497 1 a_multifundsupp.htm PUTNAM MULTIFUND SUPPLEMENT a_multifundsupp.htm
Prospectus  Supplement  dated December 31, 2007 

All Putnam funds, except Putnam money market funds, Putnam tax-exempt funds, Putnam Floating Rate Income Fund and Putnam Tax Smart Equity Fund®.

Effective January 2, 2008, the prospectuses of these funds are supplemented to reflect changes in the sales charges for class A and M shares (and for class A shares only for certain funds), as set forth below.

APPLICABLE TO GROWTH, VALUE, BLEND (excluding Putnam Tax Smart Equity Fund®) AND ASSET ALLOCATION FUNDS ONLY:

The class A and class M share information in the table of Average Annual Total Returns (for periods ending 12/31/06) in Fund summary - Past Performance is restated to reflect the increase in the maximum sales charges for class A and class M shares to 5.75% (from 5.25%) and 3.50% (from 3.25%), respectively, as follows:

PUTNAM GROWTH FUNDS
      Past 10 years 
Fund (and inception date, if less than 10 years)  Past 1 year  Past 5 years  (or since inception, if less than 10 years) 
Discovery Growth Fund       
Class A before taxes  4.45%  2.28%  3.75% 
Class A after taxes on distributions  4.45%  2.28%  3.39% 
Class A after taxes on distributions and sale of fund shares  2.89%  1.95%  3.19% 
Class M before taxes  6.41%  2.26%  3.49% 
Growth Opportunities Fund       
Class A before taxes  2.96%  -1.32%  3.05% 
Class A after taxes on distributions  2.96%  -1.38%  3.01% 
Class A after taxes on distributions and sale of fund shares  1.92%  -1.15%  2.62% 
Class M before taxes  4.87%  -1.35%  2.75% 
Health Sciences Trust       
Class A before taxes  -2.94%  2.19%  7.24% 
Class A after taxes on distributions  -4.67%  1.32%  6.15% 
Class A after taxes on distributions and sale of fund shares  -0.41%  1.68%  6.00% 
Class M before taxes  -1.11%  2.16%  6.96% 
International New Opportunities Fund       
Class A before taxes  18.43%  12.67%  6.89% 
Class A after taxes on distributions  18.70%  12.91%  6.08% 
Class A after taxes on distributions and sale of fund shares  12.43%  11.44%  5.71% 
Class M before taxes  20.68%  12.65%  6.61% 
New Opportunities Fund       
Class A before taxes  2.42%  2.68%  4.30% 
Class A after taxes on distributions  2.42%  2.68%  3.64% 
Class A after taxes on distributions and sale of fund shares  1.57%  2.29%  3.59% 
Class M before taxes  4.37%  2.65%  4.03% 
OTC & Emerging Growth Fund       
Class A before taxes  6.79%  2.42%  -1.95% 
Class A after taxes on distributions  6.79%  2.42%  -2.74% 
Class A after taxes on distributions and sale of fund shares  4.41%  2.07%  -1.63% 
Class M before taxes  8.77%  2.40%  -2.21% 
Small Cap Growth Fund (12/31/97)       
Class A before taxes  -0.45%  5.03%  15.38%* 
Class A after taxes on distributions  -1.30%  4.64%  13.86%* 
Class A after taxes on distributions and sale of fund shares  0.87%  4.32%  12.95%* 
Class M before taxes  1.44%  5.03%  15.13%* 
Vista Fund       
Class A before taxes  -0.44%  4.19%  5.85% 
Class A after taxes on distributions  -0.44%  4.19%  4.43% 
Class A after taxes on distributions and sale of fund shares  -0.29%  3.60%  4.51% 
Class M before taxes  1.46%  4.17%  5.57% 
Voyager Fund       
Class A before taxes  -0.81%  0.09%  4.70% 
Class A after taxes on distributions  -0.81%  0.04%  3.78% 

