/Bonus Plan

· Reallocate your Putnam fund choices, which results in a buy or sell of MMC from your 401(k)/Profit Sharing/Bonus Plan

· Trade in MMC securities in other accounts held outside Putnam

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Pre-clearance is not required when you:

· Increase/decrease the amount of money that is automatically deducted (systematic plan) from your paycheck and used to purchase MMC shares in your 401(k)/Profit Sharing/Stock Purchase Plan

· Maintain standing instructions to have money deducted (automatic payroll deductions) and want to increase or decrease the percentage allocated, or instruct to reduce it to “0” in your 401(k)/Profit Sharing/Stock Purchase Plan

· Apply for a loan and/or make withdrawals of the stock from your 401(k)/Profit Sharing Plan

COMMENTS

All transactions of MMC require pre-clearance in PTA before you contact your broker to trade shares in an outside brokerage account or before contacting Citigroup Smith Barney to sell shares out of your Stock Purchase Plan. Also, if MMC is one of your choices in the 401(k)/Profit Sharing Plan, all exchanges in/out must be cleared. Even though clearance is not required for Putnam mutual funds, if you do not wish to include MMC shares when rebalancing any of your fund choices, which will result in an automatic exchange of your MMC shares, you must remember to exclude MMC shares prior to submitting your changes. If you are investing online, check the box to exclude MMC; or if you are investing by telephone with a Putnam representative, ask to exclude MMC before rebalancing the funds.

Additional MMC-related policies:

· MMC securities may from time to time be restricted due to the federal laws that govern trading on inside information. All transactions are prohibited during this period.

· Members of the Executive Board of Directors and members of the Chief Financial Officer’s senior staff may not trade in MMC securities during the period between the calendar quarter-end and the public announcement of MMC’s earnings for the quarter.

· Transactions in MMC securities that are held in Putnam’s internal plans are not subject to the 90-Day Short-Term Rule (applicable to Access Persons only) or to the holding periods that apply to Putnam mutual funds.

B. Prohibited Transactions

Rule 1: Short-Selling Prohibition

Putnam employees are prohibited from short selling any security in their own account, whether or not the security is held in a Putnam client portfolio. Employees are prohibited from hedging investments made in securities of MMC.

EXCEPTION

Short selling against broad market indexes (such as the Dow Jones Industrial Average, the NASDAQ index, and the S&P 100 and 500 indexes) and short selling against the box are permitted (except that short selling shares of MMC against the box is not permitted).

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Rule 2: Initial Public Offerings Prohibition

No Putnam employee shall purchase any security for her personal account in an initial public offering. Employees are also restricted from participating in Initial Public Offerings via a Discretionary Account.

EXCEPTION

Pre-existing Status Exception. A Putnam employee shall not be barred by this Rule or by Rule 2(a) of Section I.A. from purchasing securities for her personal account in connection with an initial public offering of securities by a bank or insurance company when the employee’s status as a policyholder or depositor entitles her to purchase securities on terms more favorable than those available to the general public, in connection with the bank’s conversion from mutual or cooperative form to stock form, or the insurance company’s conversion from mutual to stock form, provided that the employee has had the status entitling her to purchase on favorable terms for at least two years. This exception is only available with respect to the value of bank deposits or insurance policies that an employee owns before the announcement of the initial public offering. This exception does not apply, however, if the security appears on th e Restricted List in the circumstances set forth in subparts (b), (c), or (d) of Section I.A., Rule 2.

COMMENTS

· The purpose of this Rule is twofold. First, it is designed to prevent a conflict of interest between Putnam employees and Putnam clients who might be in competition for the same securities in a limited public offering. Second, the Rule is designed to prevent Putnam employees from being subject to undue influence as a result of receiving favors in the form of special allocations of securities in a public offering from broker-dealers who seek to do business with Putnam.

· Purchases of securities in the immediate after-market of an initial public offering are not prohibited, provided they do not constitute violations of other provisions of the Code of Ethics. For example, participation in the immediate after-market as a result of a special allocation from an underwriting group would be prohibited by Section III, Rule 3, concerning gifts and other favors.

· Public offerings subsequent to initial public offerings are not deemed to create the same potential for competition between Putnam employees and Putnam clients because of the pre-existence of a market for the securities.

Rule 3: Private Placement Pre-approval Requirements

No Putnam employee shall purchase any security for his personal account in a limited private offering or private placement without prior approval of the Code of Ethics Officer. Privately placed limited partnerships and funds such as private equity or hedge funds are specifically included in this Rule.

COMMENTS

· The purpose of this Rule is to prevent a Putnam employee from investing in securities for his own account pursuant to a limited private offering that could compete with or disadvantage Putnam clients, and to eliminate any incentives Putnam employees might have to favor those who can affect access to limited offerings.

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· Exemptions to the prohibition will generally not be granted where the proposed investment relates directly or indirectly to investments by a Putnam client, or where individuals involved in the offering (including the issuers, broker, underwriter, placement agent, promoter, fellow investors, and affiliates of the foregoing) have any prior or existing business relationship with Putnam or a Putnam employee, or where the Putnam employee believes that such individuals may expect to have a future business relationship with Putnam or a Putnam employee.

· An exemption may be granted, subject to reviewing all the facts and circumstances, for investments in:

(a) Pooled investment funds, including hedge funds, subject to the condition that an employee investing in a pooled investment fund would have no involvement in the activities or decision-making process of the fund except for financial reports made in the ordinary course of the fund’s business, and subject to the condition that the hedge fund does not invest significantly in registered investment companies.

(b) Private placements where the investment cannot relate, or be expected to relate, directly or indirectly to Putnam or investments by a Putnam client.

· Employees who apply for an exemption will be expected to disclose to the Code of Ethics Officer in writing all facts and relationships relating to the proposed investment.

· Applications to invest in private placements will be reviewed by the Code of Ethics Oversight Committee. This review will take into account, among other factors, the considerations described in the preceding comments.

Rule 4: Trading with Material Non-public Information

No Putnam employee shall purchase or sell any security for her personal account or for any Putnam client account while in possession of material, non-public information concerning the security or the issuer. Please read Appendix A, Policy Statement Concerning Insider Trading Prohibitions.

Rule 5: No Personal Trading with Client Portfolios

No Putnam employee shall purchase from or sell to a Putnam client any securities or other property for his personal account, nor engage in any personal transaction to which a Putnam client is known to be a party, or in which the transaction may have a significant relationship to any action taken by a Putnam client.

IMPLEMENTATION

It is the responsibility of every Putnam employee to make inquiry prior to any personal transaction in order to satisfy himself that the requirements of this Rule have been met.

COMMENT

This Rule is required by federal law. It does not prohibit a Putnam employee from purchasing any shares of an open-end Putnam fund. The policy with respect to employee trading in Putnam closed-end funds is attached as Appendix B.

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Rule 6: Holding Putnam Mutual Fund Shares

Putnam employees may not hold shares of Putnam open-end U.S. mutual funds other than through accounts maintained at Putnam. Employees placing purchase orders in shares of Putnam open-end funds must place such orders through Putnam and not through an outside broker or other intermediary. Employees redeeming or exchanging shares of Putnam open-end funds must place those orders through Putnam and not through an outside broker or other intermediary. For transfer instructions, contact a Putnam Preferred Client Services (PCS) representative at 1-800-634-1590.

REMINDER

For purposes of this Rule, “employee” includes:

· Members of the immediate family of a Putnam employee who share the same household as the employee or for whom the Putnam employee has investment discretion (family member);

· Any trust in which a Putnam employee or family member is a trustee with investment discretion and in which such Putnam employee or any family members are collectively beneficiaries;

· Any closely held entity (such as a partnership, limited liability company, or corporation) in which a Putnam employee and his or her family members hold a controlling interest and with respect to which they have investment discretion; and

· Any account (including any retirement, pension, deferred compensation, or similar account) in which a Putnam employee or family member has a substantial economic interest and over which the Putnam employee or family member exercises investment discretion.

COMMENTS

These requirements also apply to:

· Self-directed IRA accounts holding Putnam fund shares;

· Variable insurance accounts that invest in Putnam Variable Trusts such as the Putnam/Hartford Capital Manager Programs. Employees must designate Putnam Retail Management as the broker of record for all such accounts and disclose these holdings in the PTA system.

NOTE:

Employees are required to seek permission from the Code of Ethics Officer to hold Putnam funds in variable trusts outside of Putnam.

EXCEPTION

Retirement, pension, deferred compensation, and similar accounts that cannot be legally transferred to Putnam are not subject to the requirement. For example, a spouse of a Putnam employee may have a 401(k)/Profit Sharing Plan with her employer that invests in Putnam funds. Any employee who continues to hold shares in open-end Putnam funds outside of Putnam must notify the Code of Ethics Officer in writing of the account information, provide the reason why the account cannot be transferred to Putnam, and arrange for a quarterly statement of transactions in such account to be sent to the Code of Ethics Administrator.

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Rule 7: Putnam Mutual Fund Employee Restrictions

(a) Employees (defined in Rule 6) may not, within a 90-calendar day period, make a purchase followed by a sale or a sale followed by a purchase of shares of the same open-end Putnam mutual fund, even if the transactions occur in different accounts.

(b) Employees who are Access Persons may not, within a one-year period, make a purchase followed by a sale or a sale followed by a purchase of shares of the same open-end Putnam mutual fund or of shares of any U.S. registered mutual fund to which Putnam acts as advisor or sub-advisor, even if the transactions occur in different accounts.

(c) All employees are required to link their immediate family members’ accounts holding Putnam mutual funds to comply with the disclosure requirements. These accounts are also subject to the 90-day and one-year rules. To link these accounts, log on to www.ibenefitcenter.com, click on @Putnam, and select Employee Essentials/Linked Mutual Fund Accounts. You are required to confirm the information and will be prompted to add any accounts that you or your family members have that should be linked or delink accounts that you or your family members have closed.

COMMENTS

This Rule applies to transactions by a Putnam employee and family members as defined in the Code in any type of account including retail, IRA, variable annuity, and 401(k)/Profit Sharing Plan, as well as any deferred compensation accounts, and the restrictions apply across all accounts maintained by an employee and family members:

· An employee who buys shares of an open-end Putnam mutual fund may not sell any shares of the same mutual fund until 90 calendar days have passed, or one year for Access Persons.

· Example: If an employee buys shares of a Putnam fund on Day 1 for a retail account and then sells (by exchange) shares of the same fund for his or her 401(k)/Profit Sharing Plan accounts on Day 85, the employee has violated the rule.

· Similarly, an employee who sells shares of an open-end Putnam mutual fund may not buy any shares of the same mutual fund until 90 calendar days have passed, or one year for Access Persons.

· The purpose of these blackout period restrictions is to prevent any market timing or the appearance of any market timing activity.

· This Rule applies to transactions by a Putnam employee and his or her family members as defined in the Code in any type of account including retail, IRA, variable annuity, and 401(k)/Profit Sharing Plan, as well as any deferred compensation accounts.

· The minimum sanction for an initial violation of the blackout period will be disgorgement of any profit made on the transaction. Additional sanctions may apply, including termination of employment.

EXCEPTIONS

A. The restrictions do not apply to Putnam’s money market funds and Putnam Stable Value Fund.

B. 401(k)/Profit Sharing Plan Contributions and Payroll Deductions: The 90-day or one year restriction is not triggered by the initial allocation of regular employee or employer contributions or forfeitures to an employee’s account under the terms of Putnam employee

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benefit plans or a Putnam payroll-deduction direct-investment program; later exchanges of these contributions will be subject to either the 90-day or one-year blackout period.

C. Systematic Programs: The restrictions do not apply with respect to shares sold or acquired as a result of participation in a systematic program for contributions, withdrawals, or exchanges, provided that an election to participate in any such program and the participation dates of the program are not changed more often than quarterly after the program is elected by the employee. Access Persons may elect a quarterly or semiannual rebalancing program although it may only be changed on an annual basis.

D. Employee Benefit Plan Withdrawals and Distributions: No restriction applies with respect to shares sold for withdrawals, loans, or distributions under the terms of Putnam employee benefit plans.

E. Dividends, Distributions, Mergers, and Share Class Conversions: No restriction applies with respect to the acquisition of shares as a result of reinvestment of dividends, distributions, mergers, conversions of share classes, or other similar actions. Subsequent transactions with respect to the shares will be covered.

