Putnam
New York
Investment Grade
Municipal Trust
Item 1. Report to Stockholders:
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The following is a copy of the report transmitted to stockholders pursuant
to Rule 30e-1 under the Investment Company Act of 1940:
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
10-31-04
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From the Trustees
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John A. Hill and
George Putnam, III
Dear Fellow Shareholder:
During the past several months, Putnam has introduced a number of reforms for
the benefit of shareholders, including increasing the amount of disclosure for
our funds. We are now including additional information about your fund's
management team. Following the Outlook for Your Fund, we list any changes in
your fund's Portfolio Leader and Portfolio Members during the prior year
period, the current Portfolio Leader's and Portfolio Members' other fund
management responsibilities at Putnam, and the dollar range of fund shares
owned by these individuals.
We are also pleased to announce that three new Trustees have joined your
fund's Board of Trustees. Nominated by your fund's independent Trustees, these
individuals have had outstanding careers as leaders in the investment
management industry. Myra R. Drucker is a Vice Chair of the Board of Trustees
of Sarah Lawrence College and serves as Chair of the New York Stock Exchange
(NYSE) Pension Managers Advisory Committee and as a Trustee of Commonfund, a
not-for-profit asset management firm. Richard B. Worley is Managing Partner of
Permit Capital LLC, an investment management firm. Both Ms. Drucker and Mr.
Worley are independent Trustees (i.e., Trustees who are not "interested
persons" of your fund or its investment advisor). Charles E. Haldeman, Jr.,
the third new Trustee, is President and Chief Executive Officer of Putnam
Investments.
During the period covered by the following report, Putnam New York
Investment Grade Municipal Trust delivered respectable results. In the
following pages, the fund managers discuss fund performance, strategy,
and their outlook for fiscal 2005.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
December 15, 2004
John A. Hill and
George Putnam, III
Report from Fund Management
Fund highlights
* For the six months ended October 31, 2004, Putnam New York Investment
Grade Municipal Trust returned 6.11% at net asset value (NAV) and 9.07%
at market price.
* The fund's benchmark, the Lehman Municipal Bond Index, returned 4.78%.
* The average return for the fund's Lipper category, New York Municipal
Debt Funds (closed-end), was 6.13%.
* See the Performance Summary beginning on page 9 for additional fund
performance, comparative performance, and Lipper data.
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TOTAL RETURN FOR
PERIODS ENDED 10/31/04
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Market
(inception 11/27/92) NAV Price
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6 months 6.11% 9.07%
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1 year 7.87 9.07
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5 years 41.23 28.68
Annual average 7.15 5.17
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10 years 89.73 82.56
Annual average 6.61 6.20
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Annual average
(life of fund) 6.12 4.43
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Data is historical. Past performance does not guarantee future results.
More recent returns may be less or more than those shown. Investment
return, net asset value, and market price will fluctuate and you may
have a gain or a loss when you sell your shares. Performance assumes
reinvestment of distributions and does not account for taxes.
Performance commentary
Municipal bond yields, particularly those of intermediate-maturity
bonds, generally declined during the six-month period ended October 31,
2004. This created a positive environment for bond prices, which rose as
yields fell. Our emphasis on uninsured bonds with higher yields in an
environment that favored higher-yielding securities helped the fund's
performance exceed that of its benchmark, the Lehman Municipal Bond
Index. The fund performed in line with the average for its Lipper peer
group, based on results at net asset value. Results at market price
outperformed the average; however, it is important to note that a fund's
performance at market price may differ from its results at NAV. Although
market price performance generally reflects investment results, it may
also be influenced by several other factors, including changes in
investor perceptions of the fund or its investment advisor, market
conditions, fluctuations in supply and demand for the fund's shares, and
changes in fund distributions.
FUND PROFILE
Putnam New York Investment Grade Municipal Trust seeks to provide high
current income free from federal income tax and New York state and city
personal income taxes, consistent with the preservation of capital. It
may be suitable for New York investors seeking tax-free income through a
diversified portfolio of high-quality bonds.
Market overview
Over the past six months, which constitute the first half of your fund's
2005 fiscal year, the yield on the 10-year Treasury bond fell, and bond
prices, which move in the opposite direction of yields, rose. In
mid-March, the bond market had begun to anticipate a change in the
Federal Reserve Board's monetary policy. Treasury bonds sold off sharply
and pushed yields upward, as strong economic growth and rising corporate
profitability increased the likelihood that the Fed would raise
short-term interest rates at its June 30 meeting. Interestingly, when
the Fed announced what had been a widely anticipated 25-basis-point
increase, the bond market changed its course. Yields of bonds with
maturities in the range of 11-21 years trended downward. At the same
time, yields rose for bonds with short maturities and those with very
long maturities (over 21 years). This resulted in a flattening of the
yield curve -- that is, shorter- and longer-term interest rates began to
converge.
Among uninsured bonds and bonds rated A and below, yield spreads
remained essentially flat for the period. However, these higher-yielding
securities continued to provide attractive income streams that
contributed to the fund's total return during the period. Among the
strongest performing bonds in the overall municipal bond market were
those issued by the state of California. The California economy improved
to such an extent that three bond-rating agencies -- Moody's, Standard &
Poor's, and Fitch -- upgraded the state's credit rating. Tobacco
settlement bonds performed fairly well during the period. Yields on
these bonds varied with the results of ongoing legal battles, but
declined overall since May, and their prices rose, accordingly.
Airline-related industrial development bonds (IDBs) performed poorly, in
general, as the industry continued to face financial difficulties that
were made worse by record high oil prices. New York City general
obligation bonds rose in price over the past six months, reflecting a
dearth of new issuance, as well as investors' confidence in improving
economic prospects for the city.
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MARKET SECTOR PERFORMANCE 6 MONTHS ENDED 10/31/04
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Bonds
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Lehman Municipal Bond Index (tax-exempt bonds) 4.78%
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Lehman Aggregate Bond Index (broad bond market) 4.23%
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Lehman Government Bond Index (U.S. Treasury and agency
securities) 3.96%
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JP Morgan Global High Yield Index (global high-yield
corporate bonds) 6.14%
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Equities
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S&P 500 Index (broad stock market) 2.96%
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Russell 1000 Index (large-company stocks) 3.04%
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Russell 2000 Index (stocks of small and midsize companies) 4.87%
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These indexes provide an overview of performance in different market
sectors for the six months ended 10/31/04.