      Past 10 years 
Fund (and inception date, if less than 10 years)  Past 1 year  Past 5 years  (or since inception, if less than 10 years) 
Class A after taxes on distributions and sale of fund shares  -0.53%  0.04%  3.81% 
Class M before taxes  1.12%  0.07%  4.42% 
 
PUTNAM BLEND FUNDS       
    Past 5  Past 10 years 
Fund (and inception date, if less than 10 years)  Past 1 year  years  (or since inception, if less than 10 years) 
Capital Appreciation Fund       
Class A before taxes  5.67%  4.84%  5.27% 
Class A after taxes on distributions  5.67%  4.80%  4.47% 
Class A after taxes on distributions and sale of fund shares  3.68%  4.15%  4.18% 
Class M before taxes  7.68%  4.81%  5.00% 
Capital Opportunities Fund (6/1/98)       
Class A before taxes  8.95%  7.37%  8.84%* 
Class A after taxes on distributions  6.61%  6.21%  7.37%* 
Class A after taxes on distributions and sale of fund shares  7.84%  6.06%  7.04%* 
Class M before taxes  10.94%  7.32%  8.58%* 
Europe Equity Fund       
Class A before taxes  26.23%  11.67%  8.93% 
Class A after taxes on distributions  26.56%  11.88%  8.37% 
Class A after taxes on distributions and sale of fund shares  18.31%  10.62%  7.73% 
Class M before taxes  28.66%  11.61%  8.66% 
Global Equity Fund       
Class A before taxes  15.98%  8.37%  9.28% 
Class A after taxes on distributions  16.14%  8.23%  7.50% 
Class A after taxes on distributions and sale of fund shares  11.18%  7.28%  7.15% 
Class M before taxes  18.21%  8.34%  9.05% 
Global Natural Resources Fund       
Class A before taxes  12.22%  18.10%  11.95% 
Class A after taxes on distributions  9.26%  16.41%  10.02% 
Class A after taxes on distributions and sale of fund shares  9.30%  15.32%  9.55% 
Class M before taxes  14.33%  18.06%  11.64% 
International Capital Opportunities Fund       
Class A before taxes  24.57%  18.30%  15.54% 
Class A after taxes on distributions  24.84%  18.57%  15.25% 
Class A after taxes on distributions and sale of fund shares  17.09%  16.67%  14.03% 
Class M before taxes  26.92%  18.27%  15.24% 
International Equity Fund       
Class A before taxes  20.84%  10.94%  10.69% 
Class A after taxes on distributions  20.43%  10.99%  9.99% 
Class A after taxes on distributions and sale of fund shares  15.86%  9.95%  9.27% 
Class M before taxes  23.13%  10.93%  10.41% 
Investors Fund       
Class A before taxes  7.32%  5.08%  6.41% 
Class A after taxes on distributions  7.24%  4.98%  5.99% 
Class A after taxes on distributions and sale of fund shares  4.76%  4.32%  5.43% 
Class M before taxes  9.29%  5.02%  6.12% 
Research Fund       
Class A before taxes  5.00%  2.90%  7.24% 
Class A after taxes on distributions  4.96%  2.83%  6.11% 
Class A after taxes on distributions and sale of fund shares  3.25%  2.44%  5.66% 
Class M before taxes  6.95%  2.87%  6.95% 
Utilities Growth and Income Fund       
Class A before taxes  19.34%  8.37%  6.96% 
Class A after taxes on distributions  18.60%  7.72%  5.35% 
Class A after taxes on distributions and sale of fund shares  12.51%  6.85%  5.14% 
Class M before taxes  21.59%  8.33%  6.68% 