F. College Savings Program: Redemptions from an employee’s college savings 529 plan to pay for qualified educational expenses for the beneficiary of the account (and redemptions due to death or disability) are exempt from the 90-day and one-year restrictions applicable to Putnam mutual funds. Qualified redemptions include:

· Tuition

· School fees

· Books

· Supplies and equipment required for enrollment

· Room and board

· Death

· Disability

G. Special Situations: In special situations as determined from time to time by Putnam’s Code of Ethics Oversight Committee, exceptions may by granted to the blackout periods as a result of death, disability, or special circumstances (such as personal hardship).

Employees may request an exception by submitting a written request to the Code of Ethics Officer.

Rule 8: Special Orders

Good Until Canceled (GTC) Limit Orders are prohibited.

Any order not executed on the day of pre-clearance must be resubmitted for pre-clearance before being executed on a subsequent day. “Good until canceled limit” orders are prohibited because of the potential failure to pre-clear.

EXCEPTION

Same-day limit orders are permitted.

Rule 9: Excessive Trading

Putnam employees are strongly discouraged from engaging in excessive trading for their personal accounts. Employees are prohibited from making more than 10 trades in

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individual securities in any given quarter. For the purpose of this rule, an employee is prohibited from engaging in more than a total of 10 trades in all accounts the employee may hold (including those accounts held by his immediate family members), not 10 trades per individual account.

EXCEPTION

For the purpose of calculating the number of trades in any quarter, trading the same security in the same direction (buy or sell) over a period of five business days will be counted as one transaction.

Trades in ETFs containing 25 or more issuers and trades of MMC stock in Putnam internal plans are not counted towards the 10 trade limit.

COMMENT

Although a Putnam employee’s excessive trading may not itself constitute a conflict of interest with Putnam clients, Putnam believes that its clients’ confidence in Putnam will be enhanced and that the likelihood of Putnam achieving better investment skills results for its clients over the long term will be increased if Putnam employees rely on their investment skills, as opposed to their trading skills in transactions for their own account. Moreover, excessive trading by a Putnam employee for his or her own account diverts an employee’s attention from the responsibility of servicing Putnam clients, and increases the possibilities for transactions that are in actual or apparent conflict with Putnam client transactions. Short-term trading is strongly discouraged, and employees are encouraged to take a long-term view.

Rule 10: Spread Betting

PIL employees may not enter into any spread betting contracts on financial instruments.

COMMENT

Spread betting provides exposure to the movement of an index or security price without holding any form of certificate.

This Rule guards against the danger that a Putnam employee may be in violation of the Code of Ethics by virtue of his spread betting transactions. Please note that this restriction also applies to the spouse of a Putnam employee and any relatives of a Putnam employee living in the same household as the employee, as their transactions are covered by the Code of Ethics. (See page 2.)

C. Discouraged Transaction

Rule 1: Naked Options

Putnam employees are strongly discouraged from engaging in writing (selling) naked options for their personal accounts.

Naked option transactions are particularly dangerous, because a Putnam employee may be prevented by the restrictions in this Code of Ethics from covering the naked option at the appropriate time. All employees should keep in mind the limitations on their personal securities trading imposed by this Code when contemplating such an investment strategy.

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Engaging in naked options transactions on the basis of material, non-public information is prohibited. (See Appendix A, Policy Statement Concerning Insider Trading Prohibitions.)

D. Exempted Transactions

Rule 1: Involuntary Transactions

Transactions that are involuntary on the part of a Putnam employee are exempt from the prohibitions set forth in Sections I.A., I.B., and I.C.

COMMENTS

This exemption is based on categories of conduct that the Securities and Exchange Commission does not consider “abusive.”

· Examples of involuntary personal securities transactions include:

(a) Sales out of the brokerage account of a Putnam employee as a result of a bona fide margin call, provided that withdrawal of collateral by the Putnam employee within the ten days previous to the margin call was not a contributing factor to the margin call;

(b) Purchases arising out of an automatic dividend reinvestment program of an issuer of a publicly traded security.

· Transactions by a trust in which the Putnam employee (or a member of his immediate family) holds a beneficial interest, but for which the employee has no direct or indirect influence or control with respect to the selection of investments, are involuntary transactions. In addition, these transactions do not fall within the definition of “personal securities transactions.” (See Appendix A, Definitions.)

· A good-faith belief on the part of the employee that a transaction was involuntary will not be a defense to a violation of the Code of Ethics. In the event of confusion as to whether a particular transaction is involuntary, the burden is on the employee to seek a prior written determination of the applicability of this exemption. The procedures for obtaining such a determination appear in Section VI.

Rule 2: Special Exemptions

Transactions that have been determined, in writing by the Code of Ethics Officer before the transaction occurs, to be no more than remotely harmful to Putnam clients because the transaction would be very unlikely to affect a highly institutional market, or because the transaction is clearly not related economically to the securities to be purchased, sold, or held by a Putnam client, are exempt from the prohibitions set forth in Sections I.A., I.B., and I.C.

IMPLEMENTATION

An employee may seek an ad hoc exemption under this Rule by following the procedures in Section VI.

COMMENTS

· This exemption is also based upon categories of conduct that the Securities and Exchange Commission does not consider “abusive.”

· The burden is on the employee to seek a prior written determination that the proposed transaction meets the standards for an ad hoc exemption set forth in this Rule.

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Section II — Additional Special Rules for Personal Securities
Transactions

A. Access Persons and Certain Investment Professionals

Access Persons include all investment professionals and other employees as defined on page 1.

Rule 1: 90-Day Short-Term Rule

Access Persons may not sell a security at a profit within 90 days of purchase or buy a security at a price below which he or she sold it within the past 90 days.

EXCEPTION

None, unless prior written approval from the Code of Ethics Officer is obtained. Exceptions may be granted on a case-by-case basis when no abuse is involved and the equities of the situation support an exemption. For example, although an Access Person may buy a stock as a long-term investment, that stock may have to be sold involuntarily due to unforeseen activity such as a merger.

IMPLEMENTATION

A. The 90-Day Short-Term Rule applies to all Access Persons, as defined in the Definitions section of the Code.

B. Calculation of whether there has been a profit is based upon the market prices of the securities. The calculation includes commissions and other sales charges.

C. As an example, an Access Person would not be permitted to sell a security at $12 that he purchased within the prior 90 days for $10. Similarly, an Access Person would not be permitted to purchase a security at $10 that she had sold within the prior 90 days for $12.

COMMENTS

· The prohibition against short-term trading profits by Access Persons is designed to minimize the possibility that they will capitalize inappropriately on the market impact of trades involving a client portfolio about which they might possibly have information.

· Although Chief Investment Officers, portfolio managers, and analysts may sell securities at a profit within 90 days of purchase in order to comply with the requirements of the 7-Day Rule applicable to them (described below), the profit will have to be disgorged to charity under the terms of the 7-Day Rule.

B. Certain Investment Professionals

Rule 2: 7-Day Rule

(a) Before a portfolio manager (including a Chief Investment Officer with respect to an account he manages) places an order to buy a security for any Putnam client portfolio that he manages, he must sell that security or related derivative security if he has purchased it in his personal account within the preceding seven calendar days.

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(b) Analysts: Before an analyst makes a purchase or an outperform recommendation for a security (including designation of a security for inclusion in the portfolio of Putnam Research Fund), he must sell that security or related derivative security if he has purchased it in his personal account within the preceding seven calendar days.

COMMENTS

· This Rule applies to portfolio managers (including Chief Investment Officers with respect to accounts they manage) in connection with any purchase, no matter how small, in any client account managed by that portfolio manager or CIO (even so-called “clone accounts”). In particular, it should be noted that the requirements of this Rule also apply with respect to purchases in client accounts, including “clone accounts,” resulting from “cash flows.” To comply with the requirements of this Rule, it is the responsibility of each portfolio manager or CIO to be aware of the placement of all orders for purchases of a security by client accounts that he or she manages for seven days following the purchase of that security for his or her personal account.

· An investment professional who must sell securities to be in compliance with the 7-Day Rule must absorb any loss and disgorge to charity any profit resulting from the sale. The recipient charity will be chosen by the Code of Ethics Officer.

· This Rule is designed to avoid even the appearance of a conflict of interest between an investment professional and a Putnam client. A greater burden is placed on these professionals given their positions in the organization. Transactions executed for the employee’s personal account must be conducted in a manner consistent with the Code of Ethics and in such a manner as to avoid any actual or perceived conflict of interest or any abuse of the employee’s position of trust and responsibility.

· “Portfolio manager” is used in this Section as a functional label, and is intended to cover any employee with authority to authorize a trade on behalf of a Putnam client, whether or not such employee bears the title “portfolio manager.” “Analyst” is also used in this Section as a functional label, and is intended to cover any employee who is not a portfolio manager but who may make recommendations regarding investments for Putnam clients.

Rule 3: Blackout Rule

(a) Portfolio Managers: No portfolio manager (including Chief Investment Officers with respect to accounts they manage) shall: (i) sell any security or related derivative security for her personal account until seven calendar days have elapsed since the most recent purchase of that security or related derivative security by any Putnam client portfolio she manages or co-manages; or (ii) purchase any security or related derivative security for her personal account until seven calendar days have elapsed since the most recent sale of that security or related derivative security from any Putnam client portfolio that she manages or co-manages.

(b) Analysts: No analyst shall: (i) sell any security or related derivative security for his personal account until seven calendar days have elapsed since his most recent buy or outperform recommendation for that security or related derivative security (including designation of a security for inclusion in the portfolio of Putnam Research Fund); or (ii) purchase any security or related derivative security for his personal account until seven calendar days have elapsed since his most recent sell or underperform recommendation for that security or related derivative security (including the removal of a security from the portfolio of Putnam Research Fund).

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COMMENTS

· This Rule applies to portfolio managers (including Chief Investment Officers with respect to accounts they manage) in connection with any purchase, no matter how small, in any client account managed by that portfolio manager or CIO (even clone accounts). In particular, it should be noted that the requirements of this rule also apply with respect to transactions in client accounts, including clone accounts, resulting from cash flows. In order to comply with the requirements of this Rule, it is the responsibility of each portfolio manager and CIO to be aware of all transactions in a security by client accounts that he or she manages that took place within the seven days preceding a transaction in that security for his or her personal account.

· This Rule is designed to prevent a Putnam portfolio manager or analyst from engaging in personal investment conduct that appears to be counter to the investment strategy she is pursuing or recommending on behalf of a Putnam client.

Rule 4: Contra-Trading Rule

(a) Portfolio Managers: No portfolio manager shall, without prior clearance and written approval, sell out of his personal account securities or related derivative securities held in any Putnam client portfolio that he manages or co-manages.

(b) Chief Investment Officers: No Chief Investment Officer shall, without prior clearance and written approval, sell out of his personal account securities or related derivative securities held in any Putnam client portfolio managed in his investment group.

IMPLEMENTATION

A. Individuals Authorized to Give Approval. Prior to engaging in any such sale, a portfolio manager shall seek written approval of the proposed sale. In the case of a portfolio manager, prior written approval of the proposed sale shall be obtained from a Chief Investment Officer to whom he reports or, in his absence, another Chief Investment Officer. In the case of a Chief Investment Officer, prior written approval of the proposed sale shall be obtained from another Chief Investment Officer. In addition to the foregoing, prior written approval must also be obtained from the Code of Ethics Officer.

B. Contents of Written Approval. In every instance, use either the attached form of written approval known as ‘Appendix C’ in this Booklet or such other form as the Code of Ethics Officer shall designate. The written approval should be signed by the Chief Investment Officer giving approval and dated when such approval was given, and shall state, briefly, the reasons why the trade was allowed and why the investment conduct pursued by the portfolio manager or Chief Investment Officer was deemed inappropriate for the Putnam client account controlled by the individual seeking to engage in the transaction for his personal account. Such written approval shall be sent by the Chief Investment Officer approving the transaction to the Code of Ethics Officer, for her approval, within 24 hours or as promptly as circumstances permit. Approvals obtained after a transaction has been completed, or while it is in process, will not satisfy the requirements of this Rule.

COMMENT

This Rule, like Rule 3 of this section, is designed to prevent a Putnam portfolio manager from engaging in personal investment conduct that appears to be counter to the investment strategy that he is pursuing on behalf of a Putnam client.

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Rule 5: No Personal Benefit

No portfolio manager shall cause, and no analyst shall recommend, a Putnam client to take action for the portfolio manager’s or analyst’s own personal benefit.

COMMENTS

· A portfolio manager who trades in, or an analyst who recommends, particular securities for a Putnam client account in order to support the price of securities in his personal account, or who “front runs” a Putnam client order is in violation of this Rule. Portfolio managers and analysts should be aware that this Rule is not limited to personal transactions in securities (as that word is defined in the Definitions section). Thus, a portfolio manager or analyst who front runs a Putnam client purchase or sale of obligations of the U.S. government is in violation of this Rule. U.S. government obligations are excluded from the definition of security.