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Strategy overview
Because we believe that the Fed is likely to continue to raise short-term
interest rates through mid-2005, we are positioning the portfolio more
defensively. This involves shortening the fund's duration, which means
reducing its sensitivity to changes in interest rates. To accomplish this, we
began the process of selling longer-term bonds and replacing them with
shorter-term bonds, which have a shorter duration. Meanwhile, we continued to
trim and diversify the fund's positions in uninsured bonds and bonds rated A
and below, which have performed strongly. The fund maintained its overweight
position in tobacco settlement bonds relative to its benchmark. We closely
monitored developments in that sector. The fund had less exposure to
airline-related IDBs during the period than did its peers. The fund also
continues to employ less leverage than its peers, making it slightly more
conservative in this regard. This strategy generally detracts from relative
performance versus the fund's peer group when fixed-income markets are
rallying, as they did during the past six months, but helps to protect fund
performance when markets are falling.
In previous fiscal years, the fund emphasized non-callable bonds -- bonds that
the issuer is not permitted to redeem (or call) before the maturity date.
These issues performed well as rates fell through March 2004, but during the
spring we began to moderate this position, selling non-callable bonds and
purchasing callable issues scheduled to mature in the 15- to 20-year range. We
believe callable bonds may perform better than non-callable bonds if interest
rates rise and the yield curve flattens further.
[GRAPHIC OMITTED: horizontal bar chart THE FUND'S MATURITY AND DURATION
COMPARED]
THE FUND'S MATURITY AND DURATION COMPARED
4/30/04 10/31/04
Average effective
maturity in years 11.0 8.7
Duration in years 8.9 7.7
Footnote reads:
This chart compares changes in the fund's duration (a measure of its
sensitivity to interest-rate changes) and its average effective maturity
(a weighted average of the holdings' maturities).
Average effective maturity also takes into account put and call
features, where applicable, and reflects prepayments for mortgage-backed
securities.
How fund holdings affected performance
Higher-yielding bonds have performed well over the past two years, fueled by
demand from income-oriented investors in an environment of historically low
yields. The fund's strategy of emphasizing uninsured bonds with higher yields,
though still within the investment-grade spectrum, helped relative performance
during the six-month period. Examples of fund holdings in this category that
were strong contributors to results include A3-rated bonds issued by the
Dutchess County Industrial Development Agency for Bard College, Baa-rated
bonds issued by Niagara County Development Agency for American Ref-Fuel
Company, and bonds issued by the Long Island Power Authority, which are rated
Baa1. (All ratings are by Moody's.)
New York City General Obligation bonds (GOs) were another solid
contributor to fund results during the period. These bonds performed
well due to their low supply amid continued strong demand, as well as
improving investor perceptions of the city's financial health.
Generally, fund holdings with maturities in the 2015 to 2025 range made
the greatest contribution to results during the period, as rates fell
most among these intermediate maturities. Particularly strong
performance in this category came from insured bonds issued by the
Metropolitan Transportation Authority that are scheduled to mature in
2020.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW
Aaa -- (42.6%)
Aa -- (8.4%)
A -- (30.3%)
Baa -- (13.6%)
Ba -- (5.1%)
Footnote reads:
As a percentage of market value as of 10/31/04. A bond rated Baa or
higher is considered investment grade. The chart reflects Moody's
ratings; percentages may include bonds not rated by Moody's but
considered by Putnam Management to be of comparable quality. Ratings
will vary over time.
The fund's greater-than-benchmark weighting in New York tobacco settlement
bonds was another positive during the period as this segment of the market
performed well. Payments from these high-yielding issues are secured by income
promised to states through legal settlements from tobacco companies. This
income could be jeopardized as a result of multibilliondollar judgments
against the tobacco companies, and prices in this sector have shifted as
concerns about litigation overshadowed optimism. Our analyst believes that,
despite several highly visible lawsuits against the tobacco industry,
litigation risk is receding from where it was in 1999. Also, cigarette
consumption levels appear to be holding steady. However, a tobacco settlement
bond issued by the Puerto Rico Children's Trust Fund Tobacco Settlement
underperformed in the period due to unfavorable market technical factors
rather than to the bond's underlying fundamentals. Considering the risks, we
have diversified the fund's investments in these bonds and remain watchful of
the situation.
Please note that all holdings discussed in this report are subject to
review in accordance with the fund's investment strategy and may vary in
the future.
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.
Judging from the flattened yield curve, the bond market appears to have
largely shrugged off the recent Fed rate hikes. However, we believe that
interest rates all along the yield curve are more likely to rise than
fall. After the close of the fiscal period, the Fed again raised the
discount rate by 25 basis points, or one quarter of a percentage point.
Going forward, we anticipate greater increases for bonds with shorter
maturities because we believe the Fed will continue to raise short-term
rates incrementally through mid-2005. This also suggests further
flattening of the yield curve. The fund is positioned defensively in
terms of duration, and we will continue to monitor and adjust the fund's
duration as seems appropriate. We believe inflation will remain low,
despite the threat posed by high oil prices. We also anticipate that the
rate of GDP growth will slow during the next two quarters, as the
effects of the Fed's tightening policy are felt.
In general, these signs indicate that we are headed into a more
challenging environment for bond investing. Our task will be to continue
to search for the most attractive opportunities among tax-exempt
securities, and to balance the pursuit of attractive current income with
prudent risk management.
The views expressed in this report are exclusively those of Putnam
Management. They are not meant as investment advice. This fund
concentrates its investments in one state and involves more risk than a
fund that invests more broadly. Capital gains, if any, are taxable for
federal and, in most cases, state purposes. For some investors,
investment income may be subject to the federal alternative minimum tax.
Income from federally exempt funds may be subject to state and local
taxes. 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.
Your fund's management
Your fund is managed by the members of the Putnam Tax Exempt
Fixed-Income Team. David Hamlin is the Portfolio Leader, and Paul Drury,
Susan McCormack, and James St. John are Portfolio Members of your fund.
The Portfolio Leader and Portfolio Members coordinate the team's
management of the fund.