2

PUTNAM VALUE FUNDS       
      Past 10 years 
Fund (and inception date, if less than 10 years)  Past 1 year  Past 5 years  (or since inception, if less than 10 years) 
Classic Equity Fund       
Class A before taxes  7.19%  4.28%  5.43% 
Class A after taxes on distributions  6.79%  3.96%  4.27% 
Class A after taxes on distributions and sale of fund shares  4.66%  3.50%  4.06% 
Class M before taxes  9.18%  4.25%  5.15% 
Convertible Income-Growth Trust       
Class A before taxes  7.94%  8.86%  6.60% 
Class A after taxes on distributions  6.87%  7.68%  4.13% 
Class A after taxes on distributions and sale of fund shares  5.12%  6.96%  4.18% 
Class M before taxes  9.98%  8.81%  6.34% 
Equity Income Fund       
Class A before taxes  12.43%  8.01%  8.96% 
Class A after taxes on distributions  9.73%  6.87%  7.34% 
Class A after taxes on distributions and sale of fund shares  9.99%  6.54%  7.06% 
Class M before taxes  14.57%  7.99%  8.68% 
The George Putnam Fund of Boston       
Class A before taxes  5.82%  5.09%  6.56% 
Class A after taxes on distributions  3.30%  3.85%  4.73% 
Class A after taxes on distributions and sale of fund shares  5.05%  3.79%  4.67% 
Class M before taxes  7.73%  5.06%  6.28% 
The Putnam Fund for Growth and Income       
Class A before taxes  9.18%  5.56%  6.73% 
Class A after taxes on distributions  6.76%  4.77%  5.24% 
Class A after taxes on distributions and sale of fund shares  8.27%  4.58%  5.18% 
Class M before taxes  11.25%  5.52%  6.45% 
International Growth and Income Fund       
Class A before taxes  20.20%  14.54%  10.20% 
Class A after taxes on distributions  19.26%  14.58%  9.05% 
Class A after taxes on distributions and sale of fund shares  16.03%  13.25%  8.51% 
Class M before taxes  22.30%  14.46%  9.89% 
Mid Cap Value Fund (11/1/99)       
Class A before taxes  8.39%  9.49%  11.04%* 
Class A after taxes on distributions  5.81%  8.32%  11.80%* 
Class A after taxes on distributions and sale of fund shares  7.05%  7.85%  11.04%* 
Class M before taxes  10.45%  9.46%  10.93%* 
New Value Fund       
Class A before taxes  9.25%  8.29%  8.96% 
Class A after taxes on distributions  7.40%  7.57%  7.54% 
Class A after taxes on distributions and sale of fund shares  7.06%  6.93%  7.07% 
Class M before taxes  11.25%  8.26%  8.66% 
Small Cap Value Fund (4/13/99)       
Class A before taxes  10.58%  12.70%  15.70%* 
Class A after taxes on distributions  7.48%  10.97%  14.42%* 
Class A after taxes on distributions and sale of fund shares  10.41%  10.81%  13.80%* 
Class M before taxes  12.60%  12.68%  15.49%* 
 
PUTNAM ASSET ALLOCATION FUNDS       
      Past 10 years 
Fund (and inception date, if less than 10 years)  Past 1 year  Past 5 years  (or since inception, if less than 10 years) 
Asset Allocation: Balanced Portfolio       
Class A before taxes  6.15%  5.65%  6.29% 
Class A after taxes on distributions  5.56%  5.03%  4.72% 
Class A after taxes on distributions and sale of fund shares  3.97%  4.52%  4.56% 
Class M before taxes  8.20%  5.62%  6.00% 
Asset Allocation: Conservative Portfolio       
Class A before taxes  1.77%  4.89%  5.38% 
Class A after taxes on distributions  0.83%  3.62%  3.35% 