· This Rule is not limited to instances when a portfolio manager or analyst has malicious intent. It also prohibits conduct that creates an appearance of impropriety. Portfolio managers and analysts who have questions about whether proposed conduct creates an appearance of impropriety should seek a prior written determination from the Code of Ethics Officer, using the procedures described in Section VI.

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Section III — General Rules for All Employees

Rule 1: Compliance with All Laws, Regulations, and Policies

All employees must comply with applicable laws and regulations as well as company policies. This includes tax, anti-trust, political contribution, and international boycott laws. In addition, no employee at Putnam may engage in fraudulent conduct of any kind.

COMMENTS

· Putnam may report to the appropriate legal authorities conduct by Putnam employees that violates this Rule.

· It should also be noted that the U.S. Foreign Corrupt Practices Act makes it a criminal offense to make a payment or offer of payment to any non-U.S. governmental official, political party, or candidate to induce that person to affect any governmental act or decision, or to assist Putnam’s obtaining or retaining business.

Rule 2: Conflicts of Interest

No Putnam employee shall conduct herself in a manner that is contrary to the interests of, or in competition with, Putnam or a Putnam client, or that creates an actual or apparent conflict of interest with a Putnam client.

COMMENTS

· This Rule is designed to recognize the fundamental principle that Putnam employees owe their chief duty and loyalty to Putnam and Putnam clients.

· It is expected that a Putnam employee who becomes aware of an investment opportunity that she believes is suitable for a Putnam client whom she services will present it to the appropriate portfolio manager prior to taking advantage of the opportunity herself.

Rule 3: Gifts and Entertainment Policy

No Putnam employee shall accept anything of material value from any broker-dealer, financial institution, corporation, or other entity; any existing or prospective supplier of goods or services with a business relationship to Putnam; or any company or other entity whose securities are held in or are being considered as investments for the Putnam funds, or any other client account. Included are gifts, favors, preferential treatment, special arrangements, or access to special events.

COMMENTS

This Rule is intended to permit the acceptance of only proper types of customary and limited business amenities.

A Putnam employee may not, under any circumstances, accept anything that could create the appearance of a conflict of interest. For example, acceptance of any consideration is prohibited if it would create the appearance of a reward or inducement for conducting Putnam business either with the person providing the gift or his employer.

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IMPLEMENTATION

A. Gifts. An employee may not accept gifts with an aggregate value of more than $100 in any year from any one source, i.e., entity or firm. Any Putnam employee who is offered or receives an item exceeding $100 in value must report the details to the Code of Ethics Officer and surrender or return the gift. Any entertainment event provided to an employee where the host is not in attendance is treated as a gift and is subject to the $100 per year per source limit.

B. Entertainment. Putnam’s rules are designed to permit reasonable, ordinary business entertainment, but prohibit any events that may be perceived as extravagant or that involve lavish expenditures.

1. Occasional lunches, dinners, cocktail parties, or comparable gatherings conducted for business purposes are permitted.

For example, occasional attendance at group functions sponsored by sell-side firms is permitted where the function relates to investments or other business activity. Occasional attendance at these functions is not required to be counted against the limits described in section (B)(2) below.

2. Other entertainment events, such as sporting events, theater, movies, concerts, or other forms of entertainment conducted for business purposes, are permitted only under the following conditions:

(i) The host must be present for the event.

(ii) The location of the event must be in the metropolitan area in which the office of the employee is located.

(iii) Spouses or other family members of the employee may not attend the entertainment event or any meals before or after the entertainment event.

(iv) The value of the entertainment event provided to the employee may not exceed $150, not including the value of any meals that may be provided to the employee before or after the event.

Acceptance of entertainment events that have a market value materially exceeding the face value of the entertainment, which includes, for example, attendance at sporting event playoff games, is prohibited. This prohibition applies even if the face value of tickets to the events is $150 or less or if the Putnam employee offers to pay for the tickets. If there is any ambiguity about whether to accept an entertainment event in these circumstances, please consult the Code of Ethics Officer.

(v) The employee may not accept entertainment events under this provision in section (B)(2) more than six times a year and not more than two times in any year from any single source.

(vi) The Code of Ethics Officer may grant exceptions to these rules. For example, it may be appropriate for an employee attending a legitimate conference in a location away from the office to attend a business entertainment event in that location. All exceptions must be approved in advance by written request to the Code of Ethics Officer.

3. Any employee attending any entertainment event under the provision in sections (B)(1) or (B)(2) above must disclose a meal or entertainment in the PTA system within 20 business days of the event. Failure to report will be treated as a violation of the Code.

Planned absences, i.e., vacations, leaves (other than certain medical leaves), or business trips, are not valid excuses for providing late reports. Failure to meet the deadline violates the Code’s rules and sanctions may be imposed.

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4. Meals and entertainment that are part of the regular program at an investment conference (i.e., open to all participants) are not subject to the limits of section (B)(2) above. Meals that are part of a meeting and/or a conference do not require reporting. An employee is required to disclose a meal outside of a business meeting or conference setting.

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C. The following items are prohibited:

1. Any entertainment event attendance that would reflect badly on Putnam as a firm of the highest fiduciary and ethical standards. For example, events involving adult entertainment or gambling must be avoided.

2. Entertainment involving travel away from the metropolitan area in which the employee is located. Even if an exception is granted as discussed in section (B)(2)(vi) above, payment by a third party of the cost of transportation to a location outside the employee’s metropolitan area, lodging while in another location, and any meals not specifically approved by the Code of Ethics officer are prohibited.

3. Personal loans to a Putnam employee on terms more favorable than those generally available for comparable credit standing and collateral.

4. Preferential brokerage or underwriting commissions or spreads or allocations of shares or interests in an investment for the personal account of a Putnam employee.

D. As with any of the provisions of the Code of Ethics, a sincere belief by the employee that he was acting in accordance with the requirements of this Rule will not satisfy his obligations under the Rule. Therefore, an employee who is in doubt concerning the propriety of any gift or favor should seek a prior written determination from the Code of Ethics Officer, as provided in Section VI.C.

E. No Putnam employee may solicit any gift or entertainment from any person, even if the gift or entertainment, if unsolicited, would be permitted.

F. The Rule does not prohibit employees on business travel from using local transportation and arrangements customarily supplied by brokers or similar entities. For example, it is customary for brokers in developing markets to make local transportation arrangements. These arrangements are permitted so long as the expense of lodging and air travel are paid by Putnam.

G. Putnam Retail Management (PRM) employees are subject to additional NASD rules on gifts and entertainment, which can be found in the PRM compliance manual.

Rule 4: Anti-bribery/Kickback Policy

No Putnam employee shall pay, offer, or commit to pay any amount of consideration that might be, or appear to be, a bribe or kickback in connection with Putnam’s business.

COMMENT

Although the Rule does not specifically address political contributions (described in Rule 5), Putnam employees should be aware that it is against corporate policy to use company assets to fund political contributions of any sort, even where such contributions may be legal. No Putnam employee should offer or agree to make any political contributions (including political dinners and similar fundraisers) on behalf of Putnam, and no employee will be reimbursed by Putnam for such contributions made by the employee personally.

Rule 5: Political Activities, Contributions, Solicitations, and Lobbying Policy

A. Corporate Contributions. Political activities of corporations such as Putnam are highly regulated, and corporate political contributions are prohibited. No corporate assets, funds, facilities, or personnel may be used to benefit any candidate, campaign, political party, or political committee, including contributions made in connection with fundraisers.

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1. If employees anticipate that any corporate funds or assets (such as corporate facilities or personnel) may be used in connection with any political volunteer activity, they must obtain pre-approval from the Chief Compliance Officer.

2. Employees should not seek or approve reimbursement from Putnam for any political contribution expenses. Any contributions for which employees seek reimbursement from Putnam are considered contributions by Putnam and are subject to the corporate political contribution requirements.

B. Personal Contributions. Employees have the right to make personal contributions. However, if employees choose to participate in the political process, they must do so as individuals, not as representatives of Putnam.

In certain limited circumstances, individual contributions may raise issues under applicable laws regulating political contributions to public officials, or candidates for official positions, who could be in a position to hire Putnam. As a result, the following rules apply to individual contributions by employees.

1. Prior to making any political contribution to a person or entity with whom Putnam has a current or proposed business relationship, or who can make or influence decisions to engage Putnam to provide services, employees must pre-clear the proposed contribution with the Chief Compliance Officer.

2. Employees may not make contributions to candidates or elected officials for the following offices without prior written approval from the Chief Compliance Officer:

· State or local offices in California, New Jersey, Ohio, or West Virginia

· State Treasurer in Connecticut or Vermont

· Any public office in the City of Houston

· Contributions by certain PRM employees to Ohio officials and candidates are also subject to Putnam’s Municipal Securities Rulemaking Board (MSRB) Political Contribution Policy.

C. Government Official. Employees must obtain pre-approval from the Code of Ethics Officer prior to providing any gift (including meals, entertainment, transportation, or lodging) to any government official or employee.

D. Lobbying. Federal and state law imposes limits and registration requirements on efforts by individuals and companies to influence the passage of legislation or to obtain business from governments. Accordingly, Putnam employees should not engage in any lobbying activities without approval from Putnam’s Director of Government Relations. Lobbying does not include solicitation of investment management business through the ordinary course of business, such as responding to a Request For Proposal (RFP).

COMMENTS

· Putnam has established a political action committee (PAC) that contributes to worthy candidates for political office. Any request received by a Putnam employee for a political contribution must be directed to Putnam’s Legal and Compliance Department.

· This Rule prohibits solicitation on personal letterhead by Putnam employees except as approved by the Code of Ethics Officer.

· Certain officers and employees of Putnam Retail Management (PRM) and other employees involved in Putnam’s College Advantage Section 529 Plan with Ohio Tuition Trust Authority are subject to special rules on political contributions. For questions on these requirements, please call the Director of Compliance for PRM.

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Rule 6: Confidentiality of Putnam Business Information

No unauthorized disclosure may be made by any employee or former employee of any trade secrets or proprietary information of Putnam or of any confidential information. No information regarding any Putnam client portfolio, actual or proposed securities trading activities of any Putnam client, or Putnam research shall be disclosed outside the Putnam organization unless doing so has a valid business purpose and is in accord with relevant procedures established by Putnam relating to such disclosures.

COMMENT

All information about Putnam and Putnam clients is strictly confidential. Putnam research information should not be disclosed without proper approval and never for personal gain.

Rule 7: Outside Business Affiliations

No Putnam employee shall serve as employee, officer, director, trustee, or general partner of a corporation or entity other than Putnam, without prior written approval of the Code of Ethics Officer. Requests for a role at a publicly traded company are especially disfavored and are closely reviewed. Permission will be granted only in extenuating circumstances. [See also Section IV, Rule 5.]

IMPLEMENTATION

A. All employees must provide a written request seeking approval from the Code of Ethics Officer if they wish to serve as an employee, officer, director, trustee, or general partner of a corporation or entity other than Putnam. The details of the outside business affiliation must be disclosed in PTA. Click on Certifications/Disclosures/Outside Business Affiliation/start/complete each question/click Submit. A determination will be sent via e-mail.

B. NASD-licensed employees under PRM also have an obligation to disclose outside business affiliations, new or terminated, in PTA as well.

C. Upon hire, all employees who also hold an outside position must complete an Outside Business Affiliation Disclosure in PTA.

EXCEPTION

Charitable or Non-profit Exception. Putnam employees may serve as an officer, director, or trustee of a charitable or not-for-profit institution, provided that the employee abides by the Code of Ethics and the Policy Statements with respect to any investment activity for which she has any discretion or input as officer, director, or trustee. The pre-clearance and reporting requirements of the Code of Ethics do not apply to the trading activities of such charitable or not-for-profit institutions for which an employee serves as an officer, director, or trustee unless the employee is responsible for day-to-day portfolio management of the account.

COMMENTS

· This Rule is designed to ensure that Putnam cannot be deemed an affiliate of any issuer of securities by virtue of service by one of its officers or employees as director or trustee.

· Positions with public companies are especially problematic and will normally not be approved.

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· Certain charitable or not-for-profit institutions have assets (such as endowment funds or employee benefit plans) that require prudent investment. To the extent that a Putnam employee (because of her position as officer, director, or trustee of an outside entity) is charged with responsibility to invest such assets prudently, she may not be able to discharge that duty while simultaneously abiding by the spirit of the Code of Ethics and the Policy Statements. Employees are cautioned that they should not accept service as an officer, director, or trustee of an outside charitable or not-for-profit entity where such investment responsibility is involved, without seriously considering their ability to discharge their fiduciary duties with respect to such investments.

