N-CSR

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: (811-05498 )

Exact name of registrant as specified in charter: Putnam Master Intermediate Income Trust

Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109

Name and address of agent for service:	Beth S. Mazor, Vice President
	One Post Office Square
	Boston, Massachusetts 02109
Copy to:	John W. Gerstmayr, Esq.
	Ropes & Gray LLP
	One International Place
	Boston, Massachusetts 02110

Registrant’s telephone number, including area code: (617) 292-1000

Date of fiscal year end: September 30, 2006

Date of reporting period: October 1, 2005 - September 30, 2006

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

What makes
Putnam different?

A time-honored tradition in
money management

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

A prudent approach to investing

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

Funds for every investment goal

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

A commitment to doing what’s right
for investors

We have stringent investor protections and provide a wealth of information about the Putnam funds.

Industry-leading service

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

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

THE PRUDENT MAN RULE

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

Putnam Master
Intermediate
Income Trust

9| 30| 06

Annual Report

Message from the Trustees	1
About the fund	2
Report from the fund managers	5
Performance	10
Your fund’s management	12
Terms and definitions	14
Trustee approval of management contract	15
Other information for shareholders	18
Financial statements	19
Federal tax information	52
Shareholder meeting results	53
Compliance certifications	54
About the Trustees	55
Officers	59

Cover photograph: © Richard H. Johnson

Message from the Trustees

Putnam Master Intermediate Income Trust: seeking

broad diversification across global bond markets

When Putnam Master Intermediate Income Trust was launched in 1988, its three-pronged focus on U.S. investment-grade bonds, high-yield corporate bonds, and non-U.S. bonds was considered innovative. Lower-rated, higher-yielding corporate bonds were relatively new, having just been established in the late 1970s. And, at the time of the fund’s launch, few investors were venturing outside the United States for fixed-income opportunities.

The bond investment landscape has undergone a transformation in the nearly two decades since. New sectors like mortgage- and asset-backed securities now make up over one third of the U.S. investment-grade market. The high-yield corporate bond sector has also grown significantly. Outside the United States, the popularity of the euro has resulted in a large market of European government bonds. There are also growing opportunities to invest in the debt of emerging-market countries.

The fund’s investment perspective has been broadened to keep pace with the market expansion over time. To process the market’s increasing complexity, Putnam’s 100-member fixed-income group aligns teams of specialists with the varied investment opportunities. Each team identifies compelling strategies within its area of expertise. Your fund’s management team selects from among these strategies, striving to systematically build a diversified portfolio that carefully balances risk and return.

We believe the fund’s multi-strategy approach is well suited to the expanding opportunities of today’s global bond marketplace. As different factors drive the

Optimizing the risk/return trade-off across multiple sectors

Putnam believes that building a diversified portfolio with multiple income-generating strategies is the best way to pursue your fund’s objectives. The fund’s portfolio is composed of a broad spectrum of government, credit, and securitized debt instruments.

performance of the various fixed-income sectors, the fund’s diversified strategy can take advantage of changing market leadership in pursuit of high current income and relative stability of net asset value.

International investing involves certain risks, such as currency fluctuations, economic instability, and political developments. Additional risks may be associated with emerging-market securities, including illiquidity and volatility. Lower-rated bonds may offer higher yields in return for more risk. Mutual funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. 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. While diversification can help protect returns from excessive volatility, it cannot ensure protection against a market loss.

How do closed-end funds
differ from open-end funds?

More assets at work While open-end funds need to maintain a cash position to meet redemptions, closed-end funds are not subject to redemptions and can keep more of their assets invested in the market, if appropriate.

Traded like stocks Closed-end fund shares are traded on stock exchanges, and their market prices fluctuate in response to supply and demand, among other factors.

Market price vs. net asset value Like an open-end fund’s net asset value (NAV) per share, the NAV of a closed-end fund share is equal to the current value of the fund’s assets, minus its liabilities, divided by the number of shares outstanding. However, when buying or selling closed-end fund shares, the price you pay or receive is the market price. Market price reflects current market supply and demand and may be higher or lower than the NAV.

Putnam Master Intermediate Income Trust seeks high current income and relative stability of net asset value by investing in investment-grade, high-yield, and non-U.S. fixed-income securities of limited maturity. Fund holdings and sector classifications reflect the diversification of the fixed-income market. The fund is designed for investors seeking high current income, fixed-income diversification, or both.

Highlights

• For the 12 months ended September 30, 2006, Putnam Master Intermediate Income Trust posted total returns of 6.01% at net asset value (NAV) and 4.17% at market price.

• The fund’s benchmark, the Lehman Government/Credit Bond Index, returned 3.33% .

• The average return for the fund’s Lipper category, Flexible Income Funds (closed-end), was 5.56% .

• After being reduced in November 2005, the fund’s dividend increased in July 2006. See page 8 for more details.

• Additional fund performance, comparative performance, and Lipper data can be found in the performance section beginning on page 10.

Performance

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 manager, market conditions, fluctuations in supply and demand for the fund’s shares, and changes in fund distributions.

Total return for periods ended 9/30/06

Since the fund’s inception (4/29/88), average annual return is 7.79% at NAV and 6.55% at market price.

	Average annual return		Cumulative return
	NAV	Market price	NAV	Market price
10 years	6.33%	6.26%	84.74%	83.59%
5 years	9.07	7.70	54.35	44.93
3 years	7.14	5.22	22.99	16.50
1 year	6.01	4.17	6.01	4.17

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.

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Report from the fund managers

The year in review

The 12-month period ended September 30, 2006, was generally favorable for most sectors of the fixed-income market, especially those associated with higher credit risk, such as emerging-market and high-yield bonds. Strong investor demand for yield boosted prices in both of these sectors, particularly during the first calendar quarter of 2006. Because your fund invests in a variety of fixed-income investments, its results were ahead of the return of its all-bond benchmark index, based on results at net asset value. The fund’s defensive posture and the performance of its emerging-market holdings also helped it outpace the average return for funds in its Lipper peer group, based on results at net asset value. The fund continued to benefit from its holdings in securitized bonds, and its currency strategy also had a positive effect on performance over the course of the 12-month period.

Market overview

Bond yields in the United States, as well as those overseas, were slightly higher at the close of the 12-month period, responding to continued global growth and monetary policy tightening. Because yields of fixed-income instruments move in the opposite direction of their prices, this trend led to lower prices for most government bonds. However, strong demand for yield, worldwide economic expansion, and robust demand for commodities led to favorable performance within other sectors of the fixed-income market, such as emerging-market and high-yield bonds.

For the first nine months of the period, the Fed continued its program of pushing up short-term interest rates in an effort to head off a higher level of price inflation without undermining economic growth. The Fed decided to pause in raising rates at its August and September 2006 meetings, however, while retaining its stated bias toward a possible resumption of rate increases in the future. As of September 30, 2006, the federal funds rate — the overnight lending rate that banks charge each other, which guides other short-term rates — stood at 5.25% .

Market sector performance

These indexes provide an overview of performance in different market sectors for the 12 months ended 9/30/06.

Bonds
Lehman Government/Credit Bond Index
(U.S. Treasury and agency securities and corporate bonds)	3.33%
JPMorgan Global Diversified Emerging Markets Bond Index
(global emerging-market bonds)	7.46%
Citigroup Non-U.S. World Government Bond Index
(international government bonds)	2.02%
JPMorgan Global High Yield Index
(global high-yield corporate bonds)	7.67%
Equities
S&P 500 Index (broad stock market)	10.79%
Russell 2000 Index (small-company stocks)	9.92%
MSCI EAFE Index (international stocks)	19.16%

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Longer-term Treasury rates also increased slightly for the period, as foreign purchasing continued to prop up Treasury security prices. (Note that, given the inverse relationship of bond yields and prices, this also lowered yields for these securities.) From mid-2004 to the end of the summer of 2006, the Fed spearheaded the global effort to cool excessive economic growth that might lead to a resurgence of inflation. By the close of the fund’s fiscal period, the U.S. economy had weakened slightly, responding to higher rates and significantly higher commodity prices. In contrast, economic growth internationally — especially in Germany and Japan — remained very strong. Foreign central banks worldwide now seem to be taking the lead in battling inflation, enacting a series of short-term rate increases that have maintained upward pressure on global interest rates.

Strategy overview

Your fund’s managers believe that using multiple income-generating strategies to build a diversified portfolio is the best way to pursue the fund’s objectives. The fund’s portfolio includes a broad spectrum of securitized, credit, and government debt instruments. Our investment process involves aligning teams of specialists with these varied investment opportunities. Each team identifies what it considers to be the most compelling strategies within its area of expertise. Our fund management team then draws from these strategies, systematically building an array of investments that seeks to carefully balance risk and return.

Over the 12-month period, we continued to maintain a conservative posture regarding both duration — a measure of interest-rate sensitivity — and credit risk. (Credit risk is the risk that a bond issuer could default and fail to pay interest and repay principal in a timely manner.) Despite the Fed’s recent pause beginning in August 2006, the global trend in monetary policy is toward higher rates. Therefore, we have kept the fund’s duration short, or less sensitive to rising rates, in order to lessen the portfolio’s vulnerability to the negative impact of potential future rate increases.

Also for defensive purposes, we continued to maintain a higher level of credit quality than we have in past years by keeping the fund’s exposure to high-yield bonds relatively low and maintaining significant exposure to securitized instruments with short maturities. The fund’s positions in international bonds, especially emerging-market debt, further diversified the fund’s sources of return. The portfolio’s relatively low exposure to high-yield and emerging-market bonds had the effect of increasing the portfolio’s cash position. The relatively flat yield curve,

Comparison of sector weightings

This chart shows how the fund’s weightings have changed over the last six months. Weightings are shown as a percentage of total investment portfolio. Holdings will vary over time. See pages 2 and 3 for more information about each sector.

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moreover, made cash holdings attractive relative to other strategies. We have also maintained an exposure to bank loans. These securities offer floating interest rates that, like an adjustable-rate home mortgage, move in tandem with market rates and can therefore help to provide some protection from interest-rate risk.

Your fund’s holdings

The portfolio’s significant position in securitized bonds, or structured securities, performed well during the 12-month period, as interest rates continued to fluctuate within a relatively narrow range. Structured securities currently offer higher income than corporate bonds of comparable credit quality. They also carry short maturities, providing us with the flexibility to shift to other fixed-income securities should interest rates rise. The most common types of structured securities are mortgage-backed securities (MBSs) issued by the Federal National Mortgage Association (Fannie Mae) and the Government National Mortgage Association (Ginnie Mae). Other types of structured securities include asset-backed securities (ABSs), which are typically backed by car loans and credit card payments, and commercial mortgage-backed securities (CMBSs), which are backed by loans on large commercial real estate projects, such as office parks or shopping malls.

Our country selection in the area of European government bonds contributed positively to performance during the 12-month period. We avoided bonds from Portugal, Greece, and Italy, countries that are experiencing higher inflation and large deficits. Bonds from these countries have also experienced a deterioration in credit quality due to euro-zone restrictions on how budgetary problems can be resolved. We invested instead in bonds from Germany and France, countries that we believe are better equipped for fiscal management when the euro is strong, and whose bonds appear to offer better relative value.

While the fund has gradually de-emphasized emerging-market securities over the past three years, holdings in this area nevertheless helped performance. Positive contributors included bonds from Brazil, Argentina, Colombia, and Indonesia (the last of which was sold by the end of the period). High energy and agriculture prices boosted exports and growth in these countries, encouraging investors to reach for their higher yield.

Additionally, we maintained the fund’s allocation in senior-secured bank loans. These floating-rate bank loans are issued by banks to corporations. The interest these loans pay adjusts to reflect changes in short-term interest rates. Also, their senior-secured status means that they are

Top holdings

This table shows the fund’s top holdings, and the percentage of the fund’s net assets that each represented, as of 9/30/06. The fund’s holdings will change over time.

Holding (percent of fund’s net assets)	Coupon (%) and maturity date
Securitized sector
Federal National Mortgage Association pass-through certificates TBA (1.7%)	6%, 2021
Federal National Mortgage Association pass-through certificates TBA (1.0%)	4.5%, 2021
Federal National Mortgage Association pass-through certificates TBA (1.0%)	4.5%, 2021
Credit sector
Gazprom OAO 144A notes (Germany) (1.6%)	9.625%, 2013
Pemex Project Funding Master Trust company guaranty (0.6%)	5.75%, 2015
VTB Capital SA 144A notes (Luxembourg) (0.5%)	7.5%, 2011
Government sector
U.S. Treasury Notes (5.6%)	4.25%, 2013
U.S. Treasury Notes (4.0%)	3.25%, 2008
Ireland (Republic of) bonds (1.5%)	5%, 2013

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backed by the assets of each issuing company, such as buildings and equipment. Although the floating-rate feature of these securities does not eliminate interest-rate or inflation risk, floating-rate bank loans can help an income-oriented portfolio weather the ups and downs of a full interest-rate cycle.

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

Of special interest

Changes in your fund’s dividend

After being reduced from $0.035 to $0.028 in November 2005, the fund’s dividend increased to $0.030 in July 2006. This net reduction from the prior year reflected the fund’s short portfolio duration and its continued relative de-emphasis of high-yield bonds, which together have reduced earning capacity at this time but are expected to contribute to longer-term performance.

8

The outlook for your fund

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

Though the U.S. economy could continue to slow in the months ahead, we believe that accelerating growth in Europe and Japan will keep the global economy on track. Given the Fed’s recent pause from its credit-tightening program, it remains to be seen whether inflationary pressures will prompt a resumption of rate increases in late 2006 or early 2007. However, we do expect foreign central banks to continue to tighten credit overseas in the coming months. This potential shift in “inflation-fighting” leadership and global growth dynamics means that central bank behavior is likely to be less predictable over the next 12 months. This unpredictability, coupled with an upward drift in interest rates, could represent a significant challenge to financial markets in general. We are therefore continuing to position the fund defensively with regard to both duration and credit. As part of this defensive posture, we are maintaining an emphasis on structured securities, which tend to have shorter maturities and are of higher quality. Going forward, we will remain vigilant regarding any possible disruptions to the global economy and fixed-income markets, and intend to continue our efforts to diversify the portfolio across a broad range of fixed-income sectors and securities.

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

International investing involves certain risks, such as currency fluctuations, economic instability, and political developments. Additional risks may be associated with emerging-market securities, including illiquidity and volatility. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. 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. The fund’s shares trade on a stock exchange at market prices, which may be lower than the fund’s net asset value.

9

Your fund’s performance

This section shows your fund’s performance for periods ended September 30, 2006, the end of its fiscal year. 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.

Fund performance Total return for periods ended 9/30/06

	NAV	Market price
Annual average
Life of fund (since 4/29/88)	7.79%	6.55%
10 years	84.74	83.59
Annual average	6.33	6.26
5 years	54.35	44.93
Annual average	9.07	7.70
3 years	22.99	16.50
Annual average	7.14	5.22
1 year	6.01	4.17

Performance assumes reinvestment of distributions and does not account for taxes.

Comparative index returns For periods ended 9/30/06

				Lipper
	Lehman	Citigroup Non-	JPMorgan	Flexible Income
	Government/	U.S. World	Global	Funds
	Credit Bond	Government	High Yield	(closed-end)
	Index	Bond Index	Index	category average†
Annual average
(life of fund, since 4/29/88)	7.60%	6.59%	—*	7.44%
10 years	87.24	58.33	93.55%	73.40
Annual average	6.47	4.70	6.83	5.58
5 years	27.43	48.08	69.22	55.15
Annual average	4.97	8.17	11.09	8.94
3 years	9.53	13.81	30.02	23.51
Annual average	3.08	4.41	9.15	7.24
1 year	3.33	2.02	7.67	5.56

Index and Lipper results should be compared to fund performance at net asset value. Lipper calculations for reinvested dividends may differ from actual performance.

* The inception date of the JPMorgan Global High Yield Index was 12/31/93.

Over the 1-, 3-, 5-, and 10-year periods ended 9/30/06, there were 7 funds in this Lipper category.

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Fund price and distribution information For the 12-month period ended 9/30/06

Distributions
Number	12
Income	$0.349
Capital gains	—
Total	$0.349
Share value:	NAV	Market price
9/30/05	$7.07	$6.25
9/30/06	7.08	6.15
Current yield (end of period)
Current dividend rate1	5.08%	5.85%

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

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Your fund’s management

Your fund is managed by the members of the Putnam Core Fixed-Income and Core Fixed-Income High Yield teams. D. William Kohli is the Portfolio Leader. Rob Bloemker, Jeffrey Kaufman, Paul Scanlon, and David Waldman are Portfolio Members of the 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 Core Fixed-Income and Core Fixed-Income High-Yield teams, including those who are not Portfolio Leaders or Portfolio Members of your fund, visit Putnam’s Individual Investor Web site at www.putnam.com.

Investment team fund ownership

The table below shows how much the fund’s current Portfolio Leader and Portfolio Members have invested in the fund and in all Putnam mutual funds (in dollar ranges). Information shown is as of September 30, 2006, and September 30, 2005.

Trustee and Putnam employee fund ownership

As of September 30, 2006, all of the 11 Trustees then on the Board of the Putnam funds owned fund shares. The table below shows the approximate value of investments in the fund and all Putnam funds as of that date by the Trustees and Putnam employees. These amounts include investments by the Trustees’ and employees’ immediate family members and investments through retirement and deferred compensation plans.

		Total assets in
	Assets in the fund	all Putnam funds
Trustees	$31,000	$ 90,000,000
Putnam employees	$ 6,000	$418,000,000

Fund manager compensation

The total 2005 fund manager compensation that is attributable to your fund is approximately $940,000. This amount includes a portion of 2005 compensation paid by Putnam Management to the fund managers listed in this section for their portfolio management responsibilities, calculated based on the fund assets they manage taken as a percentage of the total assets they manage. The compensation amount also includes a portion of the 2005 compensation paid to the Chief Investment Officer of the team and the Group Chief Investment Officer of the fund’s broader investment category for their oversight responsibilities, calculated based on the fund assets they oversee taken as a percentage of the total assets they oversee. This amount does not include compensation of other personnel involved in research, trading, administration, systems, compliance, or fund operations; nor does it include non-compensation costs. These percentages are de termined as of the fund’s fiscal period-end. For personnel who joined Putnam Management during or after 2005, the calculation reflects annualized 2005 compensation or an estimate of 2006 compensation, as applicable.

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Other Putnam funds managed by the Portfolio Leader and Portfolio Members

D. William Kohli is also a Portfolio Leader of Putnam Diversified Income Trust and Putnam Premier Income Trust, and a Portfolio Member of Putnam Global Income Trust.

Rob Bloemker is also a Portfolio Member of Putnam American Government Income Fund, Putnam Diversified Income Trust, Putnam Income Fund, Putnam Limited Duration Government Income Fund, Putnam Premier Income Trust, and Putnam U.S. Government Income Trust.

Jeffrey Kaufman is also a Portfolio Member of Putnam Diversified Income Trust and Putnam Premier Income Trust.

Paul Scanlon is also a Portfolio Leader of Putnam Floating Rate Income Fund, Putnam High Yield Advantage Fund, and Putnam High Yield Trust. He is also a Portfolio Member of Putnam Diversified Income Trust and Putnam Premier Income Trust.

David Waldman is also a Portfolio Member of Putnam Diversified Income Trust and Putnam Premier Income Trust.

D. William Kohli, Rob Bloemker, Jeffrey Kaufman, Paul Scanlon, and David Waldman may also manage other accounts and variable trust funds advised by Putnam Management or an affiliate.

Changes in your fund’s Portfolio Leader and Portfolio Members

Your fund’s Portfolio Leader and Portfolio Members did not change during the year ended September 30, 2006.

Putnam fund ownership by Putnam’s Executive Board

The table below shows how much the members of Putnam’s Executive Board have invested in all Putnam mutual funds (in dollar ranges). Information shown is as of September 30, 2006, and September 30, 2005.

			$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
Philippe Bibi	2006							•
Chief Technology Officer	2005							•
Joshua Brooks	2006							•
Deputy Head of Investments	2005							•
William Connolly	2006							•
Head of Retail Management	2005							•
Kevin Cronin	2006							•
Head of Investments	2005							•
Charles Haldeman, Jr.	2006							•
President and CEO	2005							•
Amrit Kanwal	2006						•
Chief Financial Officer	2005						•
Steven Krichmar	2006						•
Chief of Operations	2005							•
Francis McNamara, III	2006							•
General Counsel	2005							•
Jeffrey Peters	2006							•
Head of International Business	N/A
Richard Robie, III	2006						•
Chief Administrative Officer	2005						•
Edward Shadek	2006							•
Deputy Head of Investments	2005							•
Sandra Whiston	2006						•
Head of Institutional Management	2005						•

N/A indicates the individual was not a member of Putnam’s Executive Board as of 9/30/05.

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Terms and definitions

Important terms

Total return shows how the value of the fund’s shares changed over time, assuming you held the shares through the entire period and reinvested all distributions in the fund.

Net asset value (NAV) is the value of all your fund’s assets, minus any liabilities, divided by the number of outstanding 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 New York Stock Exchange and the American Stock Exchange.

Comparative indexes

Citigroup Non-U.S. World Government Bond Index is an unmanaged index of international investment-grade fixed-income securities, excluding the United States.

JPMorgan Global Diversified Emerging Markets Bond Index is an unmanaged index of global emerging-market fixed-income securities.

JPMorgan Global High Yield Index is an unmanaged index of global high-yield fixed-income securities.

Lehman Government/Credit Bond Index is an unmanaged index of U.S. Treasuries, agency securities, and investment-grade corporate bonds.

Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia.

Russell 2000 Index is an unmanaged index of the 2,000 smallest companies in 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 mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category averages reflect performance trends for funds within a category.

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Trustee approval
of management contract

General conclusions

The Board of Trustees of the Putnam funds oversees the management of each fund and, as required by law, determines annually whether to approve the continuance of your fund’s management contract with Putnam Management and the sub-management contract between Putnam Management’s affiliate, Putnam Investments Limited (“PIL”), and Putnam Management. In this regard, the Board of Trustees, with the assistance of its Contract Committee consisting solely of Trustees who are not “interested persons” (as such term is defined in the Investment Company Act of 1940, as amended) of the Putnam funds (the “Independent Trustees”), requests and evaluates all information it deems reasonably necessary under the circumstances. Over the course of several months ending in June 2006, the Contract Committee met four times to consider the information provided by Putnam Management and other information developed with the assistance of the Board’s in dependent counsel and independent staff. The Contract Committee reviewed and discussed key aspects of this information with all of the Independent Trustees. Upon completion of this review, the Contract Committee recommended, and the Independent Trustees approved, the continuance of your fund’s management contract and sub-management contract, effective July 1, 2006. (Because PIL is an affiliate of Putnam Management and Putnam Management remain fully responsible for all services provided by PIL, the Trustees have not evaluated PIL as a separate entity, and all subsequent references to Putnam Management below include reference to PIL as necessary or appropriate in the context.) This approval was based on the following conclusions:

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

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

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

Management fee schedules and categories; total expenses

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

• Competitiveness. The Trustees reviewed comparative fee and expense information for competitive funds, which indicated that, in a custom peer group of competitive funds selected by Lipper Inc., your fund ranked in the 67th percentile in management fees and in the 67th percentile in total expenses as of December 31, 2005 (the first percentile being the least expensive funds and the 100th percentile being the most expensive funds). The Trustees expressed their intention to monitor this information closely to ensure that fees and expenses of your fund continue to meet evolving competitive standards.

• Economies of scale. Your fund currently has the benefit of breakpoints in its management fee that provide shareholders with significant economies of scale, which means that the effective management fee rate of a fund (as a percentage of fund assets) declines as a fund grows in size and crosses specified asset thresholds. Conversely, as a fund shrinks in size-as has been the case for many Putnam funds in recent years-these breakpoints result in increasing fee levels. In recent years, the Trustees have examined the operation of the existing breakpoint structure during periods of both growth and decline in asset levels. The Trustees concluded that the fee schedules in effect for the funds represented an appropriate sharing of economies of scale at current asset levels. In reaching this

15

conclusion, the Trustees considered the Contract Committee’s stated intent to continue to work with Putnam Management to plan for an eventual resumption in the growth of assets, including a study of potential economies that might be produced under various growth assumptions.

In connection with their review of the management fees and total expenses of the Putnam funds, the Trustees also reviewed the costs of the services to be provided and profits to be realized by Putnam Management and its affiliates from the relationship with the funds. This information included trends in revenues, expenses and profitability of Putnam Management and its affiliates relating to the investment management and distribution services provided to the funds. In this regard, the Trustees also reviewed an analysis of Putnam Management’s revenues, expenses and profitability with respect to the funds’ management contracts, allocated on a fund-by-fund basis. Because many of the costs incurred by Putnam Management in managing the funds are not readily identifiable to particular funds, the Trustees observed that the methodology for allocating costs is an important factor in evaluating Putnam Management’s costs and pro fitability, both as to the Putnam funds in the aggregate and as to individual funds. The Trustees reviewed Putnam Management’s cost allocation methodology with the assistance of independent consultants and concluded that this methodology was reasonable and well-considered.

Investment performance

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

The Trustees noted the satisfactory investment performance of many Putnam funds. They also noted the disappointing investment performance of certain funds in recent years and discussed with senior management of Putnam Management the factors contributing to such underperformance and actions being taken to improve performance. The Trustees recognized that, in recent years, Putnam Management has made significant changes in its investment personnel and processes and in the fund product line to address areas of underperformance. In particular, they noted the important contributions of Putnam Management’s leadership in attracting, retaining and supporting high-quality investment professionals and in systematically implementing an investment process that seeks to merge the best features of fundamental and quantitative analysis. The Trustees indicated their intention to continue to monitor performance trends to assess the effectivene ss of these changes and to evaluate whether additional changes to address areas of underperformance are warranted.

In the case of your fund, the Trustees considered that your fund’s common share cumulative total return performance at net asset value was in the following percentiles of its Lipper Inc. peer group (Lipper Flexible Income Funds (closed-end)) for the one-, three-and five-year periods ended March 31, 2006 (the first percentile being the best performing funds and the 100th percentile being the worst performing funds):

One-year period	Three-year period	Five-year period
78%	45%	45%

(Because of the passage of time, these performance results may differ from the performance results for more recent periods shown elsewhere in this report. Over the one-, three- and five-year periods ended March 31, 2006, there were 8 funds in your fund’s Lipper peer group.* Past performance is no guarantee of future performance.)

The Trustees noted the disappointing performance for your fund for the one-year period ended March 31, 2006. In this regard, the Trustees considered Putnam Management’s view that one factor in the fund’s relative underperformance during this period was its selection of higher quality bonds during recent periods, given market conditions. The Trustees also considered Putnam Management’s belief that the fund’s investment strategy and process are designed to produce attractive relative performance over longer periods.

16

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

Brokerage and soft-dollar allocations; other benefits

The Trustees considered various potential benefits that Putnam Management may receive in connection with the services it provides under the management contract with your fund. These include benefits related to brokerage and soft-dollar allocations, whereby a portion of the commissions paid by a fund for brokerage may be used to acquire research services that may be useful to Putnam Management in managing the assets of the fund and of other clients. The Trustees indicated their continued intent to monitor the potential benefits associated with the allocation of fund brokerage to ensure that the principle of seeking “best price and execution” remains paramount in the portfolio trading process. The Trustees’ annual review of your fund’s management contract also included the review of your fund’s custodian and investor servicing agreements with Putnam Fiduciary Trust Company, which provide benefits to affiliat es of Putnam Management.

Comparison of retail and institutional fee schedules

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

* The percentile rankings for your fund’s common share annualized total return performance in the Lipper Flexible Income Funds (closed-end) category for the one-, five- and ten-year periods ended September 30, 2006, were 63%, 50%, and 50%, respectively. Over the one-, five- and ten-year periods ended September 30, 2006, the fund ranked 5 out of 7, 4 out of 7, and 4 out of 7 funds, respectively. Note that his more recent information was not available when the Trustees approved the continuance of your fund’s management contract.

17

Other information for shareholders

Important notice regarding share repurchase program

In September 2006, the Trustees of your fund approved an extension of the current share repurchase program being implemented by Putnam Investments on behalf of your fund. The plan, as extended, allows your fund to repurchase, in the 24 months ending October 6, 2007, up to 10% of the shares outstanding as of October 7, 2005.

Putnam’s policy on confidentiality

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

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2006, are available on the Putnam Individual Investor Web site, www.putnam.com/individual, and on the SEC’s Web site, www.sec.gov. If you have questions about finding forms on the SEC’s Web site, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.

Fund portfolio holdings

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

18

Financial statements

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

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

Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and 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. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)

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

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

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

19

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders
Putnam Master Intermediate Income Trust:

We have audited the accompanying statement of assets and liabilities of Putnam Master Intermediate Income Trust, including the fund’s portfolio, as of September 30, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years or periods in the period then ended. These financial statements and financial highlights are the responsibility of the fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2006 by correspondence with the custodian and brokers or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Putnam Master Intermediate Income Trust as of September 30, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years or periods in the period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
November 9, 2006

20

The fund’s portfolio 9/30/06

CORPORATE BONDS AND NOTES (17.8%)*
			Principal amount		Value
Basic Materials (1.4%)
Abitibi-Consolidated, Inc.
notes 7 3/4s, 2011 (Canada)		$	145,000	$	132,675
Chaparral Steel Co. company
guaranty 10s, 2013			486,000		541,890
Cognis Holding GmbH & Co.
144A sr. notes 9 1/2s,
2014 (Germany)	EUR		148,000		199,829
Compass Minerals International,
Inc. sr. disc.notes stepped-coupon
Ser. B, zero % (12s, 6/1/08),
2013 ††		$	285,000		265,050
Compass Minerals International,
Inc. sr. notes stepped-coupon
zero % (12 3/4s, 12/15/07),
2012 ††			775,000		748,844
Covalence Specialty Materials
Corp. 144A sr. sub. notes 10 1/4s,
2016			653,000		633,410
Crystal US Holdings, LLC sr. disc.
notes stepped-coupon Ser. A,
zero % (10s, 10/1/09), 2014 ††			444,000		356,310
Equistar Chemicals LP/Equistar
Funding Corp. company
guaranty 10 1/8s, 2008			581,000		617,313
Gerdau Ameristeel Corp. sr.
notes 10 3/8s, 2011 (Canada)			358,000		385,745
Huntsman, LLC company
guaranty 11 5/8s, 2010			260,000		287,300
Huntsman, LLC company
guaranty 11 1/2s, 2012			191,000		217,263
Jefferson Smurfit Corp. company
guaranty 7 1/2s, 2013			120,000		110,700
JSG Holding PLC 144A sr. notes
11 1/2s, 2015 (Ireland) ‡‡	EUR		181,020		235,012
Lyondell Chemical Co. company
guaranty 10 1/2s, 2013		$	155,000		170,500
MDP Acquisitions PLC sr. notes
9 5/8s, 2012 (Ireland)			235,000		247,925
MDP Acquisitions PLC sr. notes
Ser. EUR, 10 1/8s, 2012
(Ireland)	EUR		440,000		607,740
Nalco Co. sr. sub. notes 9s,
2013	EUR		75,000		102,690
Nalco Co. sr. sub. notes 8 7/8s,
2013		$	583,000		607,778
Novelis, Inc. 144A sr. notes 7
1/4s, 2015			760,000		722,000
PQ Corp. company guaranty
7 1/2s, 2013			92,000		87,400
Rockwood Specialties Group, Inc.
company guaranty 7 5/8s, 2014	EUR		350,000		461,042
Steel Dynamics, Inc. company
guaranty 9 1/2s, 2009		$	695,000		718,456
Stone Container Corp. sr.
notes 9 3/4s, 2011			125,000		128,906
Stone Container Corp. sr.
notes 8 3/8s, 2012			240,000		230,400

CORPORATE BONDS AND NOTES (17.8%)* continued
			Principal amount		Value
Basic Materials continued
Stone Container Finance company
guaranty 7 3/8s,2014 (Canada)		$	140,000	$	127,400
United States Steel Corp. sr.
notes 9 3/4s, 2010			324,000		345,870
					9,289,448
Capital Goods (1.0%)
Alliant Techsystems, Inc. sr. sub.
notes 6 3/4s, 2016			223,000		219,655
Allied Waste North America, Inc.
company guaranty Ser. B,
8 1/2s, 2008			732,000		766,770
Blount, Inc. sr. sub. notes
8 7/8s, 2012			455,000		453,863
Browning-Ferris Industries, Inc.
sr. notes 6 3/8s, 2008			73,000		73,000
Crown Euro Holdings SA
company guaranty 6 1/4s, 2011
(France)	EUR		107,000		141,760
Decrane Aircraft Holdings Co.
company guaranty zero %,
2008 (acquired 7/23/04,
cost $323,523) ‡		$	986,000		704,990
L-3 Communications Corp.
company guaranty 6 1/8s, 2013			2,370,000		2,304,825
L-3 Communications Corp. sr.
sub. notes 5 7/8s, 2015			854,000		811,300
Manitowoc Co., Inc. (The)
company guaranty 10 1/2s, 2012			184,000		198,260
Milacron Escrow Corp. sec.
notes 11 1/2s, 2011			123,000		116,850
Owens-Brockway Glass company
guaranty 7 3/4s, 2011			181,000		185,978
Owens-Brockway Glass sr. sec.
notes 8 3/4s, 2012			877,000		925,235
					6,902,486
Communication Services (0.8%)
American Cellular Corp. company
guaranty 9 1/2s, 2009			195,000		196,706
Cincinnati Bell, Inc. company
guaranty 7s, 2015			578,000		566,440
Digicel, Ltd. 144A sr. notes 9 1/4s,
2012 (Jamaica)			325,000		337,188
Inmarsat Finance PLC company
guaranty 7 5/8s, 2012
(United Kingdom)			223,000		229,690
Inmarsat Finance PLC company
guaranty stepped-coupon
zero % (10 3/8s, 11/15/08), 2012
(United Kingdom) ††			866,000		766,410
iPCS, Inc. sr. notes 11 1/2s, 2012			300,000		336,000
IWO Holdings, Inc. sec. FRN 9.
257s, 2012			82,000		84,255
Qwest Communications
International, Inc. company
guaranty 7 1/2s, 2014			428,000		429,070
Qwest Corp. notes 8 7/8s, 2012			1,501,000		1,637,966

21

CORPORATE BONDS AND NOTES (17.8%)* continued
		Principal amount		Value
Communication Services continued
Qwest Corp. sr. notes 7 5/8s, 2015	$	409,000	$	424,338
Rural Cellular Corp. sr. sub. notes
9 3/4s, 2010		75,000		75,469
				5,083,532
Consumer Cyclicals (3.1%)
Boyd Gaming Corp. sr. sub. notes 8 3/4s,
2012		585,000		615,713
Boyd Gaming Corp. sr. sub. notes 7 3/4s,
2012		165,000		169,331
Boyd Gaming Corp. sr. sub. notes 6 3/4s,
2014		134,000		130,985
CanWest Media, Inc. company guaranty
8s, 2012 (Canada)		337,021		332,808
Dex Media West, LLC/Dex Media
Finance Co. sr. notes Ser. B, 8 1/2s,
2010		605,000		624,663
Dex Media, Inc. notes 8s, 2013		182,000		180,635
FelCor Lodging LP company guaranty
8 1/2s, 2008 (R)		515,000		545,256
Ford Motor Credit Corp. notes 7 7/8s,
2010		245,000		238,600
Ford Motor Credit Corp. notes 7 3/8s,
2009		361,000		350,821
Ford Motor Credit Corp. sr. notes 9 7/8s,
2011		621,000		642,600
Ford Motor Credit Corp. 144A sr.
unsecd. notes 9 3/4s, 2010		444,000		458,418
General Motors Acceptance Corp. FRN
6.457s, 2007		350,000		348,033
General Motors Acceptance Corp. FRN
Ser. MTN, 6.243s, 2007		695,000		692,654
General Motors Acceptance Corp.
notes 7 3/4s, 2010		90,000		92,218
General Motors Acceptance Corp.
notes 6 7/8s, 2012		68,000		67,307
General Motors Acceptance Corp.
notes 6 3/4s, 2014		59,000		57,599
General Motors Acceptance Corp.
sr. unsub. notes 5.85s, 2009		33,000		32,355
Goodyear Tire & Rubber Co. (The) sr.
notes 9s, 2015		418,000		424,270
Host Marriott LP sr. notes Ser. M, 7s,
2012 (R)		725,000		733,156
Jostens IH Corp. company guaranty
7 5/8s, 2012		718,000		721,590
K. Hovnanian Enterprises, Inc. company
guaranty 8 7/8s, 2012		138,000		135,240
K. Hovnanian Enterprises, Inc. company
guaranty 7 3/4s, 2013		269,000		246,135
Lear Corp. company guaranty Ser. B,
8.11s, 2009		495,000		477,675
Levi Strauss & Co. sr. notes 9 3/4s, 2015		651,000		675,413
Levi Strauss & Co. sr. notes 8 7/8s, 2016		285,000		283,575
Meritage Homes Corp. company
guaranty 6 1/4s, 2015		235,000		199,750
Meritor Automotive, Inc. notes
6.8s, 2009		71,000		68,338

CORPORATE BONDS AND NOTES (17.8%)* continued
		Principal amount		Value
Consumer Cyclicals continued
MGM Mirage, Inc. company guaranty
8 1/2s, 2010	$	468,000	$	497,835
MGM Mirage, Inc. company guaranty
6s, 2009		1,009,000		996,388
Movie Gallery, Inc. sr. unsecd. notes
11s, 2012		190,000		121,600
Owens Corning notes 7 1/2s, 2005
(In default) † ****		534,000		275,010
Oxford Industries, Inc. sr. notes 8 7/8s,
2011		460,000		469,200
Park Place Entertainment Corp. sr.
notes 7s, 2013		495,000		508,877
Park Place Entertainment Corp.
sr. sub. notes 7 7/8s, 2010		395,000		410,800
Pinnacle Entertainment, Inc. sr. sub.
notes 8 1/4s, 2012		247,000		250,088
PRIMEDIA, Inc. sr. notes 8s, 2013		688,000		624,360
R.H. Donnelley Corp. sr. disc. notes
Ser. A-2, 6 7/8s, 2013		67,000		61,138
R.H. Donnelley Corp. sr. notes 6 7/8s,
2013		268,000		244,550
Reader’s Digest Association, Inc. (The)
sr. notes 6 1/2s, 2011		365,000		346,750
Resorts International Hotel and Casino,
Inc. company guaranty 11 1/2s, 2009		450,000		465,750
Scientific Games Corp. company
guaranty 6 1/4s, 2012		626,000		602,525
Sealy Mattress Co. sr. sub. notes 8 1/4s,
2014		735,000		749,700
Standard Pacific Corp. sr. notes 7 3/4s,
2013		101,000		95,445
Starwood Hotels & Resorts Worldwide,
Inc. debs. 7 3/8s, 2015		339,000		343,238
Station Casinos, Inc. sr. notes 6s, 2012		470,000		453,550
Tenneco Automotive, Inc. company
guaranty 8 5/8s, 2014		73,000		72,088
Tenneco Automotive, Inc. sec. notes
Ser. B, 10 1/4s, 2013		302,000		327,670
Texas Industries, Inc. sr. unsecd. notes
7 1/4s, 2013		161,000		161,000
THL Buildco, Inc. (Nortek Holdings, Inc.)
sr. sub. notes 8 1/2s, 2014		604,000		570,780
Trump Entertainment Resorts, Inc. sec.
notes 8 1/2s, 2015		117,000		111,881
United Auto Group, Inc. company
guaranty 9 5/8s, 2012		515,000		545,900
Vertis, Inc. company guaranty Ser. B,
10 7/8s, 2009		661,000		661,000
Vertis, Inc. 144A sub. notes 13 1/2s,
2009		285,000		259,350
Wynn Las Vegas, LLC/Wynn Las Vegas
Capital Corp. 1stmtge. 6 5/8s, 2014		555,000		538,350
				20,309,961
Consumer Staples (2.7%)
Affinity Group, Inc. sr. sub. notes
9s, 2012		545,000		545,000
AMC Entertainment, Inc. sr. sub. notes
8s, 2014		456,000		428,640