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      Past 10 years 
Fund (and inception date, if less than 10 years)  Past 1 year  Past 5 years  (or since inception, if less than 10 years) 
Class A after taxes on distributions and sale of fund shares  1.12%  3.42%  3.37% 
Class M before taxes  3.70%  4.79%  5.05% 
Asset Allocation: Growth Portfolio       
Class A before taxes  10.14%  8.48%  7.47% 
Class A after taxes on distributions  9.92%  8.09%  5.86% 
Class A after taxes on distributions and sale of fund shares  6.59%  7.15%  5.60% 
Class M before taxes  12.16%  8.44%  7.21% 
Income Strategies Fund (9/13/04)       
Class A before taxes  4.52%  -  5.63%* 
Class A after taxes on distributions  3.02%  -  4.18%* 
Class A after taxes on distributions and sale of fund shares  2.89%  -  3.93%* 
Class M before taxes  6.60%  -  6.17%* 
RetirementReady 2050 Fund (5/2/05)       
Class A before taxes  9.11%  -  13.63%* 
Class A after taxes on distributions  7.96%  -  12.20%* 
Class A after taxes on distributions and sale of fund shares  5.98%  -  10.82%* 
Class M before taxes  11.12%  -  14.64%* 
RetirementReady 2045 Fund (11/1/04)       
Class A before taxes  9.33%  -  12.30%* 
Class A after taxes on distributions  7.91%  -  10.57%* 
Class A after taxes on distributions and sale of fund shares  6.85%  -  9.67%* 
Class M before taxes  11.40%  -  12.96%* 
RetirementReady 2040 Fund (11/1/04)       
Class A before taxes  8.77%  -  11.94%* 
Class A after taxes on distributions  7.29%  -  10.18%* 
Class A after taxes on distributions and sale of fund shares  6.55%  -  9.36%* 
Class M before taxes  10.81%  -  12.61%* 
RetirementReady 2035 Fund (11/1/04)       
Class A before taxes  8.02%  -  11.20%* 
Class A after taxes on distributions  6.52%  -  9.41%* 
Class A after taxes on distributions and sale of fund shares  6.29%  -  8.75%* 
Class M before taxes  10.04%  -  11.85%* 
RetirementReady 2030 Fund (11/1/04)       
Class A before taxes  7.44%  -  10.53%* 
Class A after taxes on distributions  5.91%  -  8.79%* 
Class A after taxes on distributions and sale of fund shares  5.88%  -  8.20%* 
Class M before taxes  9.44%  -  11.18%* 
RetirementReady 2025 Fund (11/1/04)       
Class A before taxes  6.76%  -  9.81%* 
Class A after taxes on distributions  5.15%  -  8.08%* 
Class A after taxes on distributions and sale of fund shares  5.53%  -  7.60%* 
Class M before taxes  8.77%  -  10.46%* 
RetirementReady 2020 Fund (11/1/04)       
Class A before taxes  4.99%  -  8.17%* 
Class A after taxes on distributions  3.40%  -  6.56%* 
Class A after taxes on distributions and sale of fund shares  4.21%  -  6.24%* 
Class M before taxes  6.96%  -  8.80%* 
RetirementReady 2015 Fund (11/1/04)       
Class A before taxes  2.92%  -  6.19%* 
Class A after taxes on distributions  1.43%  -  4.42%* 
Class A after taxes on distributions and sale of fund shares  2.71%  -  4.41%* 
Class M before taxes  4.86%  -  6.83%* 
RetirementReady 2010 Fund (11/1/04)       
Class A before taxes  0.62%  -  3.66%* 
Class A after taxes on distributions  -1.07%  -  2.10%* 
Class A after taxes on distributions and sale of fund shares  1.07%  -  2.35%* 
Class M before taxes  2.51%  -  4.28%* 
RetirementReady Maturity Fund (11/1/04)       

4

      Past 10 years 
Fund (and inception date, if less than 10 years)  Past 1 year  Past 5 years  (or since inception, if less than 10 years) 
Class A before taxes  -0.10%  -  2.42%* 
Class A after taxes on distributions  -1.49%  -  1.08%* 
Class A after taxes on distributions and sale of fund shares  0.19%  -  1.34%* 
Class M before taxes  1.79%  -  3.04%* 
·Since inception       

The table of Shareholder Fees in Fund summary - Costs associated with your investment is revised to provide that the maximum sales charges (load) imposed on purchases (as a percentage of the offering price) for class A and class M shares are now 5.75% and 3.50%, respectively.