Rule 8: Role as Trustee or Fiduciary Outside of Putnam Investments

No Putnam employee shall serve as a trustee, an executor, a custodian, or any other fiduciary, or as an investment advisor or counselor for any account outside Putnam.

EXCEPTIONS

A. Charitable or Religious Exception. Putnam employees may serve as a fiduciary with respect to a religious or charitable trust or foundation, so long as the employee abides by the spirit of the Code of Ethics and the Policy Statements with respect to any investment activity over which he has any discretion or input. The pre-clearance and reporting requirements of the Code of Ethics do not apply to the trading activities of such a religious or charitable trust or foundation unless the employee is responsible for day-to-day portfolio management of the account.

B. Family Trust or Estate Exception. Putnam employees may serve as a fiduciary with respect to a family trust or estate, as long as the employee abides by all of the Rules of the Code of Ethics with respect to any investment activity over which he has any discretion.

COMMENT

The roles permissible under this Rule may carry with them the obligation to invest assets prudently. Once again, Putnam employees are cautioned that they may not be able to fulfill their duties in that respect while abiding by the Code of Ethics and the Policy Statements.

Rule 9: Investment Clubs

No Putnam employee may be a member of any investment club.

COMMENT

This Rule guards against the danger that a Putnam employee may be in violation of the Code of Ethics and the Policy Statements by virtue of his personal securities transactions in or through an entity that is not bound by the restrictions imposed by this Code of Ethics and the Policy Statements. Please note that this restriction also applies to the spouse of a Putnam employee and any relatives of a Putnam employee living in the same household as the employee, as their transactions are covered by the Code of Ethics. (See page 2.)

Rule 10: Business Negotiations for Putnam Investments

No Putnam employee may become involved in a personal capacity in consultations or negotiations for corporate financing, acquisitions, or other transactions for outside companies (whether or not held by any Putnam client), nor negotiate nor accept a fee in

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connection with these activities without obtaining the prior written permission of the Chief Executive Officer of Putnam Investments.

Rule 11: Accurate Records

No employee may create, alter, or destroy (or participate in the creation, alteration, or destruction of) any record that is intended to mislead anyone or to conceal anything that is, or is reasonably believed to be, improper. In addition, all employees responsible for the preparation, filing, or distribution of any regulatory filings or public communications must ensure that such filings or communications are timely, complete, fair, accurate, and understandable.

COMMENTS

· In many cases, this is not only a matter of company policy and ethical behavior but also required by law. Our books and records must accurately reflect the transactions represented and their true nature. For example, records must be accurate as to the recipient of all payments; expense items, including personal expense reports, must accurately reflect the true nature of the expense. No unrecorded fund or asset shall be established or maintained for any reason.

· All financial books and records must be prepared and maintained in accordance with generally accepted accounting principles and Putnam’s existing accounting controls, to the extent applicable.

Rule 12: Family Members’ Conflict Policy

No employee or member of an employee’s immediate family shall have any direct or indirect personal financial interests in companies that do business with Putnam, unless such interest is disclosed and approved by the Code of Ethics Officer. Investment holdings in public companies that are not material to the employee are excluded from this prohibition. The Code also provides more detailed supplemental rules to address potential conflicts of interests that may arise if members of employees’ families are closely involved in doing business with Putnam.

Corporate Purchase of Goods and Services — Putnam will not acquire goods and services from any firm in which a member of an employee’s immediate family serves as the sales representative in a senior management capacity or has an ownership interest with the supplier firm (excluding normal investment holdings in public companies) without permission from the Director of Procurement and the Code of Ethics Officer. Any employee who is aware of a proposal to purchase goods and services from a firm at which a member of the employee’s immediate family meets one of the previously mentioned conditions must notify the Director of Procurement and the Code of Ethics Officer.

Portfolio Trading — Putnam will not allocate any trades for a portfolio to any firm that employs a member of an employee’s immediate family as a sales representative to Putnam (in a primary, secondary, or backup role). Any Putnam employee who is aware that an immediate family member serves as a broker-dealer’s sales representative to Putnam should inform the Code of Ethics Officer.

Definition of Immediate Family (specific to Rule 12) — “Immediate family” of an employee means (1) spouse or domestic partner of the employee, (2) any child, sibling, or parent of an employee and any person married to a child, sibling, or parent of an employee, and (3) any other person who lives in the same household as the employee.

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Rule 13: Affiliated Entities

Non-Putnam affiliates (NPAs), listed below in the last comment, provide investment advisory services. No employee shall:

(a) Directly or indirectly seek to influence the purchase, retention or disposition of, or exercise of voting consent, approval, or similar rights with respect to any portfolio security in any account or fund advised by the NPA and not by Putnam;

(b) Transmit any information regarding the purchase, retention or disposition of, or exercise of voting, consent, approval, or similar rights with respect to any portfolio security held in a Putnam or NPA client account to any personnel of the NPA;

(c) Transmit any trade secrets, proprietary information, or confidential information of Putnam to the NPA unless doing so has a valid business purpose and is in accord with any relevant procedures established by Putnam relating to such disclosures;

(d) Use confidential information or trade secrets of the NPA for the benefit of the employee, Putnam, or any other NPA; or

(e) Breach any duty of loyalty to the NPA derived from the employee’s service as a director or officer of the NPA.

COMMENTS

· Sections (a) and (b) of the Rule are designed to help ensure that the portfolio holdings of Putnam clients and clients of the NPA need not be aggregated for purposes of determining beneficial ownership under Section 13(d) of the Securities Exchange Act or applicable regulatory or contractual investment restrictions that incorporate such definition of beneficial ownership. Persons who serve as directors or officers of both Putnam and an NPA should take care to avoid even inadvertent violations of Section (b). Section (a) does not prohibit a Putnam employee who serves as a director or officer of the NPA from seeking to influence the modification or termination of a particular investment product or strategy in a manner that is not directed at any specific securities. Sections (a) and (b) do not apply when a Putnam affiliate serves as an advisor or sub-advisor to the NPA or one of its products, in which case normal Putnam aggregation rul es apply.

· As a separate entity, any NPA may have trade secrets or confidential information that it would not choose to share with Putnam. This choice must be respected.

· When Putnam employees serve as directors or officers of an NPA, they are subject to common law duties of loyalty to the NPA, despite their Putnam employment. In general, this means that when performing their duties as NPA directors or officers, they must act in the best interest of the NPA and its shareholders. Putnam’s Legal and Compliance Department will assist any Putnam employee who is a director or officer of an NPA and has questions about the scope of his or her responsibilities to the NPA.

· Entities that are currently non-Putnam affiliates within the scope of this Rule are: Nissay Asset Management Co., Ltd., LP and PanAgora Asset Management, Inc. (“PanAgora”).

· Putnam and PanAgora also maintain an information barrier between the investment professionals of each organization regarding investment and trading information.

Rule 14: Computer and Network Use Policy

No employee shall use computers, the Internet, e-mail, instant messaging, phones, fax machines and/or the mail service in a manner that is inconsistent with their use as set forth

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in Putnam’s Employee Handbook. No employee shall introduce a computer virus or computer code that may result in damage to Putnam’s information or computer systems.

COMMENT

Putnam’s policy statements relating to these matters are contained in the Computer and Network Use Policy section within the Employee Handbook. The online Employee Handbook is also available directly on the Intranet site at: http://intranet/employee_handbook.

Rule 15: CFA Institute Code of Ethics and Standards of Professional Conduct

All employees must follow and abide by the spirit of the Code of Ethics and the Standards of Professional Conduct of the CFA Institute. The text of the CFA Institute Code of Ethics and Standards of Professional Conduct are set forth in Appendix D.

Rule 16: Privacy Policy

Except as provided below, no employee may disclose to any outside organization or person any non-public personal information about any individual who is a current or former shareholder of any Putnam retail or institutional fund, or current or former client of a Putnam company. All employees shall follow the security procedures as established from time to time by a Putnam company to protect the confidentiality of all shareholder and client account information.

Except as Putnam’s Legal and Compliance Department may expressly authorize, no employee shall collect any non-public personal information about a prospective or current shareholder of a Putnam fund or prospective or current client of a Putnam company, other than through an account application (or corresponding information provided by the shareholder’s financial representative) or in connection with executing shareholder or client transactions, nor shall any information be collected other than the following: name, address, telephone number, Social Security number, and investment, broker, and transaction information.

EXCEPTIONS

A. Putnam Employees. Non-public personal information may be disclosed to a Putnam employee in connection with processing transactions or maintaining accounts for shareholders of a Putnam fund and clients of a Putnam company, to the extent that access to such information is necessary to the performance of that employee’s job functions.

B. Shareholder Consent Exception. Non-public personal information about a shareholder’s or client’s account may be provided to a non-Putnam organization at the specific request of the shareholder or client or with the shareholder’s or client’s prior written consent.

C. Broker or Advisor Exception. Non-public personal information about a shareholder’s or client’s account may be provided to the shareholder’s or client’s broker of record.

D. Third-Party Service Provider Exception. Non-public personal information may be disclosed to a service provider that is not affiliated with a Putnam fund or Putnam company only when such disclosure is necessary for the service provider to perform the specific services contracted for, and only (a) if the service provider executes Putnam’s standard confidentiality agreement, or (b) pursuant to an agreement containing a confidentiality provision that has been approved by the Legal and Compliance Department. Examples of

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such service providers include proxy solicitors and proxy vote tabulators, mail services, and providers of other administrative services, and Information Services Division consultants who have access to non-public personal information.

COMMENTS

· Non-public personal information is any information that personally identifies a shareholder of a Putnam fund or client of a Putnam company and is not derived from publicly available sources. This privacy policy applies to shareholders or clients who are individuals, not institutions. However, as a general matter, all information that we receive about a shareholder of a Putnam fund or client of a Putnam company shall be treated as confidential. No employee may sell or otherwise provide shareholder or client lists or any other information relating to a shareholder or client to any marketing organization.

· All Putnam employees with access to shareholder or client account information must be trained in and follow Putnam’s security procedures designed to safeguard that information from unauthorized use. For example, a telephone representative must be trained in and follow Putnam’s security procedures to verify the identity of a caller requesting account information.

· Any questions regarding this privacy policy should be directed to Putnam’s Legal and Compliance Department. A violation of this policy will be subject to the sanctions imposed for violations of Putnam’s Code of Ethics.

· Employees must report any violation of this policy or any possible breach of the confidentiality of client information, whether intentional or accidental, to the managing director in charge of the employee’s business unit. Managing directors who are notified of such a violation or possible breach must immediately report it in writing to Putnam’s Chief Compliance Officer and, in the event of a breach of computerized data, Putnam’s Chief Technology Officer.

Rule 17: Anti-money Laundering Policy

No employee may engage in any money laundering activity or facilitate any money laundering activity through the use of any Putnam account or client account. Any situations giving rise to a suspicion that attempted money laundering may be occurring in any account must be reported immediately to the managing director in charge of the employee’s business unit. Managing directors who are notified of such a suspicion of money laundering activity must immediately report it in writing to Putnam’s Chief Compliance Officer and Chief Financial Officer.

Rule 18: Record Retention

All employees must comply with the record retention requirements applicable to the business unit. Employees should check with their managers or the Chief Administrative Officer of their division to determine what record retention requirements apply to their business unit.

For PIL employees, The Code of Ethics incorporates any relevant requirements of the U.K. regulator, the Financial Services Authority (FSA), and will be amended from time to time to reflect any U.K. regulatory changes as required.

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Section IV — Reporting Requirements

Reporting of Personal Securities Transactions

Rule 1: Broker Confirmations and Statements

Each Putnam employee shall ensure that copies of all confirmations for securities transactions for personal brokerage accounts, and brokerage account statements are sent to the Legal and Compliance Department Code of Ethics Administrator. (For the purpose of this Rule, securities shall also include ETFs, futures, and other derivatives on broad-based market indexes excluded from the pre-clearance requirement.) Statements and confirmations are required for Putnam funds not held at Putnam or in a Putnam retirement plan, as well as for U.S. mutual funds sub-advised by Putnam.

Putnam employees must disclose their brokerage accounts in the PTA system and complete all required information, which will facilitate the instructions to the broker.

IMPLEMENTATION

A. Putnam employees should contact the Code of Ethics Administrator for a 407 letter instructing the broker to mail copies of confirmations and statements directly to Putnam. It is the employees’ responsibility to follow up with the broker on a reasonable basis to ensure that instructions are being followed.