22

CORPORATE BONDS AND NOTES (17.8%)* continued
		Principal amount		Value
Consumer Staples continued
Archibald Candy Corp. company
guaranty 10s, 2007 (In default) (F) †	$	90,153	$	4,711
Avis Budget Care Rental, LLC 144A sr.
notes 7 3/4s, 2016		285,000		275,738
Brand Services, Inc. company guaranty
12s, 2012		565,000		632,800
Cablevision Systems Corp. sr. notes
Ser. B, 8s, 2012		167,000		169,088
CCH I, LLC/Capital Corp. sec. notes
11s, 2015		1,347,000		1,225,770
CCH I Holdings, LLC company guaranty
stepped-coupon zero % (12 1/8s,
1/15/07), 2015 ††		49,000		33,443
CCH II, LLC/Capital Corp. sr. notes
Ser. B, 10 1/4s, 2010		259,000		262,885
CCH, LLC/Capital Corp. sr. notes
10 1/4s, 2010		86,000		87,720
Church & Dwight Co., Inc. company
guaranty 6s, 2012		444,000		425,130
Cinemark USA, Inc. sr. sub.
notes 9s, 2013		20,000		20,750
Cinemark, Inc. sr. disc. notes
stepped-coupon zero %
(9 3/4s, 3/15/09), 2014 ††		990,000		789,525
Constellation Brands, Inc. company
guaranty Ser. B, 8s, 2008		825,000		845,625
Constellation Brands, Inc. sr. sub.
notes Ser. B, 8 1/8s, 2012		425,000		442,000
CSC Holdings, Inc. sr. notes Ser. B,
7 5/8s, 2011		595,000		610,619
CSC Holdings, Inc. 144A sr. notes
7 1/4s, 2012		1,068,000		1,063,995
Dean Foods Co. company guaranty 7s,
2016		264,000		264,000
Dean Foods Co. sr. notes 6 5/8s, 2009		445,000		446,669
Del Monte Corp. company guaranty
6 3/4s, 2015		320,000		308,800
Del Monte Corp. sr. sub. notes
8 5/8s, 2012		560,000		587,300
DirecTV Holdings, LLC company
guaranty 6 3/8s, 2015		1,026,000		964,440
Echostar DBS Corp. company guaranty
6 5/8s, 2014		2,119,000		2,015,699
Interpublic Group of Companies, Inc.
notes 6 1/4s, 2014		118,000		102,070
Jean Coutu Group, Inc. sr. notes 7 5/8s,
2012 (Canada)		509,000		535,086
Pinnacle Foods Holding Corp. sr. sub.
notes 8 1/4s, 2013		741,000		741,926
Playtex Products, Inc. company guaranty
9 3/8s, 2011		170,000		177,650
Playtex Products, Inc. sec. notes 8s,
2011		770,000		798,875
Prestige Brands, Inc. sr. sub. notes
9 1/4s, 2012		450,000		452,250
Rainbow National Services, LLC 144A
sr. notes 8 3/4s, 2012		482,000		515,740

CORPORATE BONDS AND NOTES (17.8%)* continued
		Principal amount		Value
Consumer Staples continued
Remington Arms Co., Inc. company
guaranty 10 1/2s, 2011	$	302,000	$	277,840
Sbarro, Inc. company guaranty 11s,
2009		726,000		738,705
Scotts Co. (The) sr. sub. notes 6 5/8s,
2013		255,000		248,944
Six Flags, Inc. sr. notes 9 5/8s, 2014		370,000		329,300
Young Broadcasting, Inc. company
guaranty 10s, 2011		431,000		402,446
Young Broadcasting, Inc. sr. sub. notes
8 3/4s, 2014		365,000		310,250
				18,081,429
Energy (3.9%)
Arch Western Finance, LLC sr. notes
6 3/4s, 2013		1,347,000		1,293,120
Bluewater Finance, Ltd. company
guaranty 10 1/4s, 2012
(Cayman Islands)		487,000		493,088
CHC Helicopter Corp. sr. sub. notes
7 3/8s, 2014 (Canada)		812,000		765,310
Chesapeake Energy Corp. company
guaranty 7 3/4s, 2015		269,000		274,380
Chesapeake Energy Corp. sr. notes
7 1/2s, 2013		1,031,000		1,046,465
Chesapeake Energy Corp. sr. notes
7s, 2014		279,000		275,861
Comstock Resources, Inc. sr. notes
6 7/8s, 2012		510,000		486,413
Dresser, Inc. company guaranty
10 1/8s, 2011		476,000		498,610
EXCO Resources, Inc. company
guaranty 7 1/4s, 2011		725,000		708,688
Forest Oil Corp. sr. notes 8s, 2011		540,000		558,900
Forest Oil Corp. sr. notes 8s, 2008		335,000		343,375
Gazprom OAO 144A notes 9 5/8s,
2013 (Germany)		9,080,000		10,748,450
Harvest Operations Corp. sr. notes
7 7/8s, 2011 (Canada)		584,000		541,660
Hornbeck Offshore Services, Inc. sr.
notes Ser. B, 6 1/8s, 2014		517,000		482,749
Massey Energy Co. sr. notes 6 5/8s,
2010		774,000		754,650
Newfield Exploration Co. sr. notes
7 5/8s, 2011		700,000		721,000
Newfield Exploration Co. sr. sub.
notes 6 5/8s, 2014		348,000		340,605
Offshore Logistics, Inc. company
guaranty 6 1/8s, 2013		655,000		614,063
Oslo Seismic Services, Inc. 1st mtge.
8.28s, 2011		458,704		470,201
Pacific Energy Partners/Pacific Energy
Finance Corp. sr. notes 7 1/8s, 2014		355,000		362,100
PetroHawk Energy Corp. 144A sr.
notes 9 1/8s, 2013		870,000		874,350
Plains Exploration & Production Co.
sr. notes 7 1/8s, 2014		620,000		647,900

23

CORPORATE BONDS AND NOTES (17.8%)* continued
		Principal amount		Value
Energy continued
Plains Exploration & Production Co.
sr. sub. notes 8 3/4s, 2012	$	485,000	$	512,888
Pogo Producing Co. sr. sub. notes
Ser. B, 8 1/4s, 2011		670,000		688,425
Pride International, Inc. sr. notes
7 3/8s, 2014		826,000		850,780
Seabulk International, Inc. company
guaranty 9 1/2s, 2013		402,000		438,180
				25,792,211
Financial (1.9%)
Bosphorus Financial Services, Ltd.
144A sec. FRN 7.205s, 2012
(Cayman Islands)		1,445,000		1,434,641
Crescent Real Estate Equities LP notes
7 1/2s, 2007 (R)		310,000		312,325
Finova Group, Inc. notes 7 1/2s, 2009		439,620		123,094
Pemex Finance, Ltd. bonds 9.69s, 2009
(Cayman Islands)		609,000		644,824
Pemex Project Funding Master Trust
company guaranty 5 3/4s, 2015		4,060,000		3,966,620
Pemex Project Funding Master Trust 144A
company guaranty 5 3/4s, 2015		1,778,000		1,737,106
UBS Luxembourg SA for Sberbank unsec.
sub. notes stepped-coupon 6.23s
(7.429s, 2/11/10), 2015 (Luxembourg) ††		1,400,000		1,398,600
VTB Capital SA 144A notes 7 1/2s, 2011
(Luxembourg)		3,010,000		3,198,125
				12,815,335
Health Care (1.2%)
Community Health Systems, Inc.
sr. sub. notes 6 1/2s, 2012		183,000		174,994
DaVita, Inc. company guaranty 6 5/8s,
2013		175,000		170,844
Extendicare Health Services, Inc.
sr. sub. notes 6 7/8s, 2014		312,000		333,840
HCA, Inc. debs. 7.19s, 2015		51,000		42,462
HCA, Inc. notes 6 3/8s, 2015		212,000		171,190
HCA, Inc. notes 5 3/4s, 2014		260,000		204,100
MedQuest, Inc. company guaranty
Ser. B, 11 7/8s, 2012		595,000		517,650
Omnicare, Inc. sr. sub. notes 6 1/8s,
2013		740,000		699,300
Service Corp. International notes 6 1/2s,
2008		110,000		110,000
Service Corp. International 144A sr.
notes 8s, 2017		170,000		162,775
Service Corporation International
sr. notes 6 3/4s, 2016		535,000		512,931
Stewart Enterprises, Inc. sr. notes
6 1/4s, 2013		724,000		669,700
Tenet Healthcare Corp. notes
7 3/8s, 2013		390,000		351,488
Tenet Healthcare Corp. sr. notes
9 7/8s, 2014		835,000		831,869
Triad Hospitals, Inc. sr. notes 7s,
2012		825,000		816,750

CORPORATE BONDS AND NOTES (17.8%)* continued
		Principal amount			Value
Health Care continued
Triad Hospitals, Inc. sr. sub.
notes 7s, 2013		$	211,000	$	204,934
US Oncology, Inc. company
guaranty 9s, 2012			420,000		434,700
Vanguard Health Holding Co. II,
LLC sr. sub. notes 9s, 2014			556,000		539,320
Ventas Realty LP/Capital Corp.
company guaranty 9s, 2012 (R)			305,000		340,075
Ventas Realty LP/Capital Corp.
company guaranty 6 3/4s, 2010 (R)			201,000		204,518
Ventas Realty LP/Capital Corp.
sr. notes 6 5/8s, 2014 (R)			173,000		173,433
					7,666,873
Technology (0.5%)
Advanced Micro Devices, Inc. sr.
notes 7 3/4s, 2012			334,000		339,010
Freescale Semiconductor, Inc. sr.
notes Ser. B, 7 1/8s, 2014			1,229,000		1,318,103
Iron Mountain, Inc. company
guaranty 8 5/8s, 2013			700,000		715,750
New ASAT Finance, Ltd. company
guaranty 9 1/4s, 2011(Cayman
Islands)			13,000		9,880
SunGard Data Systems, Inc.
company guaranty 9 1/8s, 2013			340,000		351,900
Xerox Corp. sr. notes 9 3/4s,
2009	EUR		195,000		272,303
Xerox Corp. sr. notes 7 5/8s,
2013		$	278,000		291,900
Xerox Corp. unsec. sr. notes
6 3/4s, 2017			233,000		236,495
					3,535,341
Transportation (0.1%)
CalAir, LLC/CalAir Capital Corp.
company guaranty 8 1/8s, 2008			760,000		744,800
Utilities & Power (1.2%)
AES Corp. (The) sr. notes 8 7/8s,
2011			54,000		57,780
AES Corp. (The) 144A sec. notes
8 3/4s, 2013			460,000		492,200
CMS Energy Corp. sr. notes 8.9s,
2008			600,000		628,500
CMS Energy Corp. sr. notes 7 3/4s,
2010			180,000		189,000
Colorado Interstate Gas Co. sr. notes
5.95s, 2015			174,000		166,400
Edison Mission Energy 144A sr. notes
7 3/4s, 2016			146,000		147,825
Edison Mission Energy 144A sr. notes
7 1/2s, 2013			172,000		173,720
El Paso Corp. sr. notes Ser. *, 6 3/8s,
2009			200,000		199,500
El Paso Natural Gas Co. sr. notes
Ser. A, 7 5/8s, 2010			365,000		377,319

24

CORPORATE BONDS AND NOTES (17.8%)* continued
		Principal amount		Value
Utilities & Power continued
El Paso Production Holding Co.
company guaranty 7 3/4s, 2013	$	993,000	$	1,015,343
Ferrellgas LP/Finance sr. notes
6 3/4s, 2014		520,000		508,300
Mission Energy Holding Co. sec.
notes 13 1/2s, 2008		749,000		836,071
Monongahela Power Co. 1st mtge.
6.7s, 2014		400,000		426,204
NRG Energy, Inc. sr. notes 7 3/8s,
2016		235,000		233,531
Orion Power Holdings, Inc. sr. notes
12s, 2010		655,000		741,788
SEMCO Energy, Inc. sr. notes 7 3/4s,
2013		517,000		519,499
Teco Energy, Inc. notes 7.2s, 2011		185,000		192,863
Teco Energy, Inc. notes 7s, 2012		280,000		289,800
Teco Energy, Inc. sr. notes 6 3/4s, 2015		32,000		32,800
Utilicorp Canada Finance Corp. company
guaranty 7 3/4s, 2011 (Canada)		612,000		642,600
Utilicorp United, Inc. sr. notes 9.95s,
2011		18,000		19,743
Williams Cos., Inc. (The) notes
8 1/8s, 2012		150,000		160,125
Williams Cos., Inc. (The) 144A notes
6 3/8s, 2010		172,000		171,140
York Power Funding 144A notes 12s,
2007 (Cayman Islands)
(In default) (F) †		203,730		16,991
				8,239,042
Total corporate bonds and notes
(cost $118,271,487)			$	118,460,458
U.S. GOVERNMENT AND AGENCY MORTGAGE OBLIGATIONS (4.4%)*
		Principal amount		Value
Federal National Mortgage Association
Pass-Through Certificates
8s, October 1, 2025	$	6,246	$	6,622
6 1/2s, June 1, 2036		52,989		53,983
6 1/2s, October 1, 2018		18,193		18,753
6s, TBA, October 1, 2021		11,400,000		11,571,000
5 1/2s, April 1, 2036		46,389		45,700
5 1/2s, with due dates from
March 1, 2020 to January 1, 2021		986,279		986,496
5s, May 1, 2021		121,048		118,949
4 1/2s, with due dates from
September 1, 2020 to June 1, 2034		3,004,238		2,815,318
4 1/2s, TBA, October 1, 2021		6,900,000		6,655,265
4 1/2s, TBA, November 1, 2021		6,900,000		6,655,265
Total U.S. government and agency
mortgage obligations (cost $28,820,550)			$	28,927,351

U.S. TREASURY OBLIGATIONS (10.8%)*
			Principal amount	Value
U.S. Treasury Notes
6 1/2s, February 15, 2010		$	7,500,000 $	7,937,109
4 1/4s, August 15, 2013			38,008,000	37,212,208
3 1/4s, August 15, 2008			27,242,000	26,539,669
Total U.S. treasury obligations
(cost $73,614,704)				$ 71,688,986
FOREIGN GOVERNMENT BONDS AND NOTES (14.1%)*
			Principal amount	Value
Argentina (Republic of ) FRB 5.59s,
2012		$	8,133,750	$ 7,503,436
Austria (Republic of ) 144A
notes Ser. EMTN, 3.8s, 2013	EUR		1,390,000	1,775,539
Brazil (Federal Republic of )
bonds 10 1/2s, 2014		$	1,018,000	1,279,117
Brazil (Federal Republic of )
bonds 12 1/2s, 2016			1,405,000	652,622
Brazil (Federal Republic of )
notes 11s, 2012			7,240,000	8,861,760
Canada (Government of ) bonds
Ser. WH31, 6s, 2008	CAD		3,680,000	3,406,821
Colombia (Republic of )
notes 10s, 2012		$	3,697,000	4,307,005
Colombia (Republic of )
notes 12s, 2015	COP		450,000,000	216,239
France (Government of ) bonds
4s, 2013	EUR		4,730,000	6,110,838
France (Government of ) bonds
Ser. OATe, 3s, 2012	EUR		4,329,160	5,933,494
Germany (Federal Republic of )
bonds Ser. 97, 6s, 2007	EUR		5,500,000	7,088,210
Germany (Federal Republic of )
bonds Ser. 97, 6s, 2007	EUR		5,000,000	6,374,165
Ireland (Republic of ) bonds 5s,
2013	EUR		7,500,000	10,242,361
Japan (Government of ) CPI
Linked bonds Ser. 8, 1s, 2016	JPY		1,114,545,000	9,382,760
Russia (Ministry of Finance) debs.
Ser. V, 3s, 2008		$	2,445,000	2,347,200
South Africa (Republic of )
notes 7 3/8s, 2012			1,495,000	1,618,338
South Africa (Republic of )
notes 6 1/2s, 2014			1,330,000	1,393,175
Spain (Government of ) bonds
5.4s, 2011	EUR		1,000,000	1,363,140
Spain (Kingdom of ) bonds
5s, 2012	EUR		800,000	1,083,105
Sweden (Government of )
debs. Ser. 1041, 6 3/4s, 2014	SEK		30,690,000	5,050,561
United Mexican States notes
6 5/8s, 2015		$	4,530,000	4,824,450
Venezuela (Republic of )
notes 10 3/4s, 2013			2,150,000	2,628,375
Total foreign government bonds
and notes (cost $89,911,434)			$	93,442,711

25

COLLATERALIZED MORTGAGE OBLIGATIONS (12.9%)*
			Principal amount	Value
Amresco Commercial Mortgage
Funding I Ser. 97-C1,
Class G, 7s, 2029		$	434,000 $	434,878
Banc of America Commercial
Mortgage, Inc. Ser. 01-1,
Class G, 7.324s, 2036			325,000	345,027
Banc of America Commercial
Mortgage, Inc.
144A
Ser. 01-1, Class J, 6 1/8s, 2036			163,000	164,207
Ser. 01-1, Class K, 6 1/8s, 2036			367,000	293,332
Banc of America Large Loan 144A
FRB Ser. 02-FL2A, Class L1,
8.33s, 2014			141,000	141,000
FRB Ser. 02-FL2A, Class K1,
7.83s, 2014			100,000	99,850
FRB Ser. 05-MIB1, Class K,
7.33s, 2022			645,000	638,342
FRB Ser. 05-ESHA, Class K,
7.13s, 2020			712,000	712,355
FRB Ser. 06-LAQ, Class M,
7.018s, 2021			548,000	549,655
FRB Ser. 06-LAQ, Class L,
6.918s, 2021			342,000	343,554
Bear Stearns Commercial
Mortgage Securities, Inc.
144A FRB Ser. 05-LXR1, Class J,
6.98s, 2018			696,000	696,000
Bear Stearns Commercial
Mortgage Securitization Corp.
Ser. 00-WF2, Class F, 8.453s,
2032			410,000	459,248
Broadgate Financing PLC sec.
FRB Ser. D, 5.553s,
2023 (United Kingdom)	GBP		460,750	858,047
Commercial Mortgage Pass-
Through Certificates 144A
FRB Ser. 05-F10A, Class A1,
5.43s, 2017		$	2,660,647	2,660,267
Countrywide Alternative
Loan Trust
FRB Ser. 06-OA10, Class XBI,
Interest Only (IO),
1.401s, 2046			6,196,123	294,316
IFB Ser. 06-19CB, Class A2,
IO, zero %, 2036			463,476	1,358
IFB Ser. 06-20CB, Class A14,
IO, zero %, 2036			647,046	1,213
IFB Ser. 06-14CB, Class A9,
IO, zero %, 2036			1,191,150	7,166
IFB Ser. 06-6CB, Class 1A3,
IO, zero %, 2036			7,598,805	20,184
CRESI Finance Limited Partnership
144A FRB Ser. 06-A, Class C,
5.924s, 2017			251,000	250,999

COLLATERALIZED MORTGAGE OBLIGATIONS (12.9%)* continued
			Principal amount	Value
CS First Boston Mortgage
Securities Corp. 144A
FRB Ser. 05-TFLA, Class L,
7.18s, 2020		$	699,000 $	698,994
FRB Ser. 05-TFLA, Class K,
6.63s, 2020			388,000	387,997
Ser. 98-C1, Class F, 6s, 2040			966,000	969,605
Ser. 02-CP5, Class M,
5 1/4s, 2035			354,000	322,361
Deutsche Mortgage & Asset
Receiving Corp. Ser. 98-C1,
Class X, IO, 0.982s, 2031			16,751,086	266,802
DLJ Commercial Mortgage Corp.
Ser. 98-CF2, Class B4, 6.04s,
2031			286,492	290,689
Ser. 98-CF2, Class B5, 5.95s,
2031			915,958	870,197
DLJ Mortgage Acceptance Corp.
144A
Ser. 97-CF1, Class B2, 8.16s,
2030			275,000	220,000
Ser. 97-CF1, Class B1, 7.91s,
2030			266,000	268,279
European Loan Conduit FRB
Ser. 6X, Class E, 6.49s,
2010 (United Kingdom)	GBP		358,417	670,419
European Loan Conduit 144A
FRB Ser. 6A, Class F, 6.99s,
2010 (United Kingdom)	GBP		128,006	239,483
FRB Ser. 22A, Class D, 5.59s,
2014 (Ireland)	GBP		507,000	946,924
European Prime Real Estate
PLC 144A FRB Ser. 1-A,
Class D, 5.608s, 2014
(United Kingdom)	GBP		352,516	656,814
Fannie Mae
IFB Ser. 06-70, Class BS, 14.56s,
2036		$	311,429	371,869
IFB Ser. 06-62, Class PS, 7.92s,
2036			838,738	930,297
IFB Ser. 06-76, Class QB, 7.62s,
2036			2,007,080	2,215,705
IFB Ser. 06-70, Class SJ, 7.62s,
2036			139,278	155,886
Ser. 04-W8, Class 3A, 7 1/2s,
2044			413,793	435,405
Ser. 04-W2, Class 5A, 7 1/2s,
2044			1,424,909	1,498,641
Ser. 04-T2, Class 1A4, 7 1/2s,
2043			348,904	366,754
Ser. 03-W4, Class 4A, 7 1/2s,
2042			109,094	113,974
Ser. 03-W3, Class 1A3, 7 1/2s,
2042			226,854	237,660
Ser. 02-T19, Class A3, 7 1/2s,
2042			282,810	296,306
Ser. 03-W2, Class 1A3, 7 1/2s,
2042			5,073	5,316
Ser. 02-W1, Class 2A, 7 1/2s,
2042			443,639	461,963

26

COLLATERALIZED MORTGAGE OBLIGATIONS (12.9%)* continued
		Principal amount		Value
Fannie Mae
Ser. 02-14, Class A2, 7 1/2s, 2042	$	2,258	$	2,360
Ser. 01-T10, Class A2, 7 1/2s, 2041		284,308		296,400
Ser. 02-T4, Class A3, 7 1/2s, 2041		1,355		1,414
Ser. 01-T8, Class A1, 7 1/2s, 2041		3,729		3,879
Ser. 01-T7, Class A1, 7 1/2s, 2041		1,130,427		1,174,100
Ser. 01-T3, Class A1, 7 1/2s, 2040		175,907		183,094
Ser. 01-T1, Class A1, 7 1/2s, 2040		543,384		566,428
Ser. 99-T2, Class A1, 7 1/2s, 2039		223,975		235,286
Ser. 00-T6, Class A1, 7 1/2s, 2030		108,376		113,145
Ser. 02-W7, Class A5, 7 1/2s,
2029		189,020		197,817
Ser. 01-T4, Class A1, 7 1/2s, 2028		511,737		539,264
Ser. 02-W3, Class A5, 7 1/2s,
2028		1,140		1,191
IFB Ser. 06-63, Class SP, 7.32s,
2036		2,182,220		2,397,060
IFB Ser. 06-60, Class TK, 7.28s,
2036		575,910		605,544
Ser. 04-W12, Class 1A3, 7s,
2044		413,658		429,755
Ser. 01-T10, Class A1, 7s, 2041		1,109,435		1,143,964
IFB Ser. 05-74, Class CS, 5.363s,
2035		673,828		678,115
IFB Ser. 05-74, Class CP, 5.207s,
2035		591,031		602,246
IFB Ser. 05-76, Class SA, 5.207s,
2034		837,411		839,484
IFB Ser. 06-27, Class SP, 5.023s,
2036		791,000		802,785
IFB Ser. 06-8, Class HP, 5.023s,
2036		970,446		978,272
IFB Ser. 06-8, Class WK, 5.023s,
2036		1,487,929		1,484,995
IFB Ser. 05-106, Class US, 5.023s,
2035		1,441,799		1,466,012
IFB Ser. 05-99, Class SA, 5.023s,
2035		706,279		706,103
IFB Ser. 05-114, Class SP, 4.923s,
2036		410,334		396,998
IFB Ser. 06-60, Class CS, 4.547s,
2036		946,410		907,462
IFB Ser. 05-95, Class CP, 4.059s,
2035		111,401		109,993
IFB Ser. 05-95, Class OP, 3.892s,
2035		360,000		334,776
IFB Ser. 05-83, Class QP, 3.536s,
2034		228,318		212,634
IFB Ser. 02-36, Class QH, IO, 2.72s,
2029		161,580		1,545
IFB Ser. 06-90, Class SE, IO, 2.47s,
2036		2,567,619		232,089
IFB Ser. 03-66, Class SA, IO, 2.32s,
2033		1,280,856		98,466
IFB Ser. 03-48, Class S, IO, 2.22s,
2033		571,911		44,234
IFB Ser. 05-113, Class AI, IO, 1.9s,
2036		854,337		58,741

COLLATERALIZED MORTGAGE OBLIGATIONS (12.9%)* continued
		Principal amount		Value
Fannie Mae
IFB Ser. 05-113, Class DI, IO, 1.9s,
2036	$	7,241,512	$	428,060
IFB Ser. 06-60, Class DI, IO, 1.74s,
2035		2,566,384		135,546
IFB Ser. 05-95, Class CI, IO, 1.37s,
2035		1,465,857		89,674
IFB Ser. 05-84, Class SG, IO, 1.37s,
2035		2,584,374		152,145
IFB Ser. 05-69, Class AS, IO, 1.37s,
2035		675,176		36,189
IFB Ser. 04-92, Class S, IO, 1.37s,
2034		2,074,746		119,622
IFB Ser. 05-104, Class SI, IO, 1.37s,
2033		3,454,660		204,308
IFB Ser. 05-83, Class QI, IO, 1.36s,
2035		378,091		25,848
IFB Ser. 05-92, Class SC, IO, 1.35s,
2035		3,452,985		201,762
IFB Ser. 05-83, Class SL, IO, 1.34s,
2035		6,630,210		327,086
IFB Ser. 06-20, Class IG, IO, 1.32s,
2036		9,172,246		397,928
IFB Ser. 06-45, Class SM, IO, 1.27s,
2036		2,242,457		99,789
IFB Ser. 06-20, Class IB, IO, 1.26s,
2036		3,930,462		164,457
IFB Ser. 05-95, Class OI, IO, 1.26s,
2035		212,607		14,622
IFB Ser. 06-85, Class TS, IO, 1.23s,
2036		2,929,877		124,741
IFB Ser. 03-112, Class SA, IO, 1.17s,
2028		1,267,589		38,407
Ser. 03-W17, Class 12, IO, 1.159s,
2033		2,880,048		112,132
Ser. 03-W10, Class 1A, IO, 1.041s,
2043		4,210,192		66,466
Ser. 03-W10, Class 3A, IO, 1.024s,
2043		5,038,303		89,483
IFB Ser. 05-67, Class BS, IO, 0.82s,
2035		1,705,918		49,813
IFB Ser. 05-74, Class SE, IO, 0.77s,
2035		2,333,160		66,035
IFB Ser. 05-87, Class SE, IO, 0.72s,
2035		12,785,667		356,222
IFB Ser. 04-54, Class SW, IO, 0.67s,
2033		793,092		22,972
Ser. 02-T18, IO, 0.524s, 2042		8,022,748		101,196
Ser. 06-84, Class OP, Principal
Only (PO) zero %, 2036		130,291		122,962
Ser. 371, Class 1, PO, zero %, 2036		517,288		436,481
Ser. 05-113, Class DO, PO, zero %,
2036		1,112,959		895,563
Ser. 367, Class 1, PO, zero %,
2036		783,150		578,550
Ser. 363, Class 1, PO, zero %,
2035		4,322,166		3,193,406
Ser. 361, Class 1, PO, zero %,
2035		3,091,887		2,476,506

27

COLLATERALIZED MORTGAGE OBLIGATIONS (12.9%)* continued
		Principal amount		Value
Fannie Mae
Ser. 04-38, Class AO, PO, zero %,
2034	$	372,501	$	269,772
Ser. 342, Class 1, PO, zero %, 2033		266,566		208,379
Ser. 02-82, Class TO, PO, zero %,
2032		235,500		189,062
Ser. 04-61, Class CO, PO, zero %,
2031		517,000		414,812
Ser. 99-51, Class N, PO, zero %,
2029		82,135		67,684
FRB Ser. 05-117, Class GF, zero %,
2036		336,822		317,086
Federal Home Loan Mortgage Corp.
Structured Pass-Through Securities
Ser. T-59, Class 1A3, 7 1/2s, 2043		450,019		474,292
Ser. T-58, Class 4A, 7 1/2s, 2043		7,185		7,524
Ser. T-41, Class 3A, 7 1/2s, 2032		1,089,544		1,136,563
Ser. T-60, Class 1A2, 7s, 2044		2,113,932		2,193,725
Ser. T-57, Class 1AX, IO, 0.005s,
2043		2,673,542		29,516
FFCA Secured Lending Corp. Ser. 00-1,
Class X, IO, 1.381s, 2020		5,884,428		325,914
Freddie Mac
IFB Ser. 3153, Class UK, 7.44s,
2036		214,182		243,563
IFB Ser. 3182, Class PS, 7.28s,
2032		233,772		255,268
IFB Ser. 3081, Class DC, 5.175s,
2035		575,857		571,231
IFB Ser. 3114, Class GK, 5.08s,
2036		379,137		378,189
IFB Ser. 2979, Class AS, 4.73s,
2034		252,589		250,221
IFB Ser. 3065, Class DC, 3.87s,
2035		861,040		796,778
IFB Ser. 3050, Class SA, 3.55s,
2034		619,779		563,876
IFB Ser. 2828, Class TI, IO, 1.72s,
2030		824,852		49,491
IFB Ser. 3033, Class SF, IO, 1.47s,
2035		1,211,513		48,461
IFB Ser. 3028, Class ES, IO, 1.42s,
2035		4,155,854		292,150
IFB Ser. 3042, Class SP, IO, 1.42s,
2035		972,721		61,962
IFB Ser. 3045, Class DI, IO, 1.4s,
2035		10,980,079		487,077
IFB Ser. 3054, Class CS, IO, 1.37s,
2035		957,129		47,707
IFB Ser. 3107, Class DC, IO, 1.37s,
2035		4,355,380		300,755
IFB Ser. 3066, Class SI, IO, 1.37s,
2035		2,817,422		190,248
IFB Ser. 3031, Class BI, IO, 1.36s,
2035		790,228		56,338
IFB Ser. 3067, Class SI, IO, 1.32s,
2035		3,286,073		227,032
IFB Ser. 3114, Class TS, IO, 1.32s,
2030		5,425,610		244,086

COLLATERALIZED MORTGAGE OBLIGATIONS (12.9%)* continued
		Principal amount		Value
Freddie Mac
IFB Ser. 3114, Class BI, IO, 1.32s,
2030	$	2,308,365	$	98,004
IFB Ser. 3065, Class DI, IO, 1.29s,
2035		619,296		40,448
IFB Ser. 3174, Class BS, IO, 1.19s,
2036		4,011,932		159,606
IFB Ser. 3152, Class SY, IO, 1.15s,
2036		3,493,373		224,269
IFB Ser. 3081, Class DI, IO, 1.15s,
2035		810,181		44,681
IFB Ser. 3199, Class S, IO, 1.12s,
2036		2,927,718		142,383
IFB Ser. 3016, Class SP, IO, 0.78s,
2035		813,224		24,153
IFB Ser. 3016, Class SQ, IO, 0.78s,
2035		1,935,445		61,354
IFB Ser. 2937, Class SY, IO, 0.77s,
2035		745,662		19,536
IFB Ser. 2815, Class S, IO, 0.67s,
2032		1,874,227		52,606
Ser. 3174, PO, zero %, 2036		152,869		124,335
Ser. 236, PO, zero %, 2036		734,183		576,227
Ser. 3045, Class DO, PO, zero %,
2035		839,648		675,770
Ser. 231, PO, zero %, 2035		5,340,429		3,982,889
Ser. 228, PO, zero %, 2035		3,101,294		2,426,934
Ser. 3130, Class KO, PO, zero %,
2034		149,394		117,495
Ser. 215, PO, zero %, 2031		165,012		135,080
Ser. 2235, PO, zero %, 2030		196,761		156,148
FRB Ser. 3022, Class TC, zero %,
2035		145,750		156,021
FRB Ser. 2986, Class XT, zero %,
2035		88,284		90,409
FRB Ser. 3046, Class WF, zero %,
2035		203,095		198,357
FRB Ser. 3054, Class XF, zero %,
2034		90,493		89,771
GE Capital Commercial Mortgage
Corp. 144A
Ser. 00-1, Class F, 7.787s, 2033		170,000		181,710
Ser. 00-1, Class G, 6.131s, 2033		596,000		535,595
GMAC Commercial Mortgage Securities,
Inc. 144A Ser. 99-C3, Class G, 6.974s,
2036		529,968		534,135
Government National Mortgage
Association
IFB Ser. 05-66, Class SP, 3.067s,
2035		524,562		479,323
IFB Ser. 06-26, Class S, IO, 1.17s,
2036		866,154		42,815
IFB Ser. 05-65, Class SI, IO, 1.02s,
2035		2,072,610		83,300
IFB Ser. 05-68, Class SI, IO, 0.97s,
2035		6,925,834		310,825
IFB Ser. 06-14, Class S, IO, 0.92s,
2036		2,075,812		76,597
IFB Ser. 05-51, Class SJ, IO, 0.87s,
2035		2,052,114		86,735

28

COLLATERALIZED MORTGAGE OBLIGATIONS (12.9%)* continued
			Principal amount		Value
Government National Mortgage
Association
IFB Ser. 05-68, Class S, IO, 0.87s,
2035			4,025,574	$	165,403
Ser. 98-2, Class EA, PO, zero %,
2028			81,546		66,623
GS Mortgage Securities Corp. II 144A
FRB Ser. 03-FL6A, Class L, 8.58s,
2015			214,000		215,204
LB Commercial Conduit Mortgage
Trust 144A Ser. 99-C1, Class G, 6.41s,
2031			253,101		238,076
Lehman Brothers Floating Rate
Commercial Mortgage
Trust 144A FRB Ser. 03-LLFA,
Class L, 9.08s, 2014			876,000		876,876
Lehman Mortgage Trust
IFB Ser. 06-5, Class 2A2, IO,
1.82s, 2036			2,479,000		90,274
IFB Ser. 06-5, Class 1A3, IO, 0.07s,
2036			907,000		4,498
IFB Ser. 06-4, Class 1A3, IO, 0.07s,
2036			1,238,991		10,914
Mach One Commercial Mortgage
Trust 144A
Ser. 04-1A, Class J, 5.45s, 2040			594,000		490,541
Ser. 04-1A, Class K, 5.45s, 2040			212,000		170,600
Ser. 04-1A, Class L, 5.45s, 2040			96,000		70,857
Merrill Lynch Mortgage Investors, Inc.
Ser. 96-C2, Class JS, IO, 2.174s,
2028			3,398,385		207,753
Mezz Cap Commercial Mortgage
Trust 144A Ser. 04-C1, Class X, IO,
8.05s, 2037			1,017,430		367,229
Morgan Stanley Capital I Ser. 98-CF1,
Class E, 7.35s, 2032			1,252,000		1,306,457
Morgan Stanley Capital I 144A Ser.
04-RR, Class F7, 6s, 2039			1,730,000		1,237,988
Mortgage Capital Funding, Inc.
FRB Ser. 98-MC2, Class E,
7 1/4s, 2030			327,112		336,105
Ser. 97-MC2, Class X, IO,
1.457s, 2012			1,968,464		11,303
Permanent Financing PLC FRB
Ser. 8, Class 2C, 5.7s,
2042 (United Kingdom)			500,000		499,999
PNC Mortgage Acceptance Corp.
144A Ser. 00-C1,Class J, 6 5/8s,
2010			123,000		116,544
Quick Star PLC FRB Ser. 1,
Class D, 5.59s, 2011
(United Kingdom)	GBP		322,135		601,652
SBA CMBS Trust 144A Ser.
05-1A, Class E, 6.706s, 2035		$	303,000		302,876
STRIPS 144A
Ser. 03-1A, Class M, 5s, 2018
(Cayman Islands)			162,000		136,770
Ser. 03-1A, Class N, 5s, 2018
(Cayman Islands)			193,000		149,575

COLLATERALIZED MORTGAGE OBLIGATIONS (12.9%)* continued
			Principal amount		Value
STRIPS 144A
Ser. 04-1A, Class M, 5s, 2018
(Cayman Islands)		$	174,000	$	146,269
Ser. 04-1A, Class N, 5s, 2018
(Cayman Islands)			167,000		129,360
Titan Europe PLC 144A
FRB Ser. 05-CT1A, Class D,
5.79s, 2014 (Ireland)	GBP		626,798		1,170,671
FRB Ser. 05-CT2A, Class E,
5.763s, 2014 (Ireland)	GBP		344,000		642,489
FRB Ser. 04-2A, Class D,
3.992s, 2014 (Ireland)	EUR		350,545		444,000
FRB Ser. 04-2A, Class C,
3.592s, 2014 (Ireland)	EUR		156,367		198,055
URSUS EPC 144A FRB Ser.
1-A, Class D, 5.64s, 2012
(Ireland)	GBP		351,055		655,665
Wachovia Bank Commercial
Mortgage Trust 144A FRB
Ser. 05-WL5A, Class L, 8.63s,
2018		$	477,000		473,008
Total collateralized mortgage
obligations (cost $85,377,936)				$	86,002,867
ASSET-BACKED SECURITIES (11.7%)*
			Principal amount		Value
Americredit Automobile
Receivables Trust 144A Ser. 05-1,
Class E, 5.82s, 2012		$	155,144	$	155,059
Ameriquest Finance NIM Trust
144A Ser. 04-RN9, Class N2,
10s, 2034 (Cayman Islands)			233,764		217,401
Arcap REIT, Inc. 144A
Ser. 03-1A, Class E, 7.11s, 2038			383,000		398,381
Ser. 04-1A, Class E, 6.42s, 2039			361,000		357,849
Asset Backed Securities Corp. Home
Equity Loan Trust 144A
FRB Ser. 06-HE2, Class M10, 7.83s,
2036			509,000		456,074
FRB Ser. 06-HE2, Class M11, 7.83s,
2036			450,000		365,399
Aviation Capital Group Trust 144A FRB
Ser. 03-2A, Class G1, 6.03s, 2033			283,591		284,012
Banc of America Alternative Loan
Trust IFB Ser. 06-6, Class CB2, IO, 0.02s,
2036			1,279,263		2,534
Banc of America Funding Corp. IFB
Ser. 06-4, Class A4, IO, 0.17s, 2036			1,342,113		3,942
Banc of America Mortgage Securities IFB
Ser. 06-2, Class A4, IO, 0.07s, 2036			1,067,963		7,020
Bank One Issuance Trust FRB Ser. 03-C4,
Class C4, 6.36s, 2011			340,000		344,631
Bear Stearns Alternate Trust Ser. 05-5,
Class 21A1, 4.688s, 2035			1,287,951		1,277,674
Bear Stearns Asset Backed Securities
NIM Trust 144A Ser. 04-HE10,
Class A1, 4 1/4s, 2034 (Cayman Islands)			974		971

29

ASSET-BACKED SECURITIES (11.7%)* continued
		Principal amount		Value
Bear Stearns Asset Backed Securities, Inc.
FRB Ser. 04-FR3, Class M6, 8.58s,
2034	$	286,000	$	285,643
FRB Ser. 06-PC1, Class M9, 7.08s,
2035		185,000		151,816
Bear Stearns Asset Backed Securities,
Inc. 144A FRB Ser. 06-HE2, Class M10,
7.58s, 2036		270,000		243,338
Bombardier Capital Mortgage
Securitization Corp.
Ser. 00-A, Class A4, 8.29s, 2030		568,551		413,266
Ser. 00-A, Class A2, 7.575s, 2030		155,618		109,318
Ser. 99-B, Class A4, 7.3s, 2016		731,571		495,611
Ser. 99-B, Class A3, 7.18s, 2015		1,231,162		817,569
FRB Ser. 00-A, Class A1, 5.49s,
2030		163,542		93,219
Broadhollow Funding, LLC 144A FRB
Ser. 04-A, Class Sub, 6.57s, 2009		598,000		604,937
Capital Auto Receivables Asset Trust
144A Ser. 06-1, Class D, 7.16s,
2013		500,000		500,566
CARSSX Finance, Ltd. 144A
FRB Ser. 04-AA, Class B4, 10.83s,
2011 (Cayman Islands)		180,214		187,427
FRB Ser. 04-AA, Class B3, 8.68s,
2011 (Cayman Islands)		34,922		35,612
Chase Credit Card Master Trust FRB
Ser. 03-3, Class C, 6.41s, 2010		350,000		355,400
CHEC NIM Ltd., 144A Ser. 04-2,
Class N3, 8s, 2034 (Cayman Islands)		46,290		44,293
Citigroup Mortgage Loan Trust, Inc.
FRB Ser. 06-WMC1, Class M10,
8.83s, 2035		90,000		81,984
FRB Ser. 05-HE4, Class M11,
7.83s, 2035		304,000		256,773
FRB Ser. 05-HE4, Class M12,
7.38s, 2035		457,000		372,294
Conseco Finance Securitizations Corp.
Ser. 00-2, Class A5, 8.85s, 2030		1,207,000		1,029,961
Ser. 00-2, Class A4, 8.48s, 2030		44,069		44,020
Ser. 00-4, Class A6, 8.31s, 2032		3,615,000		3,115,180
Ser. 00-5, Class A7, 8.2s, 2032		476,000		402,458
Ser. 00-1, Class A5, 8.06s, 2031		1,153,335		1,023,080
Ser. 00-4, Class A5, 7.97s, 2032		240,000		193,160
Ser. 00-5, Class A6, 7.96s, 2032		199,000		172,193
Ser. 00-4, Class A4, 7.73s, 2031		406,992		384,282
Ser. 01-3, Class M2, 7.44s, 2033		132,118		11,891
Ser. 01-4, Class A4, 7.36s, 2033		268,000		277,376
Ser. 00-6, Class A5, 7.27s, 2032		97,324		89,845
FRB Ser. 01-4, Class M1, 7.08s,
2033		295,000		112,100
Ser. 01-1, Class A5, 6.99s, 2032		993,000		973,453
Ser. 01-3, Class A4, 6.91s, 2033		3,073,000		2,955,737
Ser. 02-1, Class A, 6.681s, 2033		1,393,501		1,413,609
Ser. 01-3, Class A3, 5.79s, 2033		3,410		3,407
Consumer Credit Reference IDX
Securities 144A FRB Ser. 02-1A,
Class A, 7.387s, 2007		790,000		802,838