For a complete listing of the members of the Putnam Tax Exempt
Fixed-Income Team, including those who are not Portfolio Leaders or
Portfolio Members of your fund, visit Putnam's Individual Investor Web
site at www.putnaminvestments.com.
Fund ownership
The table below shows fund ownership, in dollar ranges, by the fund's
Portfolio Leader and Portfolio Members. Information shown is for the
current and prior year ended November 30.
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FUND PORTFOLIO LEADER AND PORTFOLIO MEMBERS
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$1 - $10,001 - $50,001 - $100,001 - $500,001 - $1,000,001
Year $0 $10,000 $50,000 $100,000 $500,000 $1,000,000 and over
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David Hamlin 2004 *
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Portfolio Leader 2003 *
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Paul Drury 2004 *
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Portfolio Member 2003 *
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Susan McCormack 2004 *
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Portfolio Member 2003 *
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James St. John 2004 *
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Portfolio Member 2003 *
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Other funds managed by the Portfolio Leader and Portfolio Members
David Hamlin is the Portfolio Leader and Paul Drury, Susan McCormack,
and James St. John are Portfolio Members for Putnam's tax-exempt funds
for the following states: Arizona, California, Florida, Massachusetts,
Michigan, Minnesota, New Jersey, New York, Ohio, and Pennsylvania. The
same group also manages Putnam AMT-Free Insured Municipal Fund*, Putnam
California Investment Grade Municipal Trust, Putnam High Yield Municipal
Trust, Putnam Investment Grade Municipal Trust, Putnam Managed Municipal
Income Trust, Putnam Municipal Bond Fund, Putnam Municipal Income Fund,
Putnam Municipal Opportunities Trust, Putnam Tax Exempt Income Fund,
Putnam Tax-Free Health Care Fund and Putnam Tax-Free High Yield Fund.
David Hamlin, Paul Drury, Susan McCormack, and James St. John may also
manage other accounts advised by Putnam Management or an affiliate.
Changes in your fund's Portfolio Leader and Portfolio Members
During the year ended October 31, 2004, Portfolio Member Richard Wyke
left your fund's management team.
* Formerly Putnam Tax-Free Insured Fund.
Performance summary
This section shows your fund's performance during the first half of its
fiscal year, which ended October 31, 2004. In accordance with regulatory
requirements, we also include performance for the most current calendar
quarter-end. 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, net asset value,
and market price will fluctuate and you may have a gain or a loss when
you sell your shares.
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TOTAL RETURN AND COMPARATIVE INDEX RESULTS FOR PERIODS ENDED 10/31/04
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Lipper New
York Municipal
Lehman Debt Funds
Municipal (closed-end)
Bond category
NAV Market price Index average*
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6 months 6.11% 9.07% 4.78% 6.13%
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1 year 7.87 9.07 6.02 8.59
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5 years 41.23 28.68 41.48 51.56
Annual average 7.15 5.17 7.19 8.58
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10 years 89.73 82.56 97.69 106.43
Annual average 6.61 6.20 7.05 7.43
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Annual average
Life of fund
(since 11/27/92) 6.12 4.43 6.50 6.41
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Performance assumes reinvestment of distributions and does not account
for taxes.
Index and Lipper results should be compared to fund performance at net
asset value.
* Over the 6-month and 1-, 5-, and 10-year periods ended 10/31/04, there
were 23, 23, 12, and 10 funds, respectively, in this Lipper category.
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PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 10/31/04
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Distributions from common shares
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Number 6
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Income 1 $0.3384
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Capital gains 1 --
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Total $0.3384
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Series A
Distributions from preferred shares (200 shares)
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Income 1 $322.10
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Capital gains 1 --
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Total $322.10
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Share value (common shares) NAV Market price
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4/30/04 $13.18 $11.35
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10/31/04 13.59 12.03
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Current return (common shares, end of period)
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Current dividend rate 2 4.98% 5.63%
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Taxable equivalent 3 8.72 9.86
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1 Capital gains, if any, are taxable for federal and, in most cases,
state purposes. For some investors, investment income may be subject to
the federal alternative minimum tax. Income from federally exempt funds
may be subject to state and local taxes.
2 Most recent distribution, excluding capital gains, annualized and
divided by NAV or market price at end of period.
3 Assumes maximum 42.90% federal, state, and city tax rate for 2004.
Results for investors subject to lower tax rates would not be as
advantageous.
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TOTAL RETURN FOR PERIODS ENDED 9/30/04 (MOST RECENT CALENDAR QUARTER)
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NAV Market price
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6 months 1.21% -2.65%
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1 year 6.40 7.12
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5 years 37.54 25.70
Annual average 6.58 4.68
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10 years 83.63 73.14
Annual average 6.27 5.64
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Annual average
Life of fund
(since 11/27/92) 6.05 4.30
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Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through he entire period and reinvested all
distributions in the fund.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities and the net assets allocated to remarketed preferred shares,
divided by the number of outstanding common shares.
Market price is the current trading price of one share of the fund.
Market prices are set by transactions between buyers and sellers on
exchanges such as the American Stock Exchange and the New York Stock
Exchange.
Comparative indexes
JP Morgan Global High Yield Index is an unmanaged index used to mirror
the investable universe of the U.S. dollar global high-yield corporate
debt market of both developed and emerging markets.
Lehman Aggregate Bond Index is an unmanaged index used as a general
measure of U.S. fixed-income securities.
Lehman Government Bond Index is an unmanaged index of U.S. Treasury and
agency securities.
Lehman Municipal Bond Index is an unmanaged index of long-term
fixed-rate investment-grade tax-exempt bonds.
Russell 1000 Index is an unmanaged index of the largest 1000 companies
in the Russell 3000 Index.
Russell 2000 Index is an unmanaged index of common stocks that generally
measure performance of small to midsize companies within the Russell
3000 Index.
S&P 500 Index is an unmanaged index of common stock performance.
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 funds
(without sales charges) with similar current investment styles or
objectives as determined by Lipper. Lipper category averages reflect
performance trends for funds within a category and are based on results
at net asset value.
A note about duplicate mailings
In response to investors' requests, the SEC has modified mailing
regulations for proxy statements, semiannual and annual reports, and
prospectuses. Putnam is now able to send a single copy of these
materials to customers who share the same address. This change will
automatically apply to all shareholders except those who notify us. If
you would prefer to receive your own copy, please call Putnam at
1-800-225-1581.