B. Upon hire and within a designated time frame, Putnam employees are required to establish their broker profiles in PTA.

C. Specific procedures apply to employees of PIL. Employees of PIL should contact the London Code of Ethics Administrator.

D. Failure of a broker-dealer to comply with the instructions of a Putnam employee to send confirmations and statements shall be a violation by the Putnam employee of this Rule. Similarly, failure by an employee to report the existence of a personal account and, if the account is opened after joining Putnam, failure to obtain proper authorization to establish the account shall be a violation of this Rule.

E. Statements and confirmations must also be sent for members of an employee’s immediate family, including statements from a family member’s 401(k)/Profit Sharing Plan at another employer.

F. Employees are not required to provide broker confirmations and statements for MMC transactions in Putnam’s 401(k)/Profit Sharing and Stock Purchase Plan accounts.

COMMENTS

· Transactions for personal accounts is defined broadly to include more than transactions in accounts under an employee’s own name. (See Definitions.)

· Statements and confirmations are required for all personal securities transactions, whether or not exempted or excepted by this Code.

· To the extent that a Putnam employee has investment authority over securities transactions of a family trust or estate, confirmations of those transactions must also be made, unless the employee has received a prior written exception from the Code of Ethics Officer.

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Rule 2: Access Person — Quarterly Transaction Report

Every Access Person shall file a quarterly report within fifteen calendar days of the end of each quarter, recording all purchases and sales of securities for personal accounts as defined in the Definitions section. (For the purpose of this Rule, reportable “securities” also include exchange-traded funds (ETFs), futures, and any option on a security or securities index, including broad-based market indexes excluded from the pre-clearance requirement, and transactions in Putnam open-end funds if the account for the Putnam funds is not held at Putnam or in a Putnam retirement plan and for transactions in U.S. mutual funds sub-advised by Putnam.)

IMPLEMENTATION

It is mandatory that all Access Persons file a quarterly transaction report in the PTA online system. The form shall contain a representation that employees have complied fully with all provisions of the Code of Ethics.

The date for each transaction required to be disclosed in the quarterly report is the trade date for the transaction, not the settlement date.

Planned absences, i.e., vacations, leaves (other than certain medical leaves), or business trips, are not valid excuses for providing late reports. Failure to meet the deadline violates the Code’s rules and sanctions may be imposed.

COMMENT

If the requirement to file a quarterly report applies to you and you fail to report within the required 15-day period, monetary fines or harsher sanctions will be imposed. It is the responsibility of the employee to request an early report if he has knowledge of a planned absence, i.e., vacation, business trip, or leave.

Rule 3: Access Person — Initial/Annual Holdings Report

Access Persons must disclose their personal securities holdings in the Code of Ethics monitoring system, PTA, upon commencement of employment (within ten days of hire) and thereafter on an annual basis. These SEC requirements are mandatory and designed to facilitate the monitoring of personal securities transactions. Putnam’s Code of Ethics Administrator provides Access Persons with instructions regarding their submissions and certifications of these reports in PTA.

Non-Access Persons must disclose their brokerage accounts within 30 days of hire.

Rule 4: Certifications

All employees are required to submit a certification in PTA annually attesting to compliance with all of the conditions of the Code of Ethics.

Rule 5: Outside Business Affiliations

The details of an outside business affiliation must be disclosed in PTA under Certifications/Disclosures/Outside Business Affiliations. (See Section III, Rule 7.)

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Rule 6: Reporting of Irregular Activity

If a Putnam employee suspects that fraudulent, illegal, or other irregular activity (including violations of the Code of Ethics) might be occurring at Putnam, the activity should be reported immediately to the managing director in charge of that employee’s business unit. Managing directors who are notified of any such activity must immediately report it in writing to Putnam’s Chief Financial Officer and Putnam’s Chief Compliance Officer.

An employee who does not feel comfortable reporting this activity to the managing director may instead contact the Chief Compliance Officer, the Putnam or MMC Ethics hotlines, or the Ombudsman.

Contact information for these hotlines is located on the PTA home page and on the Chief Compliance Officer’s intranet site.

Rule 7: Ombudsman

Putnam has established the office of the corporate ombudsman as a resource to help employees address legal or ethical issues in the workplace and to allow employees to voice concerns or seek clarity on issues. The Ombudsman provides a confidential, independent, and impartial source to employees to discuss potential violations of law or of company standards without fear of retribution, and serves as a neutral party with no vested interest in a particular outcome. The Ombudsman is available on an anonymous basis by calling 1-866-ombuds7 (866-662-8377) or by calling 1-617-760-8246.

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Section V — Education Requirements

Every Putnam employee has an obligation to fully understand the rules and requirements of the Code of Ethics.

Rule 1: Distribution of Code

A copy of the Code of Ethics will be distributed to every Putnam employee at least annually. All Access Persons will be required to certify annually that they have read, understood, and will comply with the provisions of the Code of Ethics, including the Code’s Policy Statement Concerning Insider Trading Prohibitions.

Rule 2: Annual Training Requirement

Every employee will be required to complete training on Putnam’s Code of Ethics on an annual basis.

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Section VI — Compliance and Appeal Procedures

A. Restricted List

No employee may engage in a personal securities transaction without prior clearance.

B. Consultation of Restricted List

It is the responsibility of each employee to pre-clear through PTA or consult with the Code of Ethics Administrator, prior to engaging in a personal securities transaction, to determine if the security he proposes to trade is on the Restricted List and, if so, whether it is subject to the large-cap exception.

C. Request for Determination

An employee who has a question concerning the applicability of the Code of Ethics to a particular situation shall request a determination from the Code of Ethics Officer before engaging in the conduct or personal securities transaction about which he has a question.

If the question pertains to a personal securities transaction, the request shall state for whose account the transaction is proposed, the relationship of that account to the employee, the security proposed to be traded, the proposed price and quantity, the entity with whom the transaction will take place (if known), and any other information or circumstances of the trade that could have a bearing on the Code of Ethics Officer’s determination. If the question pertains to other conduct, the request for determination shall give sufficient information about the proposed conduct to assist the Code of Ethics Officer in ascertaining the applicability of the Code. In every instance, the Code of Ethics Officer may request additional information, and may decline to render a determination if the information provided is insufficient.

The Code of Ethics Officer shall make every effort to render a determination promptly.

No perceived ambiguity in the Code of Ethics shall excuse any violation. Any person who believes the Code to be ambiguous in a particular situation should request a determination from the Code of Ethics Officer.

D. Request for Ad Hoc Exemption

Any employee who wishes to obtain an ad hoc exemption under Section I.D., Rule 2, should request from the Code of Ethics Officer an exemption in writing in advance of the conduct or transaction sought to be exempted. In the case of a personal securities transaction, the request for an ad hoc exemption shall give the same information about the transaction required in a request for determination under Section VII.C., and should state why the proposed personal securities transaction would be unlikely to affect a highly institutional market, or is unrelated economically to securities to be purchased, sold, or held by any Putnam client. In the case of other conduct, the request shall give information sufficient for the Code of Ethics Officer to ascertain whether the conduct raises questions of propriety or conflict of interest, real or apparent.

The Code of Ethics Officer shall make reasonable efforts to promptly render a written determination concerning the request for an ad hoc exemption.

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E. Appeal to Code of Ethics Officer with Respect to Restricted List

If an employee ascertains that a security that he wishes to trade for his personal account appears on the Restricted List, and thus the transaction is prohibited, he may appeal the prohibition to the Code of Ethics Officer by submitting a written memorandum containing the same information as would be required in a request for a determination. The Code of Ethics Officer shall make every effort to respond to the appeal promptly.

F. Information Concerning Identity of Compliance Personnel

The names of Code of Ethics personnel are available by contacting the Legal and Compliance Department and will be published on Putnam’s intranet site.

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Section VII — Sanctions

Sanction Guidelines

The Code of Ethics Oversight Committee is responsible for setting sanctions policies for violating the Code. The Committee has adopted the following minimum monetary sanctions for violations of the Code. These sanctions apply even if the exception results from inadvertence rather than intentional misbehavior. The Code of Ethics Officer is authorized to impose the minimum sanction on employees without further Committee action. However, the sanctions noted below are only minimums and the Committee reserves the right to impose additional sanctions such as higher monetary sanctions, trading bans, suspension, or termination of employment as it determines to be appropriate.

A. The minimum sanction per violation of the following Rules is disgorgement of
any profits or payment of avoided losses and the following payments:

Section I.A., Rule 1 (Pre-clearance and Restricted List)

Section I.B., Rule 1 (Short selling)

Section I.B., Rule 2 (IPOs)

Section I.B., Rule 3 (Private Placements)

Section I.B., Rule 4 (Trading with Inside Information)

Section I.B., Rules 6-8 (Holding and Trading of Putnam Funds)

Section II, Rule 2 (7-Day Rule)

Section II, Rule 3 (Blackout Rule)

Section II, Rule 4 (Contra-Trading Rule)

Section II, Rule 5 (Trading for Personal Benefit)

Officer Level  SMD/MD  SVP/VP  AVP/non-officer 

1st violation  $ 500  $250  $ 50 

2nd  $1,000  $500  $100 

3rd  Minimum monetary sanction as above with ban on all new personal 
  individual investments.   

   
B. The minimum sanction for violations of all other   
Rules in the Code is as follows:     
 

Officer Level  SMD/M  SVP/VP  AVP/non-officer 
  D     

1st violation  $100  $ 50  $25 

Subsequent  $200  $100  $50 


The reference period for determining whether a violation is initial or subsequent will be five years.

NOTE

The Committee’s belief that an employee has violated the Code of Ethics intentionally will result in more severe sanctions than outlined in the guidelines above. The Code of Ethics

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Oversight Committee retains the right to increase or decrease the sanctions for a particular violation in light of the circumstances.

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Appendix A: Insider Trading Prohibitions Policy Statement

Putnam has always forbidden trading by its employees on material non-public information (inside information). Tough federal laws make it important for Putnam to state that prohibition in the strongest possible terms, and to establish, maintain, and enforce written policies and procedures to prevent the use of material non-public information.

Unlawful trading while in possession of inside information can be a crime. Federal law provides that an individual convicted of trading on inside information may go to jail for a period of time. There is also significant monetary liability for an inside trader; the Securities and Exchange Commission can seek a court order requiring a violator to pay back profits, as well as penalties substantially greater than those profits. In addition private plaintiffs can seek recovery for harm suffered by them. The inside trader is not the only subject to liability. In certain cases, controlling persons of inside traders, including supervisors of inside traders or Putnam itself, can be liable for large penalties.

Section I. of this Policy Statement contains rules concerning inside information. Section II. contains a discussion of what constitutes unlawful insider trading.

Neither material, non-public information nor unlawful insider trading is easy to define. Section II. of this Policy Statement gives a general overview of the law in this area. However, the legal issues are complex and must be resolved by the Code of Ethics Officer. If an employee has any doubt as to whether she has received material, non-public information, she must consult with the Code of Ethics Officer prior to using that information in connection with the purchase or sale of a security for his own account or the account of any Putnam client, or communicating the information to others. A simple rule of thumb is if you think the information is not available to the public at large, don’t disclose it to others and don’t trade securities to which the inside information relates.

An employee aware of, or in possession of, inside information must report it immediately to the Code of Ethics Officer. If an employee has failed to consult the Code of Ethics Officer, Putnam will not excuse employee misuse of inside information on the grounds that the employee claims to have been confused about this Policy Statement or the nature of the information in his possession.

If Putnam determines, in its sole discretion, that an employee has failed to abide by this Policy Statement, or has engaged in conduct that raises a significant question concerning insider trading, he will be subject to disciplinary action, including termination of employment.

There are no exceptions to this policy statement, and no one is exempt.

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Appendix A: Definitions: Insider Trading

Code of Ethics Administrator The individual designated by the Code of Ethics Officer to assume responsibility for day-to-day, non-discretionary administration of this Policy Statement. The Code of Ethics Administrator is Laura Rose.

Code of Ethics Officer The Putnam officer who has been assigned the responsibility of enforcing and interpreting this Code. The Code of Ethics Officer shall be the Chief Compliance Officer or such other person as is designated by the Chief Executive Officer of Putnam Investments. If the Code of Ethics Officer is unavailable, the Deputy Code of Ethics Officer shall act in his stead. The Code of Ethics Officer is Tony Ruys de Perez. The Deputy Code of Ethics Officer is Kathleen Griffin.

Immediate family Spouse, domestic partner, minor children, or other relatives living in the same household as the Putnam employee.

Purchase or sale of a security Any acquisition or transfer of any interest in the security for direct or indirect consideration, including the writing of an option.