ASSET-BACKED SECURITIES (11.7%)* continued
			Principal amount		Value
Countrywide Alternative Loan Trust IFB
Ser. 06-26CB, Class A2, IO, 0.47s,
2036		$	1,531,582	$	4,092
Countrywide Asset Backed Certificates
144A
Ser. 04-6N, Class N1, 6 1/4s,
2035			40,452		40,331
Ser. 04-BC1N, Class Note, 5 1/2s,
2035			25,846		25,528
Countrywide Home Loans
Ser. 06-0A5, Class X, IO, 1.543s,
2046			4,890,108		222,347
Ser. 05-2, Class 2X, IO, 1.16s,
2035			6,240,978		152,124
Countrywide Home Loans 144A
IFB Ser. 05-R1, Class 1AS, IO, 0.806s,
2035 (SN)			4,745,671		156,460
Crest, Ltd. 144A Ser. 03-2A, Class E2,
8s, 2038 (Cayman Islands)			431,000		418,945
DB Master Finance, LLC 144A Ser. 06-1,
Class M1, 8.285s, 2031			277,000		284,494
First Chicago Lennar Trust 144A
Ser. 97-CHL1, Class E, 7.627s, 2039			1,770,781		1,795,405
First Franklin Mortgage Loan Asset
Backed Certificates FRB Ser. 04-FF7,
Class A4, 5.63s, 2034			2,903,898		2,904,662
First Horizon Mortgage Pass-Through
Trust Ser. 05-AR2, Class 1A1,
4.818s, 2035			1,263,332		1,255,687
Fremont NIM Trust 144A
Ser. 04-3, Class B, 7 1/2s, 2034			42,131		39,081
Ser. 04-3, Class A, 4 1/2s, 2034			11,662		11,623
Gears Auto Owner Trust Ser.
05-AA, Class E1, 8.22s, 2012			687,000		683,021
Granite Mortgages PLC
FRB Ser. 02-1, Class 1C, 6.8s,
2042 (United Kingdom)			401,699		403,095
FRB Ser. 03-2, Class 3C,
6.287s, 2043
(United Kingdom)	GBP		1,075,000		2,061,385
FRB Ser. 03-2, Class 2C1,
5.2s, 2043 (United Kingdom)	EUR		1,430,000		1,863,945
Green Tree Financial Corp.
Ser. 94-6, Class B2, 9s, 2020		$	870,032		809,527
Ser. 94-4, Class B2, 8.6s,
2019			347,458		258,580
Ser. 93-1, Class B, 8.45s,
2018			705,993		675,748
Ser. 99-5, Class A5, 7.86s,
2030			4,480,000		3,963,456
Ser. 96-8, Class M1, 7.85s,
2027			387,000		336,622
Ser. 95-8, Class B1, 7.3s,
2026			362,579		362,159
Ser. 95-4, Class B1, 7.3s,
2025			371,800		366,456
Ser. 97-6, Class M1, 7.21s,
2029			909,000		796,782

30

ASSET-BACKED SECURITIES (11.7%)* continued
			Principal amount		Value
Green Tree Financial Corp.
Ser. 99-3, Class A7, 6.74s,
2031		$	733,000	$	708,886
Ser. 99-3, Class A5, 6.16s,
2031			26,132		26,295
Greenpoint Manufactured Housing
Ser. 00-3, Class IA, 8.45s,
2031			1,758,669		1,630,306
Ser. 99-5, Class A4, 7.59s,
2028			80,843		82,244
GS Auto Loan Trust 144A Ser.
04-1, Class D, 5s, 2011			365,777		363,067
GSAMP Trust 144A Ser. 04-NIM2,
Class N, 4 7/8s, 2034			58,696		58,444
GSMPS Mortgage Loan Trust
144A
IFB Ser. 05-RP1, Class 1AS,
IO, 0.857s, 2035 (SN)			25,265,036		795,125
IFB Ser. 06-RP1, Class 1AS,
IO, 0.468s, 2036 (SN)			4,500,264		111,108
Guggenheim Structured Real
Estate Funding, Ltd. FRB
Ser. 05-1A, Class E, 7.13s,
2030 (Cayman Islands)			371,000		371,000
Guggenheim Structured Real
Estate Funding, Ltd. 144A
FRB Ser. 05-2A, Class E, 7.33s,
2030 (Cayman Islands)			379,000		381,577
HASCO NIM Trust 144A
Ser. 05-OP1A, Class A, 6 1/4s,
2035 (Cayman Islands)			297,164		291,741
Holmes Financing PLC FRB Ser. 8,
Class 2C, 6.227s,
2040 (United Kingdom)			235,000		235,376
Lehman Mortgage Trust
IFB Ser. 06-6, Class 1A2, IO,
1.17s, 2036			2,050,000		69,673
IFB Ser. 06-6, Class 1A3, IO,
1.17s, 2036			2,615,000		141,314
IFB Ser. 06-6, Class 4A2, IO,
0.02s, 2036			1,981,000		5,812
LNR CDO, Ltd. 144A FRB Ser.
02-1A, Class FFL, 8.08s,
2037 (Cayman Islands)			1,260,000		1,260,444
Long Beach Mortgage Loan Trust
FRB Ser. 06-2, Class M10,
7.83s, 2036			318,000		268,114
Ser. 04-3, Class S1, IO, 4 1/2s,
2006			612,305		4,305
Ser. 04-3, Class S2, IO, 4 1/2s,
2006			306,157		2,153
Long Beach Mortgage Loan
Trust 144A FRB Ser. 06-2,
Class B, 7.83s, 2036			318,000		248,934
Lothian Mortgages PLC 144A
FRB Ser. 3A, Class D, 5.537s,
2039 (United Kingdom)	GBP		900,000		1,680,930

ASSET-BACKED SECURITIES (11.7%)* continued
		Principal amount		Value
Madison Avenue Manufactured
Housing Contract FRB
Ser. 02-A, Class B1, 8.58s, 2032	$	1,046,356	$	732,449
MASTR Asset Backed Securities
NIM Trust 144A
Ser. 04-HE1A, Class Note,
5.191s, 2034 (Cayman Islands)		6,762		6,721
MBNA Credit Card Master
Note Trust FRB Ser. 03-C5,
Class C5, 6.51s, 2010		350,000		355,745
Merrill Lynch Mortgage Investors,
Inc. Ser. 03-WM3N, Class N1,
8s, 2034		3,791		3,739
Merrill Lynch Mortgage Investors,
Inc. 144A Ser. 04-FM1N,
Class N1, 5s, 2035
(Cayman Islands)		10,052		9,901
Mid-State Trust Ser. 11, Class B,
8.221s, 2038		135,060		133,752
Morgan Stanley ABS Capital I
FRB Ser. 04-HE8,
Class B3, 8.53s, 2034		214,000		216,623
Morgan Stanley Auto Loan Trust
144A Ser. 04-HB2,
Class E, 5s, 2012		130,958		129,088
Morgan Stanley Mortgage Loan
Trust Ser. 05-5AR,
Class 2A1, 5.398s, 2035		1,748,331		1,746,859
Navistar Financial Corp. Owner Trust
Ser. 05-A, Class C, 4.84s,
2014		231,609		227,088
Ser. 04-B, Class C, 3.93s,
2012		98,761		96,381
Oakwood Mortgage Investors, Inc.
Ser. 99-D, Class A1, 7.84s,
2029		1,106,506		977,398
Ser. 00-A, Class A2, 7.765s,
2017		166,862		130,500
Ser. 95-B, Class B1, 7.55s,
2021		364,000		240,240
Ser. 00-D, Class A4, 7.4s,
2030		1,022,000		665,007
Ser. 02-B, Class A4, 7.09s,
2032		441,703		392,997
Ser. 99-B, Class A4, 6.99s,
2026		1,201,233		1,054,234
Ser. 01-D, Class A4, 6.93s,
2031		790,714		564,691
Ser. 01-C, Class A2, 5.92s,
2017		1,025,446		537,514
Ser. 02-C, Class A1, 5.41s,
2032		1,470,219		1,266,956
Ser. 01-D, Class A2, 5.26s,
2019		162,625		108,165
Ser. 01-E, Class A2, 5.05s,
2019		1,180,303		919,276
Ser. 02-A, Class A2, 5.01s,
2020		333,362		256,083

31

ASSET-BACKED SECURITIES (11.7%)* continued
		Principal amount			Value
Oakwood Mortgage Investors,
Inc. 144A Ser. 01-B, Class A4,
7.21s, 2030		$	235,299	$	208,991
Ocean Star PLC 144A
FRB Ser. 04-A, Class E,
11.902s, 2018 (Ireland)			885,000		921,783
FRB Ser. 05-A, Class E,
10.002s, 2012 (Ireland)			238,000		242,808
Option One Mortgage Loan
Trust FRB Ser. 05-4,
Class M11, 7.83s, 2035			509,000		460,168
Park Place Securities, Inc. FRB
Ser. 04-MCW1, Class A2, 5.71s,
2034			1,518,777		1,519,726
Park Place Securities, Inc. 144A
FRB Ser. 05-WCW2,
Class M11, 7.83s, 2035			191,000		135,610
People’s Choice Net Interest
Margin Note 144A
Ser. 04-2, Class B, 5s, 2034			13,361		13,311
Permanent Financing PLC
FRB Ser. 3, Class 3C, 6.45s,
2042 (United Kingdom)			350,000		353,734
FRB Ser. 6, Class 3C, 5.4s,
2042 (United Kingdom)	GBP		887,000		1,656,650
Residential Asset Securities
Corp. Ser. 01-KS3,
Class AII, 5.79s, 2031		$	3,176,408		3,177,056
Residential Asset Securities Corp.
144A
FRB Ser. 05-KS10, Class B,
8.074s, 2035			395,000		351,661
Ser. 04-N10B, Class A1, 5s,
2034			8,213		8,177
Residential Asset Securitization
Trust IFB Ser. 06-A7CB, Class
1A6, IO, 0.22s, 2036			461,373		5,551
Residential Mortgage Securities
144A FRB Ser. 20A, Class B1A,
5.693s, 2038
(United Kingdom)	GBP		150,000		278,642
Rural Housing Trust Ser. 87-1,
Class D, 6.33s, 2026		$	38,941		39,154
SAIL Net Interest Margin
Notes 144A
Ser. 03-3, Class A, 7 3/4s,
2033 (Cayman Islands)			17,341		3,468
Ser. 03-BC2A, Class A, 7 3/4s,
2033 (Cayman Islands)			75,194		7,519
Ser. 03-10A, Class A, 7 1/2s,
2033 (Cayman Islands)			49,754		4,975
Ser. 03-5, Class A, 7.35s,
2033 (Cayman Islands)			12,736		1,274
Ser. 03-8A, Class A, 7s,
2033 (Cayman Islands)			7,301		584
Ser. 03-9A, Class A, 7s,
2033 (Cayman Islands)			10,294		515
Ser. 03-6A, Class A, 7s,
2033 (Cayman Islands)			3,426		343

ASSET-BACKED SECURITIES (11.7%)*
		Principal amount		Value
Ser. 03-7A, Class A, 7s,
2033 (Cayman Islands)	$	20,842	$	2,084
Ser. 04-10A, Class A, 5s,
2034 (Cayman Islands)		13,783		13,754
Sasco Net Interest Margin Trust 144A
Ser. 05-WF1A, Class A,
4 3/4s, 2035		47,565		47,347
Ser. 03-BC1, Class B, zero %,
2033 (Cayman Islands)		273,210		32,785
Sharps SP I, LLC Net Interest
Margin Trust 144A
Ser. 04-HS1N, Class Note,
5.92s, 2034 (Cayman Islands)		3,759		263
Ser. 04-HE2N, Class NA,
5.43s, 2034 (Cayman Islands)		5,853		5,809
Soundview Home Equity Loan
Trust 144A FRB Ser. 05-4,
Class M10, 7.318%, 2036		392,000		355,446
South Coast Funding 144A FRB
Ser. 3A, Class A2, 6.646s, 2038
(Cayman Islands)		140,000		140,420
Structured Asset Investment
Loan Trust FRB
Ser. 04-9, Class A4, 5.63s, 2034		2,311,142		2,312,116
Structured Asset Investment
Loan Trust 144A
FRB Ser. 06-BNC2, Class B1,
7.83s, 2036		293,000		262,316
FRB Ser. 05-HE3, Class M11,
7.83s, 2035		436,000		358,422
Structured Asset Receivables
Trust 144A FRB Ser. 05-1,
5.575s, 2015		1,788,943		1,788,385
TIAA Real Estate CDO, Ltd.
Ser. 03-1A, Class E, 8s, 2038
(Cayman Islands)		467,000		478,618
TIAA Real Estate CDO, Ltd.
144A Ser. 02-1A, Class IV, 6.84s,
2037 (Cayman Islands)		390,000		392,814
Wells Fargo Mortgage Backed
Securities Trust Ser. 05-AR13,
Class 1A4, IO, 0.742s, 2035		14,777,882		227,799
Whinstone Capital Management,
Ltd. 144A FRB Ser. 1A,
Class B3, 6.385s, 2044
(United Kingdom)		733,000		733,015
Whole Auto Loan Trust 144A
Ser. 04-1, Class D, 5.6s,
2011		138,250		137,488
Total asset-backed securities
(cost $78,201,262)				$ 78,004,994

32

SENIOR LOANS (7.2%)* (c)
		Principal amount		Value
Basic Materials (0.8%)
Georgia-Pacific Corp. bank term
loan FRN Ser. B, 7.414s, 2013	$	843,625	$	845,177
Graphic Packaging Corp. bank
term loan FRN Ser. C, 7.922s,
2010		131,094		132,241
Huntsman International, LLC
bank term loan FRN Ser. B,
7.08s, 2012		741,717		740,095
Innophos, Inc. bank term loan
FRN 7.67s, 2010		270,431		271,107
Lyondell Chemical Co. bank term
loan FRN Ser. B, 7.231s, 2013		100,000		100,250
Nalco Co. bank term loan FRN
Ser. B, 7.29s, 2010		1,078,404		1,078,649
Novelis, Inc. bank term loan
FRN 7.718s, 2012		335,529		336,133
Novelis, Inc. bank term loan
FRN Ser. B, 7.718s, 2012		583,058		584,107
Rockwood Specialties Group, Inc.
bank term loan FRN
Ser. E, 7.485s, 2012		1,380,980		1,385,813
				5,473,572
Capital Goods (0.4%)
Allied Waste Industries, Inc. bank
term loan FRN, 5.334s, 2012		62,264		61,999
Allied Waste Industries, Inc. bank
term loan FRN, 7.212s, 2012		156,479		155,832
Graham Packaging Corp. bank term
loan FRN Ser. B, 7.765s, 2011		394,975		395,715
Hexcel Corp. bank term loan FRN
Ser. B, 7.226s, 2012		546,027		546,027
Mueller Group, Inc. bank term loan
FRN, 7.418s, 2012		412,241		413,971
Polypore, Inc. bank term loan
FRN 8.33s, 2011		711,411		713,782
Solo Cup Co. bank term loan
FRN 7.823s, 2011		146,250		145,832
Terex Corp. bank term loan
FRN Ser. D, 7.12s, 2013		49,875		49,937
Transdigm, Inc. bank term loan
FRN 7.389s, 2013		250,000		250,937
				2,734,032
Communication Services (0.7%)
Centennial Cellular Operating Co.,
LLC bank term loan FRN Ser. B,
7.691s, 2011		973,277		977,969
Consolidated Communications
Holdings, Inc. bank term
loan FRN Ser. D, 7.441s, 2011		124,255		124,177
Fairpoint Communications, Inc. bank
term loan FRN Ser. B, 7 1/4s, 2012		543,116		539,043
Intelsat, Ltd. bank term loan FRN
Ser. B, 7.758s, 2013 (Bermuda)		600,000		603,250
Level 3 Communications, Inc.
bank term loan FRN 8.398s, 2011		182,000		183,517
Madison River Capital, LLC bank
term loan FRN Ser. B, 7.73s, 2012		796,423		798,912

SENIOR LOANS (7.2%)* (c) continued
		Principal amount		Value
Communication Services (continued)
PanAmSat Corp. bank term loan
FRN Ser. B, 7.981s, 2013	$	600,000	$	603,667
Syniverse Holdings, Inc. bank term
loan FRN Ser. B, 7 1/2s, 2012		507,438		507,438
Time Warner Telecom, Inc. bank
term loan FRN Ser. B, 7.824s, 2010		93,000		93,194
Windstream Corp. bank term loan
FRN Ser. B, 7.26s, 2013		288,000		288,823
				4,719,990
Consumer Cyclicals (1.5%)
Adams Outdoor Advertising, LP
bank term loan FRN 7.269s, 2012		822,236		822,751
CCM Merger, Inc. bank term loan
FRN Ser. B, 7.465s, 2012		987,504		983,060
Coinmach Service Corp. bank term
loan FRN Ser. B-1, 7.908s, 2012		249,243		250,957
Cooper Tire & Rubber Co. bank
term loan FRN Ser. B, 8s, 2012		326,625		326,931
Cooper Tire & Rubber Co. bank
term loan FRN Ser. C, 8s, 2012		605,875		606,443
Dex Media West, LLC bank term
loan FRN Ser. B1, 6.96s, 2010		496,623		493,643
Dex Media West, LLC/Dex Media
Finance Co. bank term
loan FRN Ser. B, 6.87s, 2010		131,733		130,894
Goodman Global Holdings, Inc. bank
term loan FRN Ser. C, 7 1/4s, 2011		707,868		704,329
Goodyear Tire & Rubber Co. (The)
bank term loan FRN 7.954s, 2010		195,000		196,056
Landsource, Inc. bank term loan
FRN Ser. B, 7 7/8s, 2010		50,000		49,833
Neiman Marcus Group, Inc. bank
term loan FRN Ser. B, 7.891s, 2013		474,684		477,652
Oriental Trading Co. bank term loan
FRN 8.186s, 2013		149,625		149,251
Penn National Gaming, Inc. bank
term loan FRN Ser. B, 7.196s, 2012		198,000		198,594
PRIMEDIA, Inc. bank term loan
FRN Ser. B, 7.58s, 2013		148,500		146,421
R.H. Donnelley Finance Corp. bank
term loan FRN, 6.891s, 2011		706,471		700,620
R.H. Donnelley, Inc. bank term loan
FRN Ser. D1, 6.905s, 2011		396,970		393,857
Standard-Pacific Corp. bank term
loan FRN Ser. B, 6.926s, 2013		100,000		98,000
Sun Media Corp. bank term loan
FRN Ser. B, 7.235s, 2009 (Canada)		149,853		149,853
Travelport bank term loan
FRN 8.347s, 2013		6,335		6,338
Travelport bank term loan FRN Ser. B,
8.347s, 2013		64,665		64,700
Trump Hotel & Casino Resort, Inc.
bank term loan FRNSer. B-1, 8.034s,
2012		173,250		174,008
Trump Hotel & Casino Resort, Inc.
bank term loan FRN, 5.62s,
2012 (U)		174,125		174,887

33

SENIOR LOANS (7.2%)* (c) continued
		Principal amount		Value
Consumer Cyclicals (continued)
TRW Automotive, Inc. bank term
loan FRN Ser. B, 7.188s, 2010	$	517,587	$	515,862
TRW Automotive, Inc. bank term
loan FRN Ser. B2, 6.813s, 2010		119,400		119,102
Venetian Casino Resort, LLC bank
term loan FRN Ser. B, 7 1/4s, 2011		664,302		663,990
Venetian Casino Resort, LLC
bank term loan FRN Ser. DD, 7 1/4s,
2011		136,969		136,905
Visant Holding Corp. bank term loan
FRN Ser. C, 7.068s, 2010		823,563		826,446
William Carter Holdings Co. (The)
bank term loan FRN Ser. B, 6.854s,
2012		78,580		78,359
				9,639,742
Consumer Staples (2.0%)
Affiliated Computer Services, Inc.
bank term loan FRN Ser. B2, 7.395s,
2013		49,938		50,012
Affinion Group, Inc. bank term loan
FRN Ser. B, 8.174s, 2013		824,917		829,042
Affinity Group Holdings bank term
loan FRN Ser. B2, 7.83s, 2009		116,598		116,889
AMC Entertainment, Inc. bank term
loan FRN Ser. B, 7.455s, 2013		199,000		200,016
Brand Services, Inc. bank term loan
FRN 7.693s, 2009		99,748		99,811
Burlington Coat Factory Warehouse
Corp. bank term loan FRN Ser. B,
7.53s, 2013		348,250		338,673
Cablevision Systems Corp. bank
term loan FRN Ser. B, 7.183s, 2013		1,097,250		1,092,450
CBRL Group, Inc. bank term loan
FRN Ser. B, 6.959s, 2013		131,326		130,703
CBRL Group, Inc. bank term loan FRN
Ser. DD, 5 3/4s, 2007 (U)		18,310		18,127
Cebridge Connections, Inc. bank
term loan FRN Ser. B, 7.739s, 2013		350,000		346,828
Century Cable Holdings bank term
loan FRN 10 1/4s, 2009		900,000		874,286
Charter Communications bank term
loan FRN, 8 1/8s, 2013		1,028,831		1,032,895
Cinemark, Inc. bank term loan FRN
Ser. C, 7.264s, 2011		246,835		246,835
Gray Television, Inc. bank term loan
FRN Ser. B, 7.01s, 2012		148,875		148,503
Insight Midwest, LP/Insight Capital, Inc.
bank term loan FRN 7 3/8s, 2009		68,075		68,238
Jean Coutu Group, Inc. bank term loan
FRN Ser. B, 8s, 2011 (Canada)		118,461		118,609
Mediacom Communications Corp.
bank term loan FRN Ser. C, 7.222s,
2015		987,500		982,739
Mediacom Communications Corp.
bank term loan FRN Ser. DD, 7.38s,
2015		120,000		119,200
MGM Studios, Inc. bank term loan
FRN Ser. B, 8.749s, 2011		895,500		885,745

SENIOR LOANS (7.2%)* (c) continued
		Principal amount		Value
Consumer Staples continued
Olympus Cable Holdings, LLC bank
term loan FRN Ser. B, 10 1/4s, 2010	$	500,000	$	485,469
Pinnacle Foods Holding Corp. bank
term loan FRN Ser. C, 7.473s, 2010		614,096		613,905
Regal Cinemas, Inc. bank term loan
FRN Ser. B, 7.238s, 2010		537,587		535,210
Reynolds American, Inc. bank term
loan FRN Ser. B, 7.284s, 2012		249,375		250,466
Six Flags, Inc. bank term loan FRN
Ser. B, 8.73s, 2009		427,685		432,163
Spanish Broadcasting Systems, Inc.
bank term loan FRN 7 1/4s, 2012		444,361		443,805
Spectrum Brands, Inc. bank term loan
FRN Ser. B, 8.451s, 2013		739,297		740,221
United Rentals, Inc. bank term loan
FRN 7.32s, 2011		134,837		135,029
United Rentals, Inc. bank term loan
FRN Ser. B, 5.334s, 2011		51,579		51,653
Universal City Development bank
term loan FRN Ser. B, 7.467s, 2011		969,872		969,872
Warner Music Group bank term loan
FRN Ser. B, 7.388s, 2011		154,432		154,838
Young Broadcasting, Inc. bank term
loan FRN Ser. B, 7.999s, 2012		887,935		882,941
				13,395,173
Energy (0.4%)
CR Gas Storage bank term loan FRN
7.162s, 2013		63,318		63,130
CR Gas Storage bank term loan FRN
7.14s, 2013		60,606		60,568
CR Gas Storage bank term loan FRN
Ser. B, 7.166s, 2013		332,519		331,532
CR Gas Storage bank term loan FRN
Ser. DD, 6 3/4s, 2013 (U)		42,424		42,398
Dresser, Inc. bank term loan FRN
8.94s, 2010		180,000		181,575
Key Energy Services, Inc. bank term
loan FRN Ser. B, 9.107s, 2012		893,250		896,600
Meg Energy Corp. bank term loan
FRN 7 1/2s, 2013 (Canada)		99,500		99,589
Meg Energy Corp. bank term loan
FRN Ser. DD, 6s, 2013 (Canada) (U)		100,000		99,286
Petroleum Geo-Services ASA bank
term loan FRN Ser. B, 7 3/4s, 2012
(Norway)		34,544		34,751
Targa Resources, Inc. bank term loan
FRN 7.643s, 2012		634,718		636,984
Targa Resources, Inc. bank term loan
FRN 5.374s, 2012		153,871		154,420
Universal Compression, Inc. bank
term loan FRNSer. B, 7s, 2012		147,005		146,913
				2,747,746

34

SENIOR LOANS (7.2%)* (c) continued
		Principal amount		Value
Financial (0.3%)
Capital Automotive bank term loan
FRN 7.08s, 2010 (R)	$	1,182,304	$	1,183,946
Fidelity National Information Solutions,
Inc. bank term loan FRN Ser. B, 7.08s,
2013		607,947		608,749
Nasdaq Stock Market, Inc. (The)
bank term loan FRN Ser. B, 6.972s,
2012		247,294		246,985
Nasdaq Stock Market, Inc. (The)
bank term loan FRN Ser. C, 7.068s,
2012		145,526		145,344
				2,185,024
Health Care (0.6%)
Alderwoods Group, Inc. bank term
loan FRN 7.33s, 2009		625,756		625,756
AmeriPath, Inc. bank term loan FRN
Ser. B, 7.39s, 2012		47,000		46,894
Community Health Systems, Inc.
bank term loan FRN Ser. B, 7.15s,
2011		314,585		314,241
DaVita, Inc. bank term loan FRN
Ser. B, 7.472s, 2012		513,692		515,068
Fresenius Medical Care AG & CO
KGAA bank term loan FRN Ser. B,
6.829s, 2013 (Germany)		92,535		91,790
Healthsouth Corp. bank term loan
FRN Ser. B, 8.58s, 2013		1,194,000		1,197,980
LifePoint, Inc. bank term loan FRN
Ser. B, 7 1/8s, 2012		916,222		909,478
United Surgical Partners International,
Inc. bank term loan FRN 7.145s,
2013		52,868		52,868
				3,754,075
Technology (0.2%)
Aspect Software, Inc. bank term loan
FRN 8.438s, 2011		50,000		50,025
JDA Software Group, Inc. bank term
loan FRN Ser. B, 7.787s, 2013		40,000		40,000
SunGard Data Systems, Inc. bank term
loan FRN Ser. B, 7.999s, 2013		790,435		795,445
UGS Corp. bank term loan FRN
Ser. C, 7.229s, 2012		408,276		407,425
				1,292,895
Transportation (0.2%)
Travelcenters of America, Inc. bank
term loan FRN Ser. B, 7.075s, 2011		545,875		545,466
United Airlines bank term loan FRN
Ser. B, 9 1/4s, 2012		304,719		308,845
United Airlines bank term loan FRN
Ser. DD, 9.08s, 2012		43,531		44,121
				898,432

SENIOR LOANS (7.2%)* (c) continued
		Principal amount		Value
Utilities & Power (0.1%)
Mirant North America, LLC. bank
term loan FRN Ser. B, 7.08s, 2013	$	76,807	$	76,512
NRG Energy, Inc. bank term loan
FRN Ser. B, 7.33s, 2013		694,510		697,187
				773,699
Total senior loans (cost $47,861,629)			$	47,614,380
UNITS (0.4%)* (cost $1,180,933)
		Units		Value
XCL, Ltd. Equity Units (F)		991	$	2,577,624
PREFERRED STOCKS (0.1%)*
		Shares		Value
First Republic Capital Corp. 144A
10.50% pfd.		320	$	340,800
Ion Media Networks, Inc. 14.25%
cum. pfd. ‡‡		11		91,300
Rural Cellular Corp. Ser. B, 11.375%
cum. pfd.		426		517,590
Total preferred stocks (cost $746,701)			$	949,690
CONVERTIBLE PREFERRED STOCKS (—%)*
		Shares		Value
Emmis Communications Corp. Ser. A, $3.125
cum. cv. pfd.		2,441	$	97,030
Ion Media Networks, Inc. 144A 9.75%		18		122,400
Total convertible preferred stocks
(cost $284,218)			$	219,430
COMMON STOCKS (—%)*
		Shares		Value
Contifinancial Corp. Liquidating Trust
Units (F)		3,445,121	$	345
Knology, Inc. †		199		1,974
Sterling Chemicals, Inc. †		110		1,403
Sun Healthcare Group, Inc. †		740		7,948
USA Mobility, Inc.		12		274
VFB LLC (acquired 10/27/00,
cost $594,553) (F) ‡ †		948,004		20,145
WHX Corp. †		18,832		169,488
Total common stocks (cost $3,567,649)			$	201,577

35

WARRANTS (—%)* †
	Expiration	Strike
	date	Price	Warrants		Value
Dayton Superior
Corp. 144A	6/15/09	$1,020	.01	$	10
MDP Acquisitions
PLC 144A (Ireland)	10/01/13	EUR .001	508		14,224
Ubiquitel, Inc. 144A	4/15/10	$22.74	1,670		17
Total warrants (cost $116,394)				$	14,251
EQUITY VALUE CERTIFICATES (—%)* (cost $55,183)
	Maturity date		Certificates		Value
ONO Finance PLC 144A
(United Kingdom)	3/16/11		400	$	4

SHORT-TERM INVESTMENTS (23.0%)*
		Principal amount/shares		Value
U.S. Treasury Bills for an effective
yield of 4.81%, 11/30/06 #	$	2,299,000	$	2,280,762
Putnam Prime Money Market
Fund (d)		150,451,196		150,451,196
Total short-term investments
(cost $152,731,958)			$	152,731,958
TOTAL INVESTMENTS
Total investments (cost $680,742,038)			$	680,836,281

* Percentages indicated are based on net assets of $664,410,071.

**** Security is in default of principal and interest.

† Non-income-producing security.

† † The interest rate and date shown parenthetically represent the new interest rate to be paid and the date the fund will begin accruing interest at this rate.

‡ Restricted, excluding 144A securities, as to public resale. The total market value of restricted securities held at September 30, 2006 was $725,135 or 0.1% of net assets.

‡‡ Income may be received in cash or additional securities at the discretion of the issuer.

# This security was pledged and segregated with the custodian to cover margin requirements for futures contracts at September 30, 2006.

(c) Senior loans are exempt from registration under the Security Act of 1933, as amended, but contain certain restrictions on resale and cannot be sold publicly. These loans pay interest at rates which adjust periodically. The interest rate shown for senior loans are the current interest rates at September 30, 2006. Senior loans are also subject to mandatory and/or optional prepayment which cannot be predicted. As a result, the remaining maturity may be substantially less than the stated maturity shown (Notes 1 and 6).

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

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

(R) Real Estate Investment Trust.

(SN) The securities noted above were purchased during the period for an aggregate cost of $1,226,102. During the period, questions arose regarding a potential misidentification of the characteristics of these securities. As a result of initial inquiries into the matter, the values of these securities were adjusted. As of September 30, 2006, the aggregate values of these securities totaled $1,062,693. An investigation of the facts surrounding the acquisition and valuation of these securities is currently underway to determine whether the Fund may have claims against other parties in this regard.

(U) A portion of the position represents unfunded loan commitments (Note 6).

At September 30, 2006, liquid assets totaling $153,186,091 have been designated as collateral for open forward commitments, swap contracts and forward contracts.

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

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

The rates shown on Floating Rate Bonds (FRB) and Floating Rate Notes (FRN) are the current interest rates at September 30, 2006.

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

Inverse Floating Rate Bonds (IFB) are securities that pay interest rates that vary inversely to changes in the market interest rates. As interest rates rise, inverse floaters produce less current income. The interest rates shown are the current interest rates at September 30, 2006.

DIVERSIFICATION BY COUNTRY

Distribution of investments by country of issue at September 30, 2006 (as a percentage of Portfolio Value):

Argentina	1.1%
Brazil	1.6
Canada	1.1
Cayman Islands	1.1
Colombia	0.7
France	1.8
Germany	3.6
Ireland	2.4
Japan	1.4
Luxembourg	0.7
Mexico	0.7
Sweden	0.7
United Kingdom	2.0
United States	79.2
Other	1.9
Total	100.0%

36

FORWARD CURRENCY CONTRACTS TO BUY at 9/30/06 (aggregate face value $107,505,972)
					Unrealized
			Aggregate	Delivery	appreciation/
	Value		face value	date	(depreciation)
Australian Dollar	$23,784,343		$24,169,518	10/18/06	$ (385,175)
British Pound	21,312,356		21,505,398	12/20/06	(193,042)
Canadian Dollar	8,386,171		8,371,116	10/18/06	15,055
Czech Koruna	3,345,590		3,409,085	12/20/06	(63,495)
Danish Krone	1,197,190		1,209,367	12/20/06	(12,177)
Euro Dollar	8,336,415		8,373,396	12/20/06	(36,981)
Japanese Yen	26,672,090		27,142,826	11/15/06	(470,736)
Malaysian Ringgit	1,679,446		1,697,499	11/15/06	(18,053)
New Zealand Dollar	1,666,815		1,667,313	10/18/06	(498)
Polish Zloty	2,262,191		2,284,651	12/20/06	(22,460)
South African Rand	1,582,537		1,649,653	10/18/06	(67,116)
South Korean Won	3,608,970		3,547,381	11/15/06	61,589
Swedish Krona	1,676,779		1,685,100	12/20/06	(8,321)
Swiss Franc	790,171		793,669	12/20/06	(3,498)
Total					$(1,204,908)
FORWARD CURRENCY CONTRACTS TO SELL at 9/30/06 (aggregate face value $148,228,223)
					Unrealized
			Aggregate	Delivery	appreciation/
	Value		face value	date	(depreciation)
Australian Dollar	$ 3,274,171	$	3,327,343	10/18/06	$ 53,172
British Pound	1,656,902		1,672,927	12/20/06	16,025
Canadian Dollar	10,670,556		10,595,746	10/18/06	(74,810)
Euro Dollar	58,149,217		58,726,607	12/20/06	577,390
Japanese Yen	41,953,772		43,225,655	11/15/06	1,271,883
New Zealand Dollar	1,684,750		1,666,577	10/18/06	(18,173)
Norwegian Krone	8,586,646		8,643,710	12/20/06	57,064
Singapore Dollar	1,661,169		1,678,544	11/15/06	17,375
Swedish Krona	13,536,410		13,592,705	12/20/06	56,295
Swiss Franc	5,066,483		5,098,409	12/20/06	31,926
Total					$1,988,147
FUTURES CONTRACTS OUTSTANDING at 9/30/06
					Unrealized
	Number of			Expiration	appreciation/
	contracts		Value	date	(depreciation)
Bank Acceptance Bill 90 day (Long)	441	$	77,122,519	Dec-06	$ 72,294
Canadian Government Bond 10 yr (Long)	11		1,135,503	Dec-06	17,510
Euro-Bobl 5 yr (Long)	87		12,115,856	Dec-06	42,704
Euro-Bund 10 yr (Short)	35		5,235,493	Dec-06	(50,207)
Euro-Dollar 90 day (Long)	590		139,866,875	Mar-07	(55,192)
Euro-Dollar 90 day (Short)	642		152,812,050	Dec-07	75,691
Euro-Dollar 90 day (Short)	147		34,789,388	Dec-06	(108,813)
Euro-Schatz 2 yr (Short)	235		30,958,690	Dec-06	(39,255)
Euro-Yen 90 day (Long)	304		63,906,311	Jun-07	196,787
Euro-Yen 90 day (Short)	152		32,022,363	Dec-06	(60,178)
Euro-Yen 90 day (Short)	152		31,895,214	Dec-07	(132,510)
Japanese Government Bond 10 yr (Long)	36		41,108,005	Dec-06	234,340
U.K. Gilt 10 yr (Long)	9		1,849,695	Dec-06	4,173
U.S. Treasury Bond 20 yr (Long)	856		96,219,750	Dec-06	637,886
U.S. Treasury Note 10 yr (Short)	838		90,556,375	Dec-06	(932,170)
U.S. Treasury Note 2 yr (Short)	404		82,618,000	Dec-06	76,040
U.S. Treasury Note 5 yr (Short)	1,438		151,731,469	Dec-06	(683,422)
Total					$(704,322)

37

WRITTEN OPTIONS OUTSTANDING at 9/30/06 (premiums received $245,817)
				Contract	Expiration date/
				amount	strike price	Value
Option on an interest rate swap with Citibank for the obligation
to pay a fixed rate of 1.165% versus the one year JPY-LIBOR maturing
on April 3, 2008.				JPY 13,104,267,000	Mar-07/$1.165	$466,670
TBA SALE COMMITMENTS OUTSTANDING at 9/30/06 (proceeds receivable $6,653,918)
				Principal	Settlement
				amount	date	Value
FNMA, 4 1/2s, October 1, 2021				$6,900,000	10/17/06	$6,655,050
INTEREST RATE SWAP CONTRACTS OUTSTANDING at 9/30/06
			Payments	Payments		Unrealized
Swap counterparty /		Termination	made by	received by		appreciation/
Notional amount		date	fund per annum	fund per annum		(depreciation)
Bank of America, N.A.
	$ 10,000,000	9/1/15	3 month USD-LIBOR-BBA	4.53%		$ (448,750)
	16,800,000	3/30/09	3.075%	3 month USD-LIBOR-BBA		777,123
	4,400,000	1/27/14	4.35%	3 month USD-LIBOR-BBA		216,759
Citibank, N.A.
NOK	47,500,000	7/14/10	6 month NOK-NIBOR-NIBR	3.40%		(228,509)
EUR	5,800,000	7/14/10	2.7515%	6 month
				EUR-EURIBOR-Telerate		274,818
	$ 24,650,000	7/27/09	5.504%	3 month USD-LIBOR-BBA		(275,347)
JPY	1,200,000,000	4/22/13	1.9225%	6 month JPY-LIBOR-BBA		(360,168)
JPY	5,372,749,000	4/3/08	1 year JPY-LIBOR-BBA	1.165%		175,678
JPY	380,000,000	4/21/36	6 month JPY-LIBOR-BBA	2.775%		177,313
EUR	2,300,000	7/22/10	2.825%	6 month
				EUR-EURIBOR-Telerate		101,419
NOK	18,800,000	7/22/10	6 month NOK-NIBOR-NIBR	3.52%		(78,437)
JPY	1,300,000,000	2/10/16	6 month JPY-LIBOR-BBA	1.755%		(11,631)
	$ 42,130,000	9/29/13	5.078%	3 month USD-LIBOR-BBA		88,306
JPY	1,134,000,000	9/11/16	1.8675%	6 month JPY-LIBOR-BBA		(32,748)
CAD	39,143,000	8/22/08	4.3535%	3 month CAD-BA-CDOR		131,735
CAD	9,329,000	8/22/16	4.6535%	3 month CAD-BA-CDOR		(157,265)
AUD	31,963,000	8/4/09	3 month AUD-BBR-BBSW	6.315%		90,407
CAD	13,670,000	8/4/09	4.497%	3 month CAD-BA-CDOR		(122,458)
Credit Suisse First Boston International
	$ 5,699,500	7/9/14	4.945%	3 month USD-LIBOR-BBA		76,207
Credit Suisse International
EUR	2,568,000	7/17/21	6 month EUR-EURIBOR-
			Telerate	4.445%		144,617
EUR	9,930,000	7/17/13	4.146%	6 month
				EUR-EURIBOR-Telerate		(233,475)
EUR	11,985,000	7/17/09	6 month EUR-EURIBOR-
			Telerate	3.896%		64,303
GBP	1,480,000	4/3/36	GBP 3,728,462 at maturity	6 month GBP-LIBOR-BBA		(6,451)
Deutsche Bank AG
ZAR	12,120,000	7/6/11	3 month ZAR-JIBAR-SAFEX	9.16%		15,176
JPMorgan Chase Bank, N.A.
JPY	2,576,000,000	7/24/13	1.7875%	6 month JPY-LIBOR-BBA		(434,086)
JPY	10,638,000,000	7/24/08	6 month JPY-LIBOR-BBA	0.905%		325,296
	$ 25,100,000	9/2/15	3 month USD-LIBOR-BBA	4.4505%		(1,266,520)
	16,700,000	8/4/16	3 month USD-LIBOR-BBA	5.5195%		446,114
	31,100,000	8/4/08	3 month USD-LIBOR-BBA	5.40%		130,128
	70,918,000	5/4/08	3 month USD-LIBOR-BBA	5.37%		1,136,226