The table in Fund summary - How do these fees and expenses look in dollar terms? setting forth the Example: Sales charge plus Total Annual Fund Operating Expenses on a $10,000 investment over time is revised with respect to class A and class M shares as follows:

  Class  1 year  3 years  5 years  10 years 
PUTNAM GROWTH FUNDS           
Discovery Growth Fund  A  $721  $1,038  $1,377  $2,331 
Discovery Growth Fund  M  $548  $971  $1,420  $2,662 
Growth Opportunities Fund  A  $702  $1,011  $1,343  $2,277 
Growth Opportunities Fund  M  $528  $945  $1,386  $2,610 
Health Sciences Trust  A  $687  $925  $1,182  $1,914 
Health Sciences Trust  M  $514  $858  $1,226  $2,257 
International New Opportunities Fund  A  $732  $1,080  $1,452  $2,492 
International New Opportunities Fund  M  $559  $1,015  $1,495  $2,818 
New Opportunities Fund  A  $687  $925  $1,182  $1,914 
New Opportunities Fund  M  $514  $858  $1,226  $2,257 
OTC & Emerging Growth Fund  A  $711  $1,010  $1,331  $2,237 
OTC & Emerging Growth Fund  M  $538  $944  $1,375  $2,571 
Small Cap Growth Fund  A  $724  $1,062  $1,424  $2,438 
Small Cap Growth Fund  M  $551  $996  $1,467  $2,766 
Vista Fund  A  $682  $908  $1,151  $1,849 
Vista Fund  M  $508  $840  $1,195  $2,194 
Voyager Fund  A  $685  $916  $1,167  $1,881 
Voyager Fund  M  $511  $849  $1,211  $2,226 
PUTNAM BLEND FUNDS           
Capital Appreciation Fund  A  $704  $975  $1,267  $2,095 
Capital Appreciation Fund  M  $530  $908  $1,311  $2,433 
Capital Opportunities Fund  A  $693  $943  $1,212  $1,978 
Capital Opportunities Fund  M  $520  $876  $1,256  $2,319 
Europe Equity Fund  A  $717  $1,016  $1,336  $2,242 
Europe Equity Fund  M  $544  $950  $1,380  $2,576 
Global Equity Fund  A  $698  $958  $1,237  $2,031 
Global Equity Fund  M  $525  $891  $1,281  $2,371 
Global Natural Resources Fund  A  $693  $943  $1,212  $1,978 
Global Natural Resources Fund  M  $520  $876  $1,256  $2,319 
International Capital Opportunities Fund  A  $718  $1,019  $1,341  $2,252 
International Capital Opportunities Fund  M  $545  $953  $1,385  $2,586 
International Equity Fund  A  $695  $947  $1,219  $1,994 
International Equity Fund  M  $521  $880  $1,263  $2,335 
Investors Fund  A  $679  $899  $1,136  $1,816 
Investors Fund  M  $505  $831  $1,180  $2,163 
Research Fund  A  $695  $949  $1,222  $1,999 
Research Fund  M  $522  $882  $1,266  $2,340 
Utilities Growth and Income Fund  A  $693  $945  $1,216  $1,988 
Utilities Growth and Income Fund  M  $520  $878  $1,260  $2,329 
PUTNAM VALUE FUNDS           
Classic Equity Fund  A  $690  $934  $1,197  $1,946 
Classic Equity Fund  M  $517  $867  $1,241  $2,288 
Convertible Income-Growth Trust  A  $676  $890  $1,121  $1,784 