Putnam Any or all of Putnam Investments Trust, and its subsidiaries, any one of which shall be a Putnam company.

Putnam client Any client of the Putnam mutual funds, or any advisory, trust, or other client for whom Putnam manages money.

Putnam employee (or employee) Any employee of Putnam.

Security Anything defined as a security under federal law. The term includes any type of equity or debt security, any interest in a business trust or partnership, and any rights relating to a security, such as put and call options, warrants, convertible securities, and securities indexes. (Note: The definition of security in this Insider Trading Prohibitions Policy Statement varies significantly from that in the Code of Ethics. For example, the definition in this Policy Statement specifically includes all securities of any type.)

Transaction for a personal account (or personal securities transaction) Securities transactions: (a) for the personal account of any employee; (b) for the account of a member of the immediate family of any employee; (c) for the account of a partnership in which a Putnam employee or immediate family member is a domestic partner with investment discretion; (d) for the account of a trust in which a Putnam employee or immediate family member is a trustee with investment discretion; (e) for the account of a closely held corporation in which a Putnam employee or immediate family member holds shares and for which he has investment discretion; and (f ) for any account other than a Putnam client account that receives investment advice of any sort from the employee or immediate family member, or as to which the employee or immediate family member has investment discretion. Officers and employees of PIL must also consult the relevant procedures on compliance with U.K. insider dealing legislation set forth in PIL’s Compliance Manual.

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Appendix A — Section I: Rules Concerning Inside Information

Rule 1: Inside Information

No Putnam employee shall purchase or sell any security listed on the Inside Information List (the Red List) either for his personal account or for a Putnam client.

IMPLEMENTATION

When an employee contacts the Code of Ethics Administrator seeking clearance for a personal securities transaction, the Code of Ethics Administrator’s response as to whether a security appears on the Restricted List will include securities on the Red List.

COMMENT

This Rule is designed to prohibit any employee from trading a security while Putnam may have inside information concerning that security or the issuer. Every trade, whether for a personal account or for a Putnam client, is subject to this Rule.

Rule 2: Material Non-public Information

No Putnam employee shall purchase or sell any security, either for a personal account or for the account of a Putnam client, while in possession of material, non-public information concerning that security or the issuer, without the prior written approval of the Code of Ethics Officer.

IMPLEMENTATION

In order to obtain prior written approval of the Code of Ethics Officer, a Putnam employee should follow the reporting steps prescribed in Rule 3.

COMMENTS

· Rule 1 concerns the conduct of an employee when Putnam possesses material, non-public information. Rule 2 concerns the conduct of an employee who herself possesses material, non-public information about a security that is not yet on the Red List.

· If an employee has any question as to whether information she possesses is material and/or non-public information, she must contact the Code of Ethics Officer immediately in accordance with Rule 3 prior to purchasing or selling any security related to the information or communicating the information to others. The Code of Ethics Officer shall have the sole authority to determine what constitutes material, non-public information for the purposes of this Policy Statement.

Rule 3: Reporting of Material Non-public Information

Any Putnam employee who believes he is aware of or has received material, non-public information concerning a security or an issuer shall immediately report the information to the Code of Ethics Officer, the Deputy Code of Ethics Officer, or in their absence, a lawyer in the Putnam Legal and Compliance Department and to no one else. After reporting the information, the Putnam employee shall comply strictly with Rule 2 by not trading in the security without the prior written approval of the Code of Ethics Officer and shall (a) take

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precautions to ensure the continued confidentiality of the information and (b) refrain from communicating the information in question to any person.

IMPLEMENTATION

A. In order to make any use of potential material non-public information, including purchasing or selling a security or communicating the information to others, an employee must communicate that information to the Code of Ethics Officer in a way designed to prevent the spread of such information. Once the employee has reported potential material non-public information to the Code of Ethics Officer, the Code of Ethics Officer will evaluate whether information constitutes material non-public information, and whether a duty exists that makes use of such information improper. If the Code of Ethics Officer determines either (a) that the information is not material or is public, or (b) that use of the information is proper, he will issue a written approval to the employee specifically authorizing trading while in possession of the information, if the employee so requests. If the Code of Ethics Officer determines (a) that the information may be nonpublic and material, and (b) that use of such information may be improper, he will place the security that is the subject of such information on the Red List.

B. An employee who reports potential inside information to the Code of Ethics Officer should expect that the Code of Ethics Officer will need significant information, and time to gather such information, to make the evaluation, including information about (a) the manner in which the employee acquired the information, and (b) the identity of individuals to whom the employee has revealed the information, or who have otherwise learned the information. In appropriate situations, the Code of Ethics Officer will normally place the affected security or securities on the Red List pending the completion of his evaluation.

C. If an employee possesses documents, disks, or other materials containing the potential inside information, an employee must take precautions to ensure the confidentiality of the information in question. Those precautions include (a) putting documents containing such information out of the view of a casual observer, and (b) securing files containing such documents or ensuring that computer files reflecting such information are secure from viewing by others.

D. Members of the executive board of directors and members of the Chief Financial Officer’s staff may not trade securities of MMC in the period from the end of each calendar quarter to the date of announcement of MMC’s earnings for such quarter.

COMMENT

While all employees must pre-clear trades of MMC securities and make sure they are not in possession of material inside information about MMC when trading, certain employees who may receive information about Putnam’s earnings are subject to the rules above concerning trading blackout periods.

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Appendix A — Section II: Overview of Insider Trading

Introduction

This section of the Policy Statement provides guidelines for employees as to what may constitute inside information. It is possible that in the course of her employment, an employee may receive inside information. No employee should misuse that information, either by trading for her own account or by communicating the information to others.

What constitutes unlawful insider trading?

The basic definition of unlawful insider trading is trading on material non-public information (also called inside information) by an individual who has a duty not to take advantage of the information. The following sections help explain the definition.

What is material information?

Trading on inside information is not a basis for liability unless the information is material. Information is material if a reasonable person would attach importance to the information in determining his course of action with respect to a security. Information that is reasonably likely to affect the price of a company’s securities is material, but effect on price is not the sole criterion for determining materiality. Information that employees should consider material includes, but is not limited to, dividend changes, earnings estimates, changes in previously released earnings estimates, reorganization, recapitalization, asset sales, plans to commence a tender offer, merger or acquisition proposals or agreements, major litigation, liquidity problems, significant contracts, and extraordinary management developments.

Material information does not have to relate to a company’s business. For example, a court considered as material certain information about the contents of a forthcoming newspaper column that was expected to affect the market price of a security. In that case, a reporter for the Wall Street Journal was found criminally liable for disclosing to others the dates that reports on various companies would appear in the Journal’s “Heard on the Street” column and whether those reports would be favorable or not.

What is non-public information?

Information is non-public until it has been effectively communicated to, and sufficient opportunity has existed for it to be absorbed by, the marketplace. One must be able to point to some fact to show that the information is generally public. For example, information found in a report filed with the Securities and Exchange Commission, or appearing in Dow Jones, Reuters, the Wall Street Journal, or other publications of general circulation would be considered public.

Who has a duty not to “take advantage” of inside information?

Unlawful insider trading occurs only if there is a duty not to take advantage of material non-public information. When there is no such duty, it is permissible to trade while in possession of such information. Questions as to whether a duty exists are complex, are fact specific, and must be answered by a lawyer. If you have any doubt, err on the side of caution.

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Insiders and Temporary Insiders Corporate insiders have a duty not to take advantage of inside information. The concept of insider is broad. It includes officers, directors, and employees of a corporation. In addition, a person can be a temporary insider if she enters into a special confidential relationship with a corporation and, as a result, is given access to information concerning the corporation’s affairs. A temporary insider can include, among others, accounting firms, consulting firms, law firms, banks, and the employees of such organizations. Putnam would generally be a temporary insider of a corporation it advises or for which it performs other services, because typically Putnam clients expect Putnam to keep any information disclosed to it confidential.

EXAMPLE

An investment advisor to the pension fund of a large publicly traded corporation, Acme, Inc., learns from an Acme employee that Acme will not be making the minimum required annual contribution to the pension fund because of a serious downturn in Acme’s financial situation. The information conveyed is material and non-public.

COMMENT

Neither the investment advisor, its employees, nor its clients can trade on the basis of that information, because the investment advisor and its employees could be considered temporary insiders of Acme.

Misappropriators Certain people who are not insiders (or temporary insiders) also have a duty not to deceptively take advantage of inside information. Included in this category is an individual who misappropriates (or takes for his own use) material non-public information in violation of a duty owed either to the corporation that is the subject of inside information or some other entity. Such a misappropriator can be held liable if he trades while in possession of that material non-public information.

EXAMPLE

The Chief Investment Officer of Acme, Inc., is aware of Acme’s plans to engage in a hostile takeover of Profit, Inc. The proposed hostile takeover is material and non-public.

COMMENT

The Chief Investment Officer of Acme cannot trade in Profit, Inc.’s stock for his own account. Even though he owes no duty to Profit, Inc., or its shareholders, he owes a duty to Acme not to take advantage of the information about the proposed hostile takeover by using it for his personal benefit.

Tippers and Tippees A person (the tippee) who receives material non-public information from an insider or misappropriator (the tipper) has a duty not to trade while in possession of that information if he knew, or should have known, that the information was provided by the tipper for an improper purpose and in breach of a duty owed by the tipper. In this context, it is an improper purpose for a person to provide such information for personal benefit.

EXAMPLE

The Chief Executive Officer of Acme, Inc., tells his daughter that negotiations concerning a previously announced acquisition of Acme have been terminated. This news is material and, at the time the father tells his daughter, non-public. The daughter sells her shares of Acme.

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COMMENT

The father is a tipper because he has a duty to Acme and its shareholders not to take advantage of the information concerning the breakdown of negotiations, and he has conveyed the information for an improper purpose. The daughter is a tippee and is liable for trading on inside information because she knew, or should have known, that her father was conveying the information to her for his personal benefit, and that her father had a duty not to take advantage of Acme information.

A person can be a tippee even if he did not learn the information directly from the tipper, but learned it from a previous tippee.

EXAMPLE

An employee of a law firm that works on mergers and acquisitions learns at work about impending acquisitions. She tells her friend and her friend’s stockbroker about the upcoming acquisitions on a regular basis. The stockbroker tells the brother of a client on a regular basis, who in turn tells two friends, A and B. A and B buy shares of the companies being acquired before the public announcement of the acquisition, and regularly profit from such purchases. A and B do not know the employee of the law firm. They do not, however, ask about the source of the information.

COMMENT

A and B, although they have never heard of the tipper, are tippees because they did not ask about the source of the information, even though they were experienced investors, and were aware that the “tips” they received from this particular source were accurate.

Who can be liable for insider trading?

The categories of individuals discussed above (insiders, temporary insiders, misappropriators, or tippees) can be liable if they trade while in possession of material non-public information.

In addition, individuals other than those who actually trade on inside information can be liable for trades of others. A tipper can be liable if (a) he provided the information in exchange for a personal benefit in breach of a duty, and (b) the recipient of the information (the tippee) traded while in possession of the information.

Most importantly, a controlling person can be liable if the controlling person knew or recklessly disregarded the fact that the controlled person was likely to engage in misuse of inside information and failed to take appropriate steps to prevent it. Putnam is a controlling person of its employees. In addition, certain supervisors may be controlling persons of those employees they supervise.

EXAMPLE

A supervisor of an analyst learns that the analyst has, over a long period of time, secretly received material inside information from Acme, Inc.’s Chief Investment Officer. The supervisor learns that the analyst has engaged in a number of trades for his personal account on the basis of the inside information. The supervisor takes no action.

COMMENT

Even if he is not liable to a private plaintiff, the supervisor can be liable to the Securities and Exchange Commission for a civil penalty of up to three times the amount of the analyst’s profit.

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Penalties for insider trading

Penalties for misuse of inside information are severe, both for individuals involved in such unlawful conduct and their employers. A person who violates the insider trading laws can be subject to some or all of the types of penalties below, even if he does not personally benefit from the violation. Penalties include:

· Jail sentences, criminal monetary penalties

· Injunctions permanently preventing an individual from working in the securities industry

· Injunctions ordering an individual to disgorge profits obtained from unlawful insider trading

· Civil penalties substantially greater than the profit gained or loss avoided by the trader, even if the individual paying the penalty did not trade or did not benefit personally

· Civil penalties for the employer or other controlling person

· Damages in the amount of actual losses suffered by other participants in the market for the security at issue

Regardless of whether penalties or money damages are sought by others, Putnam will take whatever action it deems appropriate, including dismissal, if Putnam determines, in its sole discretion, that an employee appears to have committed any violation of this Policy Statement, or to have engaged in any conduct that raises significant questions about whether an insider trading violation has occurred.