38

INTEREST RATE SWAP CONTRACTS OUTSTANDING at 9/30/06 continued
				Payments	Payments	Unrealized
Swap counterparty /			Termination	made by	received by	appreciation/
Notional amount			date	fund per annum	fund per annum	(depreciation)
JPMorgan Chase Bank, N.A. continued
	$ 22,964,000		5/4/16	5.62375%	3 month USD-LIBOR-BBA	$(1,117,379)
JPY	7,460,000,000		6/6/13	1.83%	6 month JPY-LIBOR-BBA	(1,610,584)
	$ 30,000,000		6/17/15	3 month USD-LIBOR-BBA	4.5505%	(919,899)
	134,000,000		6/17/07	4.0825%	3 month USD-LIBOR-BBA	(69,250)
	8,000,000		3/6/16	3 month USD-LIBOR-BBA	5.176%	10,651
NZD	20,421,000		8/8/09	3 month NZD-BBR-FRA	7.10%	(11,523)
Lehman Brothers International (Europe)
	$ 2,218,000		8/3/16	5.5675%	3 month USD-LIBOR-BBA	(67,536)
	10,091,000		8/3/11	3 month USD-LIBOR-BBA	5.445%	156,026
Lehman Brothers Special Financing, Inc.
	79,881,000		8/3/08	3 month USD-LIBOR-BBA	5.425%	373,016
GBP	1,365,000		3/15/36	3,304,437 GBP at maturity	6 month GBP-LIBOR-BBA	90,086
JPY	1,862,000,000		9/8/13	1.58375%	6 month JPY-LIBOR-BBA	(63,349)
JPY	7,854,000,000		9/8/08	6 month JPY-LIBOR-BBA	0.80625%	65,373
Merrill Lynch Capital Services, Inc.
EUR	3,500,000		7/26/10	2.801%	6 month
					EUR-EURIBOR-Telerate	157,074
NOK	28,000,000		7/26/10	6 month NOK-NIBOR-NIBR	3.54%	(118,052)
	$ 8,500,000	(E)	11/22/16	4.1735%	3 month U.S. Bond Market
					Association Municipal Swap
					Index	(292,121)
	6,000,000	(E)	11/22/16	3 month USD-LIBOR-BBA	5.711%	250,980
CAD	27,167,000		8/2/09	4.464%	3 month CAD-BA-CDOR	(218,048)
Total						$(2,668,755)
(E) See Note 1 to the financial statements regarding extended effective dates.
TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 9/30/06
				Fixed payments	Total return	Unrealized
Swap counterparty /			Termination	received (paid) by	received by	appreciation/
Notional amount			date	fund per annum	or paid by fund	(depreciation)
Credit Suisse International
GBP	1,480,000		4/3/36	3.1225%	GBP Non-revised	$ 40,466
					Retail Price
					Index
Goldman Sachs International
	$1,345,000		9/15/11	678 bp (1 month	Ford Credit Auto	741
				USD-LIBOR-BBA)	Owner Trust
					Series 2005-B
					Class D
JPMorgan Chase Bank, N.A.
EUR	15,930,000		7/21/11	(2.295%)	Euro Non-revised	(284,363)
					Consumer Price
					Index excluding
					tobacco
EUR	15,930,000		7/21/11	2.2325%	Euro Non-revised	297,267
					Consumer Price
					Index excluding
					tobacco
EUR	10,800,000		6/16/14	2.25%	Euro Non-revised	198,942
					Consumer Price
					Index excluding
					tobacco
EUR	10,800,000		6/16/14	(2.275%)	Euro Non-revised	(193,351)
					Consumer Price
					Index excluding
					tobacco

39

TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 9/30/06 continued
				Fixed payments		Total return	Unrealized
Swap counterparty /		Termination		received (paid) by		received by	appreciation/
Notional amount		date		fund per annum		or paid by fund	(depreciation)
Lehman Brothers Special Financing, Inc.
EUR	16,889,000	4/26/11		2.11%		French Non-	$ 116,584
						revised Consumer
						Price Index
						excluding tobacco
EUR	16,889,000	4/26/11		(2.115%)		Euro Non-revised	(4,278)
						Consumer Price
						Index excluding
						tobacco
GBP	1,365,000	3/15/36		2,065,993 GBP at		GBP Non-revised	34,672
				maturity		Retail Price
						Index
Total							$ 206,680
CREDIT DEFAULT CONTRACTS OUTSTANDING at 9/30/06
		Upfront				Fixed payments	Unrealized
Swap counterparty /		premium		Notional	Termination	received (paid) by	appreciation/
Referenced debt*		received (paid)**		amount	date	fund per annum	(depreciation)
Bank of America, N.A.
DJ CDX NA HY Series 3
Index		$ 24,008	$	960,000	6/20/10	360 bp	$ 57,742
DJ CDX NA HY Series 4
Index		47,895		1,824,000	6/20/10	360 bp	111,990
DJ CDX NA HY Series 4
Index		18,006		4,800,000	6/20/10	(360 bp)	(150,666)
DJ CDX NA HY Series 4
Index		(12,004)		2,400,000	6/20/10	(360 bp)	(96,340)
L-3 Communications
Corp. 7 5/8%, 6/15/12		—		590,000	9/20/11	(111 bp)	(1,805)
L-3 Communications
Corp. 7 5/8%, 6/15/12		—		235,000	6/20/11	(101 bp)	(169)
Citibank, N.A.
DJ CDX NA HY Series 6
Index		507		405,750	6/20/11	(345 bp)	(4,388)
DJ CDX NA HY Series 6
Index		3,453		212,500	6/20/11	(345 bp)	889
DJ CDX NA HY Series 6
Index 25-35% tranche		—		1,623,000	6/20/11	80 bp	2,052
DJ CDX NA HY Series 6
Index 25-35% tranche		—		850,000	6/20/11	74 bp	157
CreditSuisse First Boston International
Ford Motor Co., 7.45%,
7/16/31		—		1,400,000	9/20/07	(487.5 bp)	(24,919)
Ford Motor Co., 7.45%,
7/16/31		—		1,700,000	9/20/08	725 bp	80,419
Ford Motor Co., 7.45%,
7/16/31		—		300,000	9/20/07	(485 bp)	(5,266)
Republic of Argentina,
8.28%, 2033		—		1,175,000	7/20/09	(214 bp)	(24,614)
Ukraine Government,
7.65%, 6/11/13		—		1,105,000	10/20/11	194 bps	(497)
Deutsche Bank AG
DJ CDX NA IG Series 7		36		1,308,000	12/20/13	(50 bp)	(517)
DJ CDX NA IG Series 7
Index 7-10% tranche		—		1,308,000	12/20/13	55 bp	840
Republic of Indonesia,
6.75%, 2014		—		575,000	9/20/16	294 bp	23,437
Republic of Indonesia,
6.75%, 2014		—		575,000	9/20/16	292 bp	22,622

40

CREDIT DEFAULT CONTRACTS OUTSTANDING at 9/30/06 continued
		Upfront				Fixed payments	Unrealized
Swap counterparty /		premium		Notional	Termination	received (paid) by	appreciation/
Referenced debt*		received (paid)**		amount	date	fund per annum	(depreciation)
Goldman Sachs International
Any one of the
underlying securities
in the basket of BB
CMBS securities	$	—		$ 3,768,000	(a)	2.461%	$ 256,637
DJ CDX NA HY Series 4
Index		14,044		864,000	6/20/10	360 bp	48,760
DJ CDX NA HY Series 4
Index		14,645		2,400,000	6/20/10	(360 bp)	(69,691)
DJ CDX NA HY Series 5
Index		(241,095)		13,774,000	12/20/10	(395 bp)	(792,150)
DJ CDX NA HY Series 6
Index		1,300		520,000	6/20/11	(345 bp)	(4,973)
DJ CDX NA HY Series 6
Index 25-35% tranche		—		2,080,000	6/20/11	85 bp	7,050
DJ CDX NA IG Series 6
Index		—		2,181,000	6/20/13	55 bp	14,500
DJ CDX NA IG Series 6
Index		935		2,181,000	6/20/13	(50 bp)	(227)
DJ CDX NA IG Series 7
Index		151		2,178,000	12/20/13	(50 bp)	1,390
DJ CDX NA IG Series 7
Index 7-10% tranche		—		2,178,000	12/20/13	56 bp	2,630
General Motors Corp.,
7 1/8%, 7/15/13		—		1,400,000	9/20/08	620 bp	66,114
General Motors Corp.,
7 1/8%, 7/15/13		—		1,400,000	9/20/07	(427.5 bp)	(29,227)
General Motors Corp.,
7 1/8%, 7/15/13		—		300,000	9/20/07	(425 bp)	(6,046)
General Motors Corp.,
7 1/8%, 7/15/13		—		300,000	9/20/08	620 bp	14,164
Ray Acquisition SCA, 9
3/8%, 3/15/15		—	EUR	600,000	9/20/08	(187 bp)	(9,882)
Ray Acquisition SCA, 9
3/8%, 3/15/15		—	EUR	600,000	9/20/11	399 bp	33,001
United States Steel
Corp., 9 3/4%, 5/15/10		—	$	324,000	9/20/09	(65 bp)	268
JPMorgan Chase Bank, N.A.
Ford Motor Co.,
7.45%, 7/16/31		—		235,000	9/20/07	(345 bp)	(61)
Ford Motor Co.,
7.45%, 7/16/31		—		235,000	9/20/08	550 bp	1,917
General Motors Corp.,
7 1/8%, 7/15/13		—		235,000	9/20/07	(350 bp)	(3,127)
General Motors Corp.,
7 1/8%, 7/15/13		—		235,000	9/20/08	500 bp	5,783
United Rentals N.A.,
61/2%, 2/15/12		—		233,000	9/20/08	(95 bp)	(79)
Lehman Brothers Special Financing, Inc.
DJ CDX NA HY Series 4
Index		23,767		864,000	6/20/10	360 bp	57,070
DJ CDX NA HY Series 4
Index		24,968		4,800,000	6/20/10	(360 bp)	(160,047)
DJ CDX NA HY Series 6
Index		3,116		415,500	6/20/11	(345 bp)	(1,897)
DJ CDX NA HY Series 6
Index		5,133		513,250	6/20/11	(345 bp)	(1,059)
DJ CDX NA HY Series 6
Index 25-35% tranche		—		1,662,000	6/20/11	74 bp	1,746
DJ CDX NA HY Series 6
Index 25-35% tranche		—		2,053,000	6/20/11	72 bp	409

41

CREDIT DEFAULT CONTRACTS OUTSTANDING at 9/30/06 continued
	Upfront				Fixed payments	Unrealized
Swap counterparty /	premium		Notional	Termination	received (paid) by	appreciation/
Referenced debt*	received (paid)**		amount	date	fund per annum	(depreciation)
Lehman Brothers Special Financing, Inc. continued
DJ iTraxx EUR Series 5
Index	$ 9,890	EUR	1,836,000	6/20/13	(50 bp)	$ (5,535)
DJ iTraxx EUR Series 5
Index 6-9% tranche	—	EUR	1,836,000	6/20/13	53.5 bp	8,172
Republic of Peru, 8
3/4%, 11/21/33	—	$	1,185,000	10/20/16	215 bp	10,340
Merrill Lynch Capital Services, Inc.
Ford Motor Co., 7.45%,
7/16/31	—		685,000	9/20/07	(345 bp)	(1,098)
Ford Motor Co., 7.45%,
7/16/31	—		685,000	9/20/08	570 bp	13,235
General Motors Corp.,
7 1/8%, 7/15/13	—		960,000	9/20/07	(335 bp)	(2,229)
General Motors Corp.,
7 1/8%, 7/15/13	—		960,000	9/20/08	500 bp	24,229
L-3 Communications
Corp. 7 5/8%, 2012	—		960,000	9/20/11	(111 bp)	(2,937)
L-3 Communications
Corp. 7 5/8%, 2012	—		585,000	6/20/11	(92 bp)	2,948
Merrill Lynch International
DJ CDX NA HY Series 4
Index	27,289		1,056,000	6/20/10	360 bp	64,396
Morgan Stanley Capital Services, Inc.
DJ CDX NA HY Series 6
Index	5,313		531,250	6/20/11	(345 bp)	(1,096)
DJ CDX NA HY Series 6
Index 25-35% tranche	—		2,125,000	6/20/11	73 bp	(3,842)
DJ CDX NA HY Series 6
Index 25-35% tranche	3,453		360,000	6/20/11	(345 bp)	(890)
DJ CDX NA HY Series 6
Index 25-35% tranche	—		1,440,000	6/20/11	74 bp	(1,848)
DJ CDX NA IG Series 7
Index	1,344		2,264,000	12/20/13	(50 bp)	1,086
DJ CDX NA IG Series 7
Index, 7-10% tranche	—		2,264,000	12/20/13	53 bp	(298)
DJ iTraxx EUR Series 5
Index	8,793	EUR	1,836,000	6/20/13	(50 bp)	(6,632)
DJ iTraxx EUR Series 5
Index 6-9% tranche	—	EUR	1,836,000	6/20/13	57 bp	14,290
Ford Motor Co., 7.45%,
7/16/31	—	$	235,000	9/20/07	(345 bp)	(934)
Ford Motor Co., 7.45%,
7/16/31	—		235,000	9/20/08	560 bp	4,117
General Motors Corp.,
7 1/8%, 7/15/13	—		235,000	9/20/07	(335 bp)	(2,784)
General Motors Corp.,
7 1/8%, 7/15/13	—		235,000	9/20/08	500 bp	5,931
Total						$(457,439)

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

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

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

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

42

Statement of assets and liabilities 9/30/06

ASSETS
Investment in securities, at value (Note 1):
Unaffiliated issuers (identified cost $530,290,842)	$ 530,385,085
Affiliated issuers (identified cost $150,451,196) (Note 5)	150,451,196
Cash	2,813,581
Foreign currency (cost $5,451,053) (Note 1)	5,441,282
Dividends, interest and other receivables	6,961,244
Receivable for securities sold	1,246,349
Receivable for sales of delayed delivery securities (Note 1)	6,667,718
Receivable for variation margin (Note 1)	127,653
Receivable for open forward currency contracts (Note 1)	2,184,408
Receivable for closed forward currency contracts (Note 1)	429,238
Unrealized appreciation on swap contracts (Note 1)	7,123,834
Premium received on swap contracts (Note 1)	253,099
Receivable for closed swap contracts (Note 1)	25,419
Total assets	714,110,106
LIABILITIES
Distributions payable to shareholders	2,804,027
Payable for securities purchased	608,023
Payable for delayed delivery securities (Note 1)	24,863,201
Payable for shares of the fund repurchased	910,764
Payable for compensation of Manager (Note 2)	1,172,214
Payable for investor servicing and custodian fees (Note 2)	49,123
Payable for Trustee compensation and expenses (Note 2)	119,572
Payable for administrative services (Note 2)	2,925
Payable for open forward currency contracts (Note 1)	1,401,169
Payable for closed forward currency contracts (Note 1)	240,488
Written options outstanding, at value (premiums received $245,817) (Note 1)	466,670
Unrealized depreciation on swap contracts (Note 1)	10,043,348
TBA sales commitments, at value (proceeds receivable $6,653,918) (Note 1)	6,655,050
Premium paid on swap contracts (Note 1)	238,046
Other accrued expenses	125,415
Total liabilities	49,700,035
Net assets applicable to common shares outstanding	$ 664,410,071
REPRESENTED BY
Paid-in capital (Unlimited shares authorized) (Note 1)	$ 798,527,745
Undistributed net investment income (Note 1)	7,431,962
Accumulated net realized loss on investments and foreign currency transactions (Note 1)	(138,879,980)
Net unrealized depreciation of investments and assets and liabilities in foreign currencies	(2,669,656)
Total — Representing net assets applicable to capital shares outstanding	$ 664,410,071
COMPUTATION OF NET ASSET VALUE
Net asset value per share ($664,410,071 divided by 93,824,140 shares)	$7.08

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

43

Statement of operations Year ended 9/30/06

INVESTMENT INCOME
Interest (including interest income of $5,025,042 from investments in affiliated issuers) (Note 5)	$38,393,939
Dividends	349,144
Total investment income	38,743,083
EXPENSES
Compensation of Manager (Note 2)	4,928,639
Investor servicing fees (Note 2)	340,900
Custodian fees (Note 2)	289,863
Trustee compensation and expenses (Note 2)	49,168
Administrative services (Note 2)	25,687
Other	558,607
Fees waived and reimbursed by Manager (Note 5)	(131,153)
Total expenses	6,061,711
Expense reduction (Note 2)	(306,590)
Net expenses	5,755,121
Net investment income	32,987,962
Net realized loss on investments (Notes 1 and 3)	(6,326,993)
Net realized gain on swap contracts (Note 1)	474,476
Net realized gain on futures contracts (Note 1)	746,950
Net realized loss on foreign currency transactions (Note 1)	(3,715,978)
Net realized loss on written options (Notes 1 and 3)	(78,523)
Net unrealized appreciation of assets and liabilities in foreign currencies during the year	936,759
Net unrealized appreciation of investments, futures contracts, swap contracts,
written options and TBA sale commitments during the year	3,766,317
Net loss on investments	(4,196,992)
Net increase in net assets resulting from operations	$28,790,970

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

44

Statement of changes in net assets

DECREASE IN NET ASSETS
	Year ended	Year ended
	9/30/06	9/30/05
Operations:
Net investment income	$ 32,987,962	$ 31,885,428
Net realized gain (loss) on investments and foreign currency transactions	(8,900,068)	20,477,730
Net unrealized appreciation (depreciation) of investments and assets and liabilities in foreign currencies	4,703,076	(16,564,065)
Net increase in net assets resulting from operations	28,790,970	35,799,093
Distributions to shareholders: (Note 1)
From net investment income	(34,013,650)	(42,129,483)
Decrease from shares repurchased (Note 4)	(39,632,967)	—
Total decrease in net assets	(44,855,647)	(6,330,390)
NET ASSETS
Beginning of year	709,265,718	715,596,108
End of year (including undistributed net investment income of $7,431,962 and $10,822,412, respectively)	$664,410,071	$709,265,718
NUMBER OF FUND SHARES
Shares outstanding at beginning of year	100,313,084	100,313,084
Shares repurchased	(6,488,944)	—
Shares outstanding at end of year	93,824,140	100,313,084

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

45

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

PER-SHARE OPERATING PERFORMANCE
			Year ended
	9/30/06	9/30/05	9/30/04	9/30/03	9/30/02
Net asset value,
beginning of period	$7.07	$7.13	$6.99	$6.26	$6.54
Investment operations:
Net investment income (a)	.34(d)	.32(d)	.40(d)	.48	.52
Net realized and unrealized
gain (loss) on investments	(.04)	.04	.23	.73	(.26)
Total from
investment operations	.30	.36	.63	1.21	.26
Less distributions:
From net investment income	(.35)	(.42)	(.49)	(.48)	(.53)
From return of capital	—	—	—	—	(.01)
Total distributions	(.35)	(.42)	(.49)	(.48)	(.54)
Increase from shares repurchased	.06	—	—	—	—
Net asset value,
end of period	$7.08	$7.07	$7.13	$6.99	$6.26
Market value,
end of period	$6.15	$6.25	$6.73	$6.41	$6.38
Total return at
market value (%)(b)	4.17	(0.98)	12.95	8.35	14.81
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)	$664,410	$709,266	$715,596	$700,694	$627,620
Ratio of expenses to
average net assets (%)(c)	.89(d)	.87(d)	.86(d)	.89	.87
Ratio of net investment income
to average net assets (%)	4.84(d)	4.43(d)	5.61(d)	7.22	7.97
Portfolio turnover (%)	113.12(e)	165.33(e)	113.46	141.60(f )	193.33(f )

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

(b) Total return does not reflect the effect of sales charges.

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

(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Prime Money Market Fund during the period. As a result of such waivers, the expenses of the fund for the periods ended September 30, 2006, September 30, 2005 and September 30, 2004 reflect a reduction of 0.02%, 0.02% and less than 0.01% respectively, of average net assets for common shares (Note 5).

(e) Portfolio turnover excludes dollar roll transactions.

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

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

46

Notes to financial statements 9/30/06

Note 1: Significant accounting policies

Putnam Master Intermediate Income Trust (the “fund”), a Massachusetts business trust, is registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company and is authorized to issue an unlimited number of shares. The fund’s investment objective is to seek, with equal emphasis, high current income and relative stability of net asset value, by allocating its investments among the U.S. investment grade sector, high-yield sector and international sector. The fund invests in higher yielding, lower rated bonds that have a higher rate of default.

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

The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

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

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

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

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

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

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

E) Foreign currency translationThe accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities are recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on closed forward c urrency contracts, disposition

47

of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations, not present with domestic investments.

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

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

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

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

H) Total return swap contracts The fund may enter into total return swap contracts, which are arrangements to exchange a market linked return for a periodic payment, both based on a notional principal amount. To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. Total return swap contracts are marked to market daily based upon quotations from market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or loss. Certain total return swap contracts may include extended effective dates. Income related to these swap contracts is accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuat ion of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. Risk of loss may exceed amounts recognized on the statement of assets and liabilities. Total return swap contracts outstanding at period end, if any, are listed after the fund’s portfolio.

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

J) Credit default contracts The fund may enter into credit default contracts where one party, the protection buyer, makes an upfront or periodic payment to a counter party, the protection seller, in exchange for the right to receive a contingent payment. The maximum amount of the payment may equal the notional amount, at par, of the underlying index or security as a result of a related credit event. Payments are made up0n a credit default event of the disclosed primary referenced obligation of all other equally ranked obligations of the referenced entity. An upfront payment received by the fund, as the protection seller, is recorded as a liability on the fund’s books. An upfront payment made by the fund, as the protection buyer, is recorded as an asset on the fund’s books. Periodic payments received or paid by the fund are recorded as realized gains or losses. The credit default contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made as a result of a credit event or termination of the contract are recognized, net of a proportional amount of the upfront payment, as realized gains or losses. In addition to bearing the

48

risk that the credit event will occur, the fund could be exposed to market risk due to unfavorable changes in interest rates or in the price of the underlying security or index, the possibility that the fund may be unable to close out its position at the same time or at the same price as if it had purchased comparable publicly traded securities or that the counterparty may default on its obligation to perform. Risks of loss may exceed amounts recognized on the statement of assets and liabilities. Credit default contracts outstanding at period end, if any, are listed after the fund’s portfolio.

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

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

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

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

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

N) Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code of 1986 (the “Code”) applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code, as amended. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains.

At September 30, 2006, the fund had a capital loss carryover of $132,636,061 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
$ 6,989,067	September 30, 2007
25,640,537	September 30, 2008
24,593,458	September 30, 2009
27,431,170	September 30, 2010
47,564,236	September 30, 2011
417,593	September 30, 2014

O) Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences include temporary and permanent differences of foreign currency gains and losses, post-October loss deferrals, dividends payable, realized and unrealized gains and losses on certain futures contracts, income on swap contracts, amortization and accretion and interest only securities. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. For the year ended Sept ember 30, 2006, the fund reclassified $2,364,762 to decrease undistributed net investment income and $60,923 to increase paid-in-capital, with a decrease to accumulated net realized losses of $2,303,839.

The tax basis components of distributable earnings and the federal tax cost as of September 30, 2006 were as follows:

Unrealized appreciation	$ 12,410,136
Unrealized depreciation	(12,923,479)
	—————————————
Net unrealized depreciation	(513,343)
Undistributed ordinary income	10,209,859
Capital loss carryforward	(132,636,061)
Post-October loss	(6,929,768)
Cost for federal income tax purposes	$681,349,624

Pursuant to federal income tax regulations applicable to regulated investment companies, the fund has elected to defer to its fiscal year ending September 30, 2007, $6,929,768 of losses recognized during the period November 1, 2005 to September 30, 2006.

49

Note 2: Management fee, administrative services and other transactions

Putnam Management is paid for management and investment advisory services quarterly based on the “average weekly assets” of the fund. “Average weekly assets” is defined to mean the average of the weekly determinations of the difference between the total assets of the fund (including any assets attributable to leverage for investment purposes (through incurrence of indebtedness) and the total liabilities of the fund (excluding liabilities incurred in connection with leverage for investment purposes through incurrence of indebtedness). This fee is based on the following annual rates: 0.75% of the first $500 million of average weekly assets, 0.65% of the next $500 million, 0.60% of the next $500 million and 0.55% of the next $5 billion, with additional breakpoints at higher asset levels.

Prior to January 1, 2006, the fund’s management fee was based on the following annual rates: 0.75% of the first $500 million of average weekly assets, 0.65% of the next $500 million, 0.60% of the next $500 million and 0.55% thereafter.

Putnam Investments Limited (“PIL”), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. Putnam Management pays a quarterly sub-management fee to PIL for its services at an annual rate of 0.40% of the average weekly assets (calculated in the same manner as under the fund’s management contract with Putnam Management) of the portion of the fund managed by PIL.

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. PFTC receives fees for custody services based on the fund’s asset level, the number of its security holdings and transaction volumes. Putnam Investor Services, a division of PFTC, provides investor servicing agent functions to the fund. Putnam Investor Services is paid a monthly fee for investor servicing at an annual rate of 0.05% of the fund’s average net assets. During the year ended September 30, 2006, the fund incurred $630,763 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 year ended September 30, 2006, the fund’s expenses were reduced by $306,590 under these arrangements.

Each independent Trustee of the fund receives an annual Trustee fee, of which $373, 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, industry seminars and for certain compliance-related matters. Trustees also are reimbursed for expenses they incur relating to their services as Trustees. George Putnam, III, who is not an independent Trustee, also receives the foregoing fees for his services as Trustee.

The fund has adopted a Trustee Fee Deferral Plan (the “Deferral Plan”) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.

The fund has adopted an unfunded noncontributory defined benefit pension plan (the “Pension Plan”) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. 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 year ended September 30, 2006, cost of purchases and proceeds from sales of investment securities other than U.S. government securities and short-term investments aggregated $614,073,287 and $767,148,110, respectively. Purchases and sales of U.S. government securities aggregated $13,920,330 and $11,995,558, respectively.

Written option transactions during the year ended September 30, 2006 are summarized as follows:

	Contract	Premiums
	Amounts	Received
Written options outstanding
at beginning of year	—	—
Options opened	JPY 28,562,767,000	$468,959
Options exercised	—	—
Options expired	—	—
Options closed	JPY (15,458,500,000)	(223,142)
Written options outstanding
at end of year	JPY 13,104,267,000	$245,817

Note 4: Share repurchase program

In October 2005, the Trustees of your fund authorized Putnam Investments to implement a repurchase program on behalf of your fund, which would allow your fund to repurchase up to 5% of its outstanding shares over the 12 months ending October 6, 2006. In March 2006, the Trustees approved an increase in this repurchase program to allow the fund to repurchase a total of up to 10% of its outstanding shares over the same period. In September 2006, the Trustees extended the program on its existing terms through October 6, 2007. Repurchases will only be made when the fund’s shares are trading at less than net asset value and in accordance with procedures approved by the fund’s Trustees.

For the year ended September 30, 2006, the fund repurchased 6,488,944 common shares for an aggregate purchase price of $39,632,967, which reflects a weighted-average discount from net asset value per share of 12.7% .

Note 5: Investment in Putnam Prime Money Market Fund

The fund invests in Putnam Prime Money Market Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Prime Money Market Fund are valued at its closing net asset value each business day. Management fees paid by the fund are reduced by an amount equal to the management and administrative services fees paid by Putnam Prime Money Market Fund with respect to assets invested by the fund in Putnam Prime Money Market Fund.

50

For the year ended September 30, 2006, management fees paid were reduced by $131,153 relating to the fund’s investment in Putnam Prime Money Market Fund. Income distributions earned by the fund are recorded as income in the statement of operations and totaled $5,025,042 for the year ended September 30, 2006. During the year ended September 30, 2006, cost of purchases and proceeds of sales of investments in Putnam Prime Money Market Fund aggregated $340,543,751 and $235,207,879, respectively.

Note 6: Senior loan commitments

Senior loans are purchased or sold on a when-issued or delayed delivery basis and may be settled a month or more after the trade date, which from time to time can delay the actual investment of available cash balances; interest income is accrued based on the terms of the securities. Senior loans can be acquired through an agent, by assignment from another holder of the loan, or as a participation interest in another holder’s portion of the loan. When the fund invests in a loan or participation, the fund is subject to the risk that an intermediate participant between the fund and the borrower will fail to meet its obligations to the fund, in addition to the risk that the borrower under the loan may default on its obligations.

Note 7: Unfunded loan commitments

As of September 30, 2006, the fund had unfunded loan commitments of $344,422, which could be extended at the option of the borrower, pursuant to the following loan agreements with the following borrowers:

	Unfunded
Borrower	commitments
CBRL Group, Inc.	$ 18,310
CR Gas Storage	42,424
MEG Energy Corp.	100,000
Trump Hotel & Casino	174,125

Note 8: Regulatory matters and litigation

Putnam Management has entered into agreements with the Securities and Exchange Commission and the Massachusetts Securities Division settling charges connected 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. Pursuant to these settlement agreements, Putnam Management will pay a total of $193.5 million in penalties and restitution, with $153.5 million being paid to certain open-end funds and their shareholders. The amount will be allocated to shareholders and funds pursuant to a plan developed by an independent consultant, and will be paid following approval of the plan by the SEC and the Massachusetts Securities Division.

The Securities and Exchange Commission’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 will bear any costs incurred by Putnam funds in connection with these lawsuits. 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.

The Staff of the SEC has indicated that it believes that Putnam Management did not comply with certain disclosure requirements in connection with dividend payments to shareholders of your fund. Putnam Management is currently engaged in settlement negotiations with the SEC Staff regarding this matter.

Putnam Management and Putnam Retail Management are named as defendants in a civil suit in which the plaintiffs allege that the management and distribution fees paid by certain Putnam funds were excessive and seek recovery under the Investment Company Act of 1940. Putnam Management and Putnam Retail Management have contested the plaintiffs’ claims and the matter is currently pending in the U.S. District Court for the District of Massachusetts. Based on currently available information, Putnam Management believes that this action is without merit and that it is unlikely to have a material effect on Putnam Management’s and Putnam Retail Management’s ability to provide services to their clients, including the fund.

Note 9: New accounting pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (the “Interpretation”). The Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken by a filer in the filer’s tax return. The Interpretation will become effective for fiscal years beginning after December 15, 2006 but will also apply to tax positions reflected in the fund’s financial statements as of that date. No determination has been made whether the adoption of the Interpretation will require the fund to make any adjustments to its net assets or have any other effect on the fund’s financial statements.

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

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Federal tax information
(Unaudited)

Federal tax information

The fund designated 1.11% of ordinary income distributions as qualifying for the dividends received deduction for corporations.

For its tax year ended September 30, 2006, the fund hereby designates 1.11%, or the maximum amount allowable, of its taxable ordinary income distributions as qualified dividends taxed at the individual net capital gain rates.

The Form 1099 you receive in January 2007 will show the tax status of all distributions paid to your account in calendar 2006.

52

Shareholder meeting
results (Unaudited)

The annual meeting of shareholders of the fund was held on June 29, 2006.

At the meeting, each of the nominees for Trustees was elected, as follows:

		Votes for	Votes withheld
Jameson A. Baxter		86,358,775	2,201,698
Charles B. Curtis		86,371,546	2,188,927
Myra R. Drucker		86,400,762	2,159,711
Charles E. Haldeman, Jr.		86,404,843	2,155,630
John A. Hill		86,400,932	2,159,541
Paul L. Joskow		86,420,202	2,140,271
Elizabeth T. Kennan		86,351,607	2,208,866
Robert E. Patterson		86,420,070	2,140,403
George Putnam, III		86,403,291	2,157,182
W. Thomas Stephens		79,674,994	8,885,479
Richard B. Worley		86,385,546	2,174,927
A proposal to convert the fund to an open-end investment company was defeated as follows:
Votes for	Votes against	Abstentions	Broker non-votes
9,501,146	28,303,210	1,613,318	49,142,799

All tabulations are rounded to the nearest whole number.

53

Compliance certifications
(Unaudited)

On July 21, 2006, your fund submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) on which the fund’s principal executive officer certified that he was not aware, as of that date, of any violation by the fund of the NYSE’s Corporate Governance listing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the fund’s principal executive and principal financial officers have made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q, relating to, among other things, the fund’s disclosure controls and procedures and internal control over financial reporting.

54

About the Trustees

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

Ms. Baxter is the President of Baxter Associates, Inc., a private investment firm that she founded in 1986.

Ms. Baxter serves as a Director of ASHTA Chemicals, Inc., Banta Corporation (a printing and digital imaging firm), Ryerson Tull, Inc. (a steel service corporation), the Mutual Fund Directors Forum, Advocate Health Care and BoardSource, formerly the National Center for Nonprofit Boards. She is Chairman Emeritus of the Board of Trustees, Mount Holyoke College, having served as Chairman for five years and as a board member for thirteen years. Until 2002, Ms. Baxter was a Director of Intermatic Corporation (a manufacturer of energy control products).

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

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

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

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

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

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

Ms. Drucker is Chair of the Board of Trustees of Commonfund (a not-for-profit firm specializing in asset management for educational endowments and foundations), Vice Chair of the Board of Trustees of Sarah Lawrence College, and a member of the Investment Committee of the Kresge Foundation (a charitable trust). She is also a director of New York Stock Exchange LLC, a wholly-owned subsidiary of the publicly-traded NYSE Group, Inc. She is an advisor to Hamilton Lane LLC and RCM Capital Management (investment management firms).

Ms. Drucker is an ex-officio member of the New York Stock Exchange (NYSE) Pension Managers Advisory Committee, having served as Chair for seven years and a member of the Executive Committee of the Committee on Investment of Employee Benefit Assets.

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

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

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

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

55

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

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

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

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

Dr. Joskow serves as a Director of National Grid plc (a UK-based holding company with interests in electric and gas transmission and distribution and telecommunications infrastructure) and TransCanada Corporation (an energy company focused on natural gas transmission and power services). He also serves on the Board of Overseers of the Boston Symphony Orchestra. Prior to February 2005, he served on the board of the Whitehead Institute for Biomedical Research (a non-profit research institution) and has been President of the Yale University Council since 1993. Prior to February 2002, he was a Director of State Farm Indemnity Company (an automobile insurance company), and, prior to March 2000, he was a Director of New England Electric System (a public utility holding company).

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

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

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

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

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

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

Mr. Leibler is founding Chairman of the Boston Options Exchange, the nation’s newest electronic marketplace for the trading of derivative securities.

Mr. Leibler currently serves as a Trustee of Beth Israel Deaconess Hospital in Boston. He is also lead director of Ruder Finn Group, a global communications and advertising firm. Since 2003, he has served as a director of the Optimum Funds group. Prior to October 2006, he served as a director of ISO New England, the organization responsible for the operation of the electric generation system in the New England states. Prior to 2000, he was a director of the Investment Company Institute in Washington, D.C.

56

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

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

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

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

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

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

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

Until 2005, Mr. Stephens was a director of TransCanadaPipelines, Ltd. Until 2004, Mr. Stephens was a Director of Xcel Energy Incorporated (a public utility company), Qwest Communications, and Norske Canada, Inc. (a paper manufacturer). Until 2003, Mr. Stephens was a Director of Mail-Well, Inc. (a diversified printing company). He served as Chairman of Mail-Well until 2001 and as CEO of MacMillan-Bloedel, Ltd. (a forest products company) until 1999.

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

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

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

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

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

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

Charles E. Haldeman, Jr.* (Born 1948), Trustee since 2004

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

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

Mr. Haldeman currently serves on the Board of Governors of the Investment Company Institute and as a Trustee of Dartmouth College, and he is a member of the Partners HealthCare Systems Investment Committee. He is a graduate of Dartmouth College, Harvard Law School and Harvard Business School. Mr. Haldeman is also a Chartered Financial Analyst (CFA) charterholder.

57

George Putnam, III* (Born 1951), Trustee since 1984
and President since 2000

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

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

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

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

As of September 30, 2006, there were 108 Putnam Funds. All Trustees serve as Trustees of all Putnam funds.

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

* Trustees who are or may be deemed to be “interested persons” (as defined in the Investment Company Act of 1940) of the fund, Putnam Management, Putnam Retail Management, or Marsh & McLennan Companies, Inc., the parent company of Putnam, LLC and its affiliated companies. Messrs. Haldeman and Putnam, III are deemed “interested persons” by virtue of their positions as officers of the fund, Putnam Management or Putnam Retail Management and as shareholders of Marsh & McLennan Companies, Inc. Mr. Putnam, III is the President of your fund and each of the other Putnam funds. Mr. Haldeman is President and Chief Executive Officer of Putnam Investments.

58

Officers

In addition to George Putnam, III, the other officers of the fund are shown below:

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

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

Steven D. Krichmar (Born 1958)
Vice President and Principal Financial Officer
Since 2002
Senior Managing Director, Putnam Investments.
Prior to July 2001, Partner, PricewaterhouseCoopers LLP

Michael T. Healy (Born 1958)
Assistant Treasurer and Principal Accounting Officer
Since 2000
Managing Director, Putnam Investments

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

James P. Pappas (Born 1953)
Vice President
Since 2004
Managing Director, Putnam Investments and Putnam Management.
During 2002, Chief Operating Officer, Atalanta/Sosnoff Management
Corporation; prior to 2001, President and Chief Executive Officer,
UAM Investment Services, Inc.

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

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

Charles A. Ruys de Perez (Born 1957)
Vice President and Chief Compliance Officer
Since 2004
Managing Director, Putnam Investments

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

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

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

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

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

59

The Putnam Family of Funds

The following is a list of Putnam’s open-end mutual funds offered to the public. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund before investing. For a prospectus containing this and other information for any Putnam fund or product, call your financial advisor at 1-800-225-1581 and ask for a prospectus. Please read the prospectus carefully before investing.

Growth funds
Discovery Growth Fund
Growth Opportunities Fund
Health Sciences Trust
International New Opportunities Fund*
New Opportunities Fund
OTC & Emerging Growth Fund
Small Cap Growth Fund*
Vista Fund
Voyager Fund

Blend funds
Capital Appreciation Fund
Capital Opportunities Fund*
Europe Equity Fund*
Global Equity Fund*
Global Natural Resources Fund*
International Capital Opportunities Fund*
International Equity Fund*
Investors Fund
Research Fund
Tax Smart Equity Fund®
Utilities Growth and Income Fund

Value funds
Classic Equity Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
International Growth and Income Fund*
Mid Cap Value Fund
New Value Fund
Small Cap Value Fund*†

Income funds
American Government Income Fund
Diversified Income Trust
Floating Rate Income Fund
Global Income Trust*
High Yield Advantage Fund*†
High Yield Trust*
Income Fund
Limited Duration Government Income Fund
Money Market Fund‡
U.S. Government Income Trust

Tax-free income funds
AMT-Free Insured Municipal Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund§
Tax-Free High Yield Fund

State tax-free income funds:
Arizona, California, Florida, Massachusetts, Michigan, Minnesota,
New Jersey, New York, Ohio, and Pennsylvania

Asset allocation funds
Income Strategies Fund

Putnam Asset Allocation Funds — three investment portfolios that spread your money across a variety of stocks, bonds, and money market investments.

The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio

Putnam RetirementReady® Funds

Putnam RetirementReady Funds — ten investment portfolios that offer diversification among stocks, bonds, and money market instruments and adjust to become more conservative over time based on a target date for withdrawing assets.

The ten funds:
Putnam RetirementReady 2050 Fund
Putnam RetirementReady 2045 Fund
Putnam RetirementReady 2040 Fund
Putnam RetirementReady 2035 Fund
Putnam RetirementReady 2030 Fund
Putnam RetirementReady 2025 Fund
Putnam RetirementReady 2020 Fund
Putnam RetirementReady 2015 Fund
Putnam RetirementReady 2010 Fund
Putnam RetirementReady Maturity Fund

* A 1% redemption fee on total assets redeemed or exchanged within 90 days of purchase may be imposed for all share classes of these funds.

† Closed to new investors.

‡ An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve your investment at $1.00 per share, it is possible to lose money by investing in the fund.

With the exception of money market funds, a 1% redemption fee may be applied to shares exchanged or sold within 7 days of purchase (90 days, for certain funds).

Check your account balances and the most recent month-end performance at www.putnam.com.

Fund information

About Putnam Investments

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 manage over 100 mutual funds in growth, value, blend, fixed income, and international.

Investment Manager	Officers	Wanda M. McManus
Putnam Investment	George Putnam, III	Vice President, Senior Associate Treasurer
Management, LLC	President	and Assistant Clerk
One Post Office Square
Boston, MA 02109	Charles E. Porter	Nancy E. Florek
	Executive Vice President, Principal	Vice President, Assistant Clerk,
Investment Sub-Manager	Executive Officer, Associate Treasurer,	Assistant Treasurer and Proxy Manager
Putnam Investments Limited	and Compliance Liaison
57–59 St. James Street
London, England SW1A 1LD	Jonathan S. Horwitz
	Senior Vice President and Treasurer
Marketing Services
Putnam Retail Management	Steven D. Krichmar
One Post Office Square	Vice President and Principal Financial Officer
Boston, MA 02109
	Michael T. Healy
Custodian	Assistant Treasurer and
Putnam Fiduciary Trust Company	Principal Accounting Officer
Legal Counsel	Beth S. Mazor
Ropes & Gray LLP	Vice President
Independent Registered Public	James P. Pappas
Accounting Firm	Vice President
KPMG LLP
	Richard S. Robie, III
Trustees	Vice President
John A. Hill, Chairman
Jameson Adkins Baxter, Vice Chairman	Francis J. McNamara, III
Charles B. Curtis	Vice President and Chief Legal Officer
Myra R. Drucker
Charles E. Haldeman, Jr.	Charles A. Ruys de Perez
Paul L. Joskow	Vice President and Chief Compliance Officer
Elizabeth T. Kennan
Kenneth R. Leibler	Mark C. Trenchard
Robert E. Patterson	Vice President and BSA Compliance Officer
George Putnam, III
W. Thomas Stephens	Judith Cohen
Richard B. Worley	Vice President, Clerk and Assistant Treasurer

Call 1-800-225-1581 weekdays between 9:00 a.m. and 5:00 p.m. Eastern Time, or visit our Web site (www.putnam.com) anytime for up-to-date information about the fund’s NAV.