5

  Class  1 year  3 years  5 years  10 years 
Convertible Income-Growth Trust  M  $502  $822  $1,165  $2,131 
Equity Income Fund  A  $668  $866  $1,080  $1,696 
Equity Income Fund  M  $494  $799  $1,125  $2,046 
The George Putnam Fund of Boston  A  $667  $863  $1,075  $1,685 
The George Putnam Fund of Boston  M  $493  $796  $1,120  $2,035 
The Putnam Fund for Growth and Income  A  $662  $845  $1,045  $1,619 
The Putnam Fund for Growth and Income  M  $488  $778  $1,089  $1,971 
International Growth and Income Fund  A  $704  $977  $1,271  $2,105 
International Growth and Income Fund  M  $530  $910  $1,315  $2,442 
Mid Cap Value Fund  A  $693  $943  $1,212  $1,978 
Mid Cap Value Fund  M  $520  $876  $1,256  $2,319 
New Value Fund  A  $685  $916  $1,167  $1,881 
New Value Fund  M  $511  $849  $1,211  $2,226 
Small Cap Value Fund  A  $701  $966  $1,252  $2,063 
Small Cap Value Fund  M  $527  $900  $1,296  $2,402 
PUTNAM ASSET ALLOCATION FUNDS           
Asset Allocation: Balanced Portfolio  A  $682  $908  $1,151  $1,849 
Asset Allocation: Balanced Portfolio  M  $508  $840  $1,195  $2,194 
Asset Allocation: Conservative Portfolio  A  $691  $937  $1,202  $1,957 
Asset Allocation: Conservative Portfolio  M  $518  $870  $1,246  $2,299 
Asset Allocation: Growth Portfolio  A  $693  $943  $1,212  $1,978 
Asset Allocation: Growth Portfolio  M  $520  $876  $1,256  $2,319 
Income Strategies Fund  A  $651  $1,393  $2,154  $4,143 
Income Strategies Fund  M  $477  $1,330  $2,196  $4,421 
RetirementReady 2050 Fund  A  $697  $963  $1,248  $2,060 
RetirementReady 2050 Fund  M  $524  $896  $1,292  $2,399 
RetirementReady 2045 Fund  A  $696  $954  $1,231  $2,020 
RetirementReady 2045 Fund  M  $523  $887  $1,275  $2,360 
RetirementReady 2040 Fund  A  $695  $951  $1,226  $2,009 
RetirementReady 2040 Fund  M  $522  $884  $1,270  $2,350 
RetirementReady 2035 Fund  A  $694  $948  $1,221  $1,999 
RetirementReady 2035 Fund  M  $521  $881  $1,265  $2,339 
RetirementReady 2030 Fund  A  $691  $939  $1,206  $1,967 
RetirementReady 2030 Fund  M  $518  $872  $1,250  $2,308 
RetirementReady 2025 Fund  A  $689  $933  $1,196  $1,945 
RetirementReady 2025 Fund  M  $516  $866  $1,240  $2,288 
RetirementReady 2020 Fund  A  $685  $921  $1,176  $1,902 
RetirementReady 2020 Fund  M  $512  $854  $1,220  $2,246 
RetirementReady 2015 Fund  A  $678  $898  $1,135  $1,816 
RetirementReady 2015 Fund  M  $504  $830  $1,179  $2,162 
RetirementReady 2010 Fund  A  $670  $876  $1,099  $1,738 
RetirementReady 2010 Fund  M  $496  $809  $1,143  $2,087 
RetirementReady Maturity Fund  A  $668  $866  $1,080  $1,696 
RetirementReady Maturity Fund  M  $494  $799  $1,125  $2,046 

The section How do I buy fund shares? - Which class of shares is best for me? is revised to provide that class A shares and class M shares are subject to initial sales charges (as a percentage of the offering price) of up to 5.75% and 3.50%, respectively, and the table of initial sales charges for class A and class M shares is revised as follows:

Initial sales charges for class A and class M shares

Amount of purchase at offering price ($)  Class A sales charge as a percentage of:*  Class M sales charge as a percentage of:* 
  Net amount  Offering  Net amount invested  Offering 
  invested  Price**    Price** 
Under 50,000  6.10%  5.75%  3.63%  3.50% 
50,000 but under 100,000  4.71  4.50  2.56  2.50 
100,000 but under 250,000  3.63  3.50  1.52  1.50 
250,000 but under 500,000  2.56  2.50  1.01  1.00 
500,000 but under 1,000,000  2.04  2.00  1.01  1.00 
1,000,000 and above  NONE  NONE  NONE  NONE 

6

* Because of rounding in the calculation of offering price and the number of shares purchased, actual sales charges you pay may be more or less than these percentages.

** Offering price includes sales charge.

APPLICABLE TO INCOME FUNDS ONLY (excluding Putnam Floating Rate Income Fund):

The class A share information in the table of Average Annual Total Returns (for the periods ending 12/31/06) in the Fund summary - Past Performance is restated to reflect the increase in the maximum sales charges for class A shares to 4.00% (from 3.75%) as follows:

Fund  Past 1 year  Past 5 years  Past 10 years 
American Government Income Fund       
Class A before taxes  -1.10%  2.51%  4.43% 
Class A after taxes on distributions  -2.39%  1.37%  2.69% 
Class A after taxes on distributions and sale of fund shares  -0.74%  1.46%  2.69% 
Diversified Income Trust       
Class A before taxes  2.56%  8.01%  5.12% 
Class A after taxes on distributions  0.61%  5.38%  2.29% 
Class A after taxes on distributions and sale of fund shares  1.61%  5.26%  2.54% 
Global Income Trust       
Class A before taxes  2.24%  7.34%  3.71% 
Class A after taxes on distributions  0.42%  5.38%  2.12% 
Class A after taxes on distributions and sale of fund shares  1.41%  5.14%  2.17% 
High Yield Advantage Fund       
Class A before taxes  7.61%  9.36%  4.77% 
Class A after taxes on distributions  4.89%  6.22%  1.15% 
Class A after taxes on distributions and sale of fund shares  4.84%  6.07%  1.69% 
High Yield Trust       
Class A before taxes  5.60%  8.98%  4.96% 
Class A after taxes on distributions  2.90%  5.79%  1.25% 
Class A after taxes on distributions and sale of fund shares  3.54%  5.71%  1.80% 
Income Fund       
Class A before taxes  0.17%  3.90%  4.46% 
Class A after taxes on distributions  -1.35%  2.47%  2.46% 
Class A after taxes on distributions and sale of fund shares  0.08%  2.47%  2.54% 
U.S. Government Income Trust       
Class A before taxes  -0.11%  2.95%  4.73% 
Class A after taxes on distributions  -1.63%  1.68%  2.83% 
Class A after taxes on distributions and sale of fund shares  -0.11%  1.76%  2.84% 

The table of Shareholder Fees in Fund summary - Costs associated with your investment is revised to provide that the maximum sales charge (load) imposed on purchases (as a percentage of the offering price) for class A shares is now 4.00% .

The table in Fund summary - How do these fees and expenses look in dollar terms? setting forth the Example: Sales charge plus Total Annual Fund Operating Expenses on a $10,000 investment over time is revised with respect to class A shares as follows:

  1 Year  3 Years  5 Years  10 Years 
American Government Income Fund  $502  $730  $976  $1,681 
Diversified Income Trust  $495  $697  $915  $1,542 
Global Income Trust  $517  $827  $1,158  $2,094 
High Yield Advantage Fund  $503  $721  $956  $1,631 
High Yield Trust  $501  $715  $946  $1,609 
Income Fund  $500  $718  $953  $1,629 
U.S. Government Income Trust  $494  $694  $910  $1,531 

7

The section How do I buy fund shares? - Which class of shares is best for me? is revised to provide that class A shares are subject to initial sales charges (as a percentage of the offering price) of up to 4.00%, and the table of initial sales charges for class A shares is revised as follows:

Initial sales charges for class A shares

Amount of purchase at offering price ($)  Class A sales charge as a percentage of*: 
  Net amount invested  Offering price** 
Under 50,000  4.17%  4.00% 
50,000 but under 100,000  4.17  4.00 
100,000 but under 250,000  3.36  3.25 
250,000 but under 500,000  2.56  2.50 
500,000 but under 1,000,000  2.04  2.00 
1,000,000 and above  NONE  NONE 

* Because of rounding in the calculation of offering price and the number of shares purchased, actual sales charges you pay may be more or less than these percentages.

** Offering price includes sales charge.