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Appendix B: Policy Statement Regarding Employee Trades in
Shares of Putnam Closed-End Funds

Pre-clearance

Any purchase or sale of Putnam closed-end fund shares by a Putnam employee must be pre-cleared. A list of the closed-end funds can be obtained from the Code of Ethics Administrator.

Reporting

As with any purchase or sale of a security, duplicate confirmations and statements of all such purchases and sales must be forwarded to the Code of Ethics Administrator by the broker-dealer utilized by an employee. If you are required to file a quarterly report of all personal securities transactions, this report should include all purchases and sales of closed-end fund shares.

Special Rules Applicable to Managing Directors of Putnam Investment
Management, LLC and officers of the Putnam Funds

Please be aware that managing directors of Putnam Investment Management, Inc., the investment manager of the Putnam mutual funds, and officers of the Putnam Funds will not receive clearance to engage in any combination of purchase and sale, or sale and purchase, of the shares of a given closed-end fund within six months of each other. Therefore, purchases should be made only if you intend to hold the shares more than six months; no sales of fund shares should be made if you intend to purchase additional shares of that same fund within six months.

Certain forms are also required to be filed with the Securities and Exchange Commission in connection with purchases and sales of Putnam closed-end funds. You will be notified by the Code of Ethics Administrator if this applies to you. Please contact the Code of Ethics Officer Administrator for further information.

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Appendix C: Contra-Trading Rule Clearance Form

To: Code of Ethics Officer

From:   

Date:   

Re: Personal Securities Transaction of   

 
This serves as prior written approval of the personal securities transaction described below: 
 
Name of portfolio manager contemplating personal trade:   

Security to be traded:   

Amount to be traded:   

Fund holding securities:   

Amount held by fund:   

Reason for personal trade:   

Specific reason sale of securities is inappropriate for fund:   

 

 

 
(Please attach additional sheets if necessary.)   
 
CIO approval:  Date: 

Legal/compliance approval:  Date: 


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Appendix D: CFA Institute Code of Ethics and Standards of
Professional Conduct

The CFA Institute Code of Ethics and Standards of Professional Conduct (Code and Standards) are fundamental to CFA Institute’s values and essential to achieving its mission to lead the investment profession globally by setting high standards of education, integrity, and professional excellence. High ethical standards are critical to maintaining the public’s trust in financial markets and in the investment profession.

Since their creation in the 1960s, the Code and Standards have promoted the integrity of CFA Institute members and served as a model for measuring the ethics of investment professionals globally, regardless of job function, cultural differences, or local laws and regulations. All CFA Institute members (including holders of the Chartered Financial Analyst® (CFA®) designation) and CFA candidates must abide by the Code and Standards and are encouraged to notify their employer of this responsibility. Violations may result in disciplinary sanctions by CFA Institute. Sanctions can include revocation of membership, candidacy in the CFA Program, and the right to use the CFA designation.

The Code of Ethics

Members of CFA Institute (including Chartered Financial Analyst® (CFA®) charterholders) and candidates for the CFA designation (“Members and Candidates”) must:

· Act with integrity, competence, diligence, and respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.

· Place the integrity of the investment profession and the interests of clients above their own personal interests.

· Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities.

· Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.

· Promote the integrity of, and uphold the rules governing, capital markets.

· Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.

Standards of Professional Conduct

I. PROFESSIONALISM

A. Knowledge of the Law. Members and Candidates must understand and comply with all applicable laws, rules, and regulations (including the CFA Institute Code of Ethics and Standards of Professional Conduct) of any government, regulatory organization, licensing agency, or professional association governing their professional activities. In the event of conflict, Members and Candidates must comply with the more strict law, rule, or regulation. Members and Candidates must not knowingly participate or assist in and must dissociate from any violation of such laws, rules, or regulations.

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B. Independence and Objectivity. Members and Candidates must use reasonable care and judgment to achieve and maintain independence and objectivity in their professional activities. Members and Candidates must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another’s independence and objectivity.

C. Misrepresentation. Members and Candidates must not knowingly make any misrepresentations relating to investment analysis, recommendations, actions, or other professional activities.

D. Misconduct. Members and Candidates must not engage in any professional conduct involving dishonesty, fraud, or deceit, or commit any act that reflects adversely on their professional reputation, integrity, or competence.

II. INTEGRITY OF CAPITAL MARKETS

A. Material Non-public Information. Members and Candidates who possess material, non-public information that could affect the value of an investment must not act or cause others to act on the information.

B. Market Manipulation. Members and Candidates must not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants.

III. DUTIES TO CLIENTS

A. Loyalty, Prudence, and Care. Members and Candidates have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgment. Members and Candidates must act for the benefit of their clients and place their clients’ interests before their employer’s or their own interests. In relationships with clients, Members and Candidates must determine applicable fiduciary duty and must comply with such duty to persons and interests to whom it is owed.

B. Fair Dealing. Members and Candidates must deal fairly and objectively with all clients when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities.

C. Suitability.

1. When Members and Candidates are in an advisory relationship with a client, they must:

a) Make a reasonable inquiry into a client’s or prospective clients’ investment experience, risk and return objectives, and financial constraints prior to making any investment recommendation or taking investment action, and must reassess and update this information regularly.

b) Determine that an investment is suitable to the client’s financial situation and consistent with the client’s written objectives, mandates, and constraints before making an investment recommendation or taking investment action.

c) Judge the suitability of investments in the context of the client’s total portfolio.

2. When Members and Candidates are responsible for managing a portfolio to a specific mandate, strategy, or style, they must only make investment recommendations or take investment actions that are consistent with the stated objectives and constraints of the portfolio.

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D. Performance Presentation. When communicating investment performance information, Members or Candidates must make reasonable efforts to ensure that it is fair, accurate, and complete.

E. Preservation of Confidentiality. Members and Candidates must keep information about current, former, and prospective clients confidential unless:

1. The information concerns illegal activities on the part of the client or prospective client.

2. Disclosure is required by law.

3. The client or prospective client permits disclosure of the information.

IV. DUTIES TO EMPLOYERS

A. Loyalty. In matters related to their employment, Members and Candidates must act for the benefit of their employer and not deprive their employer of the advantage of their skills and abilities, divulge confidential information, or otherwise cause harm to their employer.

B. Additional Compensation Arrangements. Members and Candidates must not accept gifts, benefits, compensation, or consideration that competes with, or might reasonably be expected to create a conflict of interest with, their employer’s interest unless they obtain written consent from all parties involved.

C. Responsibilities of Supervisors. Members and Candidates must make reasonable efforts to detect and prevent violations of applicable laws, rules, regulations, and the Code and Standards by anyone subject to their supervision or authority.

V. INVESTMENT ANALYSIS, RECOMMENDATIONS, AND ACTION

A. Diligence and Reasonable Basis. Members and Candidates must:

1. Exercise diligence, independence, and thoroughness in analyzing investments, making investment recommendations, and taking investment actions.

2. Have a reasonable and adequate basis, supported by appropriate research and investigation, for any investment analysis, recommendation, or action.

B. Communication with Clients and Prospective Clients. Members and Candidates must:

1. Disclose to clients and prospective clients the basic format and general principles of the investment processes used to analyze investments, select securities, and construct portfolios, and must promptly disclose any changes that might materially affect those processes.

2. Use reasonable judgment in identifying which factors are important to their investment analysis, recommendations, or actions and include those factors in communications with clients and prospective clients.

3. Distinguish between fact and opinion in the presentation of investment analysis and recommendations.

C. Record Retention. Members and Candidates must develop and maintain appropriate records to support their investment analysis, recommendations, actions, and other investment-related communications with clients and prospective clients.

VI. CONFLICTS OF INTEREST

A. Disclosure of Conflicts. Members and Candidates must make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer.

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Members and Candidates must ensure that such disclosures are prominent, are delivered in plain language, and communicate the relevant information effectively.

B. Priority of Transactions. Investment transactions for clients and employers must have priority over investment transactions in which a Member or Candidate is the beneficial owner.

C. Referral Fees. Members and Candidates must disclose to their employer, clients, and prospective clients, as appropriate, any compensation, consideration, or benefit received by, or paid to, others for the recommendation of products or services.

VII. RESPONSIBILITIES AS A CFA INSTITUTE MEMBER OR CFA CANDIDATE

A. Conduct as Members and Candidates in the CFA Program. Members and Candidates must not engage in any conduct that compromises the reputation or integrity of the CFA Institute or the CFA designation or the integrity, validity, or security of the CFA examinations.

B. Reference to the CFA Institute, the CFA designation, and the CFA Program. When referring to the CFA Institute, CFA Institute membership, the CFA designation, or candidacy in the CFA Program, Members and Candidates must not misrepresent or exaggerate the meaning or implications of membership in the CFA Institute, holding the CFA designation, or candidacy in the CFA Program.

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Appendix E: Inducement Policy for Putnam Investments
Limited (PIL) Employees

Inducements

Putnam Investments Limited has adopted the following procedures to enable it to comply with, and demonstrate compliance with, the requirements in this area:

Gifts, business meals, or entertainment events that are given or received (“inducements”) and that exceed a value of £25 (40 euros or equivalent) must be reported through the PTA system within 20 days.

PIL’s policy limits gifts to a value of £100 (150 euros or equivalent) per item.

No limit is applied to meals provided such meals are for business purposes, reasonable, and not lavish.

Entertainment provided to, or received from, suppliers (including brokers) is limited to a value of £150 (225 euros or equivalent). When receiving or providing entertainment to clients or potential clients, the limit of £150 (150 euros or equivalent) may be exceeded provided that such event is for business purposes, reasonable, and not lavish. Pre-clearance must be obtained from the PIL Compliance Officer.

Inducements exceeding these limits should be politely declined, explaining that PIL’s internal policies will not permit their acceptance.

There may be rare occasions where you are unexpectedly offered a gift or are entertained where the value exceeds the limits and it would be very discourteous to decline, or difficult to pay part of the bill yourself (such as in a members’ dining club). In these circumstances the gift should be handed in to the PIL Compliance Officer, who will arrange to give it to charity, or the entertainment reported immediately to the PIL Compliance Officer with an explanation of the circumstances.

Where the gift is below £100 (150 euros or equivalent) or the entertainment is below £150 (225 euros or equivalent) for any individual, no pre-clearance is necessary. Above these levels, pre-clearance is required from the PIL Compliance Officer. If you are in doubt as to whether limits might be exceeded, please err on the side of caution and seek pre-clearance.

Employees must disclose inducements in PTA where the value is above £25 (40 euros or equivalent).

Inducements below £25 (40 euros or equivalent), e.g., an umbrella, a casual drink, or a snack, need not be reported.

No more than six entertainment events per year, and no more than two events may be accepted from a single source. Meals are not included in this limit.

Where breaches of the inducement policy occur, sanctions may apply.

Employees are required to make an annual declaration that they have reported all inducements given and received, or that they have not given or received any inducements during the course of the year.

Further detailed guidance on PIL’s Inducement Policy is available in the PIL Compliance Manual.

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407 Letter  2, 34 
7-Day Rule  3, 20, 21 
90-Day Short-Term Rule  3, 12, 20 
Access Person   
definition  5 
reporting requirements for  35 
reporting transactions/holdings  35 
Ad Hoc Exemption  38 
Affiliated Entities  30 
Analysts   
special rules  20, 21, 22 
Annual Holdings Report  11, 35 
Anti-bribery/Kickback Policy  26 
Anti-money Laundering Policy  33 
Anti-trust and other laws  24 
Appeal Procedures  38-39 
Blackout Rule   
trading by portfolio managers,   
analysts, and CIOs  3, 22 
Boycott laws  24 
Bribes  26 
Broker accounts  2, 34 
CFA Institute Code of Ethics  32 
Standards of Professional Conduct  51-54 
Chief Investment Officer   
special rules on trading  22 
Closed-end fund  2, 5, 6, 7, 8, 49 
Code of Ethics Administrator  5 
Code of Ethics Officer  5 
Deputy Code of Ethics Officer  5 
Code of Ethics   
Oversight Committee  5, 13, 16, 40 
College Savings 529 Plan  16 
Compliance and Appeal Procedures  38-39 
Computer and Network Use Policy  31 
Confidentiality  1, 28 
Confirmations and broker statements  2, 34 
Conflicts of interest  1, 4, 24, 57 
Considered List – Limited Sale Rule  10 
Contra-Trading Rule  3, 22 
clearance form  50 
Corporate/political contributions  26-27 

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Corporate purchase of goods and services  30 
Currencies    6 
Director, prohibited to serve for another entity  28 
Discretionary account    6, 10, 12 
Dividend reinvestment program    18 
Education Requirements    37 
Employees     
general rules for    24-33 
personal political contributions    27 
Entertainment Policy    24-26 
Excessive trading     
(over 10 trades) prohibited    2, 17 
Exchange traded index funds     
(ETFs)  6, 7, 8, 17, 34, 35   
Exempted transactions    18 
Family member accounts    15 
Family Members’ Conflict Policy    30 
Fiduciary    29 
Fraudulent or irregular activities reporting  35-36 
Gifts and Entertainment Policy    24-26 
Gifts donated as securities    11 
Good Until Canceled (GTC) Limit orders  16-17 
Goods and services, purchasing    30 
Initial holdings report    35 
Initial Public Offerings (IPOs)    12-13 
Inside Information    43-44 
material, non-public information  14, 43, 44, 52   
policy statement    41 
reporting of material non-public Information  44 
rules concerning    43-44 
sanctions for    40, 47 
Inside Information List (Red List)    43-44 
Insider Trading     
definitions    42 
explanations of    45-48 
liability for    47 
penalties for    47-48 
policy statement    41 
prohibitions policy statement    41 
Investment clubs    29 
Involuntary transactions    11, 18 
Irregular activity reporting    35-36 
Kickback Policy    26 
Large Cap Exemption    9 
Limit Orders    16-17 
Linked accounts    15 
Lobbying Policy    27 
Market timing prohibition    15 

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Marsh & McLennan (MMC)     
securities  2, 8, 11, 12, 34, 44   
Material information  1, 14, 18, 41, 43-47, 52   
Naked options    18 
Negotiations prohibition    29 
Non-public information  1, 5, 14, 18, 41, 43-47, 52   
Non-Putnam affiliates (NPAs)  30 
Officer, prohibited to serve for another entity  28 
Ombudsman    36 
Options     
defined as securities    11, 42 
naked    18 
relationship to securities on   
Restricted or Red Lists  11 
Outside business affiliations  28, 35 
Partner, prohibited to serve for another entity  28 
Personal securities transactions  3 
partnerships, covered in    7, 42 
Personal Trading Assistant (PTA)   
2, 6, 8, 9, 11, 15, 25, 28, 34, 35, 36, 38, 55 
Political activities, contributions, lobbying  26-27 
Portfolio managers, special rules on trading  20-23 
Portfolio Trading    20-23, 30 
Pre-clearance    2, 8-12 
sanctions for failure to pre-clear properly  40 
Privacy Policy    32-33 
Private offerings and     
private placement pre-approval  13 
Prohibited transactions    12-17 
Putnam mutual fund restrictions  2, 15-16 
90-Day Rule    15 
One-Year Rule    15-16 
Quarterly Report of Securities Transactions  2, 35 
Records     
accurate records policy    29 
retention policy    33 
Red List    43-44 
Reporting Requirements    34-35 
Restricted List  6, 8, 9, 11, 12, 38, 39, 40, 43   
Sanctions  1, 16, 25, 33, 35, 40, 55   
Securities, donated    11 
Shares by subscription, pre-clearance  10 
Short selling    2 
Special rules for investment professionals  3, 20-23 
Spread betting    17 
Tender Offers    11 
Trustee  7, 14, 28, 29, 42   
Trusts    7, 42 

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U.S. government obligations  6 
Violations reporting  35 
Warrants  42 

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One Post Office Square Boston, Massachusetts 02109 1-617-292-1000
www.putnam.com23917312/06

l

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EX-99.P CODE ETH 21 a_nf68stixmod4.htm a_nf68stixmod4.htm

Amendments to Putnam Investments
Code of Ethics dated December, 2005

Effective June 16, 2006 the following amendment was made to the Putnam Investments Code of Ethics:

Section III - Rule 5: Political Activities, Contributions, Solicitations, and Lobbying Policy

Under Employee Contributions (item #1):
The office of the State Treasurer of Connecticut, Vermont, or West Virginia
(Note: The State of West Virginia was added to this policy).

Effective July 17, 2006 the following amendment was made to the Putnam Investments Code of Ethics:

Section III - Rule 3: Gifts and Entertainment Policy

3. Any employee attending any entertainment event under the provision in sections (B)(1) or (B)(2) above must file a Report of Entertainment Form (attached as Appendix E) with the Code of Ethics Officer within 20 business days following the date of the entertainment event. Failure to file the notice is a violation of the Code of Ethics.


Appendix E

PUTNAM INVESTMENTS CODE OF ETHICS
REPORT OF ENTERTAINMENT

This form must be filed with the Putnam Legal and Compliance Department within
20 business days of date of entertainment.

Please e-mail to Putnam_Code_of_Ethics@putnam.com
Or return to Legal and Compliance Department, Mailstop A-16

Name of Employee: 

Name of Party Providing Entertainment – firm and person: 

 
Date of Entertainment: 

Describe entertainment provided: (e.g., name & location of 
restaurant, sporting or cultural event) 

 
 
Value of entertainment (excluding meals): 

Signature: 
Date: 

 


EX-99.P CODE ETH 22 a_coeamendment.htm a_coeamendment.htm

Amendments to Putnam’s Code of Ethics – August 2007

The following sections are rewritten in their entirety to read as follows:

Code of Ethics Overview

Short selling (page 2)

Putnam employees are prohibited from short selling any security, whether or not it is held in a Putnam client portfolio, although short selling against broad market indexes and “against the box” is permitted. Note, however, that short selling “against the box” or otherwise hedging an investment in shares of Power Corporation of Canada, Power Financial Corporation, and Great-West Lifeco Inc. stock is prohibited.

Section 1- Personal Securities Rules for All Employees

A. Pre-Clearance (page 8)

Rule 1: Pre-Clearance Requirements

Pre-clearance is required for the following securities:

Stock of Power Corporation of Canada, Power Financial Corporation, and Great-West Lifeco Inc.

MMC stock

Any type or class of equity or debt security, including corporate and municipal bonds

Any rights relating to a security, such as warrants and convertible securities

Closed-end funds – including Putnam closed-end funds. Country funds, as well as other funds that are not tied to an index, are considered closed-end funds and are subject to pre-clearance and reporting requirements, e.g., India Fund (INF), Morgan Stanley Asia Pacific Fund (APF), and Central Europe and Russia Fund (CEE). Certain closed-end funds which sometimes are referred to as closed-end ETFs, such as Blackrock (BKK), Western Asset Emerging (ESD), or Eaton Vance Muni Trust (EVN), are also subject to pre-clearance and reporting requirements.

Any narrow-based derivative, e.g., a put-or-call option on a single security

Any security donated as a gift to an individual or a charity

Pre-clearance is not required for:

Open-end mutual funds

● Currencies, Treasuries (T-bills), and direct and indirect obligations of the U.S. government and its agencies

Direct and indirect obligations of any member of the country of the Organization for Economic CoOperation and Development (OECD), commercial paper, certificates of deposit (CDs), repurchase agreements, bankers’ acceptances, and other money market instruments

The following are excluded from pre-clearance but not from reporting requirements:

Exchange-traded index funds (ETFs) containing a portfolio of securities of 25 or more issuers (e.g., SPDRs, WEBs, QQQQs, iShares, and HLDRs), and any option on a broad-based market index or an exchange-traded futures contract or option thereon.

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Rule 3: Marsh & McLennan (MMC) Securities (page 11)

All employees trading MMC securities must pre-clear the trades in the PTA system. MMC securities include stock, options, and any other securities such as debt. Sales out of the MMC Employee Stock Purchase Plan and transactions in all Putnam and MMC employee benefit and bonus plans, i.e., rebalancing or exchanging out of the 401(k)/Profit Sharing//Bonus Plan, are included in this requirement.

Pre-clearance of MMC is required when, for example, you:

Sell MMC out of the Stock Purchase Plan

Exchange MMC shares out of your 401(k)/Profit Sharing/Bonus Plan

Rebalance your Putnam fund choices, which results in a buy or sell of MMC from your 401(k)/Profit Sharing/Bonus Plan

Trade in MMC securities in other accounts held outside Putnam Investments

Pre-clearance is not required when you:

Apply for a loan and/or make withdrawals of the stock from your 401(k)/Profit Sharing Plan

COMMENTS

All transactions of MMC require pre-clearance in PTA before you contact your broker to trade shares in an outside brokerage account or before contacting Citigroup Smith Barney to sell shares out of your Stock Purchase Plan. Also, if MMC is one of your choices in the 401(k)/Profit Sharing Plan, all exchanges out must be cleared. Even though clearance is not required for Putnam mutual funds, if you do not wish to include MMC shares when rebalancing any of your fund choices, which will result in an automatic exchange of your MMC shares, you must remember to exclude MMC shares prior to submitting your changes. If you are investing online, check the box to exclude MMC; or if you are investing by telephone with a Putnam representative, ask to exclude MMC before rebalancing the funds.

Additional MMC-related policies:

Transactions in MMC securities that are held in Putnam’s internal plans are not subject to the 90-Day Short-Term Rule (applicable to Access Persons only) or to the holding periods that apply to Putnam mutual funds.

B. Prohibited Transactions (page 12)

Rule 1: Short-Selling Prohibition

Putnam employees are prohibited from short selling any security in their own account, whether or not the security is held in a Putnam client portfolio. Employees are prohibited from hedging investments made in securities of Power Corporation of Canada, Power Financial Corporation, and Great-West Lifeco Inc.

EXCEPTION

Short selling against broad market indexes (such as the Dow Jones Industrial Average, the NASDAQ index, and the S&P 100 and 500 indexes) and short selling against the box are permitted (except that short selling shares of Power Corporation of Canada, Power Financial Corporation, and Great-West Lifeco Inc. against the box is not permitted).

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Section IV – Reporting Requirements

Reporting of Personal Securities Transactions

Rule 6: Reporting of Irregular Activity (pages 35 and 36)

If a Putnam employee suspects that fraudulent, illegal, or other irregular activity (including violations of the Code of Ethics) might be occurring at Putnam, the activity should be reported immediately to the managing director in charge of that employee’s business unit. Managing directors who are notified of any such activity must immediately report it in writing to Putnam’s Chief Financial Officer and Putnam’s Chief Compliance Officer.

An employee who does not feel comfortable reporting this activity to the managing director may instead contact the Chief Compliance Officer, the Putnam Ethics hotline, or Putnam’s Ombudsman.

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Appendix A — Section I: Rules Concerning Inside Information (pages 43 and 44)

Rule 3: Reporting of Material Non-Public Information

Any Putnam employee who believes he is aware of or has received material, non-public information concerning a security or an issuer shall immediately report the information to the Code of Ethics Officer, the Deputy Code of Ethics Officer, or in their absence, a lawyer in the Putnam Legal and Compliance Department and to no one else. After reporting the information, the Putnam employee shall comply strictly with Rule 2 by not trading in the security without the prior written approval of the Code of Ethics Officer and shall (a) take precautions to ensure the continued confidentiality of the information, and (b) refrain from communicating the information in question to any person.

IMPLEMENTATION

A. In order to make any use of potential material non-public information, including purchasing or selling a security or communicating the information to others, an employee must communicate that information to the Code of Ethics Officer in a way designed to prevent the spread of such information. Once the employee has reported potential material non-public information to the Code of Ethics Officer, the Code of Ethics Officer will evaluate whether such information constitutes material non-public information, and whether a duty exists that makes use of such information improper. If the Code of Ethics Officer determines either (a) that the information is not material or is public, or (b) that use of the information is proper, he will issue a written approval to the employee specifically authorizing trading while in possession of the information, if the employee so requests. If the Code of Ethics Officer determines (a) that the infor mation may be non-public and material, and (b) that use of such information may be improper, he will place the security that is the subject of such information on the Red List.

B. An employee who reports potential inside information to the Code of Ethics Officer should expect that the Code of Ethics Officer will need significant information, and time to gather such information, to make the evaluation, including information about (a) the manner in which the employee acquired the information, and (b) the identity of individuals to whom the employee has revealed the information, or who have otherwise learned the information. In appropriate situations, the Code of Ethics Officer will normally place the affected security or securities on the Red List pending the completion of his evaluation.

C. If an employee possesses documents, disks, or other materials containing the potential inside information, an employee must take precautions to ensure the confidentiality of the information in question. Those precautions include (a) putting documents containing such information out of the view of a casual observer, and (b) securing files containing such documents or ensuring that computer files reflecting such information are secure from viewing by others.

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