Item 2. Code of Ethics:

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

(c) None

Item 3. Audit Committee Financial Expert:

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

Item 4. Principal Accountant Fees and Services:

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

Fiscal		Audit-
year	Audit	Related	Tax	All Other
ended	Fees	Fees	Fees	Fees
September 30, 2006	$61,380	$--	$4,680	$439
September 30 , 2005	$42,292	$--	$4,192	$-

For the fiscal years ended September 30, 2006 and September 30, 2005, the fund’s independent auditor billed aggregate non-audit fees in the amounts of $5,119 and $4,192 respectively, to the fund, Putnam Management and any entity controlling, controlled by or under common control with Putnam Management that provides ongoing services to the fund.

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

Audit-Related Fees represent fees billed in the fund’s last two fiscal years for services traditionally performed by the fund’s auditor, including accounting consultation for proposed transactions or

concerning financial accounting and reporting standards and other audit or attest services not required by statute or regulation.

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

All Other Fees represent fees billed for services relating to expense allocation methodology.

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

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

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

Fiscal	Audit-		All	Total
year	Related	Tax	Other	Non-Audit
ended	Fees	Fees	Fees	Fees
September 30,
2006	$ -	$ -	$ -	$ -
September
30, 2005	$ -	$ -	$ -	$ -

Item 5. Audit Committee of Listed Registrants

(a) The fund has a separately-designated Audit and Compliance Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit and Compliance Committee of the fund's Board of Trustees is composed of the following persons:

Robert E. Patterson (Chairperson)
Kenneth R. Leibler
W. Thomas Stephens
John A. Hill

(b) Not applicable

Item 6. Schedule of Investments:

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

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

Proxy voting guidelines of the Putnam funds

The proxy voting guidelines below summarize the funds’ positions on various issues of concern to investors, and give a general indication of how fund portfolio securities will be voted on proposals dealing with particular issues. The funds’ proxy voting service is instructed to vote all proxies relating to fund portfolio securities in accordance with these guidelines, except as otherwise instructed by the Proxy Coordinator, a member of the Office of the Trustees who is appointed to assist in the coordination and voting of the funds’ proxies.

The proxy voting guidelines are just that – guidelines. The guidelines are not exhaustive and do not include all potential voting issues. Because proxy issues and the circumstances of individual companies are so varied, there may be instances when the funds may not vote in strict adherence to these guidelines. For example, the proxy voting service is expected to bring to the Proxy Coordinator’s attention proxy questions that are company-specific and of a non-routine nature and that, even if covered by the guidelines, may be more appropriately handled on a case-by-case basis.

Similarly, Putnam Management’s investment professionals, as part of their ongoing review and analysis of all fund portfolio holdings, are responsible for monitoring significant corporate developments, including proxy proposals submitted to shareholders, and notifying the Proxy Coordinator of circumstances where the interests of fund shareholders may warrant a vote contrary to these guidelines. In such instances, the investment professionals will submit a written recommendation to the Proxy Coordinator and the person or persons designated by Putnam Management’s Legal and Compliance Department to assist in processing referral items pursuant to the funds’ “Proxy Voting Procedures.” The Proxy Coordinator, in consultation with the funds’ Senior Vice President, Executive Vice President, and/or the Chair of the Board Policy and Nominating Committee, as appropriate, will determine how the funds’ proxies will be voted. When indicated, the Chair of the Board Policy and Nominating Committee may consult with other members of the Committee or the full Board of Trustees.

The following guidelines are grouped according to the types of proposals generally presented to shareholders. Part I deals with proposals that have been put forth by management and approved and recommended by a company’s board of directors. Part II deals with proposals submitted by shareholders for inclusion in proxy statements. Part III addresses unique considerations pertaining to non-U.S. issuers.

The Putnam funds will disclose their proxy votes in accordance with the timetable established by SEC rules (i.e., not later than August 31 of each year for the most recent 12-month period ended June 30).

I. BOARD-APPROVED PROPOSALS

The vast majority of matters presented to shareholders for a vote involve proposals made by a company itself (sometimes referred to as “management proposals”), which have been approved and recommended by its board of directors. In view of the enhanced corporate governance practices currently being implemented in public companies and of the funds’ intent to hold corporate boards accountable for their actions in promoting shareholder interests, the funds’ proxies generally will be voted for the decisions reached by majority independent boards of directors, except as otherwise indicated in these guidelines. Accordingly, the funds’ proxies will be voted for board-approved proposals, except as follows:

Matters relating to the Board of Directors

Uncontested Election of Directors

The funds’ proxies will be voted for the election of a company’s nominees for the board of directors, except as follows:

► The funds will withhold votes for the entire board of directors if

• the board does not have a majority of independent directors,

• the board has not established independent nominating, audit, and compensation committees,

• the board has more than 19 members or fewer than five members, absent special circumstances,

• the board has not acted to implement a policy requested in a shareholder proposal that received the support of a majority of the shares of the company cast at its previous two annual meetings, or

• the board has adopted or renewed a shareholder rights plan (commonly referred to as a “poison pill”) without shareholder approval during the current or prior calendar year.

► The funds will on a case-by-case basis withhold votes from the entire board of directors where the board has approved compensation arrangements for one or more company executives that the funds determine are unreasonably excessive relative to the company’s performance.

► The funds will withhold votes for any nominee for director who:

• is considered an independent director by the company and who has received compensation from the company other than for service as a director (e.g., investment banking, consulting, legal, or financial advisory fees),

• attends less than 75% of board and committee meetings without valid reasons for the absences (e.g., illness, personal emergency, etc.),

• as a director of a public company (Company A), is employed as a senior executive of another public company (Company B) if a director of Company B serves as a senior executive of Company A (commonly referred to as an “interlocking directorate”), or

• serves on more than five unaffiliated public company boards (for the purpose of this guideline, boards of affiliated registered investment companies will count as one board).

Commentary:

Board independence: Unless otherwise indicated, for the purposes of determining whether a board has a majority of independent directors and independent nominating, audit, and compensation committees, an “independent director” is a director who (1) meets all requirements to serve as an independent director of a company under the final NYSE Corporate Governance Rules (e.g., no material business relationships with the company and no present or recent employment relationship with the company (including employment of an immediate family member as an executive officer)), and (2) has not accepted directly or indirectly any consulting, advisory, or other compensatory fee from the company other than in his or her capacity as a member of the board of directors or any board committee. The funds’ Trustees believe that the receipt of any amount of compensation for services other than service as a director raises significa nt independence issues.

Board size: The funds’ Trustees believe that the size of the board of directors can have a direct impact on the ability of the board to govern effectively. Boards that have too many members can be unwieldy and ultimately inhibit their ability to oversee management performance. Boards that have too few members can stifle innovation and lead to excessive influence by management.

Time commitment: Being a director of a company requires a significant time commitment to adequately prepare for and attend the company’s board and committee meetings. Directors must be able to commit the time and attention necessary to perform their fiduciary duties in proper fashion, particularly in times of crisis. The funds’ Trustees are concerned about over-committed directors. In some cases, directors may serve on too many boards to make a meaningful contribution. This may be particularly true for senior executives of public companies (or other directors with substantially full-time employment) who serve on more than a few outside boards. The funds may withhold votes from such directors on a case-by-case basis where it appears that they may be unable to discharge their duties properly because of excessive commitments.

Interlocking directorships: The funds’ Trustees believe that interlocking directorships are inconsistent with the degree of independence required for outside directors of public companies.

Corporate governance practices: Board independence depends not only on its members’ individual relationships, but also on the board’s overall attitude toward management. Independent boards are committed to good corporate governance practices and, by providing objective independent judgment, enhancing shareholder value. The funds may withhold votes on a case-by-case basis from some or all directors who, through their lack of independence, have failed to observe good corporate governance practices or, through specific corporate action, have demonstrated a disregard for the interest of shareholders. Such instances may include cases where a board of directors has approved compensation arrangements for one or more members of management that, in the judgment of the funds’ Trustees, are excessive by reasonable corporate standards relative to the company’s record of performance.

Contested Elections of Directors

► The funds will vote on a case-by-case basis in contested elections of directors.

Classified Boards

► The funds will vote against proposals to classify a board, absent special circumstances indicating that shareholder interests would be better served by this structure.

Commentary: Under a typical classified board structure, the directors are divided into three classes, with each class serving a three-year term. The classified board structure results in directors serving staggered terms, with usually only a third of the directors up for re-election at any given annual meeting. The funds’ Trustees generally believe that it is appropriate for directors to stand for election each year, but recognize that, in special circumstances, shareholder interests may be better served under a classified board structure.

Other Board-Related Proposals

The funds will generally vote for board-approved proposals that have been approved by a majority independent board, and on a case-by-case basis on board-approved proposals where the board fails to meet the guidelines’ basic independence standards (i.e., majority of independent directors and independent nominating, audit, and compensation committees).

Executive Compensation

The funds generally favor compensation programs that relate executive compensation to a company’s long-term performance. The funds will vote on a case-by-case basis on board-approved proposals relating to executive compensation, except as follows:

►Except where the funds are otherwise withholding votes for the entire board of directors, the funds will vote for stock option and restricted stock plans that will result in an average annual dilution of 1.67% or less (based on the disclosed term of the plan and including all equity-based plans).

►The funds will vote against stock option and restricted stock plans that will result in an average annual dilution of greater than 1.67% (based on the disclosed term of the plan and including all equity-based plans).

►The funds will vote against any stock option or restricted stock plan where the company's actual grants of stock options and restricted stock under all equity-based compensation plans during the prior three (3) fiscal years have resulted in an average annual dilution of greater than 1.67% .

►The funds will vote against stock option plans that permit the replacing or repricing of underwater options (and against any proposal to authorize such replacement or repricing of underwater options).

►The funds will vote against stock option plans that permit issuance of options with an exercise price below the stock’s current market price.

►Except where the funds are otherwise withholding votes for the entire board of directors, the funds will vote for an employee stock purchase plan that has the following features: (1) the shares purchased under the plan are acquired for no less than 85% of their market value; (2) the offering period under the plan is 27 months or less; and (3) dilution is 10% or less.

Commentary: Companies should have compensation programs that are reasonable and that align shareholder and management interests over the longer term. Further, disclosure of compensation programs should provide absolute transparency to shareholders regarding the sources and amounts of, and the factors influencing, executive compensation. Appropriately designed equity-based compensation plans can be an effective way to align the interests of long-term shareholders with the interests of management. The funds may vote against executive compensation proposals on a case-by-case basis where compensation is excessive by reasonable corporate standards, or where a company fails to provide transparent disclosure of

executive compensation. In voting on a proposal relating to executive compensation, the funds will consider whether the proposal has been approved by an independent compensation committee of the board.

Capitalization

Many proxy proposals involve changes in a company’s capitalization, including the authorization of additional stock, the issuance of stock, the repurchase of outstanding stock, or the approval of a stock split. The management of a company’s capital structure involves a number of important issues, including cash flow, financing needs, and market conditions that are unique to the circumstances of the company. As a result, the funds will vote on a case-by-case basis on board-approved proposals involving changes to a company’s capitalization, except that where the funds are not otherwise withholding votes from the entire board of directors:

►The funds will vote for proposals relating to the authorization and issuance of additional common stock (except where such proposals relate to a specific transaction).

►The funds will vote for proposals to effect stock splits (excluding reverse stock splits).

►The funds will vote for proposals authorizing share repurchase programs.

Commentary: A company may decide to authorize additional shares of common stock for reasons relating to executive compensation or for routine business purposes. For the most part, these decisions are best left to the board of directors and senior management. The funds will vote on a case-by-case basis, however, on other proposals to change a company’s capitalization, including the authorization of common stock with special voting rights, the authorization or issuance of common stock in connection with a specific transaction (e.g., an acquisition, merger or reorganization), or the authorization or issuance of preferred stock. Actions such as these involve a number of considerations that may affect a shareholder’s investment and that warrant a case-by-case determination.

Acquisitions, Mergers, Reincorporations, Reorganizations and Other Transactions

Shareholders may be confronted with a number of different types of transactions, including acquisitions, mergers, reorganizations involving business combinations, liquidations, and the sale of all or substantially all of a company’s assets, which may require their consent. Voting on such proposals involves considerations unique to each transaction. As a result, the funds will vote on a case-by-case basis on board-approved proposals to effect these types of transactions, except as follows:

► The funds will vote for mergers and reorganizations involving business combinations designed solely to reincorporate a company in Delaware.

Commentary: A company may reincorporate into another state through a merger or reorganization by setting up a “shell” company in a different state and then merging the company into the new company. While reincorporation into states with extensive and established corporate laws – notably Delaware – provides companies and shareholders with a more well-defined legal framework, shareholders must carefully consider the reasons for a reincorporation into another jurisdiction, including especially an offshore jurisdiction.

Anti-Takeover Measures

Some proxy proposals involve efforts by management to make it more difficult for an outside party to take control of the company without the approval of the company’s board of directors.

These include the adoption of a shareholder rights plan, requiring supermajority voting on particular issues, the adoption of fair price provisions, the issuance of blank check preferred stock, and the creation of a separate class of stock with disparate voting rights. Such proposals may adversely affect shareholder rights, lead to management entrenchment, or create conflicts of interest. As a result, the funds will vote against board-approved proposals to adopt such anti-takeover measures, except as follows:

► The funds will vote on a case-by-case basis on proposals to ratify or approve shareholder rights plans; and

► The funds will vote on a case-by-case basis on proposals to adopt fair price provisions.

Commentary: The funds’ Trustees recognize that poison pills and fair price provisions may enhance shareholder value under certain circumstances. As a result, the funds will consider proposals to approve such matters on a case-by-case basis.

Other Business Matters

Many proxies involve approval of routine business matters, such as changing a company’s name, ratifying the appointment of auditors, and procedural matters relating to the shareholder meeting. For the most part, these routine matters do not materially affect shareholder interests and are best left to the board of directors and senior management of the company. The funds will vote for board-approved proposals approving such matters, except as follows:

►The funds will vote on a case-by-case basis on proposals to amend a company’s charter or bylaws (except for charter amendments necessary or to effect stock splits to change a company’s name or to authorize additional shares of common stock).

►The funds will vote against authorization to transact other unidentified, substantive business at the meeting.

►The funds will vote on a case-by-case basis on other business matters where the funds are otherwise withholding votes for the entire board of directors.

Commentary: Charter and bylaw amendments and the transaction of other unidentified, substantive business at a shareholder meeting may directly affect shareholder rights and have a significant impact on shareholder value. As a result, the funds do not view such items as routine business matters. Putnam Management’s investment professionals and the funds’ proxy voting service may also bring to the Proxy Coordinator’s attention company-specific items that they believe to be non-routine and warranting special consideration. Under these circumstances, the funds will vote on a case-by-case basis.

II. SHAREHOLDER PROPOSALS

SEC regulations permit shareholders to submit proposals for inclusion in a company’s proxy statement. These proposals generally seek to change some aspect of the company’s corporate governance structure or to change some aspect of its business operations. The funds generally will vote in accordance with the recommendation of the company’s board of directors on all shareholder proposals, except as follows:

► The funds will vote for shareholder proposals to declassify a board, absent special circumstances which would indicate that shareholder interests are better served by a classified board structure.

► The funds will vote for shareholder proposals to require shareholder approval of shareholder rights plans.

► The funds will vote for shareholder proposals that are consistent with the funds’ proxy voting guidelines for board-approved proposals.

► The funds will vote on a case-by-case basis on other shareholder proposals where the funds are otherwise withholding votes for the entire board of directors.

Commentary: In light of the substantial reforms in corporate governance that are currently underway, the funds’ Trustees believe that effective corporate reforms should be promoted by holding boards of directors – and in particular their independent directors – accountable for their actions, rather than imposing additional legal restrictions on board governance through piecemeal proposals. Generally speaking, shareholder proposals relating to business operations are often motivated primarily by political or social concerns, rather than the interests of shareholders as investors in an economic enterprise. As stated above, the funds’ Trustees believe that boards of directors and management are responsible for ensuring that their businesses are operating in accordance with high legal and ethical standards and should be held accountable for resulting corporate behavior. Accordingly, the funds will generally support the recommendations of boards that meet the basic independence and governance standards established in these guidelines. Where boards fail to meet these standards, the funds will generally evaluate shareholder proposals on a case-by-case basis.

III. VOTING SHARES OF NON-U.S. ISSUERS

Many of the Putnam funds invest on a global basis, and, as a result, they may be required to vote shares held in non-U.S. issuers – i.e., issuers that are incorporated under the laws of foreign jurisdictions and that are not listed on a U.S. securities exchange or the NASDAQ stock market. Because non-U.S. issuers are incorporated under the laws of countries and jurisdictions outside the U.S., protection for shareholders may vary significantly from jurisdiction to jurisdiction. Laws governing non-U.S. issuers may, in some cases, provide substantially less protection for shareholders. As a result, the foregoing guidelines, which are premised on the existence of a sound corporate governance and disclosure framework, may not be appropriate under some circumstances for non-U.S. issuers.

In many non-U.S. markets, shareholders who vote proxies of a non-U.S. issuer are not able to trade in that company’s stock on or around the shareholder meeting date. This practice is known as “share blocking.” In countries where share blocking is practiced, the funds will vote proxies only with direction from Putnam Management’s investment professionals.

In addition, some non-U.S. markets require that a company’s shares be re-registered out of the name of the local custodian or nominee into the name of the shareholder for the meeting. This practice is known as “share re-registration.” As a result, shareholders, including the funds, are not able to trade in that company’s stock until the shares are re-registered back in the name of the local custodian or nominee. In countries where share re-registration is practiced, the funds will generally not vote proxies.

The funds will vote proxies of non-U.S. issuers in accordance with the foregoing guidelineswhere applicable, except as follows:

Uncontested Election of Directors

Japan

► For companies that have established a U.S.-style corporate structure, the funds will withhold votes for the entire board of directors if

• the board does not have a majority of outside directors,

• the board has not established nominating and compensation committees composed of a majority of outside directors, or

• the board has not established an audit committee composed of a majority of independent directors.

► The funds will withhold votes for the appointment of members of a company’s board of statutory auditors if a majority of the members of the board of statutory auditors is not independent.

Commentary:

Board structure: Recent amendments to the Japanese Commercial Code give companies the option to adopt a U.S.-style corporate structure (i.e., a board of directors and audit, nominating, and compensation committees). The funds will vote for proposals to amend a company’s articles of incorporation to adopt the U.S.-style corporate structure.

Definition of outside director and independent director: Corporate governance principles in Japan focus on the distinction between outside directors and independent directors. Under these principles, an outside director is a director who is not and has never been a director, executive, or employee of the company or its parent company, subsidiaries or affiliates. An outside director is “independent” if that person can make decisions completely independent from the managers of the company, its parent, subsidiaries, or affiliates and does not have a material relationship with the company (i.e., major client, trading partner, or other business relationship; familial relationship with current director or executive; etc.). The guidelines have incorporated these definitions in applying the board independence standards above.

Korea

► The funds will withhold votes for the entire board of directors if

• the board does not have a majority of outside directors,

• the board has not established a nominating committee composed of at least a majority of outside directors, or

• the board has not established an audit committee composed of at least three members and in which at least two-thirds of its members are outside directors.

Commentary: For purposes of these guideline, an “outside director” is a director that is independent from the management or controlling shareholders of the company, and holds no interests that might impair performing his or her duties impartially from the company, management or controlling shareholder. In determining whether a director is an outside director, the funds will also apply the standards included in Article 415-2(2) of the Korean Commercial Code (i.e., no employment relationship with the company for a period of two years before serving on the committee, no director or employment relationship with the company’s largest shareholder, etc.) and may consider other business relationships that would affect the independence of an outside director.

United Kingdom

► The funds will withhold votes for the entire board of directors if

• the board does not have at least a majority of independent non-executive directors,

• the board has not established nomination committees composed of a majority of independent non-executive directors, or

• the board has not established compensation and audit committees composed of (1) at least three directors (in the case of smaller companies, two directors) and (2) solely of independent non-executive directors.

► The funds will withhold votes for any nominee for director who is considered an independent director by the company and who has received compensation from the company other than for service as a director (e.g., investment banking, consulting, legal, or financial advisory fees).

Commentary:

Application of guidelines: Although the U.K.’s Combined Code on Corporate Governance (“Combined Code”) has adopted the “comply and explain” approach to corporate governance, the funds’ Trustees believe that the guidelines discussed above with respect to board independence standards are integral to the protection of investors in U.K. companies. As a result, these guidelines will be applied in a prescriptive manner.

Definition of independence: For the purposes of these guidelines, a non-executive director shall be considered independent if the director meets the independence standards in section A.3.1 of the Combined Code (i.e., no material business or employment relationships with the company, no remuneration from the company for non-board services, no close family ties with senior employees or directors of the company, etc.), except that the funds do not view service on the board for more than nine years as affecting a director’s independence.

Smaller companies: A smaller company is one that is below the FTSE 350 throughout the year immediately prior to the reporting year.

Canada

In January 2004, Canadian securities regulators issued proposed policies that would impose new corporate governance requirements on Canadian public companies. The recommended practices contained in these new corporate governance requirements mirror corporate governance reforms that have been adopted by the NYSE and other U.S. national securities exchanges and stock markets. As a result, the funds will vote on matters relating to the board of directors of Canadian issuers in accordance with the guidelines applicable to U.S. issuers.

Commentary: Like the U.K.’s Combined Code, the proposed policies on corporate governance issued by Canadian securities regulators embody the “comply and explain” approach to corporate governance. Because the funds’ Trustees believe that the board independence standards contained in the proxy voting guidelines are integral to the protection of investors in Canadian companies, these standards will be applied in a prescriptive manner.

Other Matters

► The funds will vote for shareholder proposals calling for a majority of a company’s directors to be independent of management.

►The funds will vote for shareholder proposals seeking to increase the independence of board nominating, audit, and compensation committees.

► The funds will vote for shareholder proposals that implement corporate governance standards similar to those established under U.S. federal law and the listing requirements of U.S. stock exchanges, and that do not otherwise violate the laws of the jurisdiction under which the company is incorporated.

► The funds will vote on a case-by-case basis on proposals relating to (1) the issuance of common stock in excess of 20% of the company’s outstanding common stock where shareholders do not have preemptive rights, or (2) the issuance of common stock in excess of 100% of the company’s outstanding common stock where shareholders have preemptive rights.

As adopted January 13, 2006

Proxy Voting Procedures of the Putnam Funds

The proxy voting procedures below explain the role of the funds’ Trustees, the proxy voting service and the Proxy Coordinator, as well as how the process will work when a proxy question needs to be handled on a case-by-case basis, or when there may be a conflict of interest.

The role of the funds’ Trustees

The Trustees of the Putnam funds exercise control of the voting of proxies through their Board Policy and Nominating Committee, which is composed entirely of independent Trustees. The Board Policy and Nominating Committee oversees the proxy voting process and participates, as needed, in the resolution of issues that need to be handled on a case-by-case basis. The Committee annually reviews and recommends, for Trustee approval, guidelines governing the funds’ proxy votes, including how the funds vote on specific proposals and which matters are to be considered on a case-by-case basis. The Trustees are assisted in this process by their independent administrative staff (“Office of the Trustees”), independent legal counsel, and an independent proxy voting service. The Trustees also receive assistance from Putnam Investment Management, LLC (“Putnam Management”), the funds’ investment advisor, on matters involving investment judgments. In all cases, the ultimate decision on voting proxies rests with the Trustees, acting as fiduciaries on behalf of the shareholders of the funds.

The role of the proxy voting service

The funds have engaged an independent proxy voting service to assist in the voting of proxies. The proxy voting service is responsible for coordinating with the funds’ custodians to ensure that all proxy materials received by the custodians relating to the funds’ portfolio securities are processed in a timely fashion. To the extent applicable, the proxy voting service votes all proxies in accordance with the proxy voting guidelines established by the Trustees. The proxy voting service will refer proxy questions to the Proxy Coordinator (described below) for instructions under circumstances where: (1) the application of the proxy voting guidelines is unclear; (2) a particular proxy question is not covered by the guidelines; or (3) the guidelines call for specific instructions on a case-by-case basis. The proxy voting service is also requested to call to the Proxy Coordinator’s attention specific proxy questions that, while governed by a guideline, appe ar to involve unusual or controversial issues. The funds also utilize research services relating to proxy questions provided by the proxy voting service and by other firms.

The role of the Proxy Coordinator

Each year, a member of the Office of the Trustees is appointed Proxy Coordinator to assist in the coordination and voting of the funds’ proxies. The Proxy Coordinator will deal directly with the proxy voting service and, in the case of proxy questions referred by the proxy voting service, will solicit voting recommendations and instructions from the Office of the Trustees, the Chair of the Board Policy and Nominating Committee, and Putnam Management’s investment professionals, as appropriate. The Proxy Coordinator is responsible for ensuring that these questions and referrals are responded to in a timely fashion and for transmitting appropriate voting instructions to the proxy voting service.

Voting procedures for referral items

As discussed above, the proxy voting service will refer proxy questions to the Proxy Coordinator under certain circumstances. When the application of the proxy voting guidelines is unclear or a particular proxy question is not covered by the guidelines (and does not involve investment considerations), the Proxy Coordinator will assist in interpreting the guidelines and, as appropriate, consult with one of more senior staff members of the Office of the Trustees and the Chair of the Board Policy and Nominating Committee on how the funds’ shares will be voted.

For proxy questions that require a case-by-case analysis pursuant to the guidelines or that are not covered by the guidelines but involve investment considerations, the Proxy Coordinator will refer such questions, through a written request, to Putnam Management’s investment professionals for a voting recommendation. Such referrals will be made in cooperation with the person or persons designated by Putnam Management’s Legal and Compliance Department to assist in processing such referral items. In connection with each such referral item, the Legal and Compliance Department will conduct a conflicts of interest review, as described below under “Conflicts of Interest,” and provide a conflicts of interest report (the “Conflicts Report”) to the Proxy Coordinator describing the results of such review. After receiving a referral item from the Proxy Coordinator, Putnam Management’s investment professionals will provide a written recommendation to the Proxy Coordinator and the person or persons designated by the Legal and Compliance Department to assist in processing referral items. Such recommendation will set forth (1) how the proxies should be voted; (2) the basis and rationale for such recommendation; and (3) any contacts the investment professionals have had with respect to the referral item with non-investment personnel of Putnam Management or with outside parties (except for routine communications from proxy solicitors). The Proxy Coordinator will then review the investment professionals’ recommendation and the Conflicts Report with one of more senior staff members of the Office of the Trustees in determining how to vote the funds’ proxies. The Proxy Coordinator will maintain a record of all proxy questions that have been referred to Putnam Management’s investment professionals, the voting recommendation, and the Conflicts Report.

In some situations, the Proxy Coordinator and/or one of more senior staff members of the Office of the Trustees may determine that a particular proxy question raises policy issues requiring consultation with the Chair of the Board Policy and Nominating Committee, who, in turn, may decide to bring the particular proxy question to the Committee or the full Board of Trustees for consideration.

Conflicts of interest

Occasions may arise where a person or organization involved in the proxy voting process may have a conflict of interest. A conflict of interest may exist, for example, if Putnam Management has a business relationship with (or is actively soliciting business from) either the company soliciting the proxy or a third party that has a material interest in the outcome of a proxy vote or that is actively lobbying for a particular outcome of a proxy vote. Any individual with knowledge of a personal conflict of interest (e.g., familial relationship with company management) relating to a particular referral item shall disclose that conflict to the Proxy Coordinator and the Legal and Compliance

Department and otherwise remove himself or herself from the proxy voting process. The Legal and Compliance Department will review each item referred to Putnam Management’s investment professionals to determine if a conflict of interest exists and will provide the Proxy Coordinator with a Conflicts Report for each referral item that (1) describes any conflict of interest; (2) discusses the procedures used to address such conflict of interest; and (3) discloses any contacts from parties outside Putnam Management (other than routine communications from proxy solicitors) with respect to the referral item not otherwise reported in an investment professional’s recommendation. The Conflicts Report will also include written confirmation that any recommendation from an investment professional provided under circumstances where a conflict of interest exists was made solely on the investment merits and without regard to any other consideration.

As adopted March 11, 2005

Item 8. Portfolio Managers of Closed-End Management Investment Companies

(a)(1) Investment management teams. Putnam Management’s, Putnam Investments Limited’s and The Putnam Advisory Company’s (for funds having Putnam Investments Limited and/or The Putnam Advisory Company as sub-manager) investment professionals are organized into investment management teams, with a particular team dedicated to a specific asset class. The members of the team or teams identified in the shareholder report included in Item 1 of this report manage the fund’s investments. The names of all team members can be found at www.putnam.com.

The team members identified as the fund’s Portfolio Leader(s) and Portfolio Member(s) coordinate team efforts related to the fund and are primarily responsible for the day-today management of the fund’s portfolio. In addition to these individuals, each team also includes other investment professionals, whose analysis, recommendations and research inform investment decisions made for the fund.

Portfolio	Joined
Leader	Fund	Employer	Positions Over Past Five Years
William Kohli	1994	Putnam	Director, Core Fixed Income Team
		Management
		1994 – Present
Portfolio	Joined
Members	Fund	Employer	Positions Over Past Five Years
Rob Bloemker	2005	Putnam	Team Leader, Mortgage and Government
		Management	Previously, Mortgage Specialist
		1999 – Present
Jeffrey Kaufman	2005	Putnam	Team Leader, Emerging Markets Debt
		Management
		1998 – Present
Paul Scanlon	2005	Putnam	Team Leader, Core Fixed Income High Yield
		Management	Previously, Portfolio Manager; Analyst
		1990 – Present

David Waldman	1998	Putnam	Director of Fixed Income Quantitative
		Management	Research; Senior Portfolio Manager
		1997 – Present	Previously, Director of Applied Quantitative
			Research

(a)(2) Other Accounts Managed by the Fund’s Portfolio Managers.

The following table shows the number and approximate assets of other investment accounts (or portions of investment accounts) that the fund’s Portfolio Leader(s) and Portfolio Member(s) managed as of the fund’s most recent fiscal year-end. The other accounts may include accounts for which the individual was not designated as a portfolio member. Unless noted, none of the other accounts pays a fee based on the account’s performance.

					Other accounts (including
					separate accounts,
Portfolio				Other accounts that pool	managed account programs
Leader or	Other SEC-registered open-			assets from more than one	and single-sponsor defined
Member	end and closed-end funds			client	contribution plan offerings)
	Number	Assets	Number	Assets	Number	Assets
	of		of		of
	accounts		accounts		accounts
William Kohli	5	$4,750,100,000	6	$457,200,000	2	$91,400,00
Rob Bloemker	15	$11,612,700,000	12	$10,615,800,000	23*	$6,299,100,000
Jeff Kaufman	3	$4,616,200,000	2	$64,700,000	4	$216,900,000
Paul Scanlon	14	$9,220,000,000	7	$495,700,000	7	$432,000,000
Dave Waldman	3	$4,616,200,000	0	$ -	1	$100,000

* 5 accounts, with total assets of $1,101,900,000, pay an advisory fee based on account performance.

Potential conflicts of interest in managing multiple accounts. Like other investment professionals with multiple clients, the fund’s Portfolio Leader(s) and Portfolio Member(s) may face certain potential conflicts of interest in connection with managing both the fund and the other accounts listed under “Other Accounts Managed by the Fund’s Portfolio Managers” at the same time. The paragraphs below describe some of these potential conflicts, which Putnam Management believes are faced by investment professionals at most major financial firms. As described below, Putnam Management and the Trustees of the Putnam funds have adopted compliance policies and procedures that attempt to address certain of these potential conflicts.

The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay advisory fees based on account performance (“performance fee accounts”), may raise potential conflicts of interest by creating an incentive to favor higher-fee accounts. These potential conflicts may include, among others:

• The most attractive investments could be allocated to higher-fee accounts or performance fee accounts.

• The trading of higher-fee accounts could be favored as to timing and/or execution price. For example, higher-fee accounts could be permitted to sell securities earlier than other accounts when a prompt sale is desirable or to buy securities at an earlier and more opportune time.

• The trading of other accounts could be used to benefit higher-fee accounts (front- running).

• The investment management team could focus their time and efforts primarily on higher-fee accounts due to a personal stake in compensation.

Putnam Management attempts to address these potential conflicts of interest relating to higher-fee accounts through various compliance policies that are generally intended to place all accounts, regardless of fee structure, on the same footing for investment management purposes. For example, under Putnam Management’s policies:

• Performance fee accounts must be included in all standard trading and allocation procedures with all other accounts.

• All accounts must be allocated to a specific category of account and trade in parallel with allocations of similar accounts based on the procedures generally applicable to all accounts in those groups (e.g., based on relative risk budgets of accounts).

• All trading must be effected through Putnam’s trading desks and normal queues and procedures must be followed (i.e., no special treatment is permitted for performance fee accounts or higher-fee accounts based on account fee structure).

• Front running is strictly prohibited.

• The fund’s Portfolio Leader(s) and Portfolio Member(s) may not be guaranteed or specifically allocated any portion of a performance fee.

As part of these policies, Putnam Management has also implemented trade oversight and review procedures in order to monitor whether particular accounts (including higher-fee accounts or performance fee accounts) are being favored over time.

Potential conflicts of interest may also arise when the Portfolio Leader(s) or Portfolio Member(s) have personal investments in other accounts that may create an incentive to favor those accounts. As a general matter and subject to limited exceptions, Putnam Management’s investment professionals do not have the opportunity to invest in client accounts, other than the Putnam funds. However, in the ordinary course of business, Putnam Management or related persons may from time to time establish “pilot” or “incubator” funds for the purpose of testing proposed investment strategies and products prior to offering them to clients. These pilot accounts may be in the form of registered investment companies, private funds such as partnerships or separate accounts established by Putnam Management or an affiliate. Putnam Management or an affiliate supplies the funding for these accounts. Putnam employees, including the fund’s Portfolio Leader(s) and Port folio Member(s), may also invest in certain pilot accounts. Putnam Management, and to the extent applicable, the Portfolio Leader(s) and Portfolio

Member(s) will benefit from the favorable investment performance of those funds and accounts. Pilot funds and accounts may, and frequently do, invest in the same securities as the client accounts. Putnam Management’s policy is to treat pilot accounts in the same manner as client accounts for purposes of trading allocation – neither favoring nor disfavoring them except as is legally required. For example, pilot accounts are normally included in Putnam Management’s daily block trades to the same extent as client accounts (except that pilot accounts do not participate in initial public offerings).

A potential conflict of interest may arise when the fund and other accounts purchase or sell the same securities. On occasions when the Portfolio Leader(s) or Portfolio Member(s) consider the purchase or sale of a security to be in the best interests of the fund as well as other accounts, Putnam Management’s trading desk may, to the extent permitted by applicable laws and regulations, aggregate the securities to be sold or purchased in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to the fund or another account if one account is favored over another in allocating the securities purchased or sold – for example, by allocating a disproportionate amount of a security that is likely to increase in value to a favored account. Putnam Management’s trade allocation policies generally provide that each day’s transactions in securities that are purchased or sold by multiple accounts are, insofar as possible, averaged as to price and allocated between such accounts (including the fund) in a manner which in Putnam Management’s opinion is equitable to each account and in accordance with the amount being purchased or sold by each account. Certain exceptions exist for specialty, regional or sector accounts. Trade allocations are reviewed on a periodic basis as part of Putnam Management’s trade oversight procedures in an attempt to ensure fairness over time across accounts.

“Cross trades,” in which one Putnam account sells a particular security to another account (potentially saving transaction costs for both accounts), may also pose a potential conflict of interest. Cross trades may be seen to involve a potential conflict of interest if, for example, one account is permitted to sell a security to another account at a higher price than an independent third party would pay. Putnam Management and the fund’s Trustees have adopted compliance procedures that provide that any transactions between the fund and another Putnam-advised account are to be made at an independent current market price, as required by law.

Another potential conflict of interest may arise based on the different investment objectives and strategies of the fund and other accounts. For example, another account may have a shorter-term investment horizon or different investment objectives, policies or restrictions than the fund. Depending on another account’s objectives or other factors, the Portfolio Leader(s) and Portfolio Member(s) may give advice and make decisions that may differ from advice given, or the timing or nature of decisions made, with respect to the fund. In addition, investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a particular security may be bought or sold for certain accounts even though it could have been bought or sold for other accounts at the same time. More rarely, a particular security may be bought for one or more accounts managed by the Portfolio Leader(s) or Portfolio Member(s) when one

or more other accounts are selling the security (including short sales). There may be circumstances when purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts. As noted above, Putnam Management has implemented trade oversight and review procedures to monitor whether any account is systematically favored over time.

The fund’s Portfolio Leader(s) and Portfolio Member(s) may also face other potential conflicts of interest in managing the fund, and the description above is not a complete description of every conflict that could be deemed to exist in managing both the fund and other accounts.

(a)(3) Compensation of investment professionals. Putnam Management believes that its investment management teams should be compensated primarily based on their success in helping investors achieve their goals. The portion of Putnam Investments’ total incentive compensation pool that is available to Putnam Management’s Investment Division is based primarily on its delivery, across all of the portfolios it manages, of consistent, dependable and superior performance over time. The peer group for the fund, which is identified in the shareholder report included in Item 1, is its broad investment category as determined by Lipper Inc. The portion of the incentive compensation pool available to each investment management team varies based primarily on its delivery, across all of the portfolios it manages, of consistent, dependable and superior performance over time on (i) for tax-exempt funds, a tax-adjusted basis to recognize the different federal income tax treatment for capital gains distributions and exempt-interest distributions a before-tax basis or (ii) for taxable funds, on a before-tax basis.

Consistent performance means being above median over one year.

· Dependable performance means not being in the 4th quartile of the peer group over one, three or five years.

· Superior performance (which is the largest component of Putnam Management’s incentive compensation program) means being in the top third of the peer group over three and five years.

In determining an investment management team’s portion of the incentive compensation pool and allocating that portion to individual team members, Putnam Management retains discretion to reward or penalize teams or individuals, including the fund’s Portfolio Leader(s) and Portfolio Member(s), as it deems appropriate, based on other factors. The size of the overall incentive compensation pool each year is determined by Putnam Management’s parent company, Marsh & McLennan Companies, Inc., and depends in large part on Putnam’s profitability for the year, which is influenced by assets under management. Incentive compensation is generally paid as cash bonuses, but a portion of incentive compensation may instead be paid as grants of restricted stock, options or other forms of compensation, based on the factors described above. In addition to incentive compensation, investment team members receive annual salaries that are typically based on seniority and experience. Incentive compensation generally represents at least 70% of the total compensation paid to investment team members.

(a)(4) Fund ownership. The following table shows the dollar ranges of shares of the fund owned by the professionals listed above at the end of the fund’s last two fiscal years, including investments by their immediate family members and amounts invested through retirement and deferred compensation plans.

(b) Not applicable

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

Registrant Purchase of Equity Securities
				Maximum
			Total Number	Number (or
			of Shares	Approximate
			Purchased	Dollar Value )
			as Part	of Shares
			of Publicly	that May Yet Be
	Total Number	Average	Announced	Purchased
	of Shares	Price Paid	Plans or	under the Plans
Period	Purchased	per Share	Programs	or Programs *
October 7-
October 31,2005	186,364	$6.23	186,364	9,844,944
November 1 -
November 30,
2005	501,565	$6.05	501,565	9,343,379
December 1 -
December 31,
2005	501,565	$6.06	501,565	8,841,814
January 1 -
January 31, 2006	501,565	$6.19	501,565	8,340,249
February 1 -
February 28, 2006501,575		$6.14	501,575	7,838,674
March 1 - March
31, 2006	593,946	$6.10	593,946	7,244,728
April 1 - April 30,
2006	527,325	$6.03	527,325	6,717,403
May 1 - May 31,	664,716	$6.05	664,716	6,052,687

2006
June 1 - June 30,
2006	676,032	$6.04	676,032	5,376,655
July 1 - July 31,
2006	477,232	$6.05	477,232	4,899,423
August 1 - August
31, 2006	748,957	$6.20	748,957	4,150,466
September 1 -
September 30,
2006	608,102	$6.21	608,102	3,542,364

The Board of Trustees announced a repurchase plan on October 7, 2005 for which 5,015,654 shares were approved for repurchase by the fund. The repurchase plan was approved through October 6, 2006. On March 10, 2006, the Trustees announced that the repurchase program was increased to allow repurchases of up to a total of 10,031,308 shares over the original term of the program. On September 15, 2006, the Trustees voted to extend the term of the repurchase program through October 6, 2007. This extension did not affect the number of shares eligible for repurchase under the program.

*Information is based on the total number of shares eligible for repurchase under the program, as amended through September 15, 2006

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

Not applicable

Item 11. Controls and Procedures:

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

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

Item 12. Exhibits:

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

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

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

SIGNATURES

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

Putnam Master Intermediate Income Trust

By (Signature and Title):

/s/Michael T. Healy
Michael T. Healy
Principal Accounting Officer

Date: December 5, 2006

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

By (Signature and Title):

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

Date: December 5, 2006

By (Signature and Title):

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

Date: December 5, 2006

EX-99.CERT

Certifications

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

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

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

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

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

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant's internal control over financial reporting.