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, 2004, are available on the Putnam Individual Investor Web site,
www.putnaminvestments.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
For periods ending on or after July 9, 2004, 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.
A guide to the financial statements
These sections of the report, as well as the accompanying Notes,
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 noninvestment 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 net assets allocated to
remarketed 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 period.
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. For open-end
funds, a separate table is provided for each share class.
The fund's portfolio
October 31, 2004 (Unaudited)
Key to Abbreviations
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AMBAC AMBAC Indemnity Corporation
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance
G.O. Bonds General Obligation Bonds
IFB Inverse Floating Rate Bonds
MBIA MBIA Insurance Company
U.S. Govt. Coll. U.S. Government Collateralized
Municipal bonds and notes (100.0%) (a)
Principal amount Rating (RAT) Value
New York (98.0%)
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$250,000 Albany, Indl. Dev. Agcy. Civic Fac.
Rev. Bonds (Charitable Leadership),
Ser. A, 6s, 7/1/19 Baa3 $269,063
500,000 Chemung Cnty., Indl. Dev. Agcy.
Civic Fac. Rev. Bonds (Arnot Ogden
Med. Ctr.), 5s, 11/1/34 A3 503,125
700,000 Dutchess Cnty., Indl. Dev. Agcy.
Civic Fac. Rev. Bonds (Bard
College), 5 3/4s, 8/1/30 A3 750,750
250,000 Essex Cnty., Indl. Dev. Agcy.
Rev. Bonds (Intl. Paper Co.),
Ser. A, 5 1/2s, 10/1/26 Baa2 251,875
500,000 Geneva, Indl. Dev. Agcy. Rev. Bonds
(Hobart & William Smith), Ser. A,
5 3/8s, 2/1/33 A 523,750
395,000 Hempstead, Indl. Dev. Agcy. Civic
Fac. Rev. Bonds (Hofstra U.),
5 1/4s, 7/1/16 A 427,588
Long Island, Pwr. Auth. NY Elec.
Syst. Rev. Bonds, Ser. A
750,000 5 1/4s, 12/1/26 A- 774,375
2,000,000 AMBAC, 5s, 9/1/29 Aaa 2,070,000
1,000,000 Madison Cnty., Indl. Dev. Agcy.
Rev. Bonds (Colgate U.), Ser. A, 5s,
7/1/23 Aa3 1,056,250
1,000,000 Metro. Trans. Auth. Rev. Bonds,
Ser. A, FSA, 5s, 11/15/30 Aaa 1,031,250
Metro. Trans. Auth. Svc. Contract
Rev. Bonds
500,000 (Trans. Fac.), Ser. O, U.S. Govt.
Coll., 5 3/4s, 7/1/13 AAA 575,625
1,000,000 Ser. A , MBIA, 5 1/2s, 1/1/20 Aaa 1,128,750
650,000 Niagara Cnty., Indl. Dev. Agcy.
Rev. Bonds, Ser. C, 5 5/8s, 11/15/24 Baa1 697,938
NY City, G.O. Bonds
185,000 Ser. I, U.S. Govt. Coll., 6 1/4s,
4/15/17 Aaa 205,813
65,000 Ser. D, U.S. Govt. Coll., 6s,
2/15/25 Aaa 66,431
1,000,000 Ser. B, 5 3/4s, 8/1/16 A2 1,132,500
700,000 Ser. B, 5 1/2s, 12/1/31
(Prerefunded) A2 808,500
300,000 Ser. B, 5 1/2s, 12/1/31 A2 318,000
200,000 NY City, IFB, AMBAC, 10.32s, 9/1/11 Aaa 204,140
300,000 NY City, Hlth. & Hosp. Corp.
Rev. Bonds (Hlth. Syst.), Ser. A ,
5 3/8s, 2/15/26 A3 309,375
750,000 NY City, Indl. Dev. Agcy. Rev. Bonds
(Brooklyn Navy Yard Cogen.
Partners), 5.65s, 10/1/28 BBB- 702,188
NY City, Indl. Dev. Agcy. Civic Fac.
Rev. Bonds
600,000 (Staten Island U. Hosp.), Ser. A,
6 3/8s, 7/1/31 Baa3 576,750
250,000 (Brooklyn Polytech. U. Project J),
6 1/8s, 11/1/30 BB+ 231,563
250,000 (St. Francis College), 5s, 10/1/34 A- 253,438
700,000 NY City, Indl. Dev. Agcy. Special
Arpt. Fac. Rev. Bonds (Airis JFK I
LLC), Ser. A, 5 1/2s, 7/1/28 Baa3 695,625
NY City, Indl. Dev. Agcy. Special
Fac. Rev. Bonds
1,000,000 (Terminal One Group Assn.), 6s,
1/1/15 A3 1,017,490
100,000 (British Airways), 5 1/4s, 12/1/32 BB+ 73,125
500,000 NY City, Muni. Wtr. & Swr. Fin.
Auth. Rev. Bonds, Ser. G, FSA, 5s,
6/15/34 Aaa 512,500
300,000 NY Cntys., Tobacco Trust III
Rev. Bonds, 6s, 6/1/43 BBB 284,625
1,000,000 NY Cntys., Trust II
Rev. Bonds (Tobacco Settlement),
5 3/4s, 6/1/43 BBB 898,750
NY State Dorm. Auth. Rev. Bonds
875,000 (State U. Edl. Fac.), Ser. A,
7 1/2s, 5/15/13 AA- 1,124,375
250,000 (Mount Sinai Hlth.), Ser. A, 6 1/2s,
7/1/25 Ba1 256,875
70,000 (Mental Hlth. Svcs.), Ser. A,
5 3/4s, 2/15/27 AA- 73,675
700,000 (Winthrop-U. Hosp. Assn.), Ser. A,
5 1/2s, 7/1/32 Baa1 723,625
870,000 (Dept. of Hlth.), 5 1/2s, 7/1/25
(Prerefunded) AA- 937,425
630,000 (Dept. of Hlth.), 5 1/2s, 7/1/25 AA- 672,525
600,000 (North Shore Long Island Jewish
Group), 5 3/8s, 5/1/23 A3 630,000
1,000,000 (City U. Syst. Construction), Ser.
1, 5 1/4s, 7/1/17 AA- 1,071,250
300,000 (NY Methodist Hosp.), 5 1/4s, 7/1/17 A3 324,000
1,000,000 (School Dist. Fin.), Ser. A, MBIA,
5 1/4s, 4/1/11 Aaa 1,126,250
250,000 (Lenox Hill Hosp. Oblig. Group),
5 1/4s, 7/1/08 A3 271,250
1,500,000 (NY U.), Ser. 2, AMBAC, 5s, 7/1/41 Aaa 1,533,750
500,000 (Rochester U.), Ser. A, 5s, 7/1/34 A1 511,875
1,000,000 (NY U.), Ser. A, FGIC, 5s, 7/1/29 Aaa 1,040,000
1,000,000 Ser. A, FGIC-TCRS, 5s, 3/15/27 Aaa 1,038,750
1,000,000 (Dept. of Hlth.), Ser. 2, FGIC, 5s,
7/1/22 Aaa 1,075,000
1,875,000 NY State Dorm. Auth. Lease
Rev. Bonds (State U. Dorm. Facs.),
Ser. A, MBIA, 5s, 7/1/24 Aaa 1,996,875
500,000 NY State Energy Res. & Dev. Auth.
Fac. Mandatory Put Bonds, 4.7s,
10/1/12 A1 503,105
250,000 NY State Env. Fac. Corp. Rev. Bonds,
5s, 6/15/32 Aaa 258,750
155,000 NY State Env. Fac. Corp. Poll.
Control Rev. Bonds (State Wtr.
Revolving Fund), Ser. A,
7 1/2s, 6/15/12 Aaa 156,008
1,000,000 NY State Local Govt. Assistance
Corp. Rev. Bonds (Sub. Lien),
Ser. A, FSA, 5s, 4/1/13 AAA 1,117,500
750,000 NY State Pwr. Auth. Rev. Bonds, 5s,
11/15/20 Aa2 806,250
NY State Thruway Auth. Rev. Bonds,
Ser. A, MBIA
1,000,000 5 1/4s, 4/1/13 Aaa 1,136,250
1,000,000 5 1/4s, 4/1/12 Aaa 1,133,750
1,000,000 NY State Urban Dev. Corp. Rev. Bonds
(Personal Income Tax), Ser. C-1, 5s,
3/15/33 AA 1,025,000
1,000,000 Port Auth. NY & NJ Cons. Rev. Bonds,
Ser. 124, 5s, 8/1/31 AA- 1,008,750
3,000,000 Port. Auth. NY & NJ Special
Obligation Rev. Bonds (JFK Intl. Air
Term. - 6), MBIA, 5.9s, 12/1/17 Aaa 3,281,250
100,000 Saratoga Cnty., Indl. Dev. Agcy.
Civic Fac. Rev. Bonds (Saratoga
Hosp.), Ser. A, 5s, 12/1/13 BBB+ 106,625
500,000 Suffolk Cnty., Indl. Dev. Agcy.
Civic Fac. Rev. Bonds (Huntington
Hosp.), Ser. B, 5 7/8s, 11/1/32 Baa1 521,250
1,000,000 Tobacco Settlement Fin. Auth.
Rev. Bonds, Ser. A-1, 5 1/2s, 6/1/18 AA- 1,100,000
1,000,000 Triborough Bridge & Tunnel Auth.
Rev. Bonds, Ser. A, 5s, 1/1/32 Aa3 1,022,495
165,000 Westchester Cnty., Indl Dev. Agcy.
Civic Fac. Rev. Bonds (Guiding Eyes
for The Blind), 5 3/8s, 8/1/24 BBB 174,281
250,000 Yonkers, Indl. Dev. Agcy. Civic Fac.
Rev. Bonds (St. John's Riverside
Hosp.), Ser. A, 7 1/8s, 7/1/31 BB 257,188
--------------
46,367,104
Puerto Rico (2.0%)
-------------------------------------------------------------------------------
750,000 Children's Trust Fund Tobacco
Settlement Rev. Bonds, 5 1/2s,
5/15/39 BBB 667,500
250,000 PR Indl. Tourist Edl. Med. & Env.
Control Fac. Rev. Bonds (Cogen.
Fac.-AES), 6 5/8s, 6/1/26 Baa3 272,188
--------------
939,688
-------------------------------------------------------------------------------
Total Investments (cost $45,448,260) $47,306,792
-------------------------------------------------------------------------------
(a) Percentages indicated are based on portfolio market value.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to
be the most recent ratings available at October 31, 2004 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 October 31, 2004. Securities rated by Putnam are indicated
by "/P".
The rates shown on mandatory put bonds are the current interest rates at
October 31, 2004.
The rates shown on IFBs, which are securities paying an interest rate
that varies inversely to changes in the market interest rates, are the
current interest rates at October 31, 2004.
The fund had the following industry group concentrations greater than
10% at October 31, 2004 (as a percentage of portfolio market value):
Utilities 17.8%
Transportation 15.6
Health care 11.8
Education 10.6
The fund had the following insurance concentration greater than 10% at
October 31, 2004 (as a percentage of portfolio market value):
MBIA 20.7%
The dates shown on mandatory put bonds are the next mandatory put dates.
The accompanying notes are an integral part of these financial
statements.
Statement of assets and liabilities
October 31, 2004 (Unaudited)
Assets
-------------------------------------------------------------------------------
Investments in securities, at value (identified cost
$45,448,260) (Note 1) $47,306,792
-------------------------------------------------------------------------------
Cash 91,829
-------------------------------------------------------------------------------
Interest and other receivables 723,012
-------------------------------------------------------------------------------
Receivable for securities sold 1,141,423
-------------------------------------------------------------------------------
Total assets 49,263,056
Liabilities
-------------------------------------------------------------------------------
Distributions payable to common shareholders 160,547
-------------------------------------------------------------------------------
Accrued preferred shares distribution payable (Note 1) 6,411
-------------------------------------------------------------------------------
Payable for securities purchased 252,905
-------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 79,810
-------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 5,019
-------------------------------------------------------------------------------
Payable for Trustee compensation and expenses (Note 2) 24,532
-------------------------------------------------------------------------------
Payable for administrative services (Note 2) 966
-------------------------------------------------------------------------------
Other accrued expenses 50,025
-------------------------------------------------------------------------------
Total liabilities 580,215
-------------------------------------------------------------------------------
Series A remarketed preferred shares: (200 shares authorized
and outstanding at $50,000 per share) (Note 4) 10,000,000
-------------------------------------------------------------------------------
Net assets $38,682,841
Represented by
-------------------------------------------------------------------------------
Paid-in capital -- common shares (unlimited shares
authorized) (Note 1) $38,873,239
-------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 137,869
-------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (2,186,799)
-------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,858,532
-------------------------------------------------------------------------------
Total -- Representing net assets applicable to common shares
outstanding $38,682,841
Computation of net asset value
-------------------------------------------------------------------------------
Net asset value per common share ($38,682,841 divided by
2,847,092 shares) $13.59
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial
statements.
Statement of operations
Six months ended October 31, 2004 (Unaudited)
Interest income: $1,189,768
-------------------------------------------------------------------------------
Expenses:
-------------------------------------------------------------------------------
Compensation of Manager (Note 2) 155,113
-------------------------------------------------------------------------------
Investor servicing fees (Note 2) 9,469
-------------------------------------------------------------------------------
Custodian fees (Note 2) 12,607
-------------------------------------------------------------------------------
Trustee compensation and expenses (Note 2) 4,738
-------------------------------------------------------------------------------
Administrative services (Note 2) 2,897
-------------------------------------------------------------------------------
Auditing 35,235
-------------------------------------------------------------------------------
Preferred share remarketing agent fees 12,776
-------------------------------------------------------------------------------
Other 25,434
-------------------------------------------------------------------------------
Total expenses 258,269
-------------------------------------------------------------------------------
Expense reduction (Note 2) (9,904)
-------------------------------------------------------------------------------
Net expenses 248,365
-------------------------------------------------------------------------------
Net investment income 941,403
-------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 343,212
-------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 891,821
-------------------------------------------------------------------------------
Net gain on investments 1,235,033
-------------------------------------------------------------------------------
Net increase in net assets resulting from operations $2,176,436
-------------------------------------------------------------------------------
Distributions to Series A remarketed preferred shareholders: (Note 1)
-------------------------------------------------------------------------------
From tax exempt income (64,420)
-------------------------------------------------------------------------------
Net increase in net assets resulting from operations
(applicable to common shareholders) $2,112,016
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial
statements.
Statement of changes in net assets
Six months ended Year ended
October 31 April 30
Increase (decrease) in net assets 2004* 2004
-------------------------------------------------------------------------------
Operations:
-------------------------------------------------------------------------------
Net investment income $941,403 $2,037,689
-------------------------------------------------------------------------------
Net realized gain (loss) on investments 343,212 (880,849)
-------------------------------------------------------------------------------
Net unrealized appreciation of investments 891,821 397,005
-------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 2,176,436 1,553,845
Distributions to Series A remarketed
preferred shareholders: (Note 1)
-------------------------------------------------------------------------------
From tax exempt income (64,420) (94,473)
-------------------------------------------------------------------------------
Net increase in net assets resulting from
operations (applicable to common
shareholders) 2,112,016 1,459,372
Distributions to common shareholders: (Note 1)
-------------------------------------------------------------------------------
From tax exempt income (963,281) (1,988,347)
-------------------------------------------------------------------------------
Total increase (decrease) in net assets 1,148,735 (528,975)
-------------------------------------------------------------------------------
Net assets
-------------------------------------------------------------------------------
Beginning of period 37,534,106 38,063,081
-------------------------------------------------------------------------------
End of period (including undistributed net
investment income of $137,869 and $224,167,
respectively) $38,682,841 $37,534,106
-------------------------------------------------------------------------------
Number of fund shares
-------------------------------------------------------------------------------
Common shares outstanding at beginning and
end of period 2,847,092 2,847,092
-------------------------------------------------------------------------------
Remarketed preferred shares outstanding at
beginning and end of period 200 200
-------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial
statements.
Financial highlights
(For a common share outstanding throughout the period)
Six months
ended
October 31
Per-share (Unaudited) Year ended April 30
operating performance 2004 2004 2003 2002 2001 2000
---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period
(common shares) $13.18 $13.37 $13.32 $13.45 $12.81 $14.03
---------------------------------------------------------------------------------------------------------------------------------
Investment operations:
---------------------------------------------------------------------------------------------------------------------------------
Net investment income (a) .33 .72 .83 .88 .83 .90
---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .44 (.18) (.02) (.23) .72 (1.19)
---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations: .77 .54 .81 .65 1.55 (.29)
---------------------------------------------------------------------------------------------------------------------------------
Distributions to preferred shareholders:
---------------------------------------------------------------------------------------------------------------------------------
From net investment income (.02) (.03) (.04) (.07) (.13) (.12)
---------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations: (applicable to
common shareholders) .75 .51 .77 .58 1.42 (.41)
---------------------------------------------------------------------------------------------------------------------------------
Distributions to common shareholders:
---------------------------------------------------------------------------------------------------------------------------------
From net investment income (.34) (.70) (.72) (.71) (.78) (.81)
---------------------------------------------------------------------------------------------------------------------------------
Total distributions (.34) (.70) (.72) (.71) (.78) (.81)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
(common shares) $13.59 $13.18 $13.37 $13.32 $13.45 $12.81
---------------------------------------------------------------------------------------------------------------------------------
Market price, end of period
(common shares) $12.03 $11.35 $11.99 $12.12 $12.46 $12.00
---------------------------------------------------------------------------------------------------------------------------------
Total return at market price (%)
(common shares) (b) 9.07* 0.26 4.88 2.96 10.28 (7.75)
---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(common shares)
(in thousands) $38,683 $37,534 $38,063 $37,917 $38,288 $36,479
---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c)(d) .68* 1.33 1.36 1.35 1.41 1.44
---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%)(c) 2.33* 5.06 5.84 5.96 5.25 5.96
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 29.85* 21.43 35.93 25.16 15.65 3.32
---------------------------------------------------------------------------------------------------------------------------------
* Not annualized.
(a) Per share net investment income has been determined on the basis of
the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment.
(c) Ratios reflect net assets available to common shares only; net
investment income ratio also reflects reduction for distributions to
preferred shareholders.
(d) Includes amounts paid through expense offset arrangements (Note 2).
The accompanying notes are an integral part of these financial
statements.
Notes to financial statements
October 31, 2004 (Unaudited)
Note 1
Significant accounting policies
Putnam New York Investment Grade Municipal Trust (the "fund"), a
Massachusetts business trust, is registered under the Investment Company
Act of 1940, as amended, as a non-diversified, closed-end management
investment company. The fund's investment objective is to seek a high
current income exempt from federal income tax and New York State and
City personal income tax. The fund intends to achieve its objective by
investing in investment grade municipal securities constituting a
portfolio that Putnam Investment Management, LLC ("Putnam Management"),
the fund's Manager, an indirect wholly-owned subsidiary of Putnam, LLC,
believes to be consistent with preservation of capital. The fund may be
affected by economic and political developments in the state of New
York.
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 Tax-exempt bonds and notes are valued at fair
value on the basis of valuations provided by an independent pricing
service, approved by the Trustees. Such services use information with
respect to transactions in bonds, quotations from bond dealers, market
transactions in comparable securities and various relationships between
securities in determining value. Other investments are valued at fair
value following procedures approved by the Trustees. Such valuations and
procedures are reviewed periodically by the Trustees.
B) Security transactions and related investment income Security
transactions are recorded on the trade date (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. All premiums/discounts
are amortized/accreted on a yield-to-maturity basis. The premium in
excess of the call price, if any, is amortized to the call date;
thereafter, any remaining premium is amortized to maturity.
C) Federal taxes It is the policy of the fund to distribute all of its
income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code 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 April 30, 2004, the fund had a capital loss carryover of $2,452,701
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
----------------------------------
$491,807 April 30, 2005
433,833 April 30, 2008
311,892 April 30, 2011
1,215,169 April 30, 2012
Pursuant to federal income tax regulations applicable to regulated
investment companies, the fund has elected to defer to its fiscal year
ending April 30, 2005 $42,859 of losses recognized during the period
November 1, 2003 to April 30, 2004.
The aggregate identified cost on a tax basis is $45,458,687, resulting
in gross unrealized appreciation and depreciation of $2,097,084 and
$248,979, respectively, or net unrealized appreciation of $1,848,105.
D) Distributions to shareholders Distributions to common and preferred
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. Dividends on
remarketed preferred shares become payable when, as and if declared by
the Trustees. Each dividend period for the remarketed preferred shares
is generally a 28 day period. The applicable dividend rate for the
remarketed preferred shares on October 31, 2004 was 1.45%. 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. 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.
E) Determination of net asset value Net asset value of the common shares
is determined by dividing the value of all assets of the fund, less all
liabilities and the liquidation preference of any outstanding remarketed
preferred shares, by the total number of common shares outstanding as of
period end.
Note 2
Management fee, administrative
services and other transactions
Compensation of Putnam Management, for management and investment
advisory services is paid quarterly based on the average net assets of
the fund. Such fee is based on 0.65% of the fund's weekly average net
assets attributable to common and preferred shares outstanding.
If dividends payable on remarketed preferred shares during any dividend
payment period plus any expenses attributable to remarketed preferred
shares for that period exceed the fund's gross income attributable to
the proceeds of the remarketed preferred shares during that period, then
the fee payable to Putnam Management for that period will be reduced by
the amount of the excess (but not more than 0.65% of the liquidation
preference of the remarketed preferred shares outstanding during the
period).
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 are provided by Putnam
Fiduciary Trust Company ("PFTC"), a subsidiary of Putnam, LLC. Putnam
Investor Services, a division of PFTC, provides investor servicing agent
functions to the fund. During the six months ended October 31, 2004, the
fund paid PFTC $22,076 for these services.
The fund has entered into an arrangement with PFTC whereby credits
realized as a result of uninvested cash balances are used to reduce a
portion of the fund's expenses. For the six months ended October 31,
2004 the fund's expenses were reduced by $9,904 under these
arrangements.
Each independent Trustee of the fund receives an annual Trustee fee, of
which $473, 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.
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. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. 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.
Note 3
Purchases and sales of securities
During the six months ended October 31, 2004 cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $13,709,789 and $14,534,747 respectively. There
were no purchases or sales of U.S. government securities.
Note 4
Preferred shares
The Series A shares are redeemable at the option of the fund on any
dividend payment date at a redemption price of $50,000 per share, plus
an amount equal to any dividends accumulated on a daily basis but unpaid
through the redemption date (whether or not such dividends have been
declared) and, in certain circumstances, a call premium.
It is anticipated that dividends paid to holders of remarketed preferred
shares will be considered tax-exempt dividends under the Internal
Revenue Code of 1986. To the extent that the fund earns taxable income
and capital gains by the conclusion of a fiscal year, it may be required
to apportion to the holders of the remarketed preferred shares
throughout that year additional dividends as necessary to result in an
after-tax equivalent to the applicable dividend rate for the period.
Under the Investment Company Act of 1940, the fund is required to maintain
asset coverage of at least 200% with respect to the remarketed preferred
shares as of the last business day of each month in which any such shares are
outstanding. Additionally, the fund is required to meet more stringent asset
coverage requirements under terms of the remarketed preferred shares and the
shares' rating agencies. Should these requirements not be met, or should
dividends accrued on the remarketed preferred shares not be paid, the fund may
be restricted in its ability to declare dividends to common shareholders or
may be required to redeem certain of the remarketed preferred shares. At
October 31, 2004, no such restrictions have been placed on the fund.
Note 5
Regulatory matters and litigation
On April 8, 2004, Putnam Management entered into agreements with the
Securities and Exchange Commission ("SEC") and the Massachusetts
Securities Division representing a final settlement of all charges
brought against Putnam Management by those agencies on October 28, 2003
in connection with excessive short-term trading by Putnam employees and,
in the case of the charges brought by the Massachusetts Securities
Division, by participants in some Putnam-administered 401(k) plans. The
settlement with the SEC requires Putnam Management to pay $5 million in
disgorgement plus a civil monetary penalty of $50 million, and the
settlement with the Massachusetts Securities Division requires Putnam
Management to pay $5 million in restitution and an administrative fine
of $50 million. The settlements also leave intact the process
established under an earlier partial settlement with the SEC under which
Putnam Management agreed to pay the amount of restitution determined by
an independent consultant, which may exceed the disgorgement and
restitution amounts specified above, pursuant to a plan to be developed
by the independent consultant.