Date: December 5, 2006

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

Certifications

I, Steven D. Krichmar, the Principal Financial Officer of the funds listed on Attachment A, certify that:

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

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

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

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

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant's internal control over financial reporting.

Date: December 5, 2006

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

Attachment A
September 30, 2006

054	Putnam High Yield Municipal Trust
074	Putnam Master Intermediate Income Trust
027	Putnam California Tax Exempt Income Fund
033	Putnam American Government Income Fund
011	Putnam Tax Exempt Income Fund
539	Putnam International New Opportunities Fund
032	Putnam U.S. Government Income Trust
010	Putnam Money Market Fund
062	Putnam Tax Exempt Money Market Fund
23T	Putnam Prime Money Market Fund
075	Putnam Diversified Income Trust
259	Putnam Asset Allocation: Balanced Portfolio
250	Putnam Asset Allocation: Growth Portfolio
264	Putnam Asset Allocation: Conservative Portfolio

EX-99.906 CERT

Section 906 Certifications

I, Charles E. Porter, the Principal Executive Officer of the Funds listed on Attachment A, certify that, to my knowledge: 1. The form N-CSR of the Funds listed on Attachment A for the period ended September 30, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended September 30, 2006 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: December 5, 2006

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

Section 906 Certifications

I, Steven D. Krichmar, the Principal Financial Officer of the Funds listed on Attachment A, certify that, to my knowledge: 1. The form N-CSR of the Funds listed on Attachment A for the period ended September 30, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended September 30, 2006 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: December 5, 2006

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

Attachment A
September 30, 2006

054	Putnam High Yield Municipal Trust
074	Putnam Master Intermediate Income Trust
027	Putnam California Tax Exempt Income Fund
033	Putnam American Government Income Fund
011	Putnam Tax Exempt Income Fund
539	Putnam International New Opportunities Fund
032	Putnam U.S. Government Income Trust
010	Putnam Money Market Fund
062	Putnam Tax Exempt Money Market Fund
23T	Putnam Prime Money Market Fund
075	Putnam Diversified Income Trust
259	Putnam Asset Allocation: Balanced Portfolio
250	Putnam Asset Allocation: Growth Portfolio
264	Putnam Asset Allocation: Conservative Portfolio

EX-99.P CODE ETH

   COE.htm

EX-99.P CODE ETH

Putnam Investments

Code of Ethics
December 2005

One Post Office Square
Boston, Massachusetts 02109
1-617-292-1000

www.putnam.com

December, 2005

Dear Putnam Employee,

Putnam’s Code of Ethics is an essential component of the “fiduciary mindset” and of our commitment to the maintenance of the highest professional standards. Taking care of other people’s money is a serious responsibility, and we need to ensure that our clients’ interests come first. Firms with a strong fiduciary culture are attractive to clients who are looking for superior money management, and Putnam’s Code is designed to ensure that Putnam preserves that trust.

The rules reflected in the Code are good business practices and were not created simply to meet regulatory standards. If, from time to time, the rules seem burdensome, I ask you to put yourself in the place of our shareholders and clients, who have entrusted us to manage their assets so that they may pursue the goals of saving for retirement or funding their children’s education.

We have also provided a guide to use as quick reference to some of the Code’s key provisions.

If you have any questions or concerns at any time, however, I encourage you to contact one of the members of our Code of Ethics staff in the Legal and Compliance Department.

Ed Haldeman
President and Chief Executive Officer

Table of Contents
Code of Ethics Overview			iii
PUTNAM’S CODE OF ETHICS			vi
DEFINITIONS			vii
SECTION I -- Personal Securities Rules for All Employees			1
Rule	1:	Requirements to Pre-clear	1
Rule	1:	Short-Selling Prohibition	5
Rule	2:	Initial Public Offerings Prohibition	5
Rule	3:	Private Placement Pre-approval Requirements	6
Rule	4:	Trading with Material Non-public Information	6
Rule	5:	No Personal Trading with Client Portfolios	6
Rule	6:	Holding of Putnam Mutual Fund Shares	7
Rule	7:	Putnam Mutual Fund Employee Restrictions	8
Rule	8:	Special Orders	10
Rule	9:	Excessive Trading	10
Rule	1:	Naked Options	10
Rule	1:	Involuntary Transactions	11
Rule	2:	Special Exemptions	11
SECTION II -- Additional Special Rules for Personal Securities Transactions of Access Persons			12
and Certain Investment Professionals
Rule	1:	90-Day Short-Term Rule	12
Rule	2:	7-Day Rule	12
Rule	3:	Blackout Rule	13
Rule	4:	Contra-Trading Rule	14
Rule	5:	No Personal Benefit	15
SECTION III -- General Rules for All Employees			16
Rule	1:	Compliance with All Laws, Regulations, and Policies	16
Rule	2:	Conflicts of Interest	16
Rule	3:	Gifts and Entertainment Policy	16
Rule	4:	Anti-bribery/Kickback Policy	18
Rule	5:	Political Activities, Contributions, Solicitations, and Lobbying Policy	19
Rule	6:	Confidentiality of Putnam Business Information	20
Rule	7:	Roles at Other Entities (Outside Business Affiliations)	20
Rule	8:	Role as Trustee or Fiduciary Outside of Putnam Investments	21
Rule	9:	Investment Clubs	21
Rule	10: Business Negotiations for Putnam Investments		22
Rule	11: Accurate Records		22
Rule	12: Family Members’ Conflict Policy		22
Rule 13: Affiliated Entities			23
Rule	14: Computer System/Network Policies		24
Rule	15: CFA Institute Code of Ethics		24
Rule	16: Privacy Policy		24
Rule	17: Anti-money Laundering Policy		25
Rule	18: Record Retention		25
SECTION IV -- Special Rules for Officers and Employees of Putnam Investments Limited (PIL)			26
SECTION V -- Reporting Requirements			28
Rule	1:	Broker Confirmations and Statements	28
Rule	2:	Access Person – Quarterly Transaction Report	29
Rule	3:	Access Person - Initial/Annual Holdings Report	29
Rule	4:	Certifications	29
Rule	5:	Roles at Other Entities	29
Rule	6:	Reporting of Irregular Activity	30
Rule	7:	Ombudsman	30
SECTION VI -- Education Requirements			31

Rule 1: Distribution of Code	31
Rule 2: Annual Training Requirement	31
SECTION VII -- Compliance and Appeal Procedures	32
SECTION VIII -- Sanctions	34
APPENDIX A: Insider Trading Prohibitions Policy Statement	35
APPENDIX A: DEFINITIONS: Insider Trading	36
APPENDIX A -- SECTION I: Rules Concerning Inside Information	37
Rule 1: Inside Information	37
Rule 2: Material Non-public Information	37
Rule 3: Reporting of Material Non-public Information	37
APPENDIX A -- SECTION II: Overview of Insider Trading	39
APPENDIX B: Policy Statement Regarding Employee Trades in Shares of Putnam Closed-End	43
Funds
APPENDIX C: Contra-Trading Rule Clearance Form	44
APPENDIX D: CFA Institute Code of Ethics and Standards of Professional Conduct	45*
APPENDIX E: Report of Entertainment Form	49
APPENDIX F -- Inducement Policy for Putnam Investments Limited (PIL) Employees	50
APPENDIX G -- Record of Inducement for Putnam Investments Limited (PIL)Employees	52

Code of Ethics Overview

This overview of Putnam’s Code of Ethics is not intended to substitute for a careful reading of the complete document. As a condition of continued employment, every Putnam employee is required to read, understand, and comply with all of the provisions of the Code of Ethics. Additionally, employees are expected to comply with the policies and procedures contained within the Putnam Employee Handbook, which is available online on www.ibenefitcenter.com.

It is the personal responsibility of every Putnam employee to avoid any conduct that could create a conflict, or even the appearance of a conflict, with our fund shareholders or other clients, or do anything that could damage or erode the trust our clients place in Putnam and its employees. This is the spirit of the Code of Ethics. In accepting employment at Putnam, every employee accepts the absolute obligation to comply with the letter and the spirit of the Code of Ethics. Failure to comply with the spirit of the Code of Ethics is just as much a violation of the Code as failure to comply with the written rules of the Code.

The rules of the Code cover activities, including personal securities transactions, of Putnam employees, certain family members of employees, and entities (such as corporations, trusts, or partnerships) that employees may be deemed to control or influence.

Sanctions will be imposed for violations of the Code of Ethics. Sanctions may include monetary fines, bans on personal trading, reductions in salary increases or bonuses, disgorgement of trading profits, suspension of employment, and termination of employment. The proceeds resulting from monetary sanctions will be given to a charity chosen by the Code of Ethics Officer.

Insider trading

Putnam employees are forbidden to buy or sell any security while either Putnam or the employee is in possession of material, non-public information (inside information) concerning the security or the issuer. A violation of Putnam’s insider trading policies may result in criminal and civil penalties, including imprisonment, disgorgement of profits, and substantial fines. An employee aware of or in possession of inside information must report it immediately to the Code of Ethics Officer. (See Appendix A: Overview of Insider Trading).

Conflicts of interest

The Code of Ethics imposes limits on activities of Putnam employees where the activity may conflict with the interests of Putnam or its clients. These include limits on the receipt and solicitation of gifts and on service as a fiduciary for a person or entity outside of Putnam. For example, Putnam employees generally may not accept gifts over $100 in total value in a calendar year from any entity or any supplier of goods or services to Putnam. In addition, a Putnam employee may not serve as a director of any corporation or other entity without prior approval of the Code of Ethics Officer.

Confidentiality

Information about Putnam clients and Putnam investment activity and research is proprietary and confidential and may not be disclosed or used by any Putnam employee outside Putnam without a valid business purpose.

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Putnam mutual funds

All employees and certain family members are subject to a minimum 90-day holding period for shares in Putnam’s open-end mutual funds. This restriction does not apply to Putnam’s money market funds. Except in limited circumstances, all employees must hold Putnam open-end fund shares in accounts at Putnam.

Portfolio managers and others with access to investment information (“Access Persons”) are subject to a minimum one-year holding period for holding Putnam open-end fund shares.

Personal securities trading

Putnam employees may not buy or sell any security for their own account without clearing the proposed transaction in advance. Clearance is facilitated through the Personal Trading Assistant (PTA), the online pre-clearance system for equity securities, and directly with the Code of Ethics Administrator for fixed-income securities and transactions in Putnam closed-end funds. Certain securities are exempted from this pre-clearance requirement (e.g., shares of open-end (not closed-end) mutual funds).

Putnam employees may not buy any securities in an initial public offering or in a private placement, except in limited circumstances when prior written authorization is obtained.

Clearance must be obtained in advance, between 9:00 a.m. and 4:00 p.m. Eastern Time (ET) on the day of the trade. A clearance is valid only for the day it is obtained. Putnam employees are strongly discouraged from engaging in excessive trading for their personal accounts. Employees are prohibited from making more than 10 trades in individual securities each calendar quarter.

Short selling

Putnam employees are prohibited from short selling any security, whether or not it is held in a Putnam client portfolio, although short selling against broad market indexes and “against the box” are permitted. Note, however, that short selling “against the box” or otherwise hedging an investment in shares of Marsh & McLennan (MMC) stock is prohibited.

Confirmations of trading and periodic account statements

All Putnam employees must have their brokers send copies of confirmations and statements of personal securities transactions to the Code of Ethics Administrator. This also applies to members of the immediate family who share the same household as the employee or for whom the employee has investment discretion. Employees must contact the Code of Ethics Administrator to (a) obtain an authorization [407] letter, (b) provide instructions to the broker in establishing a personal brokerage account, and (c) enter a broker account profile into PTA.

Quarterly and annual reporting

Each calendar quarter, Access Persons must report all their securities transactions to the Code of Ethics Officer within 15 days after the end of the quarter. All Access Persons must disclose all personal securities holdings (even those to which pre-clearance may not apply)

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upon commencement of employment, quarterly, and thereafter on an annual basis. You will be notified if these requirements apply to you.

Personal securities transactions by Access Persons and certain investment professionals

The Code imposes several special restrictions on personal securities transactions by Access Persons and certain investment professionals, which are summarized as follows. (Refer to Section II for details):

• 90-Day Short-Term Rule. No Access Person shall purchase and then sell at a profit, or sell and then repurchase at a lower price, any security or related derivative security within 90 calendar days regardless of tax lot election.

• 7-Day Rule. Before a portfolio manager places an order to buy a security for any portfolio he manages, he must sell from his personal account any such security or related derivative security purchased within the preceding seven calendar days, and disgorge any profit from the sale.

• Blackout Rule. No portfolio manager may sell any security or related derivative security for her personal account until seven calendar days after the most recent purchase of that security or related derivative security for any portfolio she manages. No portfolio manager may buy any security or related derivative security for his personal account until seven calendar days after the most recent sale of that security or related derivative security by any portfolio he manages.

Analysts are also subject to the 7-Day and Blackout Rules in connection with a recommendation to buy/outperform or sell/underperform a security.

• Contra-Trading Rule. No portfolio manager may sell out of her personal account any security or related derivative security that is held in any portfolio she manages unless she has received the written approval of an appropriate CIO and the Code of Ethics Officer.

• No portfolio manager may cause a Putnam client to take action for the manager’s personal benefit.

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PUTNAM’S CODE OF ETHICS

Putnam Investments is required by law to adopt a Code of Ethics. The purposes of the law are to ensure that companies and their employees comply with all applicable laws and to prevent abuses in the investment advisory business that can arise when conflicts of interest exist between the employees of an investment advisor and its clients. By adopting and enforcing a Code of Ethics, we strengthen the trust and confidence reposed in us by demonstrating that at Putnam, client interests come first.

The Code that follows represents a balancing of important interests. On the one hand, as a registered investment advisor, Putnam owes a duty of undivided loyalty to its clients, and must avoid even the appearance of a conflict that might be perceived as abusing the trust they have placed in Putnam. On the other hand, Putnam does not want to prevent conscientious professionals from investing for their own account where conflicts do not exist or that are immaterial to investment decisions affecting Putnam clients.

When conflicting interests cannot be reconciled, the Code makes clear that, first and foremost, Putnam employees owe a fiduciary duty to Putnam clients. In most cases, this means that the affected employee will be required to forego conflicting personal securities transactions. In some cases, personal investments will be permitted, but only in a manner, which, because of the circumstances and applicable controls, cannot reasonably be perceived as adversely affecting Putnam client portfolios or taking unfair advantage of the relationship Putnam employees have to Putnam clients.

The Code contains specific rules prohibiting defined types of conflicts. Because every potential conflict cannot be anticipated the Code also contains general provisions prohibiting conflict situations. In view of these general provisions, it is critical that any individual who is in doubt about the applicability of the Code in a given situation seeks a determination from the Code of Ethics Officer about the propriety of the conduct in advance. The procedures for obtaining such a determination are described in Section VII of the Code.

It is critical that the Code be strictly observed. Not only will adherence to the Code ensure that Putnam renders the best possible service to its clients, it will help to ensure that no individual is liable for violations of law.

It should be emphasized that adherence to this policy is a fundamental condition of employment at Putnam. Every employee is expected to adhere to the requirements of this Code of Ethics despite any inconvenience that may be involved. Any employee failing to do so may be subject to disciplinary action, including financial penalties and termination of employment, as determined by the Code of Ethics Officer, the Code of Ethics Oversight Committee, or the Chief Executive Officer of Putnam Investments.

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DEFINITIONS

The words below are defined specifically for the purpose of Putnam’s Code of Ethics.

Access Persons Each employee will be informed if he or she is considered an Access Person. The Code of Ethics Officer maintains a list of all Access Persons, categorized as follows:

• All employees of Putnam’s Investment Division

• All employees of Global Operations Services

• All employees who have access to My Putnam (unless access is limited to the Wall Street Journal via Factiva)

• All members of Putnam’s Executive Board

• Senior Managing Directors and Managing Directors of the Transfer Agency

• Senior Managing Directors and Managing Directors of Enterprise Services

• Senior Managing Directors and Managing Directors of Putnam Retail Management (PRM) and Putnam Global Institutional Management (PGIM)

• All directors, officers, employees of a registered investment advisor affiliate, i.e., Putnam Investment Management, LLC, (PIM), The Putnam Advisory Company, LLC (PAC), or Putnam Investments Limited (PIL)

• Employees who have certain systems access and who have access to non-public information about any client’s purchase or sale of securities or to information regarding recommendations with respect to such purchases or sales

• Employees who have access to non-public information regarding the portfolio holdings of any Putnam-advised or sub-advised mutual fund

• Others as defined by the Legal and Compliance Department

Code of Ethics Administrator The individual designated by the Code of Ethics Officer to assume responsibility for day-to-day, nondiscretionary administration of this Code. The current Code of Ethics Administrator is Laura Rose, who can be reached at extension 11104.

Code of Ethics Officer The Putnam officer who has been assigned the responsibility of enforcing and interpreting this Code. The Code of Ethics Officer shall be the Chief Compliance Officer or such other person as is designated by the Chief Executive Officer of Putnam Investments. If the Code of Ethics Officer is unavailable, the Deputy Code of Ethics Officer shall act in his stead. The Code of Ethics Officer is Tony Ruys de Perez. The Deputy Code of Ethics Officer is Kathleen Griffin.

Code of Ethics Oversight Committee Has oversight responsibility for administering the Code of Ethics. Members include the Code of Ethics Officer and other members of Putnam’s senior management approved by the Chief Executive Officer of Putnam.

Immediate family Spouse, partner, minor children, or other relatives living in the same household as the Putnam employee.

Narrow-based derivative A future, swap, option, or similar derivative instrument whose return is determined by reference to fewer than 25 underlying issuers. Single stock futures and exchange traded funds based on less than 25 issuers are included.

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Personal Trading Assistant (PTA) The Personal Trading Assistant (PTA) is an internet application designed for employees to manage personal trading activities, such as pre-clearance, reporting, and certifications, in accordance with regulatory requirements and Putnam’s Code of Ethics.

Policy statements The Insider Trading Prohibitions Policy Statement is attached to the Code as Appendix A and the Policy Statement Regarding Employee Trades in Shares of Putnam Closed-End Funds is attached to the Code as Appendix B.

Private placement Any offering of a security not offered to the public and not requiring registration with the relevant securities authorities.

Purchase or sale of a security Any acquisition or transfer of any interest in the security for direct or indirect consideration; this includes the writing of an option. This definition includes any transfer of a security by an employee as a gift to an individual or a charity.

Putnam Any or all of Putnam, LLC and its subsidiaries, any one of which shall be a Putnam company.

Putnam client Any of the Putnam mutual funds, or any advisor, trust, or other client for whom Putnam manages money.

Putnam employee (or employee) Any employee of Putnam.

Restricted list The list established in accordance with Rule 1 of Section I.A.

Security The following instruments are defined as “securities” and require pre-clearance:

• Any type or class of equity or debt security

• Any rights relating to a security, such as warrants and convertible securities

• Closed-end funds

• Any narrow-based derivative

Pre-clearance and reporting is not required (unless otherwise noted) for:

• Currencies, Treasuries (T-bills), and direct and indirect obligations of the U.S. government and its agencies

• Direct and indirect obligations of any member country in the Organization for Economic CoOperation and Development (OECD), commercial paper, certificates of deposit (CDs), repurchase agreements, bankers’ acceptances, and other money market instruments

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NOTE:

Excluded from pre-clearance but not from reporting requirements are: Exchange-traded index funds (ETFs) containing a portfolio of securities of 25 or more issuers (e.g., SPDRs, WEBs, QQQs, iShares, HLDRs), commodities, and any option on a broad-based market index or an exchange-traded futures contract or option.

Transaction for a personal account (or personal securities transaction)Securities transactions: (a) for the personal account of any employee; (b) for the account of a member of the immediate family of any employee; (c) for the account of a partnership in which a Putnam employee or immediate family member is a general partner or a partner with investment discretion; (d) for the account of a trust in which a Putnam employee or immediate family member is a trustee with investment discretion; (e) for the account of a closely held corporation in which a Putnam employee or immediate family member holds shares and for which he has investment discretion; and (f ) for any account other than a Putnam client account, which receives investment advice of any sort from the employee or immediate family member, or as to which the employee or immediate family member has investment discretion.

Rule of construction regarding time periods Unless the context indicates otherwise, time periods used in the Code of Ethics shall be measured inclusively, i.e., beginning on the date from which the measurement is made.

EXCEPTIONS

Unless the context indicates otherwise, there will be no exceptions to the rules.

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SECTION I -- Personal Securities Rules for All Employees

A. Pre-clearance

Rule 1: Requirements to Pre-clear

No Putnam employee shall purchase or sell for his personal account any security without prior clearance obtained through procedures set forth by the Code of Ethics Officer. Equity securities are pre-cleared through the Personal Trading Assistant (PTA) pre-clearance system (under the @Putnam tab of www.ibenefitcenter.com). Fixed-income securities must be pre-cleared by calling the Code of Ethics Administrator. There are special rules for trading in Putnam closed-end funds (see Appendix B). Subject to the limited exceptions below, no clearance will be granted for securities appearing on the Restricted List. Securities will be placed on the Restricted List in the following circumstances:

(a) When orders to purchase or sell such security have been entered for any Putnam client or the security is being actively considered for purchase for any Putnam client, unless the security is a non-convertible investment-grade (rated at least BBB by S&P or Baa by Moody’s) fixed-income investment;

(b) When such a security is a voting security of a corporation in the banking, savings and loan, communications, or gaming (i.e., casinos) industries, if holdings of Putnam clients in that corporation exceed 7% (for public utilities, the threshold is 4%);

(c) When, in the judgment of the Code of Ethics Officer, other circumstances warrant restricting personal transactions of Putnam employees in a particular security;

(d) When required under the Policy Statement Concerning Insider Trading Prohibitions. (See Appendix A)

Pre-clearance of Marsh & McLennan (MMC) securities All employee trading in MMC securities must be pre-cleared in the Code of Ethics system. MMC securities include stock, options, and any other securities such as debt. Trades in the MMC Employee Stock Purchase Plan and in all Putnam and MMC employee benefit and bonus plans, i.e., reallocating, rebalancing, or exchanging in and out of the 401(k)/Profit/Bonus Plan, etc., are included in this requirement.

Pre-clearance of MMC is required when, for example, you:

• Sell MMC out of the Stock Purchase Plan

• Exchange MMC shares into or out of your 401(k)/Profit Sharing/Bonus Plan

• Reallocate your Putnam fund choices, which results in a buy or sell of MMC from your 401(k)/Profit Sharing/Bonus Plan

• Trade in MMC securities in other accounts held outside Putnam

 Pre-clearance is not required when you:

• Increase/decrease the amount of money that is automatically deducted (systematic plan) from your paycheck and used to purchase MMC shares in your 401(k)/Profit Sharing/Stock Purchase Plan

• Maintain standing instructions to have money deducted (automatic payroll deductions) and want to increase or decrease the percentage allocated, or instruct to reduce it to “0” in your 401(k)/Profit Sharing/Stock Purchase Plan

• Apply for a loan and/or make withdrawals of the stock from your 401(k)/Profit Sharing Plan

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COMMENTS

All transactions of MMC require pre-clearance in PTA before you contact your broker to trade shares in an outside brokerage account or before contacting Smith Barney to sell shares out of your Stock Purchase Plan. Also, if MMC is one of your choices in the 401(k)/Profit Sharing Plan, all exchanges in/out must be cleared. Even though clearance is not required for Putnam mutual funds, if you do not wish to include MMC shares when rebalancing any of your fund choices, which will result in an automatic exchange of your MMC shares, you must remember to exclude MMC shares prior to submitting your changes. If you are investing online, check the box to exclude MMC; or if you are investing by telephone with a Putnam representative, ask to exclude MMC before rebalancing the funds.

Additional MMC-related policies:

• MMC securities may from time to time be restricted due to the federal laws that govern trading on inside information. All transactions are prohibited during this period.

• Members of the Executive Board of Directors and members of the Chief Financial Officer’s senior staff may not trade in MMC securities during the calendar quarter-end prior to the public announcement of MMC’s earnings.

• Transactions in MMC securities are not subject to the 90-Day Short-Term Rule (applicable to Access Persons only) or to the holding periods that apply to Putnam mutual funds.

IMPLEMENTATION

A. Maintenance of Restricted List. The Restricted List shall be maintained by the Code of Ethics Administrator.

B. Pre-clearance. An employee wishing to trade any equity securities for his personal account shall first obtain clearance through the Personal Trading Assistant (PTA) system. The system may be accessed online either at www.ibenefitcenter.com by clicking on “Employee Essentials” under the @Putnam tab and selecting “Clear personal trade,” or at iworkplace. Employees may pre-clear securities between 9:00 a.m. and 4:00 p.m. ET. Requests to make personal securities transactions may not be made using the system or presented to the Code of Ethics Administrator before 9:00 a.m. or after 4:00 p.m. ET.

Pre-clearance must be made by calling the Code of Ethics Administrator for fixed-income (municipal and corporate bonds, including non-convertible investment-grade bonds (rated BBB by S&P or Baa by Moody’s) and Putnam closed-end funds.

The PTA system will inform the employee whether the security may be traded and whether trading in the security is subject to the “Large Cap” limitation or the “Considered List – Limited Sale Exception.” The response of the pre-clearance system as to whether a security appears on the Restricted List and, if so, whether it is eligible for the exceptions set forth after this Rule shall be final, unless the employee appeals to the Code of Ethics Officer, using the procedure described in Section VII, regarding the request to trade a particular security.

A clearance is only valid for trading on the day it is obtained. Trades in securities listed on Asian or European stock exchanges, however, may be executed within one business day after pre-clearance is obtained.

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If a security is not on the Restricted List, other classes of securities of the same issuer (e.g., preferred or convertible preferred stock) may be on the Restricted List. It is the employee’s responsibility to identify with particularity the class of securities for which permission is being sought for a personal investment.

If the PTA system does not recognize a security, or if an employee is unable to use the system or has any questions with respect to the system or pre-clearance, the employee may consult the Code of Ethics Administrator. The Code of Ethics Administrator shall not have authority to answer any questions about a security other than whether trading is permitted. The response of the Code of Ethics Administrator as to whether a security appears on the Restricted List and, if so, whether it is eligible for any applicable exceptions set forth after this Rule shall be final, unless the employee appeals to the Code of Ethics Officer, using the procedure described in Section VII, regarding the request to trade a particular security.

EXCEPTIONS

A. Large Cap Exemption. If a security appearing on the Restricted List is an equity security for which the issuer has a market capitalization (defined as outstanding shares multiplied by current price per share) of over $5 billion, then upon clearance approval, the Putnam employee may not trade more than 1,000 shares of the security for the day.

B. Considered List – Limited Sale Rule. As the Putnam list of considered securities is broad and inclusive, employees will be permitted to make limited sales but not purchases of securities held in their accounts if trading is blocked solely by the Considered List of securities.

C. Pre-clearing Transactions Effected by Share Subscription. Trades of securities made by subscription rather than on an exchange are limited to issuers having a market capitalization of $5 billion or more and are subject to the 1,000 share limit. The following are procedures to comply with Rule 1 when effecting a purchase or sale of shares by subscription:

• The Putnam employee must pre-clear the trade on the day he or she submits a subscription to the issuer rather than on the actual day of the trade since the actual day of the trade typically will not be known to the employee who submits the subscription. The employee must contact the Code of Ethics Administrator at the time of pre-clearance and will be told whether the purchase is permitted (in the case of a corporation having a market capitalization of $5 billion or more) or not permitted (in the case of a smaller capitalization issuer).

• The subscription for any purchase or sale of shares must be reported on the Access Person’s quarterly personal securities transaction report, noting the trade was accomplished by subscription.

• Because no brokers are involved in the transaction, the confirmation requirement will be waived for these transactions, although the Putnam employee must provide the Legal and Compliance Department with any transaction summaries or statements sent by the issuer.

D. Trades in Approved Discretionary Brokerage Accounts. A transaction does not need to be pre-cleared if it takes place in an account that the Code of Ethics Officer has approved in writing as exempt from the pre-clearance requirement. In the sole discretion of the Code of Ethics Officer, accounts that will be considered for exclusion from the pre-clearance requirement are only those for which an employee’s securities broker or investment advisor has complete discretion (a discretionary account) and the following conditions are met:

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(i) the employee certifies annually in writing that the employee has no influence over the transactions in the discretionary account and is not aware of the transactions in the discretionary account prior to their execution; (ii) the compliance department of the employee’s broker or investment advisor certifies annually in writing that the employee has no influence over the transactions in the discretionary account and is not aware of the transactions in the discretionary account prior to their execution; and (iii) each calendar quarter, the broker or investment advisor sends Putnam’s Code of Ethics Administrator copies of each quarterly statement for the discretionary account. Employees wishing to seek such an exemption must send a written request to the Code of Ethics Administrator.

COMMENTS

• Pre-clearance. Subpart (a) of Rule 1 is designed to avoid the conflict of interest that might occur when an employee trades for his personal account a security that currently is being traded or is likely to be traded for a Putnam client. Such conflicts arise, for example, when the trades of an employee might have an impact on the price or availability of a particular security, or when the trades of the client might have an impact on price to the benefit of the employee. Thus, exceptions involve situations where the trade of a Putnam employee is unlikely to have an impact on the market.

• Regulatory Limits. Owing to a variety of federal statutes and regulations in the banking, savings and loan, communications, and gaming industries, it is critical that accounts of Putnam clients do not hold more than 10% of the voting securities (5% for public utilities) of any issuer in those industries. Subpart (b) of this rule limits employees’ personal trades to sales of shares in these areas because of the risk that the personal holdings of Putnam employees may be aggregated with Putnam holdings. Putnam’s so-called 7% rule will allow the regulatory limits to be observed.

• Options. For the purposes of this Code, options are treated like the underlying security. Thus, an employee may not purchase, sell, or “write” option contracts for a security that is on the Restricted List. The automatic exercise of an options contract (the purchase or writing of which was previously pre-cleared) does not have to be pre-cleared. Note, however, that the purchase or sale of securities obtained through the exercise of options must be pre-cleared.

• Involuntary Transactions. Involuntary personal securities transactions are exempted from the Code. Special attention should be paid to this exemption. (See Section I.D.)

• Tender Offers. This Rule does not prohibit an employee from tendering securities from his personal account in response to any and all tender offers, even if Putnam clients are also tendering securities. If tendering a security in response to a “partial tender offer”, an employee must pre-clear the trade on the day she submits instructions to her broker, and she will be prohibited from trading if Putnam clients are also tendering the same security.

• Gifts of Securities. Pre-clearance is required for securities donated as a gift to a charitable organization or to an individual. Employees are required to provide a gift transfer certificate of the transaction (if produced) to the Code of Ethics Administrator along with an account statement reflecting the gift transaction. Receipt of a securities gift should be reported on the Access Person’s Annual Holdings Report. Employees who receive a securities gift must report the gift to the Code of Ethics Administrator to make the necessary adjustments in PTA.

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B. Prohibited Transactions

Rule 1: Short-Selling Prohibition

Putnam employees are prohibited from short selling any security, whether or not the security is held in a Putnam client portfolio. Employees are prohibited from hedging investments made in securities of MMC.

EXCEPTION

Short selling against broad market indexes (such as the Dow Jones Industrial Average, the NASDAQ index, and the S&P 100 and 500 indexes) and short selling against the box are permitted (except that short selling shares of MMC against the box is not permitted).

Rule 2: Initial Public Offerings Prohibition

No Putnam employee shall purchase any security for her personal account in an initial public offering.

EXCEPTION

Pre-existing Status Exception. A Putnam employee shall not be barred by this Rule or by Rule 1(a) of Section I.A. from purchasing securities for her personal account in connection with an initial public offering of securities by a bank or insurance company when the employee’s status as a policyholder or depositor entitles her to purchase securities on terms more favorable than those available to the general public, in connection with the bank’s conversion from mutual or cooperative form to stock form, or the insurance company’s conversion from mutual to stock form, provided that the employee has had the status entitling her to purchase on favorable terms for at least two years. This exception is only available with respect to the value of bank deposits or insurance policies that an employee owns before the announcement of the initial public offering. This exception does not apply, however, if the security appears on the Restricted List in the circumstances set forth in subparts (b), (c), or (d) of Section I.A., Rule 1.

COMMENTS

• The purpose of this Rule is twofold. First, it is designed to prevent a conflict of interest between Putnam employees and Putnam clients who might be in competition for the same securities in a limited public offering. Second, the Rule is designed to prevent Putnam employees from being subject to undue influence as a result of receiving favors in the form of special allocations of securities in a public offering from broker-dealers who seek to do business with Putnam.

• Purchases of securities in the immediate after-market of an initial public offering are not prohibited, provided they do not constitute violations of other provisions of the Code of Ethics. For example, participation in the immediate after-market as a result of a special allocation from an underwriting group would be prohibited by Section III, Rule 3, concerning gifts and other favors.

• Public offerings subsequent to initial public offerings are not deemed to create the same potential for competition between Putnam employees and Putnam clients because of the pre-existence of a market for the securities.

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Rule 3: Private Placement Pre-approval Requirements

No Putnam employee shall purchase any security for his personal account in a limited private offering or private placement without prior approval of the Code of Ethics Officer. Privately placed limited partnerships are specifically included in this Rule.

COMMENTS

• The purpose of this Rule is to prevent a Putnam employee from investing in securities for his own account pursuant to a limited private offering that could compete with or disadvantage Putnam clients, and to eliminate any incentives Putnam employees might have to favor those who can affect access to limited offerings.

• Exemptions to the prohibition will generally not be granted where the proposed investment relates directly or indirectly to investments by a Putnam client, or where individuals involved in the offering (including the issuers, broker, underwriter, placement agent, promoter, fellow investors, and affiliates of the foregoing) have any prior or existing business relationship with Putnam or a Putnam employee, or where the Putnam employee believes that such individuals may expect to have a future business relationship with Putnam or a Putnam employee.

• An exemption may be granted, subject to reviewing all the facts and circumstances, for investments in:

(a) Pooled investment funds, including hedge funds, subject to the condition that an employee investing in a pooled investment fund would have no involvement in the activities or decision-making process of the fund except for financial reports made in the ordinary course of the fund’s business, and subject to the condition that the hedge fund does not invest significantly in registered investment companies.

(b) Private placements where the investment cannot relate, or be expected to relate, directly or indirectly to Putnam or investments by a Putnam client.

• Employees who apply for an exemption will be expected to disclose to the Code of Ethics Officer in writing all facts and relationships relating to the proposed investment.

• Applications to invest in private placements will be reviewed by the Code of Ethics Oversight Committee. This review will take into account, among other factors, the considerations described in the preceding comments.

Rule 4: Trading with Material Non-public Information

No Putnam employee shall purchase or sell any security for her personal account or for any Putnam client account while in possession of material, non-public information concerning the security or the issuer. Please read Appendix A, Policy Statement Concerning Insider Trading Prohibitions.

Rule 5: No Personal Trading with Client Portfolios

No Putnam employee shall purchase from or sell to a Putnam client any securities or other property for his personal account, nor engage in any personal transaction to which a Putnam client is known to be a party, or in which the transaction may have a significant relationship to any action taken by a Putnam client.

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IMPLEMENTATION

It is the responsibility of every Putnam employee to make inquiry prior to any personal transaction in order to satisfy himself that the requirements of this Rule have been met.

COMMENT

This rule is required by federal law. It does not prohibit a Putnam employee from purchasing any shares of an open-end Putnam fund. The policy with respect to employee trading in Putnam closed-end funds is attached as Appendix B.

Rule 6: Holding of Putnam Mutual Fund Shares

Putnam employees may not hold shares of Putnam open-end U.S. mutual funds other than through accounts maintained at Putnam. Employees placing purchase orders in shares of Putnam open-end funds must place such orders through Putnam and not through an outside broker or other intermediary. Employees redeeming or exchanging shares of Putnam open-end funds must place those orders through Putnam and not through an outside broker or other intermediary. For transfer instructions, contact a Putnam Preferred Client Services (PCS) representative at 1-800-634-1590.

REMINDER

For purposes of this Rule, “employee” includes:

• -Members of the immediate family of a Putnam employee who share the same household as the employee or for whom the Putnam employee has investment discretion (family member);

• -Any trust in which a Putnam employee or family member is a trustee with investment discretion and in which such Putnam employee or any family members are collectively beneficiaries;

• Any closely held entity (such as a partnership, limited liability company, or corporation) in which a Putnam employee and his or her family members hold a controlling interest and with respect to which they have investment discretion; and

• Any account (including any retirement, pension, deferred compensation, or similar account) in which a Putnam employee or family member has a substantial economic interest and over which the Putnam employee or family member exercises investment discretion.

COMMENTS

These requirements also apply to:

• Self-directed IRA accounts holding Putnam fund shares;

• Variable insurance accounts which invest in Putnam Variable Trusts such as the Putnam/Hartford Capital Manager Programs. Employees must designate Putnam Retail Management as the broker of record for all such accounts and disclose these holdings in the PTA system.

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NOTE:

Employees are required to seek permission from the Code of Ethics Officer to hold Putnam funds in variable trusts outside of Putnam.

EXCEPTION

Retirement, pension, deferred compensation, and similar accounts that cannot be legally transferred to Putnam are not subject to the requirement. For example, a spouse of a Putnam employee may have a 401(k)/Profit Sharing Plan with her employer that invests in Putnam funds. Any employee who continues to hold shares in open-end Putnam funds outside of Putnam must notify the Code of Ethics Officer in writing of the account information, provide the reason why the account cannot be transferred to Putnam, and arrange for a quarterly statement of transaction in such account to be sent to the Code of Ethics Administrator.

Rule 7: Putnam Mutual Fund Employee Restrictions

(a) Employees defined in Rule 6 may not, within a 90-calendar day period, make a purchase followed by a sale or a sale followed by a purchase of shares of the same open-end Putnam mutual fund, even if the transactions occur in different accounts.

(b) Employees who are Access Persons may not, within a one-year period, make a purchase followed by a sale or a sale followed by a purchase of shares of the same open-end Putnam mutual fund or of shares of any U.S. registered mutual fund to which Putnam acts as advisor or sub-advisor, even if the transactions occur in different accounts.

(c) All employees are required to link their immediate family members’ accounts holding Putnam mutual funds to comply with the disclosure requirements. These accounts are also subject to the 90-day and one-year rules. To link these accounts, log on to www.ibenefitcenter.com, click on @Putnam, and select Employee Essentials/Linked Mutual Fund Accounts. You are required to confirm the information and will be prompted to add any accounts that you or your family members have that should be linked or delinked based on the definitions outlined.

COMMENTS

This restriction applies across all accounts maintained by an employee as follows:

• An employee who buys shares of an open-end Putnam mutual fund may not sell any shares of the same mutual fund until 90 calendar days have passed, or one year for Access Persons.

Example: If an employee buys shares of a Putnam fund on Day 1 for a retail account and then sells (by exchange) shares of the same fund for his or her 401(k)/Profit Sharing Plan accounts on Day 85, the employee has violated the rule.

Similarly, an employee who sells shares of an open-end Putnam mutual fund may not buy any shares of the same mutual fund until 90 calendar days have passed, or one year for Access Persons.

• The purpose of these blackout period restrictions is to prevent any market timing or the appearance of any market timing activity.

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• This Rule applies to transactions by a Putnam employee in any type of account including retail, IRA, variable annuity, 401(k)/Profit Sharing Plan, and any deferred compensation accounts.

• The minimum sanction for an initial violation of the blackout period will be disgorgement of any profit made on the transaction. Additional sanctions may apply, including termination of employment.

EXCEPTIONS

A. This restriction does not apply to Putnam’s money market funds and Putnam Stable Value Fund.

B. 401(k)/Profit Sharing Plan Contributions and Payroll Deductions: The 90-day or one year restriction is not triggered by the initial allocation of regular employee or employer contributions or forfeitures to an employee’s account under the terms of Putnam employee benefit plans or a Putnam payroll-deduction direct-investment program; later exchanges of these contributions will be subject to either the 90-day or one-year blackout period.

C. Systematic Programs: This restriction does not apply with respect to shares sold or acquired as a result of participation in a systematic program for contributions, withdrawals, or exchanges, provided that an election to participate in any such program and the participation dates of the program may not be changed more often than quarterly after the program is elected by the employee. Access Persons may elect a quarterly or semiannual rebalancing program although it may only be changed on an annual basis.

D. Employee Benefit Plan Withdrawals and Distributions: This restriction does not apply with respect to shares sold for withdrawals, loans, or distributions under the terms of Putnam employee benefit plans.

E. Dividends, Distributions, Mergers, and Share Class Conversions: This restriction does not apply with respect to the acquisition of shares as a result of reinvestment of dividends, distributions, mergers, conversions of share classes, or other similar actions. Subsequent transactions with respect to the shares will be covered.

F. College Savings Program: Redemptions from an employee’s college savings 529 plan to pay for qualified educational expenses for the beneficiary of the account (and redemptions due to death or disability) are exempt from the 90-day and one-year restrictions applicable to Putnam mutual funds. Qualified redemptions include:

• Tuition

• School fees

• Books

• Supplies and equipment required for enrollment

• Room and board

• Death

• Disability

G. Special Situations: In special situations, Putnam’s Code of Ethics Oversight Committee may grant exceptions to the blackout periods as a result of death, disability, or special circumstances (such as personal hardship), all as determined from time to time by the Committee. Employees can request an exception by submitting a written request to the Code of Ethics Officer.

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Rule 8: Special Orders

Good Until Canceled (GTC) Orders and Limit Orders are prohibited.

Any order not executed on the day of pre-clearance must be resubmitted for pre-clearance before being executed on a subsequent day. “Good until canceled” or “limit” orders are prohibited because of the potential failure to pre-clear.

EXCEPTION

Same-day limit orders are permitted.

Rule 9: Excessive Trading

Putnam employees are strongly discouraged from engaging in excessive trading for their personal accounts. Employees are prohibited from making more than 10 trades in individual securities in any given quarter.

EXCEPTION

For the purpose of calculating the number of trades in any quarter, trading the same security in the same direction (buy or sell) over a period of five business days will be counted as one transaction.

All other rules under the Code of Ethics will continue to be applied.

COMMENTS

Although a Putnam employee’s excessive trading may not itself constitute a conflict of interest with Putnam clients, Putnam believes that its clients’ confidence in Putnam will be enhanced and that the likelihood of Putnam achieving better investment skills results for its clients over the long term will be increased if Putnam employees rely on their investment skills, as opposed to their trading skills in transactions for their own account. Moreover, excessive trading by a Putnam employee for his or her own account diverts an employee’s attention from the responsibility of servicing Putnam clients, and increases the possibilities for transactions that are in actual or apparent conflict with Putnam client transactions. Short-term trading is strongly discouraged, and employees are encouraged to take a long-term view.

C. Discouraged Transactions

Rule 1: Naked Options

Putnam employees are strongly discouraged from engaging in writing (selling) naked options for their personal accounts.

Naked option transactions are particularly dangerous, because a Putnam employee may be prevented by the restrictions in this Code of Ethics from covering the naked option at the appropriate time. All employees should keep in mind the limitations on their personal securities trading imposed by this Code when contemplating such an investment strategy. Engaging in naked options transactions on the basis of material, non-public information is prohibited. (See Appendix A, Policy Statement Concerning Insider Trading Prohibitions.)

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D. Exempted Transactions

Rule 1: Involuntary Transactions

Transactions that are involuntary on the part of a Putnam employee are exempt from the prohibitions set forth in Sections I.A., I.B., and I.C.

COMMENTS

This exemption is based on categories of conduct that the Securities and Exchange Commission does not consider “abusive.”

• Examples of involuntary personal securities transactions include:

(a) Sales out of the brokerage account of a Putnam employee as a result of a bona fide margin call, provided that withdrawal of collateral by the Putnam employee within the ten days previous to the margin call was not a contributing factor to the margin call;

(b) Purchases arising out of an automatic dividend reinvestment program of an issuer of a publicly traded security.

• Transactions by a trust in which the Putnam employee (or a member of his immediate family) holds a beneficial interest, but for which the employee has no direct or indirect influence or control with respect to the selection of investments, are involuntary transactions. In addition, these transactions do not fall within the definition of “personal securities transactions.” (See Definitions.)

• A good-faith belief on the part of the employee that a transaction was involuntary will not be a defense to a violation of the Code of Ethics. In the event of confusion as to whether a particular transaction is involuntary, the burden is on the employee to seek a prior written determination of the applicability of this exemption. The procedures for obtaining such a determination appear in Section VII. D.

Rule 2: Special Exemptions

Transactions that have been determined, in writing by the Code of Ethics Officer before the transaction occurs, to be no more than remotely harmful to Putnam clients because the transaction would be very unlikely to affect a highly institutional market, or because the transaction is clearly not related economically to the securities to be purchased, sold, or held by a Putnam client, are exempt from the prohibitions set forth in Sections I.A., I.B., and I.C.

IMPLEMENTATION

An employee may seek an ad hoc exemption under this Rule by following the procedures in Section VII.D.

COMMENTS

• This exemption is also based upon categories of conduct that the Securities and Exchange Commission does not consider “abusive.”

• The burden is on the employee to seek a prior written determination that the proposed transaction meets the standards for an ad hoc exemption set forth in this Rule.

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SECTION II -- Additional Special Rules for Personal Securities Transactions of Access Persons and Certain Investment Professionals

Access Persons include all investment professionals and other employees as defined on page vii.

Rule 1: 90-Day Short-Term Rule

Access Persons may not sell a security at a profit within 90 days of purchase or buy a security at a price below which he or she sold it within the past 90 days.

EXCEPTION

None, unless prior written approval from the Code of Ethics Officer is obtained. Exceptions may be granted on a case-by-case basis when no abuse is involved and the equities of the situation support an exemption. For example, although an Access Person may buy a stock as a long-term investment, that stock may have to be sold involuntarily due to unforeseen activity such as a merger.

IMPLEMENTATION

A. The 90-Day Short-Term Rule applies to all Access Persons, as defined in the Definitions section of the Code.

B. Calculation of whether there has been a profit is based upon the market prices of the securities. The calculation includes commissions and other sales charges.

C. As an example, an Access Person would not be permitted to sell a security at $12 that he purchased within the prior 90 days for $10. Similarly, an Access Person would not be permitted to purchase a security at $10 that she had sold within the prior 90 days for $12.

COMMENTS

• The prohibition against short-term trading profits by Access Persons is designed to minimize the possibility that they will capitalize inappropriately on the market impact of trades involving a client portfolio about which they might possibly have information.

• Although Chief Investment Officers, portfolio managers, and analysts may sell securities at a profit within 90 days of purchase in order to comply with the requirements of the 7-Day Rule applicable to them (described below), the profit will have to be disgorged to charity under the terms of the 7-Day Rule.

Certain Investment Professionals

Rule 2: 7-Day Rule

(a) Before a portfolio manager (including a Chief Investment Officer with respect to an account he manages) places an order to buy a security for any Putnam client portfolio that he manages, he must sell that security or related derivative security if he has purchased it in his personal account within the preceding seven calendar days.

(b) Analysts: Before an analyst makes a purchase or an outperform recommendation for a security (including designation of a security for inclusion in the portfolio of Putnam Research Fund), he must sell that security or related derivative security if he has purchased it in his personal account within the preceding seven calendar days.

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COMMENTS

• This Rule applies to portfolio managers (including Chief Investment Officers with respect to accounts they manage) in connection with any purchase, no matter how small, in any client account managed by that portfolio manager or CIO (even so-called “clone accounts”). In particular, it should be noted that the requirements of this Rule also apply with respect to purchases in client accounts, including “clone accounts,” resulting from “cash flows.” To comply with the requirements of this Rule, it is the responsibility of each portfolio manager or CIO to be aware of the placement of all orders for purchases of a security by client accounts that he or she manages for seven days following the purchase of that security for his or her personal account.

• An investment professional who must sell securities to be in compliance with the 7-Day Rule must absorb any loss and disgorge to charity any profit resulting from the sale. The recipient charity will be chosen by the Code of Ethics Officer.

• This Rule is designed to avoid even the appearance of a conflict of interest between an investment professional and a Putnam client. A greater burden is placed on these professionals given their positions in the organization. Transactions executed for the employee’s personal account must be conducted in a manner consistent with the Code of Ethics and in such a manner as to avoid any actual or perceived conflict of interest or any abuse of the employee’s position of trust and responsibility.

• “Portfolio manager” is used in this Section as a functional label, and is intended to cover any employee with authority to authorize a trade on behalf of a Putnam client, whether or not such employee bears the title “portfolio manager.” “Analyst” is also used in this Section as a functional label, and is intended to cover any employee who is not a portfolio manager but who may make recommendations regarding investments for Putnam clients.

Rule 3: Blackout Rule

(a) Portfolio Managers: No portfolio manager (including Chief Investment Officers with respect to accounts they manage) shall: (i) sell any security or related derivative security for her personal account until seven calendar days have elapsed since the most recent purchase of that security or related derivative security by any Putnam client portfolio she manages or co-manages; or (ii) purchase any security or related derivative security for her personal account until seven calendar days have elapsed since the most recent sale of that security or related derivative security from any Putnam client portfolio that she manages or co-manages.

(b) Analysts: No analyst shall: (i) sell any security or related derivative security for his personal account until seven calendar days have elapsed since his most recent buy or outperform recommendation for that security or related derivative security (including designation of a security for inclusion in the portfolio of Putnam Research Fund); or (ii) purchase any security or related derivative security for his personal account until seven calendar days have elapsed since his most recent sell or underperform recommendation for that security or related derivative security (including the removal of a security from the portfolio of Putnam Research Fund).

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COMMENTS

• This Rule applies to portfolio managers (including Chief Investment Officers with respect to accounts they manage) in connection with any purchase, no matter how small, in any client account managed by that portfolio manager or CIO (even clone accounts). In particular, it should be noted that the requirements of this rule also apply with respect to transactions in client accounts, including clone accounts, resulting from cash flows. In order to comply with the requirements of this Rule, it is the responsibility of each portfolio manager and CIO to be aware of all transactions in a security by client accounts that he or she manages that took place within the seven days preceding a transaction in that security for his or her personal account.

• This Rule is designed to prevent a Putnam portfolio manager or analyst from engaging in personal investment conduct that appears to be counter to the investment strategy she is pursuing or recommending on behalf of a Putnam client.

Rule 4: Contra-Trading Rule

(a) Portfolio Managers: No portfolio manager shall, without prior clearance and written approval, sell out of his personal account securities or related derivative securities held in any Putnam client portfolio that he manages or co-manages.

(b) Chief Investment Officers: No Chief Investment Officer shall, without prior clearance and written approval, sell out of his personal account securities or related derivative securities held in any Putnam client portfolio managed in his investment group.

IMPLEMENTATION

A. Individuals Authorized to Give Approval. Prior to engaging in any such sale, a portfolio manager shall seek written approval of the proposed sale. In the case of a portfolio manager, prior written approval of the proposed sale shall be obtained from a Chief Investment Officer to whom he reports or, in his absence, another Chief Investment Officer. In the case of a Chief Investment Officer, prior written approval of the proposed sale shall be obtained from another Chief Investment Officer. In addition to the foregoing, prior written approval must also be obtained from the Code of Ethics Officer.

B. Contents of Written Approval. In every instance, the written approval form attached as Appendix C (or such other form as the Code of Ethics Officer shall designate) shall be used. The written approval should be signed by the Chief Investment Officer giving approval and dated when such approval was given, and shall state, briefly, the reasons why the trade was allowed and why the investment conduct pursued by the portfolio manager or Chief Investment Officer was deemed inappropriate for the Putnam client account controlled by the individual seeking to engage in the transaction for his personal account. Such written approval shall be sent by the Chief Investment Officer approving the transaction to the Code of Ethics Officer, for her approval, within 24 hours or as promptly as circumstances permit. Approvals obtained after a transaction has been completed, or while it is in process, will not satisfy the requirements of this Rule.

COMMENT

This Rule, like Rule 3 of this section, is designed to prevent a Putnam portfolio manager from engaging in personal investment conduct that appears to be counter to the investment strategy that he is pursuing on behalf of a Putnam client.

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Rule 5: No Personal Benefit

No portfolio manager shall cause, and no analyst shall recommend, a Putnam client to take action for the portfolio manager’s or analyst’s own personal benefit.

COMMENTS

• A portfolio manager who trades in, or an analyst who recommends, particular securities for a Putnam client account in order to support the price of securities in his personal account, or who “front runs” a Putnam client order is in violation of this Rule. Portfolio managers and analysts should be aware that this Rule is not limited to personal transactions in securities (as that word is defined in the Definitions section). Thus, a portfolio manager or analyst who front runs a Putnam client purchase or sale of obligations of the U.S. government is in violation of this Rule. U.S. government obligations are excluded from the definition of security.

• This Rule is not limited to instances when a portfolio manager or analyst has malicious intent. It also prohibits conduct that creates an appearance of impropriety. Portfolio managers and analysts who have questions about whether proposed conduct creates an appearance of impropriety should seek a prior written determination from the Code of Ethics Officer, using the procedures described in Section VII.C.

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SECTION III -- General Rules for All Employees

Rule 1: Compliance with All Laws, Regulations, and Policies

All employees must comply with applicable laws and regulations as well as company policies. This includes tax, anti-trust, political contribution, and international boycott laws. In addition, no employee at Putnam may engage in fraudulent conduct of any kind.

COMMENTS

• Putnam may report to the appropriate legal authorities conduct by Putnam employees that violates this Rule.

• It should also be noted that the U.S. Foreign Corrupt Practices Act makes it a criminal offense to make a payment or offer of payment to any non-U.S. governmental official, political party, or candidate to induce that person to affect any governmental act or decision, or to assist Putnam’s obtaining or retaining business.

Rule 2: Conflicts of Interest

No Putnam employee shall conduct herself in a manner that is contrary to the interests of, or in competition with, Putnam or a Putnam client, or that creates an actual or apparent conflict of interest with a Putnam client.

COMMENTS

• This Rule is designed to recognize the fundamental principle that Putnam employees owe their chief duty and loyalty to Putnam and Putnam clients.

• It is expected that a Putnam employee who becomes aware of an investment opportunity that she believes is suitable for a Putnam client whom she services will present it to the appropriate portfolio manager prior to taking advantage of the opportunity herself.

Rule 3: Gifts and Entertainment Policy

No Putnam employee shall accept anything of material value from any broker-dealer, financial institution, corporation, or other entity; any existing or prospective supplier of goods or services with a business relationship to Putnam; or any company or other entity whose securities are held in or are being considered as investments for the Putnam funds, or any other client account. Included are gifts, favors, preferential treatment, special arrangements, or access to special events.

COMMENTS

This Rule is intended to permit the acceptance of only proper types of customary and limited business amenities.

A Putnam employee may not, under any circumstances, accept anything that could create the appearance of a conflict of interest. For example, acceptance of any consideration is prohibited if it would create the appearance of a reward or inducement for conducting Putnam business either with the person providing the gift or his employer.

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IMPLEMENTATION

A. Gifts. An employee may not accept gifts with an aggregate value of more than $100 in any year from any one source, i.e., entity or firm. Any Putnam employee who is offered or receives an item exceeding $100 in value must report the details to the Code of Ethics Officer and surrender or return the gift. Any entertainment event provided to an employee where the host is not in attendance is treated as a gift and is subject to the $100 per year per source limit.

B. Entertainment. Putnam’s rules are designed to permit reasonable, ordinary business entertainment, but prohibit any events that may be perceived as extravagant or that involve lavish expenditures.

1. Occasional lunches, dinners, cocktail parties, or comparable gatherings conducted for business purposes are permitted.

For example, occasional attendance at group functions sponsored by sell-side firms is permitted where the function relates to investments or other business activity. Occasional attendance at these functions is not required to be counted against the limits described in section (B)(2) below.

2. Other entertainment events, such as sporting events, theater, movies, concerts, or other forms of entertainment conducted for business purposes, are permitted only under the following conditions:

(i)The host must be present for the event.

(ii)The location of the event must be in the metropolitan area in which the office of the employee is located.

(iii)Spouses or other family members of the employee may not attend the entertainment event or any meals before or after the entertainment event.

(iv)The value of the entertainment event provided to the employee may not exceed $150, not including the value of any meals that may be provided to the employee before or after the event.

Acceptance of entertainment events that have a market value materially exceeding the face value of the entertainment, which includes, for example, attendance at sporting event playoff games, is prohibited. This prohibition applies even if the face value of tickets to the events is $150 or less or if the Putnam employee offers to pay for the tickets. If there is any ambiguity about whether to accept an entertainment event in these circumstances, please consult the Code of Ethics Officer.

(v)The employee may not accept entertainment events under this provision in section (B)(2) more than six times a year and not more than two times in any year from any single source.

(vi)The Code of Ethics Officer may grant exceptions to these rules. For example, it may be appropriate for an employee attending a legitimate conference in a location away from the office to attend a business entertainment event in that location. All exceptions must be approved in advance by written request to the Code of Ethics Officer.

3. Any employee attending any entertainment event under the provision in sections (B)(1) or (B)(2) above must file a Report of Entertainment Form (attached as Appendix E) with the Code of Ethics Officer within 10 business days following the date of the entertainment event. Failure to file the notice is a violation of the Code of Ethics.

Planned absences, i.e., vacations, leaves (other than certain medical leaves), or business trips are not valid excuses for providing late reports. Failure to meet the deadline violates the Code’s rules and sanctions may be imposed.

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4. Meals and entertainment that are part of the regular program at an investment conference (i.e., open to all participants) are not subject to the limits of section (B)(2) above.

C. The following items are prohibited:

1. Any entertainment event attendance that would reflect badly on Putnam as a firm of the highest fiduciary and ethical standards. For example, events involving adult entertainment or gambling must be avoided.

2. Entertainment involving travel away from the metropolitan area in which the employee is located. Even if an exception is granted as discussed in section (B)(2)(vi) above, payment by a third party of the cost of transportation to a location outside the employee’s metropolitan area, lodging while in another location, and any meals not specifically approved by the Code of Ethics officer are prohibited.

3. Personal loans to a Putnam employee on terms more favorable than those generally available for comparable credit standing and collateral.

4. Preferential brokerage or underwriting commissions or spreads or allocations of shares or interests in an investment for the personal account of a Putnam employee.

5. Cash or cash equivalents.

D. As with any of the provisions of the Code of Ethics, a sincere belief by the employee that he was acting in accordance with the requirements of this Rule will not satisfy his obligations under the Rule. Therefore, an employee who is in doubt concerning the propriety of any gift or favor should seek a prior written determination from the Code of Ethics Officer, as provided in Section VII.C.

E. No Putnam employee may solicit any gift or entertainment from any person, even if the gift or entertainment, if unsolicited, would be permitted.

F. The Rule does not prohibit employees on business travel from using local transportation and arrangements customarily supplied by brokers or similar entities. For example, it is customary for brokers in developing markets to make local transportation arrangements. These arrangements are permitted so long as the expense of lodging and air travel are paid by Putnam.

G. Putnam Retail Management (PRM) employees are subject to additional NASD rules on gifts and entertainment which can be found in the PRM compliance manual.

Rule 4: Anti-bribery/Kickback Policy

No Putnam employee shall pay, offer, or commit to pay any amount of consideration which might be, or appear to be, a bribe or kickback in connection with Putnam’s business.

COMMENT

Although the Rule does not specifically address political contributions (described in Rule 5), Putnam employees should be aware that it is against corporate policy to use company assets to fund political contributions of any sort, even where such contributions may be legal. No Putnam employee should offer or agree to make any political contributions (including political dinners and similar fundraisers) on behalf of Putnam, and no employee will be reimbursed by Putnam for such contributions made by the employee personally.

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Rule 5: Political Activities, Contributions, Solicitations, and Lobbying Policy

A. Corporate Contributions and Solicitations. Political activities of corporations such as Putnam are highly regulated, and corporate political contributions are largely prohibited. Accordingly, no contributions may be made with Putnam corporate funds to any political party or campaign, whether directly or by reimbursement of such a contribution, unless pre-approved by the Code of Ethics Officer. Employee contributions to any pending or proposed client of Putnam, regardless of whether the employee will seek reimbursement from Putnam for such contributions, must be pre-approved by the Code of Ethics Officer. Donations of Putnam property and of employee time when working for Putnam are prohibited. No Putnam employee may make any solicitation for, or endorsement of, any campaign or candidate using Putnam letterhead, referencing Putnam, or while on Putnam business.

B. Employee Personal Political Contributions. Employees are free to engage in political activities as long as they do not use Putnam assets, or state or imply that Putnam is involved in a campaign. Employees are subject to three restrictions as follows:

1. - -Some states and localities have laws that prohibit employees from making political contributions to candidates for state and local office if their employer has an investment management contract with, or is seeking one from, the state or locality. Accordingly, Putnam employees must pre-clear with the Code of Ethics Officer any contributions to candidates for any of the following offices:

• The office of State Treasurer of Connecticut or Vermont

• State or local offices in California, New Jersey, or Ohio

• Any local office in the city of Houston, Texas

2. - -Contributions to state and local officials with whom Putnam has a business relationship or from whom is seeking a business relationship must be pre-cleared with the Code of Ethics Officer.

3. - -Certain employees at PRM involved in the CollegeAdvantage program are restricted from making contributions to candidates for offices in Ohio under the rules of the Municipal Securities Rulemaking Board. These employees are separately identified and informed by Putnam’s Compliance Department of applicable requirements.

C. Government Official. Employees must obtain pre-approval from the Code of Ethics Officer prior to providing any gift (including meals, entertainment, transportation, or lodging) to any government official or employee.

D. Lobbying. Federal and state law imposes limits and registration requirements on efforts by individuals and companies to influence the passage of legislation or to obtain business from governments. Accordingly, Putnam employees should not engage in any lobbying activities without approval from Putnam’s Director of Government Relations. Lobbying does not include solicitation of investment management business through the ordinary course of business, such as responding to a Request For Proposal (RFP).

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COMMENTS

• Putnam has established a political action committee (PAC) that contributes to worthy candidates for political office. Any request received by a Putnam employee for a political contribution must be directed to Putnam’s Legal and Compliance Department.

• This Rule prohibits solicitation on personal letterhead by Putnam employees except as approved by the Code of Ethics Officer.

• Certain officers and employees of Putnam Retail Management (PRM) and other employees involved in Putnam’s College Advantage Section 529 Plan with Ohio Tuition Trust Authority are subject to special rules on political contributions. For questions on these requirements, please call the Code of Ethics Officer.

Rule 6: Confidentiality of Putnam Business Information

No unauthorized disclosure may be made by any employee or former employee of any trade secrets or proprietary information of Putnam or of any confidential information. No information regarding any Putnam client portfolio, actual or proposed securities trading activities of any Putnam client, or Putnam research shall be disclosed outside the Putnam organization unless doing so has a valid business purpose and is in accord with relevant procedures established by Putnam relating to such disclosures.

COMMENT

All information about Putnam and Putnam clients is strictly confidential. Putnam research information should not be disclosed without proper approval and never for personal gain.

Rule 7: Roles at Other Entities (Outside Business Affiliations)

No Putnam employee shall serve as employee, officer, director, trustee, or general partner of a corporation or entity other than Putnam, without prior written approval of the Code of Ethics Officer. Requests for a role at a publicly traded company are especially disfavored and are closely reviewed. Permission will be granted only in extenuating circumstances.

COMMENTS

If the request is approved, the employee must enter his profile in the Personal Trading Assistant under Disclosures – Outside Business Affiliations.

NASD-licensed employees under PRM also have an obligation to disclose outside business affiliations, new or terminated, with Putnam’s Licensing and Registration Department.

EXCEPTION

Charitable or Non-profit Exception. Putnam employees may serve as an officer, director, or trustee of a charitable or not-for-profit institution, provided that the employee abides by the Code of Ethics and the Policy Statements with respect to any investment activity for which she has any discretion or input as officer, director, or trustee. The pre-clearance and reporting requirements of the Code of Ethics do not apply to the trading activities of such charitable or not-for-profit institutions for which an employee serves as an officer, director, or trustee unless the employee is responsible for day-today portfolio management of the account.

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COMMENTS

• This Rule is designed to ensure that Putnam cannot be deemed an affiliate of any issuer of securities by virtue of service by one of its officers or employees as director or trustee.

• Positions with public companies are especially problematic and will normally not be approved.

• Certain charitable or not-for-profit institutions have assets (such as endowment funds or employee benefit plans) which require prudent investment. To the extent that a Putnam employee (because of her position as officer, director, or trustee of an outside entity) is charged with responsibility to invest such assets prudently, she may not be able to discharge that duty while simultaneously abiding by the spirit of the Code of Ethics and the Policy Statements. Employees are cautioned that they should not accept service as an officer, director, or trustee of an outside charitable or not-for-profit entity where such investment responsibility is involved, without seriously considering their ability to discharge their fiduciary duties with respect to such investments.

Rule 8: Role as Trustee or Fiduciary Outside of Putnam Investments

No Putnam employee shall serve as a trustee, an executor, a custodian, or any other fiduciary, or as an investment advisor or counselor for any account outside Putnam.

EXCEPTIONS

A. Charitable or Religious Exception. Putnam employees may serve as a fiduciary with respect to a religious or charitable trust or foundation, so long as the employee abides by the spirit of the Code of Ethics and the Policy Statements with respect to any investment activity over which he has any discretion or input. The pre-clearance and reporting requirements of the Code of Ethics do not apply to the trading activities of such a religious or charitable trust or foundation unless the employee is responsible for day-to-day portfolio management of the account.

B. Family Trust or Estate Exception. Putnam employees may serve as a fiduciary with respect to a family trust or estate, as long as the employee abides by all of the Rules of the Code of Ethics with respect to any investment activity over which he has any discretion.

COMMENT

The roles permissible under this Rule may carry with them the obligation to invest assets prudently. Once again, Putnam employees are cautioned that they may not be able to fulfill their duties in that respect while abiding by the Code of Ethics and the Policy Statements.

Rule 9: Investment Clubs

No Putnam employee may be a member of any investment club.

COMMENT

This Rule guards against the danger that a Putnam employee may be in violation of the Code of Ethics and the Policy Statements by virtue of his personal securities transactions in or through an entity that is not bound by the restrictions imposed by this Code of Ethics and the Policy Statements. Please note that this restriction also applies to the spouse of a Putnam employee and any relatives of a Putnam employee living in the same household as the employee, as their transactions are covered by the Code of Ethics (see page viii).

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Rule 10: Business Negotiations for Putnam Investments

No Putnam employee may become involved in a personal capacity in consultations or negotiations for corporate financing, acquisitions, or other transactions for outside companies (whether or not held by any Putnam client), nor negotiate nor accept a fee in connection with these activities without obtaining the prior written permission of the Chief Executive Officer of Putnam Investments.

Rule 11: Accurate Records

No employee may create, alter, or destroy (or participate in the creation, alteration, or destruction of) any record that is intended to mislead anyone or to conceal anything that is, or is reasonably believed to be, improper. In addition, all employees responsible for the preparation, filing, or distribution of any regulatory filings or public communications must ensure that such filings or communications are timely, complete, fair, accurate, and understandable.

COMMENTS

• In many cases, this is not only a matter of company policy and ethical behavior but also required by law. Our books and records must accurately reflect the transactions represented and their true nature. For example, records must be accurate as to the recipient of all payments; expense items, including personal expense reports, must accurately reflect the true nature of the expense. No unrecorded fund or asset shall be established or maintained for any reason.

• All financial books and records must be prepared and maintained in accordance with generally accepted accounting principles and Putnam’s existing accounting controls, to the extent applicable.

Rule 12: Family Members’ Conflict Policy

No employee or member of an employee’s immediate family shall have any direct or indirect personal financial interests in companies that do business with Putnam, unless such interest is disclosed and approved by the Code of Ethics Officer. Investment holdings in public companies that are not material to the employee are excluded from this prohibition. The Code also provides more detailed supplemental rules to address potential conflicts of interests that may arise if members of employees’ families are closely involved in doing business with Putnam.

Corporate Purchase of Goods and Services -- Putnam will not acquire goods and services from any firm in which a member of an employee’s immediate family serves as the sales representative in a senior management capacity or has an ownership interest with the supplier firm (excluding normal investment holdings in public companies) without permission from the Director of Procurement and the Code of Ethics Officer. Any employee who is aware of a proposal to purchase goods and services from a firm at which a member of the employee’s immediate family meets one of the previously mentioned conditions must notify the Director of Procurement and the Code of Ethics Officer.

Portfolio Trading -- Putnam will not allocate any trades for a portfolio to any firm that employs a member of an employee’s immediate family as a sales representative to Putnam (in a primary, secondary, or backup role). Any Putnam employee who is aware that an immediate family member serves as a broker-dealer’s sales representative to Putnam should inform the Code of Ethics Officer.

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Definition of Immediate Family -- “Immediate family” of an employee means (1) spouse or partner of the employee, (2) any child, sibling, or parent of an employee and any person married to a child, sibling, or parent of an employee, and (3) any other person who lives in the same household as the employee.

Rule 13: Affiliated Entities

Non-Putnam affiliates (NPAs), listed below in the last comment, provide investment advisory services. No employee shall:

(a) Directly or indirectly seek to influence the purchase, retention or disposition of, or exercise of voting consent, approval, or similar rights with respect to any portfolio security in any account or fund advised by the NPA and not by Putnam;

(b) Transmit any information regarding the purchase, retention or disposition of, or exercise of voting, consent, approval, or similar rights with respect to any portfolio security held in a Putnam or NPA client account to any personnel of the NPA;

(c) Transmit any trade secrets, proprietary information, or confidential information of Putnam to the NPA unless doing so has a valid business purpose and is in accord with any relevant procedures established by Putnam relating to such disclosures;

(d) Use confidential information or trade secrets of the NPA for the benefit of the employee, Putnam, or any other NPA; or

(e) Breach any duty of loyalty to the NPA derived from the employee’s service as a director or officer of the NPA.

COMMENTS

• Sections (a) and (b) of the Rule are designed to help ensure that the portfolio holdings of Putnam clients and clients of the NPA need not be aggregated for purposes of determining beneficial ownership under Section 13(d) of the Securities Exchange Act or applicable regulatory or contractual investment restrictions that incorporate such definition of beneficial ownership. Persons who serve as directors or officers of both Putnam and an NPA should take care to avoid even inadvertent violations of Section (b). Section (a) does not prohibit a Putnam employee who serves as a director or officer of the NPA from seeking to influence the modification or termination of a particular investment product or strategy in a manner that is not directed at any specific securities. Sections (a) and (b) do not apply when a Putnam affiliate serves as an advisor or sub-advisor to the NPA or one of its products, in which case normal Putnam aggregation rules apply.

• As a separate entity, any NPA may have trade secrets or confidential information that it would not choose to share with Putnam. This choice must be respected.

• When Putnam employees serve as directors or officers of an NPA, they are subject to common law duties of loyalty to the NPA, despite their Putnam employment. In general, this means that when performing their duties as NPA directors or officers, they must act in the best interest of the NPA and its shareholders. Putnam’s Legal and Compliance Department will assist any Putnam employee who is a director or officer of an NPA and has questions about the scope of his or her responsibilities to the NPA.

• Entities that are currently non-Putnam affiliates within the scope of this Rule are: Nissay Asset Management Co., Ltd., L.P., Thomas H. Lee Partners, L.P., Ampega Asset Management, GmbH, and PanAgora Asset Management, Inc.

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Rule 14: Computer System/Network Policies

No employee shall use computers, the Internet, e-mail, instant messaging, phones, fax machines and/or the mail service in a manner that is inconsistent with their use as set forth in Putnam’s Employee Handbook. No employee shall introduce a computer virus or computer code that may result in damage to Putnam’s information or computer systems.

COMMENT

Putnam’s policy statements relating to these matters are contained in the Computer System and Network Responsibilities section of the Employment Issues category within the Employee Handbook. The online Employee Handbook is located on www.ibenefitcenter.com.

Rule 15: CFA Institute Code of Ethics

All employees must follow and abide by the spirit of the Code of Ethics and the Standards of Professional Conduct of the CFA Institute. The text of the CFA Institute Code of Ethics and Standards of Professional Conduct are set forth in Appendix D.

Rule 16: Privacy Policy

Except as provided below, no employee may disclose to any outside organization or person any non-public personal information about any individual who is a current or former shareholder of any Putnam retail or institutional fund, or current or former client of a Putnam company. All employees shall follow the security procedures as established from time to time by a Putnam company to protect the confidentiality of all shareholder and client account information.

Except as Putnam’s Legal and Compliance Department may expressly authorize, no employee shall collect any non-public personal information about a prospective or current shareholder of a Putnam fund or prospective or current client of a Putnam company, other than through an account application (or corresponding information provided by the shareholder’s financial representative) or in connection with executing shareholder or client transactions, nor shall any information be collected other than the following: name, address, telephone number, Social Security number, and investment, broker, and transaction information.

EXCEPTIONS

A. Putnam Employees. Non-public personal information may be disclosed to a Putnam employee in connection with processing transactions or maintaining accounts for shareholders of a Putnam fund and clients of a Putnam company, to the extent that access to such information is necessary to the performance of that employee’s job functions.

B. Shareholder Consent Exception. Non-public personal information about a shareholder’s or client’s account may be provided to a non-Putnam organization at the specific request of the shareholder or client or with the shareholder’s or client’s prior written consent.

C. Broker or Advisor Exception. Non-public personal information about a shareholder’s or client’s account may be provided to the shareholder’s or client’s broker of record.

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D. Third-Party Service Provider Exception. Non-public personal information may be disclosed to a service provider that is not affiliated with a Putnam fund or Putnam company only when such disclosure is necessary for the service provider to perform the specific services contracted for, and only (a) if the service provider executes Putnam’s standard confidentiality agreement, or (b) pursuant to an agreement containing a confidentiality provision that has been approved by the Legal and Compliance Department. Examples of such service providers include proxy solicitors and proxy vote tabulators, mail services, and providers of other administrative services, and Information Services Division consultants who have access to non-public personal information.

COMMENTS

• Non-public personal information is any information that personally identifies a shareholder of a Putnam fund or client of a Putnam company and is not derived from publicly available sources. This privacy policy applies to shareholders or clients who are individuals, not institutions. However, as a general matter, all information that we receive about a shareholder of a Putnam fund or client of a Putnam company shall be treated as confidential. No employee may sell or otherwise provide shareholder or client lists or any other information relating to a shareholder or client to any marketing organization.

• All Putnam employees with access to shareholder or client account information must be trained in and follow Putnam’s security procedures designed to safeguard that information from unauthorized use. For example, a telephone representative must be trained in and follow Putnam’s security procedures to verify the identity of a caller requesting account information.

• Any questions regarding this privacy policy should be directed to Putnam’s Legal and Compliance Department. A violation of this policy will be subject to the sanctions imposed for violations of Putnam’s Code of Ethics.

• Employees must report any violation of this policy or any possible breach of the confidentiality of client information, whether intentional or accidental, to the managing director in charge of the employee’s business unit. Managing directors who are notified of such a violation or possible breach must immediately report it in writing to Putnam’s Chief Compliance Officer and, in the event of a breach of computerized data, Putnam’s Chief Technology Officer.

Rule 17: Anti-money Laundering Policy

No employee may engage in any money laundering activity or facilitate any money laundering activity through the use of any Putnam account or client account. Any situations giving rise to a suspicion that attempted money laundering may be occurring in any account must be reported immediately to the managing director in charge of the employee’s business unit. Managing directors who are notified of such a suspicion of money laundering activity must immediately report it in writing to Putnam’s Chief Compliance Officer and Chief Financial Officer.

Rule 18: Record Retention

All employees must comply with the record retention requirements applicable to the business unit. Employees should check with their managers or the Chief Administrative Officer of their division to determine what record retention requirements apply to their business unit.

The Code of Ethics incorporates any relevant requirements of the U.K. regulator, and the Financial Services Authority (FSA), and will be amended from time to time to reflect any U.K. regulatory changes as required.

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SECTION IV -- Special Rules for Officers and Employees of Putnam Investments Limited (PIL)

Rule 1

In situations subject to Section I.A., Rule 1 (Restricted List Personal Securities Transactions), Putnam Investments Limited (PIL) employees must obtain clearance via the PTA online system.

EXCEPTION

Government securities and other related bonds issued by member countries of the Organization for Economic Co-Operation and Development are not subject to pre-clearance rules.

IMPLEMENTATION

The position of the London Code of Ethics Administrator is held by the PIL Compliance Officer. All requests for clearances must be made through the PTA online system. Pre-clearance for trades of fixed-income securities must be made by calling the Boston Administrator.

Putnam’s Code of Ethics Administrator in Boston (the Boston Administrator) has also been designated the Deputy London Administrator of PIL and has been delegated the right to approve or disapprove personal securities transactions in accordance with the requirements of Section I.A. Therefore, approval from the Code of Ethics Administrator for PIL employees to make personal securities investments constitutes approval under the Code of Ethics.

Both the Boston and London Administrators may record clearances in PTA for inspection by senior management and regulators.

Rule 2

No PIL employee may trade with any broker-dealer unless that broker-dealer has sent a letter to the PIL Compliance Officer agreeing to deliver copies of trade confirmations and statements to PIL. No PIL employee may enter into any margin or any other special dealing arrangement with any broker-dealer without the prior written consent of the PIL Compliance Officer.

IMPLEMENTATION

PIL employees will be notified separately of this requirement once a year by the PIL Compliance Officer, and are required to provide an annual certification of compliance with the Rule.

All PIL employees must inform the PIL Compliance Officer of the names of all brokers-dealers with whom they trade prior to trading. The PIL Compliance Officer will send a letter to the broker(s) in question requesting them to agree to deliver copies of confirms to PIL. PIL employees may trade with a broker only when the PIL Compliance Officer has received the signed agreement from that broker.

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Rule 3

For purposes of the Code of Ethics, including Putnam’s Policy Statement on Insider Trading Prohibitions, PIL employees must also comply with Part V of the Criminal Justice Act 1993 on insider dealing.

IMPLEMENTATION

To ensure compliance with U.K. insider dealing legislation, PIL employees must observe the relevant procedures set forth in PIL’s Compliance Manual, a copy of which is sent to each PIL employee, and must sign an annual certification as to compliance.

Rule 4: Inducement Policy for All PIL Employees

See Appendix F: Inducement Policy for PIL Employees, and Appendix G: Record of Inducement for PIL Employees.

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SECTION V -- Reporting Requirements

Reporting of Personal Securities Transactions

Rule 1: Broker Confirmations and Statements

Each Putnam employee shall ensure that copies of all confirmations for securities transactions for personal brokerage accounts, and brokerage account statements are sent to the Putnam Compliance Department Code of Ethics Administrator. (For the purpose of this Rule, securities shall also include ETFs, futures, and other derivatives on broad-based market indexes excluded from the pre-clearance requirement.) Statements and confirmations are required for Putnam funds not held at Putnam or in a Putnam retirement plan, as well as for U.S. mutual funds sub-advised by Putnam.

IMPLEMENTATION

A. Putnam employees should contact the Code of Ethics Administrator for a 407 letter instructing the broker to mail copies of confirmations and statements to Putnam. It is the employees’ responsibility to follow up with the broker on a reasonable basis to ensure that instructions are being followed.

B. Upon hire, Putnam employees are required to establish their broker profiles in PTA.

C. Specific procedures apply to employees of PIL. Employees of PIL should contact the London Code of Ethics Administrator.

D. Failure of a broker-dealer to comply with the instructions of a Putnam employee to send confirmations shall be a violation by the Putnam employee of this Rule. Similarly, failure by an employee to report the existence of a personal account and, if the account is opened after joining Putnam, failure to obtain proper authorization to establish the account shall be a violation of this Rule.

E. Statements and confirmations must also be sent for members of an employee’s immediate family, including statements from a family member’s 401(k)/Profit Sharing Plan at another employer.

F. Employees are not required to provide broker confirmations and statements for MMC transactions in Putnam’s 401(k)/Profit Sharing and Stock Purchase Plan accounts.

COMMENTS

• Transactions for personal accounts is defined broadly to include more than transactions in accounts under an employee’s own name. (See Definitions.)

• Statements and confirmations are required for all personal securities transactions, whether or not exempted or excepted by this Code.

• To the extent that a Putnam employee has investment authority over securities transactions of a family trust or estate, confirmations of those transactions must also be made, unless the employee has received a prior written exception from the Code of Ethics Officer.

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Rule 2: Access Person – Quarterly Transaction Report

Every Access Person shall file a quarterly report within fifteen calendar days of the end of each quarter, recording all purchases and sales of securities for personal accounts as defined in the Definitions section. (For the purpose of this Rule, “securities” shall include exchange-traded funds (ETFs), futures, and any option on a security or securities index, including broad-based market indexes excluded from the pre-clearance requirement, and shall also include transactions in Putnam open-end funds if the account for the Putnam funds is not held at Putnam or in a Putnam retirement plan and for transactions in U.S. mutual funds sub-advised by Putnam.)

IMPLEMENTATION

It is mandatory that all Access Persons file a quarterly transaction report in the PTA online system. The form shall contain a representation that employees have complied fully with all provisions of the Code of Ethics.

The date for each transaction required to be disclosed in the quarterly report is the trade date for the transaction, not the settlement date.

Planned absences, i.e., vacations, leaves (other than certain medical leaves), or business trips, are not valid excuses for providing late reports. Failure to meet the deadline violates the Code’s rules and sanctions may be imposed.

COMMENT

If the requirement to file a quarterly report applies to you and you fail to report within the required 15-day period, monetary fines or harsher sanctions will be imposed. It is the responsibility of the employee to request an early report if he has knowledge of a planned absence, i.e., vacation, business trip, or leave.

Rule 3: Access Person - Initial/Annual Holdings Report

Access Persons must disclose their personal securities holdings in the Code of Ethics monitoring system, PTA, upon commencement of employment (within ten days of hire) and thereafter on an annual basis. These SEC requirements are mandatory and designed to facilitate the monitoring of personal securities transactions. Putnam’s Code of Ethics Administrator provides Access Persons with instructions regarding their submissions and certifications of these reports in PTA.

Non-Access Persons must disclose their brokerage accounts upon 30 days of hire.

Rule 4: Certifications

All employees are required to submit a certification in PTA annually attesting to compliance with all of the conditions of the Code of Ethics.

Rule 5: Roles at Other Entities

Upon approval of an outside business affiliation by the Code of Ethics Officer, employees must complete the Outside Business Affiliation profile in the Disclosure section of PTA.