Putnam Management, and not the investors in any Putnam fund, will bear
all costs, including restitution, civil penalties and associated legal
fees stemming from both of these proceedings. The SEC's and
Massachusetts Securities Division's allegations and related matters also
serve as the general basis for numerous lawsuits, including purported
class action lawsuits filed against Putnam Management and certain
related parties, including certain Putnam funds. Putnam Management has
agreed to bear any costs incurred by Putnam funds in connection with
these lawsuits. Based on currently available information, Putnam
Management believes that the likelihood that the pending private
lawsuits and purported class action lawsuits will have a material
adverse financial impact on the fund is remote, and the pending actions
are not likely to materially affect its ability to provide investment
management services to its clients, including the Putnam funds.
Results of October 14, 2004 shareholder meeting
(Unaudited)
An annual meeting of shareholders of the fund was held on October 14,
2004. At the meeting, each of the nominees for Trustees was elected, as
follows:
Common Shares
Votes
Votes for withheld
--------------------------------------------------------------------
Jameson Adkins Baxter 2,405,328 74,701
Charles B. Curtis 2,405,328 74,701
Myra R. Drucker 2,405,328 74,701
Charles E. Haldeman, Jr. 2,405,328 74,701
Ronald J. Jackson 2,405,328 74,701
Paul L. Joskow 2,405,328 74,701
Elizabeth T. Kennan 2,405,328 74,701
John H. Mullin, III 2,405,328 74,701
George Putnam, III 2,405,328 74,701
A.J.C. Smith 2,405,328 74,701
W. Thomas Stephens 2,405,328 74,701
Richard B. Worley 2,405,328 74,701
Preferred Shares
Votes
Votes for withheld
--------------------------------------------------------------------
Jameson Adkins Baxter 199 --
Charles B. Curtis 199 --
Myra R. Drucker 199 --
Charles E. Haldeman, Jr. 199 --
John A. Hill 199 --
Ronald J. Jackson 199 --
Paul L. Joskow 199 --
Elizabeth T. Kennan 199 --
John H. Mullin, III 199 --
George Putnam, III 199 --
Robert E. Patterson 199 --
A.J.C. Smith 199 --
W. Thomas Stephens 199 --
Richard B. Worley 199 --
All tabulations are rounded to nearest whole number.
Fund information
About Putnam Investments
One of the largest mutual fund families in the United States, Putnam
Investments has a heritage of investment leadership dating back to Judge
Samuel Putnam, whose Prudent Man Rule has defined fiduciary tradition
and practice since 1830. Founded over 65 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 presently manage
over 100 mutual funds in growth, value, blend, fixed income, and
international.
Investment Manager
Putnam Investment
Management, LLC
One Post Office Square
Boston, MA 02109
Marketing Services
Putnam Retail Management
One Post Office Square
Boston, MA 02109
Custodian
Putnam Fiduciary
Trust Company
Legal Counsel
Ropes & Gray LLP
Trustees
John A. Hill, Chairman
Jameson Adkins Baxter
Charles B. Curtis
Myra R. Drucker
Charles E. Haldeman, Jr.
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
John H. Mullin, III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
Richard B. Worley
Officers
George Putnam, III
President
Charles E. Porter
Executive Vice President,
Associate Treasurer and
Principal Executive Officer
Jonathan S. Horwitz
Senior Vice President
and Treasurer
Steven D. Krichmar
Vice President and Principal
Financial Officer
Michael T. Healy
Assistant Treasurer and
Principal Accounting Officer
Daniel T. Gallagher
Vice President and Legal and
Compliance Liaison Officer
Beth S. Mazor
Vice President
James P. Pappas
Vice President
Richard S. Robie, III
Vice President
Mark C. Trenchard
Vice President and
BSA Compliance Officer
Francis J. McNamara, III
Vice President and Chief
Legal Officer
Charles A. Ruys de Perez
Vice President and ChiefCompliance Officer
Judith Cohen
Clerk and Assistant Treasurer
Call 1-800-225-1581 weekdays from 9:00 a.m. to 5:00 p.m. Eastern Time,
or visit our Web site (www.putnaminvestments.com) anytime for up-to-date
information about the fund's NAV.
PUTNAM INVESTMENTS
PRSRT STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
Do you want to save paper and receive this document faster?
Shareholders can sign up for email delivery of shareholder reports on
www.putnaminvestments.com.
216536 12/04
Item 2. Code of Ethics:
-----------------------
Not applicable
Item 3. Audit Committee Financial Expert:
-----------------------------------------
Not applicable
Item 4. Principal Accountant Fees and Services:
-----------------------------------------------
Not applicable
Item 5. Audit Committee: Not applicable
-------------------------
Item 6. Schedule of Investments: Not applicable
--------------------------------
Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End
-------------------------------------------------------------------------
Management Investment Companies: Not applicable
--------------------------------
Item 8. Purchases of Equity Securities by Closed-End Management Investment
--------------------------------------------------------------------------
Companies and Affiliated Purchasers: Not applicable
------------------------------------
Item 9. Submission of Matters to a Vote of Security Holders:
------------------------------------------------------------
Not applicable
Item 10. Controls and Procedures:
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(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 on Form N-CSR, that the design and
operation of such procedures are generally effective to provide
reasonable assurance that information required to be disclosed by
the investment company in the reports that it files or submits under
the Securities Exchange Act of 1934 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 11. Exhibits:
------------------
(a) Not applicable
(b) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Investment Company Act of 1940, as amended, and the officer
certifications as required by Section 906 of the Sarbanes-Oxley Act
of 2002 are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
an 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.
NAME OF REGISTRANT
By (Signature and Title): /s/Michael T. Healy
--------------------------
Michael T. Healy
Principal Accounting Officer
Date: December 29, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934
an 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: December 29, 2004
By (Signature and Title): /s/Steven D. Krichmar
---------------------------
Steven D. Krichmar
Principal Financial Officer
Date: December 29, 2004