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Rule 6: Reporting of Irregular Activity

If a Putnam employee suspects that fraudulent, illegal, or other irregular activity (including violations of the Code of Ethics) might be occurring at Putnam, the activity should be reported immediately to the managing director in charge of that employee’s business unit. Managing directors who are notified of any such activity must immediately report it in writing to Putnam’s Chief Financial Officer and Putnam’s Chief Compliance Officer.

An employee who does not feel comfortable reporting this activity to the managing director may instead contact the Chief Compliance Officer, the Putnam or MMC Ethics hotlines, or the Ombudsman.

Contact information for these hotlines is located on the PTA home page and on the Chief Compliance Officer’s intranet site.

Rule 7: Ombudsman

Putnam has established the office of the corporate ombudsman as a resource to help employees address legal or ethical issues in the workplace and to allow employees to voice concerns or seek clarity on issues. The Ombudsman provides a confidential, independent, and impartial source to employees to discuss potential violations of law or of company standards without fear of retribution, and serves as a neutral party with no vested interest in a particular outcome. The Ombudsman is available on an anonymous basis by calling 1-866-ombuds7 (866-662-8377) or by calling 1-617-760-8246.

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SECTION VI -- Education Requirements

Every Putnam employee has an obligation to fully understand the rules and requirements of the Code of Ethics.

Rule 1: Distribution of Code

A copy of the Code of Ethics will be distributed to every Putnam employee at least annually. All Access Persons will be required to certify annually that they have read, understood, and will comply with the provisions of the Code of Ethics, including the Code’s Policy Statement Concerning Insider Trading Prohibitions.

Rule 2: Annual Training Requirement

Every employee will be required to complete training on Putnam’s Code of Ethics on an annual basis.

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SECTION VII -- Compliance and Appeal Procedures

A. Restricted List

The Code of Ethics Administrator will maintain the Restricted List. No employee may engage in a personal securities transaction without prior clearance on any day, even if the employee believes that the trade will be subject to an exception.

B. Consultation of Restricted List

It is the responsibility of each employee to pre-clear through the pre-clearance system, or consult with the Code of Ethics Administrator, prior to engaging in a personal securities transaction, to determine if the security he proposes to trade is on the Restricted List and, if so, whether it is subject to the large-cap exception. The pre-clearance system and the Code of Ethics Administrator will be able to tell the employee whether a security is on the Restricted List. No other information about the Restricted List is available through the pre-clearance system.

C. Request for Determination

An employee who has a question concerning the applicability of the Code of Ethics to a particular situation shall request a determination from the Code of Ethics Officer before engaging in the conduct or personal securities transaction about which he has a question.

If the question pertains to a personal securities transaction, the request shall state for whose account the transaction is proposed, the relationship of that account to the employee, the security proposed to be traded, the proposed price and quantity, the entity with whom the transaction will take place (if known), and any other information or circumstances of the trade that could have a bearing on the Code of Ethics Officer’s determination. If the question pertains to other conduct, the request for determination shall give sufficient information about the proposed conduct to assist the Code of Ethics Officer in ascertaining the applicability of the Code. In every instance, the Code of Ethics Officer may request additional information, and may decline to render a determination if the information provided is insufficient.

The Code of Ethics Officer shall make every effort to render a determination promptly.

No perceived ambiguity in the Code of Ethics shall excuse any violation. Any person who believes the Code to be ambiguous in a particular situation should request a determination from the Code of Ethics Officer.

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D. Request for Ad Hoc Exemption

Any employee who wishes to obtain an ad hoc exemption under Section I.D., Rule 2, should request from the Code of Ethics Officer an exemption in writing in advance of the conduct or transaction sought to be exempted. In the case of a personal securities transaction, the request for an ad hoc exemption shall give the same information about the transaction required in a request for determination under Section VII.C., and should state why the proposed personal securities transaction would be unlikely to affect a highly institutional market, or is unrelated economically to securities to be purchased, sold, or held by any Putnam client. In the case of other conduct, the request shall give information sufficient for the Code of Ethics Officer to ascertain whether the conduct raises questions of propriety or conflict of interest, real or apparent.

The Code of Ethics Officer shall make reasonable efforts to promptly render a written determination concerning the request for an ad hoc exemption.

E. Appeal to Code of Ethics Officer with Respect to Restricted List

If an employee ascertains that a security that he wishes to trade for his personal account appears on the Restricted List, and thus the transaction is prohibited, he may appeal the prohibition to the Code of Ethics Officer by submitting a written memorandum containing the same information as would be required in a request for a determination. The Code of Ethics Officer shall make every effort to respond to the appeal promptly.

F. Information Concerning Identity of Compliance Personnel

The names of Code of Ethics personnel are available by contacting the Legal and Compliance Department and will be published on Putnam’s intranet site.

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SECTION VIII -- Sanctions

Sanction Guidelines

The Code of Ethics Oversight Committee is responsible for setting sanctions policies for violating the Code. The Committee has adopted the following minimum monetary sanctions for violations of the Code. These sanctions apply even if the exception results from inadvertence rather than intentional misbehavior. The Code of Ethics Officer is authorized to impose the minimum sanction on employees without further Committee action. However, the sanctions noted below are only minimums and the Committee reserves the right to impose additional sanctions such as higher monetary sanctions, trading bans, suspension, or termination of employment as it determines to be appropriate.

A. The minimum sanction for a violation of the following Rules is disgorgement of any profits or payment of avoided losses and the following payments:

Section I.A., Rule 1 (Pre-clearance and Restricted List)Section I.B., Rule 1 (Short selling)Section I.B., Rule 2 (IPOs)Section I.B., Rule 3 (Private Placements)Section I.B., Rule 4 (Trading with Inside Information)Section I.B., Rules 6-8 (Holding and Trading of Putnam Funds)Section II, Rule 2 (7-Day Rule)Section II, Rule 3 (Blackout Rule)Section II, Rule 4 (Contra-Trading Rule)Section II, Rule 5 (Trading for Personal Benefit)

Officer Level	SMD/MD	SVP/VP	AVP/non-officer
1st violation	$ 500	$250	$ 50
2nd	$1,000	$500	$100
3rd	Minimum monetary sanction as above with ban on all new personal
	individual investments.

B. The minimum sanction for violations of all other Rules in the Code is as follows:

Officer Level	SMD/MD	SVP/VP	AVP/non-officer
1st violation	$100	$ 50	$25
Subsequent	$200	$100	$50

The reference period for determining whether a violation is initial or subsequent will be five years.

NOTE

The Committee’s belief that an employee has violated the Code of Ethics intentionally will result in more severe sanctions than outlined in the guidelines above. The Code of Ethics Oversight Committee retains the right to increase or decrease the sanctions for a particular violation in light of the circumstances.

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APPENDIX A: Insider Trading Prohibitions Policy Statement

Putnam has always forbidden trading by its employees on material non-public information (inside information). Tough federal laws make it important for Putnam to state that prohibition in the strongest possible terms, and to establish, maintain, and enforce written policies and procedures to prevent the use of material non-public information.

Unlawful trading while in possession of inside information can be a crime. Federal law provides that an individual convicted of trading on inside information may go to jail for a period of time. There is also significant monetary liability for an inside trader; the Securities and Exchange Commission can seek a court order requiring a violator to pay back profits, as well as penalties substantially greater than those profits. In addition private plaintiffs can seek recovery for harm suffered by them. The inside trader is not the only subject to liability. In certain cases, controlling persons of inside traders, including supervisors of inside traders or Putnam itself, can be liable for large penalties.

Section A. of this Policy Statement contains rules concerning inside information. Section B. contains a discussion of what constitutes unlawful insider trading.

Neither material, non-public information nor unlawful insider trading is easy to define. Section B. of this Policy Statement gives a general overview of the law in this area. However, the legal issues are complex and must be resolved by the Code of Ethics Officer. If an employee has any doubt as to whether she has received material, non-public information, she must consult with the Code of Ethics Officer prior to using that information in connection with the purchase or sale of a security for his own account or the account of any Putnam client, or communicating the information to others. A simple rule of thumb is if you think the information is not available to the public at large, don’t disclose it to others and don’t trade securities to which the inside information relates.

An employee aware of, or in possession of, inside information must report it immediately to the Code of Ethics Officer. If an employee has failed to consult the Code of Ethics Officer, Putnam will not excuse employee misuse of inside information on the grounds that the employee claims to have been confused about this Policy Statement or the nature of the information in his possession.

If Putnam determines, in its sole discretion, that an employee has failed to abide by this Policy Statement, or has engaged in conduct that raises a significant question concerning insider trading, he will be subject to disciplinary action, including termination of employment.

There are no exceptions to this policy statement and no one is exempt.

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APPENDIX A: DEFINITIONS: Insider Trading

Code of Ethics Administrator

The individual designated by the Code of Ethics Officer to assume responsibility for day-to-day, non-discretionary administration of this Policy Statement. The Code of Ethics Administrator is Laura Rose.

Code of Ethics Officer

The Putnam officer who has been assigned the responsibility of enforcing and interpreting this Code. The Code of Ethics Officer shall be the Chief Compliance Officer or such other person as is designated by the Chief Executive Officer of Putnam Investments. If the Code of Ethics Officer is unavailable, the Deputy Code of Ethics Officer shall act in his stead. The Code of Ethics Officer is Tony Ruys de Perez. The Deputy Code of Ethics Officer is Kathleen Griffin.

Immediate family Spouse, partner, minor children, or other relatives living in the same household as the Putnam employee.

Purchase or sale of a security Any acquisition or transfer of any interest in the security for direct or indirect consideration, including the writing of an option.

Putnam Any or all of Putnam Investments Trust, and its subsidiaries, any one of which shall be a Putnam company.

Putnam client Any client of the Putnam mutual funds, or any advisory, trust, or other client for whom Putnam manages money.

Putnam employee (or employee) Any employee of Putnam.

Security Anything defined as a security under federal law. The term includes any type of equity or debt security, any interest in a business trust or partnership, and any rights relating to a security, such as put and call options, warrants, convertible securities, and securities indexes. (Note: The definition of security in this Insider Trading Prohibitions Policy Statement varies significantly from that in the Code of Ethics. For example, the definition in this Policy Statement specifically includes all securities of any type.)

Transaction for a personal account (or personal securities transaction)

Securities transactions: (a) for the personal account of any employee; (b) for the account of a member of the immediate family of any employee; (c) for the account of a partnership in which a Putnam employee or immediate family member is a partner with investment discretion; (d) for the account of a trust in which a Putnam employee or immediate family member is a trustee with investment discretion; (e) for the account of a closely held corporation in which a Putnam employee or immediate family member holds shares and for which he has investment discretion; and (f ) for any account other than a Putnam client account that receives investment advice of any sort from the employee or immediate family member, or as to which the employee or immediate family member has investment discretion. Officers and employees of PIL must also consult the relevant procedures on compliance with U.K. insider dealing legislation set forth in PIL’s Compliance Manual (See Rule 3 of Section IV of the Code of Ethics).

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APPENDIX A -- SECTION I: Rules Concerning Inside Information

Rule 1: Inside Information

No Putnam employee shall purchase or sell any security listed on the Inside Information List (the Red List) either for his personal account or for a Putnam client.

IMPLEMENTATION

When an employee contacts the Code of Ethics Administrator seeking clearance for a personal securities transaction, the Code of Ethics Administrator’s response as to whether a security appears on the Restricted List will include securities on the Red List.

COMMENT

This Rule is designed to prohibit any employee from trading a security while Putnam may have inside information concerning that security or the issuer. Every trade, whether for a personal account or for a Putnam client, is subject to this rule.

Rule 2: Material Non-public Information

No Putnam employee shall purchase or sell any security, either for a personal account or for the account of a Putnam client, while in possession of material, non-public information concerning that security or the issuer, without the prior written approval of the Code of Ethics Officer.

IMPLEMENTATION

In order to obtain prior written approval of the Code of Ethics Officer, a Putnam employee should follow the reporting steps prescribed in Rule 3.

COMMENTS

• Rule 1 concerns the conduct of an employee when Putnam possesses material, non-public information. Rule 2 concerns the conduct of an employee who herself possesses material, non-public information about a security that is not yet on the Red List.

• If an employee has any question as to whether information she possesses is material and/or non-public information, she must contact the Code of Ethics Officer immediately in accordance with Rule 3 prior to purchasing or selling any security related to the information or communicating the information to others. The Code of Ethics Officer shall have the sole authority to determine what constitutes material, non-public information for the purposes of this Policy Statement.

Rule 3: Reporting of Material Non-public Information

Any Putnam employee who believes he is aware of or has received material, non-public information concerning a security or an issuer shall immediately report the information to the Code of Ethics Officer, the Deputy Code of Ethics Officer, or in their absence, a lawyer in the Putnam Legal and Compliance Department and to no one else. After reporting the information, the Putnam employee shall comply strictly with Rule 2 by not trading in the security without the prior written approval of the Code of Ethics Officer and shall (a) take precautions to ensure the continued confidentiality of the information and (b) refrain from communicating the information in question to any person.

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IMPLEMENTATION

A. In order to make any use of potential material non-public information, including purchasing or selling a security or communicating the information to others, an employee must communicate that information to the Code of Ethics Officer in a way designed to prevent the spread of such information. Once the employee has reported potential material non-public information to the Code of Ethics Officer, the Code of Ethics Officer will evaluate whether information constitutes material non-public information, and whether a duty exists that makes use of such information improper. If the Code of Ethics Officer determines either (a) that the information is not material or is public, or (b) that use of the information is proper, he will issue a written approval to the employee specifically authorizing trading while in possession of the information, if the employee so requests. If the Code of Ethics Officer determines (a) that the information may be nonpublic and material, and (b) that use of such information may be improper, he will place the security that is the subject of such information on the Red List.

B. An employee who reports potential inside information to the Code of Ethics Officer should expect that the Code of Ethics Officer will need significant information, and time to gather such information, to make the evaluation, including information about (a) the manner in which the employee acquired the information, and (b) the identity of individuals to whom the employee has revealed the information, or who have otherwise learned the information. In appropriate situations, the Code of Ethics Officer will normally place the affected security or securities on the Red List pending the completion of his evaluation.

C. If an employee possesses documents, disks, or other materials containing the potential inside information, an employee must take precautions to ensure the confidentiality of the information in question. Those precautions include (a) putting documents containing such information out of the view of a casual observer, and (b) securing files containing such documents or ensuring that computer files reflecting such information are secure from viewing by others.

D. Members of the executive board of directors and members of the Chief Financial Officer’s staff may not trade securities of MMC in the period from the end of each calendar quarter to the date of announcement of MMC’s earnings for such quarter.

COMMENT

While all employees must pre-clear trades of MMC securities and make sure they are not in possession of material inside information about MMC when trading, certain employees who may receive information about Putnam’s earnings are subject to the rules above concerning trading blackout periods.

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APPENDIX A -- SECTION II: Overview of Insider Trading

Introduction

This section of the Policy Statement provides guidelines for employees as to what may constitute inside information. It is possible that in the course of her employment, an employee may receive inside information. No employee should misuse that information, either by trading for her own account or by communicating the information to others.

What constitutes unlawful insider trading?

The basic definition of unlawful insider trading is trading on material non-public information (also called inside information) by an individual who has a duty not to take advantage of the information. The following sections help explain the definition.

What is material information?

Trading on inside information is not a basis for liability unless the information is material. Information is material if a reasonable person would attach importance to the information in determining his course of action with respect to a security. Information that is reasonably likely to affect the price of a company’s securities is material, but effect on price is not the sole criterion for determining materiality. Information that employees should consider material includes, but is not limited to, dividend changes, earnings estimates, changes in previously released earnings estimates, reorganization, recapitalization, asset sales, plans to commence a tender offer, merger or acquisition proposals or agreements, major litigation, liquidity problems, significant contracts, and extraordinary management developments.

Material information does not have to relate to a company’s business. For example, a court considered as material certain information about the contents of a forthcoming newspaper column that was expected to affect the market price of a security. In that case, a reporter for the Wall Street Journal was found criminally liable for disclosing to others the dates that reports on various companies would appear in the Journal’s “Heard on the Street” column and whether those reports would be favorable or not.

What is non-public information?

Information is non-public until it has been effectively communicated to, and sufficient opportunity has existed for it to be absorbed by, the marketplace. One must be able to point to some fact to show that the information is generally public. For example, information found in a report filed with the Securities and Exchange Commission, or appearing in Dow Jones, Reuters, the Wall Street Journal, or other publications of general circulation would be considered public.

Who has a duty not to “take advantage” of inside information?

Unlawful insider trading occurs only if there is a duty not to take advantage of material non-public information. When there is no such duty, it is permissible to trade while in possession of such information. Questions as to whether a duty exists are complex, fact specific, and must be answered by a lawyer. If you have any doubt, err on the side of caution.

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Insiders and Temporary Insiders Corporate insiders have a duty not to take advantage of inside information. The concept of insider is broad. It includes officers, directors, and employees of a corporation. In addition, a person can be a temporary insider if she enters into a special confidential relationship with a corporation and, as a result, is given access to information concerning the corporation’s affairs. A temporary insider can include, among others, accounting firms, consulting firms, law firms, banks, and the employees of such organizations. Putnam would generally be a temporary insider of a corporation it advises or for which it performs other services, because typically Putnam clients expect Putnam to keep any information disclosed to it confidential.

EXAMPLE

An investment advisor to the pension fund of a large publicly traded corporation, Acme, Inc., learns from an Acme employee that Acme will not be making the minimum required annual contribution to the pension fund because of a serious downturn in Acme’s financial situation. The information conveyed is material and non-public.

COMMENT

Neither the investment advisor, its employees, nor its clients can trade on the basis of that information, because the investment advisor and its employees could be considered temporary insiders of Acme.

Misappropriators Certain people who are not insiders (or temporary insiders) also have a duty not to deceptively take advantage of inside information. Included in this category is an individual who misappropriates (or takes for his own use) material non-public information in violation of a duty owed either to the corporation that is the subject of inside information or some other entity. Such a misappropriator can be held liable if he trades while in possession of that material non-public information.

EXAMPLE

The Chief Investment Officer of Acme, Inc., is aware of Acme’s plans to engage in a hostile takeover of Profit, Inc. The proposed hostile takeover is material and non-public.

COMMENT

The Chief Investment Officer of Acme cannot trade in Profit, Inc.’s stock for his own account. Even though he owes no duty to Profit, Inc., or its shareholders, he owes a duty to Acme not to take advantage of the information about the proposed hostile takeover by using it for his personal benefit.

Tippers and Tippees A person (the tippee) who receives material non-public information from an insider or misappropriator (the tipper) has a duty not to trade while in possession of that information if he knew, or should have known, that the information was provided by the tipper for an improper purpose and in breach of a duty owed by the tipper. In this context, it is an improper purpose for a person to provide such information for personal benefit.

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EXAMPLE

The Chief Executive Officer of Acme, Inc., tells his daughter that negotiations concerning a previously announced acquisition of Acme have been terminated. This news is material and, at the time the father tells his daughter, non-public. The daughter sells her shares of Acme.

COMMENT

The father is a tipper because he has a duty to Acme and its shareholders not to take advantage of the information concerning the breakdown of negotiations, and he has conveyed the information for an improper purpose. The daughter is a tippee and is liable for trading on inside information because she knew, or should have known, that her father was conveying the information to her for his personal benefit, and that her father had a duty not to take advantage of Acme information.

A person can be a tippee even if he did not learn the information directly from the tipper, but learned it from a previous tippee.

EXAMPLE

An employee of a law firm that works on mergers and acquisitions learns at work about impending acquisitions. She tells her friend and her friend’s stockbroker about the upcoming acquisitions on a regular basis. The stockbroker tells the brother of a client on a regular basis, who in turn tells two friends, A and B. A and B buy shares of the companies being acquired before the public announcement of the acquisition, and regularly profit from such purchases. A and B do not know the employee of the law firm. They do not, however, ask about the source of the information.

COMMENT

A and B, although they have never heard of the tipper, are tippees because they did not ask about the source of the information, even though they were experienced investors, and were aware that the “tips” they received from this particular source were accurate.

Who can be liable for insider trading?

The categories of individuals discussed above (insiders, temporary insiders, misappropriators, or tippees) can be liable if they trade while in possession of material non-public information.

In addition, individuals other than those who actually trade on inside information can be liable for trades of others. A tipper can be liable if (a) he provided the information in exchange for a personal benefit in breach of a duty, and (b) the recipient of the information (the tippee) traded while in possession of the information.

Most importantly, a controlling person can be liable if the controlling person knew or recklessly disregarded the fact that the controlled person was likely to engage in misuse of inside information and failed to take appropriate steps to prevent it. Putnam is a controlling person of its employees. In addition, certain supervisors may be controlling persons of those employees they supervise.

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EXAMPLE

A supervisor of an analyst learns that the analyst has, over a long period of time, secretly received material inside information from Acme, Inc.’s Chief Investment Officer. The supervisor learns that the analyst has engaged in a number of trades for his personal account on the basis of the inside information. The supervisor takes no action.

COMMENT

Even if he is not liable to a private plaintiff, the supervisor can be liable to the Securities and Exchange Commission for a civil penalty of up to three times the amount of the analyst’s profit.

Penalties for insider trading

Penalties for misuse of inside information are severe, both for individuals involved in such unlawful conduct and their employers. A person who violates the insider trading laws can be subject to some or all of the types of penalties below, even if he does not personally benefit from the violation. Penalties include:

• Jail sentences, criminal monetary penalties

• Injunctions permanently preventing an individual from working in the securities industry

• Injunctions ordering an individual to disgorge profits obtained from unlawful insider trading

• Civil penalties substantially greater than the profit gained or loss avoided by the trader, even if the individual paying the penalty did not trade or did not benefit personally

• Civil penalties for the employer or other controlling person

• Damages in the amount of actual losses suffered by other participants in the market for the security at issue

Regardless of whether penalties or money damages are sought by others, Putnam will take whatever action it deems appropriate, including dismissal, if Putnam determines, in its sole discretion, that an employee appears to have committed any violation of this Policy Statement, or to have engaged in any conduct which raises significant questions about whether an insider trading violation has occurred.

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APPENDIX B: Policy Statement Regarding Employee Trades in Shares of Putnam Closed-End Funds

Pre-clearance

Any purchase or sale of Putnam closed-end fund shares by a Putnam employee must be pre-cleared with the Code of Ethics Administrator. A list of the closed-end funds can be obtained from the Code of Ethics Administrator. The PTA system is not available for Putnam closed-end fund clearance.

Reporting

As with any purchase or sale of a security, duplicate confirmations of all such purchases and sales must be forwarded to the Code of Ethics Officer by the broker-dealer utilized by an employee. If you are required to file a quarterly report of all personal securities transactions, this report should include all purchases and sales of closed-end fund shares.

Special Rules Applicable to Managing Directors of Putnam Investment Management, LLC and officers of the Putnam Funds.

Please be aware that managing directors of Putnam Investment Management, Inc., the investment manager of the Putnam mutual funds, and officers of the Putnam Funds will not receive clearance to engage in any combination of purchase and sale, or sale and purchase, of the shares of a given closed-end fund within six months of each other. Therefore, purchases should be made only if you intend to hold the shares more than six months; no sales of fund shares should be made if you intend to purchase additional shares of that same fund within six months.

You are also required to file certain forms with the Securities and Exchange Commission in connection with purchases and sales of Putnam closed-end funds. Please contact the Code of Ethics Officer Administrator for further information. Please contact the Code of Ethics Officer or Deputy Code of Ethics Officer if there are any questions regarding these matters.

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APPENDIX C: Contra-Trading Rule Clearance Form

To: Code of Ethics Officer

From: _____________________________________________ ____________________________

Date:  __________________________________________ _______________________________

Re: Personal Securities Transaction of_________________ ______________________________

This serves as prior written approval of the personal securities transaction described below:

Name of portfolio manager contemplating personal trade: ________________________________

Security to be traded: ___________________________ _________________________________

Amount to be traded:

_____________________________________________________________________

Fund holding securities:

____________________________________________________________________

Amount held by fund:

_____________________________________________________________________

Reason for personal trade:

__________________________________________________________________

Specific reason sale of securities is inappropriate for fund: ________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________

(Please attach additional sheets if necessary.)

CIO approval:                        ____________________ Date:

Legal/compliance approval:    ____________________ Date:

44

APPENDIX D: CFA Institute Code of Ethics and Standards of Professional Conduct

The CFA Institute Code of Ethics and Standards of Professional Conduct (Code and Standards) are fundamental to CFA Institute’s values and essential to achieving its mission to lead the investment profession globally by setting high standards of education, integrity, and professional excellence. High ethical standards are critical to maintaining the public’s trust in financial markets and in the investment profession.

Since their creation in the 1960s, the Code and Standards have promoted the integrity of CFA Institute members and served as a model for measuring the ethics of investment professionals globally, regardless of job function, cultural differences, or local laws and regulations. All CFA Institute members (including holders of the Chartered Financial Analyst® (CFA®) designation) and CFA candidates must abide by the Code and Standards and are encouraged to notify their employer of this responsibility. Violations may result in disciplinary sanctions by CFA Institute. Sanctions can include revocation of membership, candidacy in the CFA Program, and the right to use the CFA designation.

The Code of Ethics

Members of CFA Institute (including Chartered Financial Analyst® (CFA®) charterholders) and candidates for the CFA designation (“Members and Candidates”) must:

• Act with integrity, competence, diligence, and respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.

• Place the integrity of the investment profession and the interests of clients above their own personal interests.

• Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities.

• Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.

• Promote the integrity of, and uphold the rules governing, capital markets.

• Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.

Standards of Professional Conduct

I. PROFESSIONALISM

A. Knowledge of the Law. Members and Candidates must understand and comply with all applicable laws, rules, and regulations (including the CFA Institute Code of Ethics and Standards of Professional Conduct) of any government, regulatory organization, licensing agency, or professional association governing their professional activities. In the event of conflict, Members and Candidates must comply with the more strict law, rule, or regulation. Members and Candidates must not knowingly participate or assist in and must dissociate from any violation of such laws, rules, or regulations.

45

B. Independence and Objectivity. Members and Candidates must use reasonable care and judgment to achieve and maintain independence and objectivity in their professional activities. Members and Candidates must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another’s independence and objectivity.

C. Misrepresentation. Members and Candidates must not knowingly make any misrepresentations relating to investment analysis, recommendations, actions, or other professional activities.

D. Misconduct. Members and Candidates must not engage in any professional conduct involving dishonesty, fraud, or deceit, or commit any act that reflects adversely on their professional reputation, integrity, or competence.

II. INTEGRITY OF CAPITAL MARKETS

A. Material Non-public Information. Members and Candidates who possess material, non-public information that could affect the value of an investment must not act or cause others to act on the information.

B. Market Manipulation. Members and Candidates must not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants.

III.DUTIES TO CLIENTS

A. Loyalty, Prudence, and Care. Members and Candidates have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgment. Members and Candidates must act for the benefit of their clients and place their clients’ interests before their employer’s or their own interests. In relationships with clients, Members and Candidates must determine applicable fiduciary duty and must comply with such duty to persons and interests to whom it is owed.

B. Fair Dealing. Members and Candidates must deal fairly and objectively with all clients when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities.

C. Suitability.

1. When Members and Candidates are in an advisory relationship with a client, they must:

a. Make a reasonable inquiry into a client’s or prospective clients’ investment experience, risk and return objectives, and financial constraints prior to making any investment recommendation or taking investment action and must reassess and update this information regularly.

b. Determine that an investment is suitable to the client’s financial situation and consistent with the client’s written objectives, mandates, and constraints before making an investment recommendation or taking investment action.

c. Judge the suitability of investments in the context of the client’s total portfolio.

2. When Members and Candidates are responsible for managing a portfolio to a specific mandate, strategy, or style, they must only make investment recommendations or take investment actions that are consistent with the stated objectives and constraints of the portfolio.

46

D. Performance Presentation. When communicating investment performance information, Members or Candidates must make reasonable efforts to ensure that it is fair, accurate, and complete.

E. Preservation of Confidentiality. Members and Candidates must keep information about current, former, and prospective clients confidential unless:

1. The information concerns illegal activities on the part of the client or prospective client.

2. Disclosure is required by law.

3. The client or prospective client permits disclosure of the information.

IV. DUTIES TO EMPLOYERS

A. Loyalty. In matters related to their employment, Members and Candidates must act for the benefit of their employer and not deprive their employer of the advantage of their skills and abilities, divulge confidential information, or otherwise cause harm to their employer.

B. Additional Compensation Arrangements. Members and Candidates must not accept gifts, benefits, compensation, or consideration that competes with, or might reasonably be expected to create a conflict of interest with, their employer’s interest unless they obtain written consent from all parties involved.

C. Responsibilities of Supervisors. Members and Candidates must make reasonable efforts to detect and prevent violations of applicable laws, rules, regulations, and the Code and Standards by anyone subject to their supervision or authority.

V. INVESTMENT ANALYSIS, RECOMMENDATIONS, AND ACTION

A. Diligence and Reasonable Basis. Members and Candidates must:

1. Exercise diligence, independence, and thoroughness in analyzing investments, making investment recommendations, and taking investment actions.

2. Have a reasonable and adequate basis, supported by appropriate research and investigation, for any investment analysis, recommendation, or action.

B. Communication with Clients and Prospective Clients. Members and Candidates must:

1. Disclose to clients and prospective clients the basic format and general principles of the investment processes used to analyze investments, select securities, and construct portfolios, and must promptly disclose any changes that might materially affect those processes.

2. Use reasonable judgment in identifying which factors are important to their investment analysis, recommendations, or actions and include those factors in communications with clients and prospective clients.

3. Distinguish between fact and opinion in the presentation of investment analysis and recommendations.

C. Record Retention. Members and Candidates must develop and maintain appropriate records to support their investment analysis, recommendations, actions, and other investment-related communications with clients and prospective clients.

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VI. CONFLICTS OF INTEREST

A. Disclosure of Conflicts. Members and Candidates must make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer. Members and Candidates must ensure that such disclosures are prominent, are delivered in plain language, and communicate the relevant information effectively.

B. Priority of Transactions. Investment transactions for clients and employers must have priority over investment transactions in which a Member or Candidate is the beneficial owner.

C. Referral Fees. Members and Candidates must disclose to their employer, clients, and prospective clients, as appropriate, any compensation, consideration, or benefit received by, or paid to, others for the recommendation of products or services.

VII. RESPONSIBILITIES AS A CFA INSTITUTE MEMBER OR CFA CANDIDATE

A. Conduct as Members and Candidates in the CFA Program. Members and Candidates must not engage in any conduct that compromises the reputation or integrity of the CFA Institute or the CFA designation or the integrity, validity, or security of the CFA examinations.

B. Reference to the CFA Institute, the CFA designation, and the CFA Program. When referring to the CFA Institute, CFA Institute membership, the CFA designation, or candidacy in the CFA Program, Members and Candidates must not misrepresent or exaggerate the meaning or implications of membership in the CFA Institute, holding the CFA designation, or candidacy in the CFA Program.

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APPENDIX E: Report of Entertainment Form

This form must be filed with the Putnam’s Legal and Compliance Department and sanctions may apply if received after 10 business days of attending an event. Planned absences, i.e., vacations, leaves (other than certain medical leaves), or business trips are not valid excuses for providing late reports. Failure to meet the deadline violates the Code’s rules and sanctions may be imposed.

Send report to:
Jonathan Ramsey
Compliance Coordinator
COE Mailstop A-16

OR

Attach to an e-mail to:
Jonathan_Ramsey@putnam.com

Name of
employee:_______________________________________________________________________

Name of party providing entertainment:

Firm:

__________________________________________________________________________________

Person:

________________________________________________________________________________

Date of entertainment:

____________________________________________________________________

Describe entertainment provided:

___________________________________________________________
(e.g., name and location of restaurant, sporting, or cultural event)

Value of entertainment (excluding meals): ____________________________________________

Signature: ______________________________________________   Date:
___________________________

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APPENDIX F -- Inducement Policy for Putnam Investments Limited (PIL) Employees

Inducements

Putnam Investments Limited has adopted the following procedures to enable it to comply with, and demonstrate compliance with, the requirements in this area:

All gifts, business meals, entertainment, or other inducements received by any employee must be reported on the appropriate forms to the PIL Compliance Officer within ten days of receipt. PIL’s policy limits gifts or business meals to a value of £100 (150 euros or equivalent) and entertainment to a value of £150 (225 euros or equivalent). Gifts, business meals, and entertainment that exceed these limits should be politely declined, explaining that PIL’s internal policies will not permit a breach of these limits.

There may be rare occasions where you are unexpectedly offered a gift or business meal or are entertained where the value exceeds the limits and it would be very discourteous (to a prospect/client) to decline, or difficult to pay part of the bill yourself (such as in a members’ dining club). In these circumstances the gift should be handed in to the PIL Compliance Officer, who will arrange to give it to charity, or the entertainment reported immediately to the PIL Compliance Officer with an explanation of the circumstances.

The policy regarding gifts, business meals, entertainment, or other inducements for giving or receiving is as follows. Where the gift or business meal is below £100 (150 euros or equivalent) or the entertainment is below £150 (225 euros or equivalent) for any individual, no pre-clearance is necessary. Above these levels, pre-clearance is required from the PIL Compliance Officer. If in doubt as to whether limits might be exceeded, please err on the side of caution and seek pre-clearance.

Anything above £25 (40 euros or equivalent) should be reported on the appropriate forms to the PIL Compliance Officer within ten days, who will review these on a monthly basis.

Anything below £25 (40 euros or equivalent), e.g., dealer gifts, a casual drink, or a snack, etc., need not be reported.

Where a working lunch is provided as part of an Analyst’s Day or Management Day, report this event and note the value as £0. This ensures that there is no potential for conflicts of interest and avoids guestimates of the cost.

No more than six entertainment events per year and no more than two events may be accepted from a single source.

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The record will contain details of:

the individuals concerned (from both PIL and the other party);

the nature and circumstances of the inducement;

the date; and

the approximate cost, if offered by PIL, although if it’s an in-house lunch/dinner, a statement to that effect will suffice.

The frequency and nature of any gifts, business meals, entertainment, or other inducement given or received, together with the names of those individuals entertained, is monitored periodically by the PIL Compliance Officer, and that monitoring is evidenced.

Where any deadlines or limits are exceeded, these will be reported to the Code of Ethics Officer on a monthly basis and sanctions may apply.

A template on which to record details of inducements given can be obtained from the PIL Compliance Officer.

Employees are also required to make an annual declaration that either they have reported all inducements given and received, or that they have not given or received any inducements, during the course of the year.

Further detailed guidance on PIL’s Inducement Policy is available in the PIL Compliance Manual.

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APPENDIX G -- Record of Inducement for Putnam Investments Limited (PIL)Employees

Director/Employee:

___________________________________________________________________

Inducement Given/Received:

____________________________________________________________
(Indicate which it is):

Nature of Inducement Given/Received:

____________________________________________________

Date of Giving/Receipt:

_________________________________________________________________

Name of Other Party:

__________________________________________________________________

Name(s) of Personnel of Other Party Involved:

______________________________________________

Name(s) of Other Putnam Individuals Involved:

______________________________________________

Approximate Value of Inducement (if Known):

_______________________________________________

Signature of PIL Director/Employee

Giving/Receiving Inducement ________________________________________ Date:
_______________

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INDEX
407 Letter	iv, 28
7-Day Rule	v, 12-13
90-Day Short Term Rule	v, 12
A
Access Persons
definition	vii
reporting requirements for	29
reporting transactions/holdings	29
special rules for personal securities transactions	12-15
Ad hoc exemption	32
Affiliated entities	23
Analysts, special rules	12, 13, 15
Annual Holdings Report	29
Anti-money Laundering Policy	25
Anti-bribery/Kickback Policy	18
Appeals procedures	32-33
B
Blackout rule, trading by portfolio managers,
analysts, and CIOs	v, 13-14
Boycotts	16
anti-trust and other laws	16
Bribes	18
Broker accounts	iv, 28
Confirmations and statements	28
C
CFA Institute Code of Ethics	24, 45-48
Standards of Professional Conduct	45-48
Chief Investment Officer
special rules on trading	12-15
Closed-end funds	iv, 43
Code of Ethics Administrator	vii
Code of Ethics Officer	vii
Deputy Code of Ethics Officer	vii
Code of Ethics Oversight Committee	viii
Commodities	ix
Compliance and appeal procedures	32-33
Computer system policies	24
Confidentiality	iv, 20
Confirmations and broker statements	iv, 28
Conflicts of interest	iii, vi, 16
Considered List – Limited Sales Exemption	3
Contra-trading rule	v, 14
clearance form	44
Corporate/political contributions	19
Corporate purchase of goods and services	22
Currencies	ix
D
Director
prohibited to serve for another entity	20

53

Discretionary accounts	3-4
Dividend reinvestment program	9, 11
E
Education requirements	31
Employees
general rules for	16-25
personal political contributions	19
personal securities rules for all	1-11
(see also Access Persons)
Entertainment policies	16-18
Report of Entertainment Form	49
Excessive trading (over 10 traders) prohibited	iv, 10
Exchange traded index funds (ETFs)	ix, 29
F
Family members accounts	8
Family Members’ Conflict Policy	22-23
Fiduciary	21
Fraudulent or irregular activities reporting	30
G
Gifts and Entertainment Policy	iii, 16-18, 49
Gifts donated as a security	4
Goods and services, purchasing	22
Good-until-canceled (GTC) orders	10
H
Holdings of securities
disclosure by Access Persons	29
I
Initial Holdings Report	29
Initial public offerings/IPOs	5
Inside information
material, non-public information	6, 37
reporting material, non-public information	37-38
rules concerning	37-38
Inside Information List (Red List)	37-38
Insider trading
definitions	36
explanations of	39-42
liability for	41-42
penalties for	42
policy statement	35
prohibitions	iii, 35
rules concerning	37-38
sanctions for	34, 42
Investment clubs	21
Involuntary transactions, exemptions	4, 11
Irregular activity reporting	30
K
Kickback Policy	18
L
Large Cap Exemption	3
Limit Orders	10
Linked accounts	8

54

Lobbying Policy	19-20
M
Market timing prohibition	8
Marsh & McLennan (MMC) securities	iv, 1-2
Material Information	6, 37, 39-42
N
Naked options	10
Negotiations prohibition	22
Non-public information	iii, 6, 37, 39-42
Non-Putnam affiliates (NPAs)	23
O
Officer, prohibited to serve for another entity	20
Ombudsman	30
Options
defined as securities	4, 36
naked	10
relationship to securities on Restricted or Red Lists	4
Outside business affiliations	20-21
P
Partner, prohibited to serve for another entity	20
Partnerships, covered in personal securities transactions	ix, 36
Personal securities transaction	ix, 36
Personal Trading Assistant (PTA) system	iv, viii, 26, 28-30, 43
Accessing	1, 2
Political activities, contributions, lobbying	19-20
Portfolio managers, special rules on trading	12-15
Portfolio trading	12-15, 22
Pre-clearance	iv, 1-4
sanctions for failure to pre-clear properly	34
Privacy policy	24-25
Private offerings and private placement pre-approval	6
Prohibited transactions	5-10
Putnam Investments Limited (PIL)
special rules	26-27
record of inducement	52
Putnam Mutual Funds restrictions	iv, 7-9
90-day Rule	iv, 8-9
One-year Rule	iv, 8
Q
Quarterly Report of Securities Transactions	v. 29
R
Records
accuracy records policy	22
retention policy	25
Red List	37, 38
Reporting requirements	v, 28-30
Restricted List	viii, 1-5, 26, 32-34, 37
Roles at other entities	20-21
S
Sanctions	34-42
Securities donated	4
Shares by subscription, pre-clearance	3
Short selling	iv
Special rules for Investment Professionals	v, 12-15

55

T
Tender offers	4
Trustee, prohibited to serve for another entity	20
Trusts	ix, 36
U
U.S. government obligations	ix
V
Violations reporting	30
W
Warrants	36

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EX-99.P CODE ETH

Amendments to Putnam Investments
Code of Ethics dated December, 2005

Effective June 16, 2006 the following amendment was made to the Putnam Investments Code of Ethics:

Section III - Rule 5: Political Activities, Contributions, Solicitations, and Lobbying Policy

Under Employee Contributions (item #1):
The office of the State Treasurer of Connecticut, Vermont, or West Virginia
(Note: The State of West Virginia was added to this policy).

Effective July 17, 2006 the following amendment was made to the Putnam Investments Code of Ethics:

Section III - Rule 3: Gifts and Entertainment Policy

3. Any employee attending any entertainment event under the provision in sections (B)(1) or (B)(2) above must file a Report of Entertainment Form (attached as Appendix E) with the Code of Ethics Officer within 20 business days following the date of the entertainment event. Failure to file the notice is a violation of the Code of Ethics.

Appendix E

PUTNAM INVESTMENTS CODE OF ETHICS
REPORT OF ENTERTAINMENT

This form must be filed with the Putnam Legal and Compliance Department within
20 business days of date of entertainment.

Please e-mail to Putnam_Code_of_Ethics@putnam.com
Or return to Legal and Compliance Department, Mailstop A-16

Name of Employee: 

Name of Party Providing Entertainment – firm and person: 

Date of Entertainment: 

Describe entertainment provided: (e.g., name & location of 

restaurant, sporting or cultural event) 

Value of entertainment (excluding meals): 

Signature: 

Date: