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<SEC-DOCUMENT>0000928816-03-000753.txt : 20031125
<SEC-HEADER>0000928816-03-000753.hdr.sgml : 20031125
<ACCEPTANCE-DATETIME>20031125170321
ACCESSION NUMBER:		0000928816-03-000753
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20030930
FILED AS OF DATE:		20031125
EFFECTIVENESS DATE:		20031125

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PUTNAM MASTER INTERMEDIATE INCOME TRUST
		CENTRAL INDEX KEY:			0000830622
		IRS NUMBER:				046584465
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		N-CSR
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-05498
		FILM NUMBER:		031023814

	BUSINESS ADDRESS:	
		STREET 1:		ONE POST OFFICE SQ
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02109
		BUSINESS PHONE:		6172921562
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>pmii1.txt
<DESCRIPTION>PUTNAM MASTER INTERMEDIATE INCOME TRUST
<TEXT>
Putnam
Master
Intermediate
Income Trust

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:

ANNUAL REPORT ON PERFORMANCE AND OUTLOOK

9-30-03

[GRAPHIC OMITTED: YELLOW WATCH DUO]

[SCALE LOGO OMITTED]



From the Trustees

[GRAPHIC OMITTED: PHOTO OF JOHN A. HILL AND GEORGE PUTNAM, III]

John A. Hill and
George Putnam, III

Dear Fellow Shareholder:

You may have seen media coverage of market timing  allegations involving
Putnam Investments. A separate letter has been sent to you detailing the
steps being taken by Putnam Investments to address these matters. In
addition, the Board of Trustees of The Putnam Funds is conducting an
independent investigation of these issues. When that investigation is
complete, we will report to you on the steps we are taking to make sure
that nothing like this happens in the future. We will, of course, ensure
that your fund is fully compensated for any losses resulting from
improper trading activity at Putnam. We appreciate your loyalty and want
you to know that we intend to restore full confidence in Putnam, an
organization that aspires to the highest ethical and business standards.

The balance of this report focuses on the performance of your fund. We
are pleased to report that Putnam Master Intermediate Income Trust
recorded a robust gain, at net asset value, for the fiscal year ended
September 30, 2003. It strongly outperformed its primary benchmark
index, though it came in slightly below its Lipper category average. You
will find the details on the facing page.

The management team's decision to focus more heavily on lower-rated
higher-yielding bonds provided the impetus behind these results. Their
efforts to reduce the fund's sensitivity to interest-rate changes proved
successful and a favorable currency strategy also contributed to the
positive performance.

In the following report, the managers provide a detailed discussion of
their approach to the market environment that prevailed during the
period. They also offer their views on the fund's prospects for fiscal
2004.

Respectfully yours,

/S/ JOHN A. HILL              /S/ GEORGE PUTNAM, III

John A. Hill                  George Putnam, III
Chairman of the Trustees      President of the Funds

November 19, 2003



Report from Fund Management

Fund highlights

 * During the fiscal year ended September 30, 2003, Putnam Master
   Intermediate Income Trust had a total return at net asset value (NAV) of
   20.42%. The fund's return at market price was 8.35%.

 * The fund outperformed its primary benchmark, the Lehman Government
   Credit Index, which returned 6.51% during the period. The fund's other
   comparative indexes, the Citigroup Non-U.S. World Government Bond Index
   and the JP Morgan Global High Yield Index, returned 17.80% and 27.18%,
   respectively.

 * Due to its underweighting in emerging-market securities, the fund
   underperformed the average return of 21.85% for the Lipper Flexible
   Income Funds (closed-end) category.

 * The fund's lower performance at market price was primarily the result
   of a reduction in the fund's dividend, which occurred in February 2003.
   See page 5 for details.

 * See the Performance Summary beginning on page 7 for complete fund
   performance, comparative performance, and Lipper data.

Performance commentary

The fund's fiscal year began just weeks before a turning point in the
bond market. Starting in mid October 2002, higher-yielding, non-Treasury
bonds began to significantly outperform Treasuries. This outperformance
benefited the fund, which was invested predominantly in such bonds --
corporate investment-grade and high-yield bonds, emerging-market bonds,
and mortgage-backed securities. As bonds from these sectors appreciated,
the credit spread, or difference in yield between Treasuries and these
higher-yielding securities, narrowed, bolstering the fund's returns. As
a result, the fund strongly outperformed its benchmark index, which is
composed of lower-yielding, higher-quality bonds (including Treasuries).
The fund's underperformance of its Lipper category average reflects our
underweighting of emerging-market securities relative to other funds in
the category, discussed further on page 3.

FUND PROFILE

Putnam Master Intermediate Income Trust seeks high current income and
relative stability by investing in limited-maturity bonds in the
investment-grade and high-yield sectors, as well as non-U.S. bond
markets. The fund is designed for investors seeking high current income,
asset class diversification, or both.

The significantly lower return at market price reflects a reduction in
the fund's dividend, which caused investor demand for the fund -- a key
factor in market price performance -- to decline.



Market overview

The beginning of this fund's fiscal year in October 2002 marked a
seminal change in the global credit markets. Hints of an economic
recovery, a passing of the September 11 anniversary, and an improvement
in the stock market all contributed to a sudden improvement in the
direction of credit spreads. As a result, investment-grade corporate
bonds, high-yield corporate bonds, and emerging-market bonds all
significantly outperformed U.S. Treasuries over the course of the
reporting period.

In July and August of 2003, Treasury prices declined sharply after
rallying in May and the first half of June. Having reached a historical
low of 3.11% on June 13, the benchmark 10-year Treasury yield -- which
moves in the opposite direction to its price -- then increased by over
one and a half percentage points by the beginning of September -- an
extremely large increase for a 10-week period. While this event shook
all fixed-income sectors, higher-yielding bonds with lower sensitivity
to interest-rate changes (which made up much of the fund's portfolio)
fared much better than Treasuries.

Mortgage-backed securities performed well for much of the year, but
their performance suffered somewhat during the summer because of
excessive refinancing. When homeowners refinance their mortgages at
lower rates, they "prepay" their existing mortgages, hurting investors
who have been receiving these higher levels of interest income.

Emerging markets generally fared well, with above-average returns that
we attribute to higher commodity prices, especially oil prices. The
dollar continued to move lower relative to other major currencies,
including the yen and the euro, as low interest rates and the threat of
deflation in the United States caused global investors to seek higher
returns in other countries.

- ------------------------------------------------------------------------------
MARKET SECTOR PERFORMANCE 12 MONTHS ENDED 9/30/03
- ------------------------------------------------------------------------------
Bonds
- ------------------------------------------------------------------------------
Lehman Government Credit Index                                          6.51%
- ------------------------------------------------------------------------------
JP Morgan Global Diversified Emerging Markets Index                    29.19%
- ------------------------------------------------------------------------------
Citigroup Non-U.S. World Government Bond Index
(international bonds)                                                  17.80%
- ------------------------------------------------------------------------------
JP Morgan Global High Yield Index (high-yield bonds)                   27.18%
- ------------------------------------------------------------------------------
Equities
- ------------------------------------------------------------------------------
S&P 500 Index (broad stock market)                                     24.40%
- ------------------------------------------------------------------------------
Russell 2000 Growth Index (small-company growth stocks)                41.72%
- ------------------------------------------------------------------------------
Russell 2000 Value Index (small-company value stocks)                  31.66%
- ------------------------------------------------------------------------------
These indexes provide an overview of performance in different market
sectors for the 12 months ended 9/30/03.
- ------------------------------------------------------------------------------



Strategy overview

Several of the fund's areas of emphasis -- including high-yield bonds,
mortgage-backed securities (MBSs), and international bonds -- performed
well during the period. Our significant allocation to high-yield
corporate bonds, which increased during the second half of the period,
was particularly helpful, as they were among the strongest-performing
fixed-income securities over the period. As yield spreads narrowed
toward the end of the period, we reduced this allocation, but still
maintain a large high-yield weighting. We sought to keep the fund's
exposure to another higher-risk area of the portfolio -- emerging-market
securities -- low (relative to the fund's competitors). Because this
subgroup of the fund's international holdings delivered strong
performance, our strategy detracted from the fund's relative
performance.

Over the second half of the fiscal year, the fund was much less
sensitive to interest-rate changes than other funds in its category,
reflecting our decision to keep the portfolio duration (a measure of
interest-rate sensitivity) relatively short. While rates continued to
decline in May and June, this positioning hurt relative performance, but
when rates spiked in July and August, the fund gained significant ground
against funds in its peer group. The fund's currency strategy has been
on target; we emphasized the Australian dollar and European currencies,
and continued to underweight the U.S. dollar. Toward the end of the
fiscal year, we also began to increase our emphasis on the yen. All of
these positions were beneficial to the fund's absolute and relative
performance.



[GRAPHIC OMITTED: horizontal bar chart SECTOR WEIGHTINGS COMPARED]

SECTOR WEIGHTINGS COMPARED

                              as of     as of
                             3/31/03   9/30/03

High yield                    45.9%     48.1%

U.S. investment grade         31.1%     27.2%

International                 23.0%     24.7%

Footnote reads:
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.



How fund holdings and sector allocations affected performance

Throughout the year, the fund's largest sector weighting (close to half
of its assets) was in high-yield bonds, and this position was a
significant contributor to the fund's strong returns during the period.
High-yield bonds have performed well during the past 12 months for
several reasons. Among the most important is the decline in default
rates. Although still high by historical standards, corporate defaults
have steadily declined since hitting a peak in January 2002. This trend
has been seen as a positive sign that, if it continues, may help
high-yield bond performance over the next several years. Second,
fixed-income investors have been seeking higher yields and have become
more willing to take on risk in exchange. As a result, high-yield bonds
have significantly outperformed Treasuries, causing a narrowing in the
yield spread between Treasuries and high-yield bonds. This narrowing has
been another strong driver of high-yield bond performance. Finally,
corporations are generally focusing on reducing debt, improving their
balance sheets, and increasing profits -- all of which have  generally
helped improve credit quality in the high-yield market.

[GRAPHIC OMITTED: TOP HOLDINGS]

TOP HOLDINGS

   High Yield Sector

1  HMH Properties, Inc.
   Company guaranty, Ser B, 7 78s, 2008

2  Qwest Services Corp
   144A notes 13 12s, 2010

3  Pioneer Natural Resources Co.
   Company guaranty 9 58s, 2010

   International Sector

1  Russia (Federation of)
   Unsubordinated bonds 8 14s, 2010

2  United Kingdom
   Treasury bonds, 7 12s, 2006

3  Germany (Federal Republic of)
   Bonds, Ser. 95 7 38s, 2005

   U.S. Investment Grade Sector

1  Government National
   Mortgage Association
   Pass through certificates, 5s, TBA
   October 1, 2033

2  Federal National Mortgage Association
   Pass through certificates, 6 12s, TBA
   October 1, 2032

3  US Government Treasury notes
   1 58s, March 31, 2005

Footnote reads:
These holdings represent 16.5% of the funds net assets as of 9/30/03.
Portfolio holdings will vary over time.


Bonds of several corporate high-yield issuers performed well for the
fund during the past year, including those of HMH Properties, Inc. and
Qwest Services Corp. HMH, which owns the Marriott hotel chain, has
benefited from an improvement in the hotel business since 9/11. The
company is financially strong and has dependable cash flows. Qwest, a
telecommunications company, has increased significantly in price and is
one of the fund's top-performing high-yield holdings. We felt it was
attractively valued, and the market has concurred in the past six
months. Qwest has worked through an SEC investigation of its accounting
practices, sold its directory business, and cut costs and reduced debt.

Some industrial holdings made positive contributions in the high-yield
portion of the fund, including Tyco, a conglomerate, and Georgia Pacific,
a large paper company. These firms benefited from the strength of the
high-yield bond market and the recovering economy, which has translated
into increased availability of funding for them.

The fund's holdings of AK Steel Corp. and Collins and Aikman Products,
an auto and truck parts maker, detracted from performance during the
period due to disappointing earnings. However, if the economy continues
to grow, as we believe it will, we expect these holdings to benefit. We
have maintained the fund's positions. Mortgage-backed securities (MBSs),
a subgroup within the fund's U.S. investment-grade sector, were among
the weakest-performing securities in the fund on a relative basis,
primarily because of the refinancing crunch that occurred in the spring
and summer of 2003. However, our strategy of investing in different
types of MBSs helped us take advantage of the diversification this
sector offers while maximizing the available opportunities. For example,
we invested in commercial mortgage-backed securities, which are less
prone to refinancing than residential mortgages, as well as
agency-wrapped FHA/VA reperforming MBSs. These are traditional
mortgage-backed securities in which the borrowers have become delinquent
on making payments for a period of time and, as a result, the securities
are less likely to be refinanced. Because these securities are
guaranteed by government-sponsored agencies (Fannie Mae and Freddie
Mac), they do not represent a major credit risk, and the fund has
benefited from the higher income that they produce.

The fund's international bonds benefited from slowing global economies,
especially in Europe, where the fund's Swedish government bonds
outperformed. These securities attracted investors in part because they
outperformed German government bonds. Canadian and New Zealand
government bonds also performed well for the fund, benefiting from the
countries' commodity-based economies. European high-yield bonds, a small
allocation in the fund, had weaker performance than their U.S.
counterparts, primarily as a result of slower economic growth in Europe,
but they still made a solid contribution during the year.

Please note that all holdings discussed in this report are subject to
review in  accordance with the fund's investment strategy and may vary
in the future.

OF SPECIAL INTEREST

As a result of significant declines in the yields of shorter- and
intermediate-duration bonds over the past several years, the level of
income produced by the fund's holdings has declined. In February 2003,
the fund lowered its distribution rate from $0.045 per share to $0.038
per share.

The fund's management team

This fund is managed by the Putnam Core Fixed-Income Team. The members
of this team are D. William Kohli (Portfolio Leader), David Waldman
(Portfolio Member), Carl Bell, Rob Bloemker, Andrea Burke, Kevin Cronin,
Steve Horner, Michael Salm, and John Van Tassel.


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.

We anticipate continued interest-rate volatility in the coming months as
investors come to terms with two different economic scenarios. The first
is a continuation of the cyclical recovery from recession, which has
been stimulated by tax cuts, low interest rates, and increased capital
spending among corporations, as well as signs of growth in Asia. These
trends, if they continue, could lead to faster growth and potentially
higher inflation. Higher inflation, in turn, could lead to higher
interest rates, which would hurt your fund's performance. In the second
scenario, certain structural "headwinds" could dampen growth. These
inhibitors may include lower-than-expected corporate profits, a decline
in consumer spending, a lack of new job creation, and a dearth of
much-needed corporate capital spending. A positive effect of slower
growth would be lower inflation and lower interest rates, which would be
positive for the bond market and for your fund.

The conflict between stimulating and inhibiting forces on the economy
may produce higher volatility in the bond market in the months ahead,
but we believe that your fund's holdings, which are well diversified and
generally less sensitive to interest-rate movements than Treasuries,
should continue to perform as the economy sorts itself out. Since the
fund is so well diversified, certain sectors and holdings in the
portfolio have the potential to benefit from either faster or slower
growth. For example, the fund's emphasis on a shorter portfolio
duration, which is designed to reduce sensitivity to interest-rate
changes, may help mitigate the negative impact of rising interest rates,
while the fund's high-yield bond holdings should benefit from continued
strength in the economy.

We would like to caution shareholders that the strong returns of the
past year are well above the historical average for a fund of this type,
and that this strong performance is not likely to be repeated. That
being said, we believe that for those seeking income, investing in a
well-diversified fund such as this one remains a sensible approach.

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 markets 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.


Performance summary

This section provides information about your fund's performance during
its fiscal year, which ended September 30, 2003. Performance should
always be considered in light of a fund's investment strategy. Past
performance does not indicate 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. A profile of your fund's strategy appears on the first
page of this report. See page 8 for definitions of some terms used in
this section.


- ------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 9/30/03
- ------------------------------------------------------------
                            NAV       Market price
- ------------------------------------------------------------
1 year                    20.42%      8.35%
- ------------------------------------------------------------
5 years                   33.98      29.04
Annual average             6.02       5.23
- ------------------------------------------------------------
10 years                  86.65      82.09
Annual average             6.44       6.18
- ------------------------------------------------------------
Life of fund
(since 4/29/88)
Annual average             7.92       6.81
- ------------------------------------------------------------

Performance does not reflect taxes on reinvested distributions.

<TABLE>
<CAPTION>

- -------------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 9/30/03
- -------------------------------------------------------------------------------------
                     Lehman    Citigroup    JP Morgan              Lipper Flexible
                      Govt.     Non-U.S.      Global      CSFB      Income Funds
                      Credit   World Govt.  High Yield  High Yield  (closed-end)
                      Index    Bond Index    Index+       Index   category average*
- -------------------------------------------------------------------------------------
<S>                <C>         <C>         <C>          <C>        <C>
1 year                6.51%      17.80%      27.18%      28.05%      21.85%
- -------------------------------------------------------------------------------------
5 years              38.24       27.17       29.84       32.62       31.51
Annual average        6.69        4.92        5.36        5.81        5.29
- -------------------------------------------------------------------------------------
10 years             95.82       80.00          --       99.52       78.39
Annual average        6.95        6.05          --        7.15        5.90
- -------------------------------------------------------------------------------------
Life of fund
(since 4/29/88)
Annual average        8.50        7.02          --        9.09        8.06
- -------------------------------------------------------------------------------------

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

* Over the 1-, 5-, and 10-year periods ended 9/30/03, there were 12, 12,
  and 9 funds, respectively, in this Lipper category.

+ This comparative index replaced the CSFB High Yield Index on 12/30/02
  because, in Putnam Management's opinion, the securities tracked by this
  index more accurately reflect the types of securities generally held by
  the fund. The JP Morgan Global High Yield Index's inception date was
  12/31/93.

</TABLE>


- ----------------------------------------------------------------------
PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 9/30/03
- ----------------------------------------------------------------------
Distributions (number)                      12
- ----------------------------------------------------------------------
Income                                    $0.484
- ----------------------------------------------------------------------
Capital gains                               --
- ----------------------------------------------------------------------
Total                                     $0.484
- ----------------------------------------------------------------------
Share value:                                NAV       Market price
- ----------------------------------------------------------------------
9/30/02                                    $6.26         $6.38
- ----------------------------------------------------------------------
9/30/03                                     6.99          6.41
- ----------------------------------------------------------------------
Current return (end of period)
- ----------------------------------------------------------------------
Current dividend rate 1                    6.52%         7.11%
- ----------------------------------------------------------------------

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

Terms and definitions

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 the
New York Stock Exchange.

Comparative indexes

Citigroup (formerly Salomon Smith Barney) Non-U.S. World Government Bond
Index is an unmanaged index of government bonds from 10 countries.

JP Morgan Global High Yield Index is an unmanaged index used to mirror
the investable universe of the U.S. dollar global high-yield corporate
debt market of both developed and emerging markets.

JP Morgan Global Diversified Emerging Markets Index is an unmanaged
index of global emerging markets fixed-income securities.

Lehman Government Credit Index is an unmanaged index of U.S fixed-income
securities.

Russell 2000 Growth Index is an unmanaged index of those companies in
the Russell 2000 Index chosen for their growth orientation.

Russell 2000 Value Index is an unmanaged index of those companies in the
Russell 2000 Index chosen for their value orientation.

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 Inc. is a third-party industry ranking entity that ranks funds
(without sales charges) with similar current investment styles or
objectives as determined by Lipper. Lipper category averages reflect
performance trends for funds within a category and are based on results
at net asset value.

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
confidentiality agreements with us, and we provide only the information
necessary to process transactions and perform other services related to
your account. We may also share this information with our Putnam
affiliates to service your account or provide you with information about
other Putnam products or services. It is also our policy to share
account information with your financial advisor, if you've listed one on
your Putnam account.

If you would like clarification about our confidentiality policies or
have any questions or concerns, please don't hesitate to contact us at
1-800-225-1581, Monday through Friday, 8:30 a.m. to 7:00 p.m., or
Saturdays from 9:00 a.m. to 5:00 p.m. Eastern Time.

Putnam is committed to managing our mutual funds in the best interests
of our shareholders. Our proxy voting guidelines and policies are
available on the Putnam Individual Investor Web site,
www.putnaminvestments.com, by calling Putnam's Shareholder Services at
1-800-225-1581, or on the SEC's Web site, www.sec.gov.


A guide to the financial statements

These sections of the report, as well as the accompanying Notes,
preceded by the Independent Auditors' Report, constitute the fund's
financial statements.

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

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

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

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

Financial highlights provide an overview of the fund's investment
results, per-share distributions, expense ratios, net investment
income ratios, and portfolio turnover in one summary table, reflecting
the five most recent reporting periods. In a semiannual report, the
highlight table also includes the current reporting period. For open-end
funds, a separate table is provided for each share class.


Independent auditors' report

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, 2003, 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 four years 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 auditing standards generally
accepted in the United States of America. 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, 2003 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, 2003, 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 four
years in the period then ended in conformity with accounting principles
generally accepted in the United States of America.

KPMG LLP

Boston, Massachusetts
November 17, 2003



The fund's portfolio
September 30, 2003

Corporate bonds and notes (51.1%) (a)
Principal amount                                                          Value

Advertising and Marketing Services (0.2%)
- -------------------------------------------------------------------------------
      $238,719 Adams Outdoor Advertising bank term
               loan FRN 4.5844s, 2008  (acquired
               4/2/03, cost $238,121) (RES)                            $239,117
       200,000 Lamar Media Corp. bank term loan FRN
               Ser. B, 3.4375s, 2010  (acquired
               2/27/03, cost $200,000) (RES)                            201,250
       560,000 Lamar Media Corp. company guaranty
               7 1/4s, 2013                                             585,200
                                                                 --------------
                                                                      1,025,567

Automotive (1.0%)
- -------------------------------------------------------------------------------
     1,020,000 Collins & Aikman Products company
               guaranty 10 3/4s, 2011                                   887,400
       160,000 Dana Corp. notes 10 1/8s, 2010                           178,800
       675,000 Dana Corp. notes 9s, 2011                                739,125
EUR     50,000 Dana Corp. notes 9s, 2011                                 61,126
      $295,000 Dana Corp. notes 6 1/2s, 2009                            295,000
       360,000 Dana Corp. notes 6 1/4s, 2004                            363,600
       160,000 Delco Remy International, Inc.
               company guaranty 11s, 2009                               145,600
       390,000 Delco Remy International, Inc.
               company guaranty 10 5/8s, 2006                           369,525
       420,000 Dura Operating Corp. company
               guaranty Ser. D, 9s, 2009                                390,600
       180,000 Hayes Lemmerz International, Inc.
               bank term loan FRN 5.9267s,
               2009 (acquired 6/3/03, cost
               $178,200) (RES)                                          181,406
       805,000 Lear Corp. company guaranty Ser. B,
               8.11s, 2009                                              925,750
EUR    215,000 Lear Corp. sr. notes 8 1/8s, 2008                        282,867
      $113,361 SPX Corp. bank term loan FRN Ser. B,
               3.375s, 2009  (acquired 7/23/02,
               cost $42,524) (RES)                                      114,034
EUR    300,000 Teksid Aluminum 144A company
               guaranty 11 3/8s, 2011 (Luxembourg)                      354,540
      $485,000 Tenneco Automotive, Inc. company
               guaranty Ser. B, 11 5/8s, 2009                           477,725
       750,000 Tenneco Automotive, Inc. 144A sec.
               notes 10 1/4s, 2013                                      813,750
       150,000 TRW Automotive bank term loan FRN
               Ser. C-1, 4.13s, 2011  (acquired
               7/21/03, cost $150,000) (RES)                            150,703
                                                                 --------------
                                                                      6,731,551

Basic Materials (5.4%)
- -------------------------------------------------------------------------------
        10,000 Abitibi-Consolidated Finance LP
               company guaranty 7 7/8s, 2009                             10,741
       960,000 Acetex Corp. sr. notes 10 7/8s, 2009
               (Canada)                                               1,063,200
       145,000 Acetex Corp. 144A sr. notes 10 7/8s,
               2009 (Canada)                                            160,588
     1,060,000 AK Steel Corp. company guaranty
               7 3/4s, 2012                                             731,400
       154,144 Appleton Papers, Inc. bank term loan
               FRN Ser. C, 4.3764s, 2006 (acquired
               6/4/02, cost $154,722) (RES)                             154,658
       785,000 Appleton Papers, Inc. company
               guaranty Ser. B, 12 1/2s, 2008                           859,575
       780,000 Armco, Inc. sr. notes 9s, 2007                           561,600
        85,000 Avecia Group PLC company guaranty
               11s, 2009 (United Kingdom)                                74,375
       575,000 Better Minerals & Aggregates Co.
               company guaranty 13s, 2009                               370,875
       530,000 Compass Minerals Group, Inc. company
               guaranty 10s, 2011                                       583,000
     1,041,866 Doe Run Resources Corp. company
               guaranty Ser. A1, 11 3/4s, 2008
               (acquired various dates from 7/27/01
               to 5/27/03, cost $554,349) (RES) (PIK)                   416,746
       765,000 Dow Chemical Co. (The) notes 5 3/4s, 2009                813,565
       195,000 Equistar Chemical notes 6 1/2s, 2006                     184,275
       185,000 Equistar Chemicals LP notes 8 3/4s, 2009                 172,975
     1,690,000 Equistar Chemicals LP/Equistar
               Funding Corp. company guaranty
               10 1/8s,2008                                           1,681,550
       390,000 Equistar Chemicals LP/Equistar
               Funding Corp. 144A sr. notes
               10 5/8s, 2011                                            386,100
       985,000 Georgia-Pacific Corp. company
               guaranty 8 7/8s, 2010                                  1,078,575
       505,000 Georgia-Pacific Corp. debs. 9 1/2s, 2011                 559,288
       451,000 Georgia-Pacific Corp. 144A sr. notes
               7 3/8s, 2008                                             465,094
       545,000 Gerdau Ameristeel Corp/Gusap
               Partners 144A sr. notes 10 3/8s,
               2011 (Canada)                                            547,725
       150,000 Graphics Packaging bank term loan
               FRN 3.86s, 2010  (acquired 8/6/03,
               cost $150,000) (RES)                                     150,713
       198,500 Hercules, Inc. bank term loan FRN
               Ser. B, 4.3681s, 2007  (acquired
               12/17/02, cost $198,004) (RES)                           198,996
     2,140,000 Hercules, Inc. company guaranty
               11 1/8s, 2007                                          2,477,050
       485,000 Huntsman Advanced Materials, LLC
               144A sec. notes 11s, 2010                                504,400
       567,004 Huntsman Corp. bank term loan FRN
               Ser. A, 5.9508s, 2007  (acquired
               various dates from 6/10/02 to
               9/24/03, cost $504,775) (RES)                            518,337
       301,555 Huntsman Corp. bank term loan FRN
               Ser. B, 8.4375s, 2007  (acquired
               various dates from 6/10/02 to
               9/24/03, cost $269,037) (RES)                            275,672
     1,030,000 Huntsman ICI Chemicals, Inc. company
               guaranty 10 1/8s, 2009                                   973,350
     1,375,000 Huntsman ICI Holdings sr. disc.
               notes zero %, 2009                                       543,125
EUR    415,000 Huntsman International, LLC sr. sub.
               notes Ser. EXCH, 10 1/8s, 2009                           420,371
      $265,000 Huntsman LLC 144A sec. notes
               11 5/8s, 2010                                            261,025
       240,000 IMC Global, Inc. company guaranty
               Ser. B, 11 1/4s, 2011                                    249,600
       395,000 IMC Global, Inc. company guaranty
               Ser. B, 10 7/8s, 2008                                    410,800
     1,385,000 ISP Chemco, Inc. company guaranty
               Ser. B, 10 1/4s, 2011                                  1,544,275
       275,000 ISP Holdings, Inc. sec. sr. notes
               Ser. B, 10 5/8s, 2009                                    298,375
        60,000 Kaiser Aluminum & Chemical Corp. sr.
               notes Ser. B, 10 7/8s, 2006 (In
               default) (NON)                                            46,200
     1,685,000 Kaiser Aluminum & Chemical Corp. sr.
               sub. notes 12 3/4s, 2003 (In
               default) (NON)                                           134,800
       400,000 Louisiana-Pacific Corp. sr. notes
               8 7/8s, 2010                                             465,000
       335,000 Lyondell Chemical Co. bonds 11 1/8s, 2012                329,975
       135,000 Lyondell Chemical Co. company
               guaranty 9 1/2s, 2008                                    125,550
         5,000 Lyondell Chemical Co. company
               guaranty 9 1/2s, 2008                                      4,625
     1,370,000 Lyondell Chemical Co. notes Ser. A,
               9 5/8s, 2007                                           1,301,500
EUR    800,000 MDP Acquisitions PLC sr. notes
               10 1/8s, 2012 (Ireland)                                1,017,598
       $85,000 MDP Acquisitions PLC sr. notes
               9 5/8s, 2012 (Ireland)                                    93,075
       330,502 MDP Acquisitions PLC sub. notes
               15 1/2s, 2013 (Ireland) (PIK)                            364,378
EUR    210,000 Messer Griesheim Holdings AG sr.
               notes 10 3/8s, 2011 (Germany)                            280,200
      $980,000 Millennium America, Inc. company
               guaranty 9 1/4s, 2008                                  1,016,750
        10,000 Millennium America, Inc. company
               guaranty 7s, 2006                                          9,750
       190,000 Millennium America, Inc. 144A sr.
               notes 9 1/4s, 2008                                       197,125
       500,000 Noveon International bonds 13s, 2011                     515,000
       460,000 Noveon International company
               guaranty Ser. B, 11s, 2011                               519,800
       935,000 OM Group, Inc. company guaranty
               9 1/4s, 2011                                             920,975
       900,000 Pacifica Papers, Inc. sr. notes 10s,
               2009 (Canada)                                            954,000
       509,465 PCI Chemicals Canada sec. sr. notes
               10s, 2008 (Canada)                                       441,961
       243,657 Pioneer Cos., Inc. sec. FRN 4.64s, 2006                  211,372
       805,000 Potlatch Corp. company guaranty 10s, 2011                893,550
       505,000 Resolution Performance Products, LLC
               sr. notes 9 1/2s, 2010                                   517,625
       295,000 Rhodia SA 144A sr. sub. notes
               8 7/8s, 2011 (France)                                    289,100
       310,000 Royster-Clark, Inc. 1st mtge.
               10 1/4s, 2009                                            241,800
       285,000 Salt Holdings Corp. 144A sr. disc.
               notes stepped-coupon zero %  (12s,
               6/1/06), 2013 (STP)                                      171,000
       775,000 Salt Holdings Corp. 144A sr. notes
               stepped-coupon zero %  (12 3/4s,
               12/15/07), 2012 (STP)                                    542,500
        80,000 Smurfit-Stone Container Corp.
               company guaranty 8 1/4s, 2012                             83,600
       850,000 Solutia, Inc. company guaranty
               11 1/4s, 2009                                            824,500
       885,000 Steel Dynamics, Inc. company
               guaranty 9 1/2s, 2009                                    946,950
       137,417 Sterling Chemicals, Inc. sec. notes
               10s, 2007 (PIK)                                          129,172
       930,000 Stone Container Corp. sr. notes
               9 3/4s, 2011                                           1,009,050
       350,000 Stone Container Corp. sr. notes
               9 1/4s, 2008                                             380,625
       800,000 Stone Container Corp. sr. notes
               8 3/8s, 2012                                             840,000
       300,000 Tembec Industries, Inc. company
               guaranty 8 1/2s, 2011 (Canada)                           292,500
        80,000 Tembec Industries, Inc. company
               guaranty 7 3/4s, 2012 (Canada)                            75,200
        50,000 Texas Petrochemical Corp. sr. sub.
               notes 11 1/8s, 2006 (In default) (NON)                    14,000
       200,000 Texas Petrochemical Corp. sr. sub.
               notes Ser. B, 11 1/8s, 2006 (In
               default) (NON)                                            56,000
       745,000 Ucar Finance, Inc. company guaranty
               10 1/4s, 2012                                            813,913
       605,000 United States Steel Corp. sr. notes
               9 3/4s, 2010                                             620,125
       510,000 WCI Steel, Inc. sr. notes Ser. B,
               10s, 2004 (In default) (NON)                             153,000
        38,500 Weirton Steel Corp. sr. notes 10s,
               2008 (In default) (NON)                                    5,775
       780,000 Wheeling-Pittsburgh Steel Corp. sr.
               notes 9 1/4s, 2007 (In default) (NON)                     85,800
       410,000 WHX Corp. sr. notes 10 1/2s, 2005                        352,600
                                                                 --------------
                                                                     37,990,013

Building Materials (0.6%)
- -------------------------------------------------------------------------------
     1,075,000 American Standard Cos., Inc. company
               guaranty 7 5/8s, 2010                                  1,198,625
       270,000 Atrium Cos., Inc. company guaranty
               Ser. B, 10 1/2s, 2009                                    288,900
       320,000 Building Materials Corp. company
               guaranty 8s, 2008                                        320,000
       775,000 Dayton Superior Corp. 144A sec.
               notes 10 3/4s, 2008                                      794,375
       190,000 NCI Building Systems, Inc. bank term
               loan FRN Ser. B, 4.35s,
               2008 (acquired 9/4/02, cost
               $190,000) (RES)                                          190,871
       450,000 Nortek, Inc. sr. notes Ser. B,
               8 7/8s, 2008                                             465,750
        90,000 Nortek, Inc. sr. sub. notes Ser. B,
               9 7/8s, 2011                                              94,725
       330,000 Nortek, Inc. 144A sr. notes Ser. B,
               9 1/8s, 2007                                             339,900
     1,510,000 Owens Corning notes 7 1/2s, 2005 (In
               default) (NON)                                           681,388
                                                                 --------------
                                                                      4,374,534

Capital Goods (5.0%)
- -------------------------------------------------------------------------------
       250,000 Advanced Glass Fiber Yarns bank term
               loan FRN Ser. A, 6 1/2s,
               2004 (acquired 9/12/02, cost
               $175,000) (RES)                                          150,000
       230,000 Advanced Glass Fiber Yarns sr. sub.
               notes 9 7/8s, 2009 (In default) (NON)                      2,300
       830,000 AEP Industries, Inc. sr. sub. notes
               9 7/8s, 2007                                             815,475
       209,084 Alliant Techsystems, Inc. bank term
               loan FRN Ser. C, 3.4924s, 2009 (acquired
               5/7/02, cost $209,084) (RES)                             210,260
       154,286 Allied Waste Industries, Inc. bank
               term loan FRN 4.3927s, 2010 (acquired
               4/25/03, cost $154,286) (RES)                            155,760
        25,714 Allied Waste Industries, Inc. bank
               term loan FRN Ser. C, 4.393s, 2010
               (acquired 4/25/03, cost $25,714) (RES)                    25,939
     1,430,000 Allied Waste North America, Inc.
               company guaranty Ser. B, 9 1/4s, 2012                  1,580,150
       480,000 Allied Waste North America, Inc.
               company guaranty Ser. B, 8 7/8s, 2008                    519,600
     1,175,000 Allied Waste North America, Inc.
               company guaranty Ser. B, 8 1/2s, 2008                  1,263,125
        20,000 Allied Waste North America, Inc.
               company guaranty Ser. B, 7 5/8s, 2006                     20,900
       330,000 Allied Waste North America, Inc.
               144A Structured Notes 8.2s, 2006 (issued
               by Credit and Repackaged Securities, Ltd.)
               (Cayman Islands)                                         350,559
       200,000 Amsted Industries bank term loan FRN
               5.12s, 2010  (acquired 8/12/03, cost
               $199,000) (RES)                                          200,583
     1,320,000 Argo-Tech Corp. company guaranty
               8 5/8s, 2007                                           1,280,400
       200,000 Argo-Tech Corp. company guaranty
               Ser. D, 8 5/8s, 2007                                     194,000
       500,000 BE Aerospace, Inc. sr. sub. notes
               9 1/2s, 2008                                             455,000
       135,000 BE Aerospace, Inc. sr. sub. notes
               Ser. B, 8 7/8s, 2011                                     116,775
       670,000 BE Aerospace, Inc. sr. sub. notes
               Ser. B, 8s, 2008                                         584,575
       290,000 Berry Plastics Corp. company
               guaranty 10 3/4s, 2012                                   324,075
       945,000 Blount, Inc. company guaranty 13s, 2009                  841,050
       945,000 Blount, Inc. company guaranty 7s, 2005                   926,100
       555,000 Briggs & Stratton company guaranty
               8 7/8s, 2011                                             621,600
       270,000 Browning-Ferris Industries, Inc. sr.
               notes 6 3/8s, 2008                                       262,238
EUR    575,000 BSN Financing Co. SA company
               guaranty Ser. EUR, 10 1/4s,
               2009 (Luxembourg)                                        684,536
EUR    340,000 BSN Glasspack 144A sec. notes
               9 1/4s, 2009 (France)                                    403,779
      $200,000 Crown Cork & Seal Company, Inc. bank
               term loan FRN Ser. B, 4.14s,
               2008 (acquired 2/21/03, cost
               $198,000) (RES)                                          201,450
       535,000 Crown Holdings SA 144A sec. notes
               10 7/8s, 2013 (France)                                   589,838
     1,760,000 Crown Holdings SA 144A sec. notes
               9 1/2s, 2011 (France)                                  1,892,000
     1,000,000 Decrane Aircraft Holdings Co.
               company guaranty Ser. B, 12s, 2008                       450,000
       149,625 EaglePicher bank term loan FRN
               4.64s, 2009  (acquired 8/6/03, cost
               $150,500) (RES)                                          150,685
       715,000 Earle M. Jorgensen Co. sec. notes
               9 3/4s, 2012                                             761,475
       930,000 FIMEP SA sr. notes 10 1/2s, 2013 (France)              1,050,900
EUR    360,000 Flender Holdings 144A notes 11s, 2010                    452,680
       $92,942 Flowserve Corp. bank term loan FRN
               Ser. C, 3.911s, 2009  (acquired
               4/30/02, cost $92,942) (RES)                              93,482
       555,000 Flowserve Corp. company guaranty
               12 1/4s, 2010                                            635,475
EUR     95,000 Flowserve Finance BV company
               guaranty 12 1/4s, 2010 (Netherlands)                     124,158
       $95,000 Fonda Group, Inc. sr. sub. notes
               Ser. B, 9 1/2s, 2007                                      76,950
       199,649 Graham Packaging bank term loan FRN
               5.1055s, 2010  (acquired 2/18/03,
               cost $198,651) (RES)                                     200,448
       665,000 Hexcel Corp. sr. sub. notes 9 3/4s, 2009                 694,925
       460,000 Insilco Holding Co. sr. disc. notes
               zero %, 2008 (In default) (NON)                            2,300
EUR    275,000 Invensys, PLC sr. unsub. notes
               5 1/2s, 2005 (United Kingdom)                            310,577
      $420,000 Jordan Industries, Inc. sr. notes
               Ser. D, 10 3/8s, 2007                                    189,000
       375,000 K&F Industries, Inc. sr. sub. notes
               Ser. B, 9 5/8s, 2010                                     412,500
       239,000 K&F Industries, Inc. sr. sub. notes
               Ser. B, 9 1/4s, 2007                                     246,368
       330,000 L-3 Communications Corp. company
               guaranty Ser. B, 8s, 2008                                342,375
       140,000 L-3 Communications Corp. 144A
               Structured Notes 8 1/2s, 2006
               (Issued by Credit and Repackaged
               Securities, Ltd.) (Cayman Islands)                       157,046
       176,400 Laidlaw International, Inc. bank
               term loan FRN 7s, 2009  (acquired
               6/18/03, cost $172,872) (RES)                            177,282
       740,000 Laidlaw International, Inc. 144A sr.
               notes 10 3/4s, 2011                                      793,650
       305,000 Manitowoc Co., Inc. (The) company
               guaranty 10 1/2s, 2012                                   342,363
EUR    190,000 Manitowoc Co., Inc. (The) company
               guaranty 10 3/8s, 2011                                   237,919
      $394,876 Michigan Electric Transmission
               Co./Michigan Electric Transmission,
               Inc. bank term loan FRN Ser. B,
               3.6s, 2007  (acquired various dates
               from 4/22/02 to 5/3/02, cost
               $554,101) (RES)                                          396,192
       925,000 Motors and Gears, Inc. sr. notes
               Ser. D, 10 3/4s, 2006                                    721,500
       880,000 Owens-Brockway Glass company
               guaranty 8 7/8s, 2009                                    937,200
       560,000 Owens-Brockway Glass company
               guaranty 8 1/4s, 2013                                    571,200
       520,000 Owens-Brockway Glass company
               guaranty 7 3/4s, 2011                                    538,200
       685,000 Owens-Brockway Glass sr. sec. notes
               8 3/4s, 2012                                             734,663
        95,000 Pliant Corp. company guaranty 13s, 2010                   88,350
       515,000 Pliant Corp. 144A sec. notes
               11 1/8s, 2009                                            553,625
       585,000 Roller Bearing Company of America
               company guaranty  Ser. B, 9 5/8s, 2007                   538,200
     1,140,000 Sequa Corp. sr. notes 9s, 2009                         1,242,600
       240,000 Sequa Corp. sr. notes Ser. B,
               8 7/8s, 2008                                             259,200
       430,000 Siebe PLC 144A notes 7 1/8s, 2007
               (United Kingdom)                                         422,475
       205,000 Siebe PLC 144A sr. unsub. 6 1/2s,
               2010 (United Kingdom)                                    188,088
       535,000 Sweetheart Cup Co. company guaranty
               12s, 2004                                                522,963
       430,000 TD Funding Corp. 144A sr. sub. notes
               8 3/8s, 2011                                             462,250
     1,245,000 Tekni-Plex, Inc. company guaranty
               Ser. B, 12 3/4s, 2010                                  1,220,100
        75,000 Terex Corp. company guaranty 8 7/8s, 2008                 78,188
       730,000 Terex Corp. company guaranty Ser. B,
               10 3/8s, 2011                                            819,425
       130,000 Terex Corp. company guaranty Ser. D,
               8 7/8s, 2008                                             136,175
       296,256 Titan Corp. (The) bank term loan FRN
               Ser. B, 4.4346s, 2009  (acquired
               various dates from 5/14/02 to
               6/3/02, cost $297,385) (RES)                             296,564
       370,000 Titan Corp. (The) 144A sr. sub.
               notes 8s, 2011                                           432,900
        50,000 Transdigm, Inc. bank term loan FRN
               4.13s, 2010  (acquired 7/21/03, cost
               $50,000) (RES)                                            50,458
       660,000 Trimas Corp. company guaranty
               9 7/8s, 2012                                             669,900
       365,000 Vought Aircraft Industries Inc. 144A
               sr. notes 8s, 2011                                       372,300
                                                                 --------------
                                                                     34,827,341

Commercial and Consumer Services (0.3%)
- -------------------------------------------------------------------------------
       143,242 Coinmach Corp. bank term loan FRN
               Ser. B, 4.0327s, 2009  (acquired
               1/31/02, cost $143,063) (RES)                            143,749
     1,190,000 Coinmach Corp. sr. notes 9s, 2010                      1,267,350
        49,875 Corrections Corporation of America
               bank term loan FRN 3.88s, 2008 (acquired
               8/5/03, cost $49,875) (RES)                               50,187
       441,621 Derby Cycle Corp. (The) sr. notes
               10s, 2008 (In default) (NON)                              24,289
DEM  1,265,879 Derby Cycle Corp. (The) sr. notes
               9 3/8s, 2008 (In default) (NON)                           41,447
      $645,000 IESI Corp. company guaranty 10 1/4s, 2012                699,825
        90,000 Worldspan bank term loan FRN 4 7/8s,
               2007  (acquired 6/30/03, cost
               $89,100) (RES)                                            90,281
                                                                 --------------
                                                                      2,317,128

Communication Services (4.9%)
- -------------------------------------------------------------------------------
     1,440,000 ACC Escrow Corp. 144A sr. notes 10s, 2011              1,548,000
       420,000 Airgate PCS, Inc. sr. sub. notes
               stepped-coupon zero %  (13 1/2s,
               10/1/04), 2009 (STP)                                     319,200
       640,000 Alamosa Delaware, Inc. company
               guaranty 13 5/8s, 2011                                   627,200
       280,000 Alamosa Delaware, Inc. company
               guaranty 12 1/2s, 2011                                   270,200
         3,000 Alamosa PCS Holdings, Inc. company
               guaranty stepped-coupon zero %
               (12 7/8s, 2/15/05), 2010 (STP)                             2,370
       295,000 American Tower Corp. sr. notes
               9 3/8s, 2009                                             300,900
       550,000 Asia Global Crossing, Ltd. sr. notes
               13 3/8s, 2010 (Bermuda) (In default) (NON)                82,500
     1,870,000 Centennial Cellular Operating Co.
               144A sr. notes 10 1/8s, 2013                           1,926,100
     1,015,000 Cincinnati Bell, Inc. 144A company
               guaranty 7 1/4s, 2013                                  1,004,850
       756,908 Colo.com, Inc. 144A sr. notes
               13 7/8s, 2010 (In default) (NON)                           1,892
        55,000 Colt Telecommunications Group PLC
               sr. disc. notes 12s, 2006 (United
               Kingdom)                                                  55,138
GBP    220,000 Colt Telecommunications Group PLC
               sr. notes 10 1/8s, 2007 (United Kingdom)                 361,831
EUR    110,000 Colt Telecommunications Group PLC
               sr. notes 7 5/8s, 2009 (United Kingdom)                  115,906
      $580,000 Crown Castle International Corp. sr.
               disc. notes stepped-coupon zero %
               (10 3/8s, 5/15/04), 2011 (STP)                           582,900
       765,000 Crown Castle International Corp. sr.
               notes 9 3/8s, 2011                                       816,638
        90,000 Crown Castle International Corp. sr.
               notes 9s, 2011                                            92,925
     1,100,000 Dobson Communications Corp. 144A sr.
               notes 8 7/8s, 2013                                     1,105,500
       940,000 Dobson/Sygnet Communications, Inc.
               sr. notes 12 1/4s, 2008                                1,008,150
       265,000 Eircom Funding 144A sr. sub. notes
               8 1/4s, 2013 (Ireland)                                   284,875
       390,000 Fairpoint Communications, Inc. sr.
               sub. notes 12 1/2s, 2010                                 415,350
        80,000 Firstworld Communication Corp. sr.
               disc. notes zero %, 2008 (In
               default) (NON)                                                 8
       328,078 Globix Corp. company guaranty 11s,
               2008 (PIK)                                               249,339
       160,000 Horizon PCS, Inc. company guaranty
               13 3/4s, 2011 (In default) (NON)                          36,800
        60,000 Intermedia Communications, Inc. sr.
               notes Ser. B, 8.6s, 2008 (In
               default) (NON)                                            50,100
       910,000 iPCS, Inc. sr. disc. notes
               stepped-coupon zero % (14s, 7/15/05),
               2010 (In default) (NON) (STP)                            100,100
       506,000 IWO Holdings, Inc. company guaranty
               14s, 2011                                                 83,490
        85,000 Level 3 Communications, Inc. sr.
               notes 9 1/8s, 2008                                        72,250
     1,500,000 Level 3 Financing Inc. 144A sr.
               notes 10 3/4s, 2011                                    1,496,250
       725,000 Madison River Capital Corp. sr.
               notes 13 1/4s, 2010                                      761,250
       530,000 Metromedia Fiber Network, Inc. sr.
               notes 10s, 2009 (In default) (NON)                        38,425
       570,000 Metromedia Fiber Network, Inc. sr.
               notes Ser. B, 10s, 2008 (In default) (NON)                41,325
       774,000 Millicom International Cellular SA
               144A sr. notes 11s, 2006 (Luxembourg)                    791,415
       123,750 Nextel Communications, Inc. bank
               term loan FRN Ser. B, 4.5671s,
               2008 (acquired 12/19/02, cost
               $114,468) (RES)                                          124,169
       123,750 Nextel Communications, Inc. bank
               term loan FRN Ser. C, 4.8171s,
               2008 (acquired 12/19/02, cost
               $114,468) (RES)                                          124,169
         8,000 Nextel Communications, Inc. sr.
               disc. notes 9.95s, 2008                                    8,420
       930,000 Nextel Communications, Inc. sr.
               notes 9 1/2s, 2011                                     1,027,650
     1,000,000 Nextel Communications, Inc. sr.
               notes 9 3/8s, 2009                                     1,085,000
       625,000 Nextel Communications, Inc. sr.
               notes 7 3/8s, 2015                                       631,250
       385,000 Nextel Partners, Inc. sr. notes
               12 1/2s, 2009                                            439,863
       550,000 Nextel Partners, Inc. sr. notes 11s, 2010                600,875
     1,315,000 Nextel Partners, Inc. 144A sr. notes
               8 1/8s, 2011                                           1,282,125
       620,000 Orbital Imaging Corp. sr. notes
               Ser. B, 11 5/8s, 2005 (In default) (NON)                 303,800
       318,500 PanAmSat Corp. bank term loan FRN
               Ser. B, 4.62s, 2009  (acquired
               2/21/02, cost $318,102) (RES)                            319,637
       830,000 PanAmSat Corp. company guaranty
               8 1/2s, 2012                                             869,425
       195,000 Qwest Communications International,
               Inc. bank term loan FRN 6 1/2s, 2007
               (acquired 6/5/03, cost $193,050) (RES)                   198,803
     2,055,000 Qwest Corp. 144A notes 8 7/8s, 2012                    2,281,050
     2,611,000 Qwest Services Corp. 144A notes
               13 1/2s, 2010                                          3,041,815
        50,000 Rogers Cantel, Ltd. debs. 9 3/8s,
               2008 (Canada)                                             52,375
       770,000 Rogers Cantel, Ltd. sr. sub. notes
               8.8s, 2007 (Canada)                                      789,250
       280,000 Rogers Wireless, Inc. sec. notes
               9 5/8s, 2011 (Canada)                                    321,650
       270,000 Rural Cellular Corp. sr. sub. notes
               Ser. B, 9 5/8s, 2008                                     245,700
     1,545,000 Telus Corp. notes 8s, 2011 (Canada)                    1,803,643
       198,500 Time Warner Telecom, Inc. bank term
               loan FRN Ser. B, 5.1s, 2009 (acquired
               1/15/03, cost $173,688) (RES)                            197,756
       510,000 TSI Telecommunication Services, Inc.
               company guaranty  Ser. B, 12 3/4s, 2009                  512,550
       390,000 U S West, Inc. notes 5 5/8s, 2008                        380,250
       417,000 UbiquiTel Operating Co. bonds
               stepped-coupon zero %  (14s,
               4/15/05), 2010                                           283,560
     1,210,000 US UnWired, Inc. company guaranty
               stepped-coupon Ser. B, zero %
               (13 3/8s, 11/1/04), 2009 (STP)                           883,300
       405,000 US West Capital Funding, Inc.
               company guaranty 6 1/4s, 2005                            396,900
     1,080,000 Western Wireless Corp. 144A sr.
               notes 9 1/4s, 2013                                     1,101,600
        10,000 Williams Communications Group, Inc.
               notes zero %, 2010 (In default) (NON)                          1
       220,000 Williams Communications Group, Inc.
               notes zero %, 2008 (In default) (NON)                          2
       200,000 Williams Communications Group, Inc.
               notes zero %, 2007 (In default) (NON)                          2
                                                                 --------------
                                                                     33,949,767

Conglomerates (0.3%)
- -------------------------------------------------------------------------------
       365,000 Tyco International Group SA company
               guaranty 6 3/4s,  2011 (Luxembourg)                      385,075
        55,000 Tyco International Group SA company
               guaranty 6 3/8s,  2006 (Luxembourg)                       57,613
       225,000 Tyco International Group SA company
               guaranty 6 3/8s,  2005 (Luxembourg)                      234,000
     1,670,000 Tyco International Group SA notes
               6 3/8s, 2011 (Luxembourg)                              1,722,188
                                                                 --------------
                                                                      2,398,876

Consumer (0.5%)
- -------------------------------------------------------------------------------
     1,055,000 Icon Health & Fitness company
               guaranty 11 1/4s, 2012                                 1,128,850
       200,000 Jostens, Inc. bank term loan FRN
               Ser. B, 3.64s, 2010  (acquired
               7/28/03, cost $200,000) (RES)                            201,325
       510,000 Jostens, Inc. sr. sub. notes
               12 3/4s, 2010                                            591,600
     1,681,000 Samsonite Corp. sr. sub. notes
               10 3/4s, 2008                                          1,756,645
                                                                 --------------
                                                                      3,678,420

Consumer Staples (7.8%)
- -------------------------------------------------------------------------------
        40,000 Adelphia Communications Corp. notes (NON)                 27,600
       215,000 Adelphia Communications Corp. sr.
               notes 10 7/8s, 2010 (In default) (NON)                   150,500
        50,000 Adelphia Communications Corp. sr.
               notes 9 3/8s, 2009 (In default) (NON)                     35,750
       341,000 Adelphia Communications Corp. sr.
               notes Ser. B, 9 7/8s, 2007 (In
               default) (NON)                                           237,848
       580,000 Adelphia Communications Corp. sr.
               notes Ser. B, 7 3/4s, 2009 (In
               default) (NON)                                           406,000
EUR    260,000 Ahold Finance USA eurobonds 6 3/8s, 2005                 303,626
      $660,000 AMC Entertainment, Inc. sr. sub.
               notes 9 7/8s, 2012                                       719,400
       700,000 AMC Entertainment, Inc. sr. sub.
               notes 9 1/2s, 2011                                       735,000
       450,000 AMC Entertainment, Inc. sr. sub.
               notes 9 1/2s, 2009                                       466,313
       445,065 American Seafood Group, LLC bank
               term loan FRN Ser. B, 4.36s,
               2009 (acquired 4/11/02, cost
               $444,620) (RES)                                          445,714
       196,349 AMF Bowling Worldwide bank term loan
               FRN Ser. B, 5.4521s, 2008 (acquired
               3/1/02, cost $195,858) (RES)                             196,921
       342,227 Archibald Candy Corp. company
               guaranty 10s, 2007 (PIK)                                 130,046
       635,000 Armkel, LLC/Armkel Finance sr. sub.
               notes 9 1/2s, 2009                                       700,088
       140,000 Aurora Foods, Inc. sr. sub. notes
               Ser. B, 9 7/8s, 2007 (In default) (NON)                   79,800
       415,000 Aurora Foods, Inc. 144A sr. sub.
               notes Ser. D, 9 7/8s, 2007 (In
               default) (NON)                                           236,550
        10,263 Australis Media, Ltd. sr. disc.
               notes 15 3/4s, 2003 (Australia) (In
               default) (DEF) (NON)                                           1
       565,000 Brand Services, Inc. company
               guaranty 12s, 2012                                       627,150
       655,000 Capital Records, Inc. 144A company
               guaranty 8 3/8s, 2009                                    668,100
       171,923 Carmike Cinemas, Inc. bank term loan
               FRN Ser. B, 7 3/4s, 2005 (acquired
               10/4/02, cost $167,625) (RES)                            172,782
       900,000 Century Cable Holdings bank term
               loan FRN 6s, 2009  6/5/02 and
               6/11/02, cost $749,082) (RES)                            775,286
       158,791 Charter Communications Holdings, LLC
               bank term loan FRN Ser. B,  3.86s,
               2008 (acquired 1/9/03, cost
               $137,950) (RES)                                          150,216
       100,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. disc. notes
               stepped-coupon zero % (12 1/8s,
               1/15/07), 2012 (STP)                                      51,500
       525,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. disc. notes
               stepped-coupon zero % (11 3/4s,
               5/15/06), 2011 (STP)                                     288,750
       415,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. disc. notes
               stepped-coupon zero % (11 3/4s,
               1/15/05), 2010 (STP)                                     280,125
     1,595,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. notes
               11 1/8s, 2011                                          1,303,913
       860,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. notes
               10 3/4s, 2009                                            703,050
       420,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. notes
               10 1/4s, 2010                                            327,600
     1,560,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. notes  10s, 2011                 1,177,800
       745,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. notes  9 5/8s, 2009                575,513
       375,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. notes  8 5/8s, 2009                286,875
        30,000 Charter Communications Holdings,
               LLC/Capital Corp. sr. notes  8 1/4s, 2007                 25,500
       650,000 Cinemark USA, Inc. sr. sub. notes
               9s, 2013                                                 693,875
     1,600,000 Cinemark USA, Inc. sr. sub. notes
               Ser. B, 8 1/2s, 2008                                   1,660,000
       150,000 Constellation Brands, Inc. company
               guaranty 8 1/2s, 2009                                    158,250
       305,000 Constellation Brands, Inc. company
               guaranty Ser. B, 8s, 2008                                330,925
       425,000 Constellation Brands, Inc. sr. sub.
               notes Ser. B, 8 1/8s, 2012                               456,875
       156,758 Constellation Energy Group, Inc.
               bank term loan FRN Ser. B,
               3 7/8s, 2008 (acquired 3/20/03, cost
               $156,758) (RES)                                          157,972
       570,000 Cott Beverages USA, Inc. company
               guaranty 8s, 2011                                        612,750
       150,000 CSC Holdings, Inc. sr. notes 7 7/8s, 2007                153,375
       170,000 Dean Foods Co. sr. notes 6 5/8s, 2009                    177,650
       210,000 Del Monte Corp. company guaranty
               Ser. B, 9 1/4s, 2011                                     231,000
       560,000 Del Monte Corp. 144A sr. sub. notes
               8 5/8s, 2012                                             611,800
       230,878 Del Monte Foods Co. bank term loan
               FRN Ser. B, 4.8581s, 2010  (acquired
               12/16/02, cost $229,724) (RES)                           233,379
       180,000 DirecTV bank term loan FRN Ser. B,
               4.0039s, 2010  (acquired 3/4/03 and
               8/5/03, cost $180,000) (RES)                             180,698
     2,742,000 Diva Systems Corp. sr. disc. notes
               Ser. B, 12 5/8s, 2008 (In default) (NON)                 219,360
     1,370,000 Doane Pet Care Co. sr. sub. debs.
               9 3/4s, 2007                                           1,301,500
        27,391 Dole Food Co. bank term loan FRN
               Ser. B, 5.0875s, 2008  (acquired
               3/28/03, cost $27,391) (RES)                              27,563
       260,000 Dole Food Co. sr. notes 8 7/8s, 2011                     276,900
       200,000 Dole Food Co. sr. notes 7 1/4s, 2009                     213,000
       665,000 Domino's, Inc. 144A sr. sub. notes
               8 1/4s, 2011                                             702,406
       380,000 Eagle Family Foods company guaranty
               Ser. B, 8 3/4s, 2008                                     250,800
     1,015,000 Echostar DBS Corp. sr. notes
               10 3/8s, 2007                                          1,127,919
     1,509,000 Echostar DBS Corp. sr. notes 9 1/8s, 2009              1,707,056
     1,660,000 Echostar DBS Corp. 144A sr. notes
               6 3/8s, 2011                                           1,651,700
       125,000 Echostar DBS Corp. 144A sr. notes
               FRN 4.41s, 2008                                          127,813
        95,000 Elizabeth Arden, Inc. sec. notes
               Ser. B, 11 3/4s, 2011                                    108,300
       198,000 Emmis Communications Corp. bank term
               loan FRN Ser. C, 3 3/8s,
               2009 (acquired 6/20/02, cost
               $197,753) (RES)                                          198,935
       235,000 Emmis Communications Corp. company
               guaranty Ser. B, 8 1/8s, 2009                            244,988
        61,000 Emmis Communications Corp. sr. disc.
               notes stepped-coupon zero %
               (12 1/2s, 3/15/06), 2011 (STP)                            54,290
       625,000 Fleming Cos., Inc. company guaranty
               10 1/8s, 2008 (In default) (NON)                         103,125
       515,000 Fleming Cos., Inc. sr. notes 9 1/4s,
               2010 (In default) (NON)                                   73,388
       124,000 French Fragrances, Inc. company
               guaranty Ser. D, 10 3/8s, 2007                           128,960
       265,000 French Fragrances, Inc. sr. notes
               Ser. B, 10 3/8s, 2007                                    276,263
        45,000 Granite Broadcasting Corp. sr. sub.
               notes 10 3/8s, 2005                                       44,325
       610,000 Granite Broadcasting Corp. sr. sub.
               notes 9 3/8s, 2005                                       592,463
       820,000 Granite Broadcasting Corp. sr. sub.
               notes 8 7/8s, 2008                                       788,225
       415,000 Gray Television, Inc. company
               guaranty 9 1/4s, 2011                                    457,538
        70,000 Insight Midwest LP/Insight Capital,
               Inc. bank term loan FRN
               3.9375s, 2009 (acquired 1/9/01, cost
               $69,895) (RES)                                            70,011
        37,590 Knology, Inc. 144A sr. notes 12s,
               2009 (PIK)                                                35,898
       585,000 Land O'Lakes, Inc. sr. notes 8 3/4s, 2011                485,550
       250,000 LIN Television Corp. company
               guaranty 8s, 2008                                        268,750
       300,000 MGM Studios bank term loan FRN
               Ser. B, 4.1s, 2008  (acquired
               6/10/02, cost $300,000) (RES)                            300,656
       910,000 News America Holdings, Inc. company
               guaranty 9 1/4s, 2013                                  1,190,564
        61,486 Nexstar Broadcasting bank term loan
               FRN Ser. B, 4.12s, 2011  (acquired
               2/5/03, cost $61,486) (RES)                               61,717
        26,014 Nexstar Mission Broadcasting bank
               term loan FRN 4.12s, 2011  (acquired
               2/5/03, cost $26,014) (RES)                               26,112
     1,115,000 North Atlantic Trading Co. company
               guaranty Ser. B, 11s, 2004                             1,064,825
       500,000 Olympus Cable bank term loan FRN
               Ser. B, 6s, 2010  (acquired 6/20/02,
               cost $435,750) (RES)                                     444,659
       220,000 ONO Finance PLC sr. notes 14s, 2011
               (United Kingdom)                                         201,025
       100,000 ONO Finance PLC sr. notes 13s, 2009
               (United Kingdom)                                          90,125
        15,000 Pegasus Communications Corp. sr.
               notes 12 1/2s, 2007                                       12,000
        60,000 Pegasus Communications Corp. sr.
               notes Ser. B, 9 3/4s, 2006                                47,400
       400,000 Pegasus Satellite sr. notes 12 3/8s, 2006                320,000
       197,000 Playtex Products, Inc. bank term
               loan FRN Ser. C, 4.6164s, 2009 (acquired
               6/3/02, cost $197,000) (RES)                             196,508
     1,595,000 Playtex Products, Inc. company
               guaranty 9 3/8s, 2011                                  1,531,200
       480,000 Polaroid Corp. sr. notes 11 1/2s,
               2006 (In default) (NON)                                   97,200
       650,000 Premier International Foods PLC sr.
               notes 12s, 2009 (United Kingdom)                         711,750
     1,000,000 Premier Parks, Inc. sr. notes 10s, 2007                  982,500
     1,050,000 Premium Standard Farms, Inc. sr.
               notes 9 1/4s, 2011                                     1,050,000
     1,896,149 Quorum Broadcast Holdings, LLC notes
               stepped-coupon zero %  (15s,
               5/15/06), 2009 (STP)                                   1,403,719
       133,500 Rayovac Corp. bank term loan FRN
               Ser. B, 4.8748s, 2009  (acquired
               9/26/02, cost $133,367) (RES)                            133,778
       352,000 RCN Corp. sr. disc. notes Ser. B,
               zero %, 2008                                             160,160
       400,000 Regal Cinemas, Inc. company guaranty
               Ser. B, 9 3/8s, 2012                                     450,000
       700,000 Remington Arms Co., Inc. company
               guaranty 10 1/2s, 2011                                   717,500
       465,000 Revlon Consumer Products sr. notes
               9s, 2006                                                 325,500
       360,000 Revlon Consumer Products sr. notes
               8 1/8s, 2006                                             248,400
GBP    100,000 RHM Finance, Ltd. bonds
               stepped-coupon Ser. B1, 11 1/2s
               (17 1/4s, 2/28/11), 2011 (Cayman
               Islands) (STP)                                           141,211
      $120,000 Rite Aid Corp. bank term loan FRN
               4.12s, 2008  (acquired 5/16/03, cost
               $119,850) (RES)                                          121,400
       560,000 Rite Aid Corp. company guaranty
               9 1/2s, 2011                                             632,800
       115,000 Rite Aid Corp. 144A notes 6s, 2005                       115,575
       675,000 Rite Aid Corp. 144A sr. notes
               9 1/4s, 2013                                             715,500
       380,000 Rite Aid Corp. 144A sr. sec. notes
               8 1/8s, 2010                                             404,700
       550,000 Rogers Cablesystems, Ltd. sr. notes
               Ser. B, 10s, 2005 (Canada)                               589,875
       246,256 Roundy's, Inc. bank term loan FRN
               3.6362s, 2009  (acquired 6/3/02,
               cost $246,256) (RES)                                     246,872
       820,000 Sbarro, Inc. company guaranty 11s, 2009                  709,300
       470,000 Scotts Co. (The) company guaranty
               8 5/8s, 2009                                             495,850
       282,113 Shoppers Drug Mart bank term loan
               FRN Ser. F, 3.163s, 2009
               (acquired various dates from 5/22/02
               to 5/29/02, cost $283,363) (RES)                         282,340
       340,000 Sinclair Broadcast Group, Inc.
               company guaranty 8 3/4s, 2011                            369,750
       375,000 Sinclair Broadcast Group, Inc.
               company guaranty 8s, 2012                                395,625
        93,750 Six Flags, Inc. bank term loan FRN
               Ser. B, 3.37s, 2009  (acquired
               1/15/03, cost $93,633) (RES)                              93,382
     1,600,000 Six Flags, Inc. sr. notes 8 7/8s, 2010                 1,472,000
     1,270,000 TeleWest Communications PLC debs.
               11s, 2007 (United Kingdom) (In
               default) (NON)                                           619,125
       260,000 TeleWest Communications PLC debs.
               9 5/8s, 2006 (United Kingdom) (In
               default) (NON)                                           122,200
       200,000 TeleWest Communications PLC sr.
               notes Ser. S, 9 7/8s, 2010 (United
               Kingdom) (In default) (NON)                               91,000
        80,000 TeleWest Communications PLC 144A sr.
               notes 11 1/4s, 2008 (United Kingdom)
               (In default) (NON)                                        38,400
        60,000 TM Group Holdings sr. notes 11s,
               2008 (United Kingdom)                                     63,300
       290,000 United Rentals (North America), Inc.
               company guaranty Ser. B,  10 3/4s, 2008                  321,900
       120,000 Vivendi Universal SA bank term loan
               FRN Ser. B, 3.8677s, 2008 (acquired
               6/23/03, cost $120,000) (France) (RES)                   120,600
       770,000 Vivendi Universal SA 144A notes
               6 1/4s, 2008 (France)                                    793,100
       455,000 Vivendi Universal SA 144A sr. notes
               9 1/4s, 2010 (France)                                    522,681
       680,000 Williams Scotsman, Inc. company
               guaranty 9 7/8s, 2007                                    669,800
     1,421,000 Young Broadcasting, Inc. company
               guaranty 10s, 2011                                     1,506,260
        82,000 Young Broadcasting, Inc. company
               guaranty Ser. B, 8 3/4s, 2007                             83,230
        60,000 Yum! Brands, Inc. sr. notes 8 7/8s, 2011                  69,900
       265,000 Yum! Brands, Inc. sr. notes 8 1/2s, 2006                 294,150
     1,060,000 Yum! Brands, Inc. sr. notes 7.65s, 2008                1,171,300
                                                                 --------------
                                                                     54,521,316

Energy (4.6%)
- -------------------------------------------------------------------------------
       710,000 Arch Western Finance, LLC 144A sr.
               notes 6 3/4s, 2013                                       731,300
       690,000 Belden & Blake Corp. company
               guaranty Ser. B, 9 7/8s, 2007                            652,050
       640,000 BRL Universal Equipment sec. notes
               8 7/8s, 2008                                             681,600
       340,000 Chesapeake Energy Corp. company
               guaranty 9s, 2012                                        382,500
       215,000 Chesapeake Energy Corp. company
               guaranty 8 3/8s, 2008                                    233,275
       115,000 Chesapeake Energy Corp. company
               guaranty 8 1/8s, 2011                                    124,775
       155,000 Chesapeake Energy Corp. sr. notes
               Ser. B, 8 1/2s, 2012                                     164,300
     1,135,000 Chesapeake Energy Corp. 144A sr.
               notes 7 1/2s, 2013                                     1,191,750
       875,000 Comstock Resources, Inc. company
               guaranty 11 1/4s, 2007                                   949,375
       695,000 Dresser, Inc. company guaranty
               9 3/8s, 2011                                             728,013
       215,000 El Paso Energy Partners LP company
               guaranty Ser. B, 8 1/2s, 2011                            231,663
       545,000 Encore Acquisition Co. company
               guaranty 8 3/8s, 2012                                    572,250
       200,000 Forest Oil Corp. company guaranty
               7 3/4s, 2014                                             206,500
       300,000 Forest Oil Corp. sr. notes 8s, 2011                      318,000
       335,000 Forest Oil Corp. sr. notes 8s, 2008                      355,100
       430,000 Hornbeck Offshore Services, Inc. sr.
               notes 10 5/8s, 2008                                      471,925
       295,000 Key Energy Services, Inc. sr. notes
               6 3/8s, 2013                                             294,263
        80,000 Leviathan Gas Corp. company guaranty
               Ser. B, 10 3/8s, 2009                                     86,800
       700,000 Newfield Exploration Co. sr. notes
               7 5/8s, 2011                                             745,500
     2,950,000 OAO Gazprom 144A notes 9 5/8s, 2013 (Russia)           3,156,500
       500,000 OAO Gazprom notes Ser. REGS, 9 5/8s,
               2013 (Russia)                                            535,000
       470,000 Offshore Logistics, Inc. company
               guaranty 6 1/8s, 2013                                    448,850
       540,000 Parker Drilling Co. company guaranty
               Ser. B, 10 1/8s, 2009                                    550,800
        89,550 Peabody Energy Corp. bank term loan
               FRN Ser. B, 3.6356s, 2010 (acquired
               3/20/03, cost $89,550) (RES)                              90,166
     2,750,000 Petronas Capital, Ltd. company
               guaranty 7s, 2012 (Malaysia)                           3,117,950
     2,170,000 Petronas Capital, Ltd. 144A company
               guaranty 7s, 2012 (Malaysia)                           2,460,346
     2,260,000 Pioneer Natural Resources Co.
               company guaranty 9 5/8s, 2010                          2,813,700
       115,000 Pioneer Natural Resources Co.
               company guaranty 6 1/2s, 2008                            124,488
       380,000 Plains All American Pipeline
               LP/Plains All American Finance
               Corp. company guaranty 7 3/4s, 2012                      412,300
       485,000 Plains Exploration & Production Co.
               144A sr. sub. notes 8 3/4s, 2012                         518,950
       670,000 Pogo Producing Co. sr. sub. notes
               Ser. B, 8 1/4s, 2011                                     728,625
       425,000 Pride Petroleum Services, Inc. sr.
               notes 9 3/8s, 2007                                       437,750
       600,000 Seabulk International, Inc. 144A sr.
               notes 9 1/2s, 2013                                       602,250
       270,000 Seven Seas Petroleum, Inc. sr. notes
               Ser. B, 12 1/2s, 2005 (In default) (NON)                  29,700
       745,000 Star Gas Partners LP/Star Gas
               Finance Co. sr. notes 10 1/4s, 2013                      793,425
       364,615 Star Gas Propane 1st Mtge. 8.04s, 2009                   359,146
       710,000 Stone Energy Corp. sr. sub. notes
               8 1/4s, 2011                                             752,600
       330,000 Swift Energy Co. sr. sub. notes
               10 1/4s, 2009                                            349,800
       470,000 Swift Energy Co. sr. sub. notes
               9 3/8s, 2012                                             505,250
       360,000 Tesoro Petroleum Corp. sec. notes
               8s, 2008                                                 369,000
       740,000 Trico Marine Services, Inc. company
               guaranty 8 7/8s, 2012                                    540,200
       150,000 Universal Compression, Inc. sr.
               notes 7 1/4s, 2010                                       154,500
       670,000 Vintage Petroleum, Inc. sr. notes
               8 1/4s, 2012                                             720,250
       405,000 Vintage Petroleum, Inc. sr. sub.
               notes 9 3/4s, 2009                                       431,325
       145,000 Vintage Petroleum, Inc. sr. sub.
               notes 7 7/8s, 2011                                       149,350
       120,000 Weg Acquisition bank term loan FRN
               5.61s, 2008  (acquired 6/13/03, cost
               $118,800) (RES)                                          120,900
       925,000 Westport Resources Corp. company
               guaranty 8 1/4s, 2011                                  1,010,563
       280,000 Westport Resources Corp. 144A
               company guaranty 8 1/4s, 2011                            305,900
       500,000 XCL, Ltd. 144A company guaranty
               13 1/2s, 2004 (In default) (NON)                         150,000
       390,000 XTO Energy, Inc. sr. notes 7 1/2s, 2012                  431,925
       230,000 XTO Energy, Inc. sr. notes 6 1/4s, 2013                  238,050
                                                                 --------------
                                                                     32,530,498

Financial (1.4%)
- -------------------------------------------------------------------------------
       460,000 Chevy Chase Savings Bank, Inc. sub.
               debs. 9 1/4s, 2005                                       462,300
       790,000 Conseco, Inc. 144A notes zero %,
               2009 (In default) (NON)                                        1
       120,000 Crescent Real Estate Equities LP
               notes 7 1/2s, 2007 (R)                                   122,400
       765,000 Crescent Real Estate Equities LP sr.
               notes 9 1/4s, 2009 (R)                                   822,375
     2,192,000 Finova Group, Inc. notes 7 1/2s, 2009                  1,085,040
       219,612 Hilb, Rogal & Hamilton Co. bank term
               loan FRN Ser. B, 3 7/8s,
               2007 (acquired 6/20/02, cost
               $219,612) (RES)                                          221,534
       177,975 Infinity Inc. bank term loan FRN
               3.61s, 2010  (acquired 7/2/03, cost
               $177,975) (RES)                                          179,013
       840,000 iStar Financial, Inc. sr. notes
               8 3/4s, 2008 (R)                                         938,700
       125,000 iStar Financial, Inc. sr. notes 7s,
               2008 (R)                                                 133,750
     1,831,500 JP Morgan HY disc. notes 8s, 2008                      1,858,973
       258,000 Nationwide Credit, Inc. sr. notes
               Ser. A, 10 1/4s, 2008 (In default) (NON)                       3
       112,000 Ocwen Financial Corp. notes 11 7/8s, 2003                112,000
       770,000 Resource America, Inc. 144A sr.
               notes 12s, 2004                                          777,700
     2,065,000 Sovereign Bancorp, Inc. sr. notes
               10 1/2s, 2006                                          2,458,079
       540,000 Western Financial Bank sub. debs.
               9 5/8s, 2012                                             584,550
                                                                 --------------
                                                                      9,756,418

Gaming & Lottery (2.9%)
- -------------------------------------------------------------------------------
       500,000 Ameristar Casinos, Inc. company
               guaranty 10 3/4s, 2009                                   568,750
       590,000 Argosy Gaming Co. company guaranty
               10 3/4s, 2009                                            646,050
       160,000 Argosy Gaming Co. sr. sub. notes 9s, 2011                174,000
       165,000 Borgata Resorts bank term loan FRN
               Ser. B, 5.1793s, 2007  (acquired
               6/5/02, cost $164,588) (RES)                             165,928
       750,000 Boyd Gaming Corp. sr. sub. notes
               8 3/4s, 2012                                             811,875
       370,000 Chumash Casino & Resort Enterprise
               144A sr. notes 9 1/4s, 2010                              397,750
       900,000 Herbst Gaming, Inc. sec. notes
               Ser. B, 10 3/4s, 2008                                    999,000
       630,000 Hollywood Park, Inc. company
               guaranty Ser. B, 9 1/4s, 2007                            643,388
       940,000 Horseshoe Gaming Holdings company
               guaranty 8 5/8s, 2009                                  1,003,450
       540,000 Majestic Investor Holdings/Capital
               Corp. company guaranty  11.653s, 2007                    588,600
       430,000 Mandalay Resort Group 144A sr. notes
               6 1/2s, 2009                                             437,525
     1,970,000 MGM Mirage, Inc. company guaranty
               8 1/2s, 2010                                           2,216,250
       490,000 Mirage Resorts, Inc. notes 6 3/4s, 2008                  515,725
       105,000 Mohegan Tribal Gaming Authority sr.
               notes 8 1/8s, 2006                                       113,269
       200,000 Mohegan Tribal Gaming Authority sr.
               sub. notes 8 3/8s, 2011                                  218,000
     1,420,000 Mohegan Tribal Gaming Authority 144A
               sr. sub. notes 6 3/8s, 2009                            1,432,425
     1,020,000 Park Place Entertainment Corp. sr.
               notes 7 1/2s, 2009                                     1,091,400
       380,000 Park Place Entertainment Corp. sr.
               notes 7s, 2013                                           392,825
       395,000 Park Place Entertainment Corp. sr.
               sub. notes 8 7/8s, 2008                                  437,463
       115,000 Park Place Entertainment Corp. sr.
               sub. notes 8 1/8s, 2011                                  123,913
       199,000 Penn National Gaming, Inc. bank term
               loan FRN Ser. B, 5.0563s, 2010 (acquired
               2/19/03, cost $198,751) (RES)                            199,995
       455,000 Penn National Gaming, Inc. company
               guaranty Ser. B, 11 1/8s, 2008                           509,600
       955,000 Penn National Gaming, Inc. sr. sub.
               notes 8 7/8s, 2010                                     1,027,819
       119,700 Pinnacle Entertainment, Inc. bank
               term loan FRN Ser. B, 5.7406s,
               2008 (acquired 4/3/03, cost
               $118,204) (RES)                                          120,299
       370,000 Pinnacle Entertainment, Inc. sr.
               sub. notes 8 3/4s, 2013                                  366,300
       220,000 Pinnacle Entertainment, Inc. sr.
               sub. notes Ser. B, 9 1/2s, 2007                          225,225
       395,000 Resorts International Hotel and
               Casino, Inc. company guaranty
               11 1/2s, 2009                                            391,544
       565,000 Riviera Holdings Corp. company
               guaranty 11s, 2010                                       560,056
       248,125 Scientific Gaming bank term loan FRN
               Ser. B, 4.61s, 2008  (acquired
               12/11/02, cost $246,884) (RES)                           248,559
       750,000 Station Casinos, Inc. sr. notes
               8 3/8s, 2008                                             806,250
       410,000 Trump Atlantic City Associates
               company guaranty 11 1/4s, 2006                           314,675
     1,535,000 Trump Casino Holdings, LLC company
               guaranty 11 5/8s, 2010                                 1,371,906
       945,000 Venetian Casino Resort, LLC company
               guaranty 11s, 2010                                     1,077,300
                                                                 --------------
                                                                     20,197,114

Health Care (3.7%)
- -------------------------------------------------------------------------------
        54,952 ALARIS Medical Systems, Inc. bank
               term loan FRN 3.8694s,
               2009 (acquired 6/30/03, cost
               $54,952) (RES)                                            55,447
       515,000 ALARIS Medical Systems, Inc. sr.
               sub. notes 7 1/4s, 2011                                  517,575
       100,000 Alderwoods Group, Inc. bank term
               loan FRN 4.387s, 2008  (acquired
               9/9/03, cost $100,000) (RES)                             101,000
     1,385,700 Alderwoods Group, Inc. company
               guaranty 12 1/4s, 2009                                 1,534,663
       697,000 Alliance Imaging, Inc. sr. sub.
               notes 10 3/8s, 2011                                      724,880
       435,000 AmerisourceBergen Corp. company
               guaranty 7 1/4s, 2012                                    442,613
       560,000 AmerisourceBergen Corp. sr. notes
               8 1/8s, 2008                                             602,000
       990,000 Ardent Health Services 144A sr. sub.
               notes 10s, 2013                                        1,049,400
       870,000 Biovail Corp. sr. sub. notes 7 7/8s,
               2010 (Canada)                                            896,100
       297,000 Community Health Systems, Inc. bank
               term loan FRN Ser. B, 3.6399s, 2010
               (acquired 7/11/02, cost $297,000) (RES)                  297,603
       199,500 Concentra bank term loan FRN
               4.9203s, 2009  (acquired 8/12/03,
               cost $199,500) (RES)                                     200,373
       185,000 Dade Behring, Inc. company guaranty
               11.91s, 2010                                             210,438
       200,000 DaVita, Inc. bank term loan FRN
               Ser. C, 3.6193s, 2009 (acquired
               7/17/03, cost $200,000) (RES)                            200,775
       500,000 Extendicare Health Services, Inc.
               company guaranty 9 1/2s, 2010                            542,500
       183,630 Fisher Scientific International,
               Inc. bank term loan FRN Ser. B,
               3.6s, 2010 (acquired 2/13/03, cost
               $183,630) (RES)                                          185,053
        37,341 Genesis Health Ventures, Inc. sec.
               notes FRN 6.114s, 2007                                    36,968
       100,000 Hanger Orthopedic Group, Inc. bank
               term loan FRN 3.87s, 2009  (acquired
               9/29/03, cost $100,000) (RES)                            100,375
       605,000 Hanger Orthopedic Group, Inc.
               company guaranty 10 3/8s, 2009                           676,088
       145,000 Hanger Orthopedic Group, Inc. sr.
               sub. notes 11 1/4s, 2009                                 161,313
     1,500,000 HCA, Inc. med. term notes 8.85s, 2007                  1,697,091
     1,240,000 HCA, Inc. notes 7s, 2007                               1,350,687
     1,095,000 Healthsouth Corp. notes 7 5/8s, 2012                     941,700
       510,000 Healthsouth Corp. sr. notes 8 1/2s, 2008                 448,800
       245,000 Healthsouth Corp. sr. notes 8 3/8s, 2011                 211,925
       205,000 Healthsouth Corp. sr. notes 7s, 2008                     176,300
       400,000 IASIS Healthcare Corp. company
               guaranty 13s, 2009                                       449,000
        75,000 IASIS Healthcare Corp. company
               guaranty 8 1/2s, 2009                                     77,625
     1,000,000 Integrated Health Services, Inc. sr.
               sub. notes Ser. A, 9 1/2s, 2007 (In
               default) (NON)                                            21,250
       380,000 Integrated Health Services, Inc. sr.
               sub. notes Ser. A, 9 1/4s, 2008 (In
               default) (NON)                                             8,550
       149,625 Kinetic Concepts, Inc. bank term
               loan FRN 3.87s, 2011  (acquired
               8/5/03, cost $149,969) (RES)                             150,420
     1,440,000 Magellan Health Svcs., Inc. sr. sub.
               notes 9s, 2008 (In default) (NON)                        799,200
       270,000 Magellan Health Svcs., Inc. 144A sr.
               notes 9 3/8s, 2007 (In default) (NON)                    279,450
       149,625 Medex, Inc. bank term loan FRN
               4.86s, 2009  (acquired various dates
               from 5/16/03 to 6/16/03, cost $149,551) (RES)            150,248
       560,000 Mediq, Inc. debs. zero %, 2009 (In
               default) (NON)                                                56
       925,000 MedQuest, Inc. company guaranty
               Ser. B, 11 7/8s, 2012                                    980,500
     1,590,000 Multicare Companies, Inc. sr. sub.
               notes 9s, 2007 (In default) (NON)                         23,850
EUR     50,000 NYCO Holdings 144A 11 1/2s, 2013                          61,562
      $740,000 Omnicare, Inc. sr. sub. notes
               6 1/8s, 2013                                             723,350
     1,135,000 PacifiCare Health Systems, Inc.
               company guaranty 10 3/4s, 2009                         1,308,088
       670,000 Province Healthcare Co. sr. sub.
               notes 7 1/2s, 2013                                       666,650
        75,000 Service Corp. International notes
               7.2s, 2006                                                75,000
        25,000 Service Corp. International notes
               6 7/8s, 2007                                              24,875
       110,000 Service Corp. International notes
               6 1/2s, 2008                                             108,900
     1,580,000 Service Corp. International notes
               6s, 2005                                               1,587,900
       270,000 Service Corp. International notes
               Ser. (a), 7.7s, 2009                                     276,075
       720,000 Stewart Enterprises, Inc. notes
               10 3/4s, 2008                                            802,800
       115,000 Tenet Healthcare Corp. sr. notes
               6 3/8s, 2011                                             110,113
       560,000 Tenet Healthcare Corp. sr. notes
               5 3/8s, 2006                                             548,800
     1,995,000 Triad Hospitals Holdings company
               guaranty Ser. B, 11s, 2009                             2,194,500
       632,042 Triad Hospitals, Inc. bank term loan
               FRN Ser. B, 4.11s, 2008  (acquired
               4/24/01, cost $631,410) (RES)                            634,915
        35,000 Triad Hospitals, Inc. company
               guaranty Ser. B, 8 3/4s, 2009                             38,063
       305,000 Ventas Realty LP/Capital Corp.
               company guaranty 9s, 2012                                338,550
                                                                 --------------
                                                                     25,801,957

Homebuilding (1.0%)
- -------------------------------------------------------------------------------
       430,000 Beazer Homes USA, Inc. company
               guaranty 8 5/8s, 2011                                    463,325
       630,000 D.R. Horton, Inc. sr. notes 7 7/8s, 2011                 683,550
       190,000 D.R. Horton, Inc. sr. notes 6 7/8s, 2013                 190,475
       630,000 D.R. Horton, Inc. sr. notes 5 7/8s, 2013                 582,750
       450,000 K. Hovnanian Enterprises, Inc.
               company guaranty 10 1/2s, 2007                           519,750
       575,000 K. Hovnanian Enterprises, Inc.
               company guaranty 8 7/8s, 2012                            615,250
       130,000 K. Hovnanian Enterprises, Inc.
               company guaranty 8s, 2012                                139,100
       210,000 K. Hovnanian Enterprises, Inc. 144A
               sr. sub. notes 7 3/4s, 2013                              216,300
       365,000 KB Home sr. sub. notes 9 1/2s, 2011                      400,131
       295,000 Meritage Corp. 144A sr. notes
               9 3/4s, 2011                                             322,288
       615,000 Ryland Group, Inc. sr. notes 9 3/4s, 2010                699,563
       140,000 Ryland Group, Inc. sr. notes 5 3/8s, 2008                140,875
       385,000 Schuler Homes, Inc. company guaranty
               10 1/2s, 2011                                            436,494
       190,000 Technical Olympic USA, Inc. company
               guaranty 10 3/8s, 2012                                   204,250
       135,000 Technical Olympic USA, Inc. company
               guaranty 9s, 2010                                        142,425
       250,000 Toll Corp. sr. sub. notes 8 1/4s, 2011                   273,125
       160,000 WCI Communities, Inc. company
               guaranty 10 5/8s, 2011                                   175,200
       530,000 WCI Communities, Inc. company
               guaranty 9 1/8s, 2012                                    567,100
                                                                 --------------
                                                                      6,771,951

Household Furniture and Appliances (0.2%)
- -------------------------------------------------------------------------------
       701,000 Sealy Mattress Co. company guaranty
               Ser. B, zero %, 2007                                     716,773
       890,000 Sealy Mattress Co. sr. sub. notes
               Ser. B, 9 7/8s, 2007                                     903,350
                                                                 --------------
                                                                      1,620,123

Lodging/Tourism (1.4%)
- -------------------------------------------------------------------------------
       695,000 FelCor Lodging LP company guaranty
               9 1/2s, 2008 (R)                                         747,125
       850,000 Hilton Hotels Corp. notes 7 5/8s, 2012                   935,000
     4,260,000 HMH Properties, Inc. company
               guaranty Ser. B, 7 7/8s, 2008 (R)                      4,377,150
       250,000 HMH Properties, Inc. sr. notes
               Ser. C, 8.45s, 2008                                      260,313
       279,000 Host Marriott LP sr. notes Ser. E,
               8 3/8s, 2006 (R)                                         291,904
       585,000 ITT Corp. notes 6 3/4s, 2005                             616,444
     1,510,000 John Q. Hammons Hotels LP/John Q.
               Hammons Hotels Finance  Corp. III
               1st mtge. Ser. B, 8 7/8s, 2012                         1,630,800
       670,000 RFS Partnership LP company guaranty
               9 3/4s, 2012                                             687,588
       100,000 Starwood Hotels & Resorts Worldwide,
               Inc. company guaranty  7 7/8s, 2012                      109,500
       390,000 Starwood Hotels & Resorts Worldwide,
               Inc. company guaranty  7 3/8s, 2007                      418,275
                                                                 --------------
                                                                     10,074,099

Publishing (2.2%)
- -------------------------------------------------------------------------------
        42,643 Affinity Group Holdings bank term
               loan FRN Ser. B1, 4.85s, 2009 (acquired
               5/27/03, cost $42,536) (RES)                              42,656
       106,607 Affinity Group Holdings bank term
               loan FRN Ser. B2, 5.1479s, 2009 (acquired
               5/27/03, cost $106,341) (RES)                            106,641
     1,203,000 Affinity Group Holdings sr. notes
               11s, 2007                                              1,233,075
       200,000 Dex Media West, LLC bank term loan
               FRN 3.87s, 2010  (acquired 9/9/03,
               cost $200,000) (RES)                                     201,750
     1,115,000 Dex Media West, LLC 144A sr. notes
               8 1/2s, 2010                                           1,206,988
       670,000 Garden State Newspapers, Inc. sr.
               sub. notes 8 5/8s, 2011                                  703,500
        50,000 Garden State Newspapers, Inc. sr.
               sub. notes Ser. B, 8 3/4s, 2009                           51,375
       450,000 Hollinger International Publishing,
               Inc. sr. notes 9s, 2010                                  474,188
     1,512,785 Hollinger Participation Trust 144A
               sr. notes 12 1/8s, 2010 (Canada) (PIK)                 1,701,883
       530,000 Key3media Group, Inc. company
               guaranty 11 1/4s, 2011 (In default) (NON)                  5,300
       120,000 Moore Wallace bank term loan FRN
               Ser. B, 3.7313s, 2010  (acquired
               3/13/03, cost $120,000) (RES)                            121,013
       188,478 PRIMEDIA, Inc. bank term loan FRN
               Ser. B, 4.0979s, 2009  (acquired
               2/10/03, cost $180,468) (RES)                            184,974
     1,095,000 PRIMEDIA, Inc. company guaranty
               8 7/8s, 2011                                           1,136,063
       350,000 PRIMEDIA, Inc. company guaranty
               7 5/8s, 2008                                             344,750
       800,000 PRIMEDIA, Inc. 144A sr. notes 8s, 2013                   802,000
       165,000 Quebecor Media, Inc. sr. disc. notes
               stepped-coupon zero %  (13 3/4s,
               7/15/06), 2011 (Canada) (STP)                            137,981
     1,055,000 Quebecor Media, Inc. sr. notes
               11 1/8s, 2011 (Canada)                                 1,200,063
       248,108 RH Donnelley Finance Corp. I bank
               term loan FRN Ser. B,  5.1295s, 2010
               (acquired 12/04/02, cost $245,627) (RES)                 252,489
       925,000 RH Donnelley Finance Corp. I 144A
               sr. notes 8 7/8s, 2010                                 1,036,000
       600,000 RH Donnelley Finance Corp. I 144A
               sr. sub. notes 10 7/8s, 2012                             708,000
       168,038 Sum Media bank term loan FRN Ser. B,
               3.61s, 2009  (acquired 2/4/03, cost
               $168,038) (RES)                                          168,248
       875,000 Vertis, Inc. company guaranty
               Ser. B, 10 7/8s, 2009                                    901,250
       655,000 Vertis, Inc. sub. notes 13 1/2s, 2009                    609,150
       455,000 Vertis, Inc. 144A sec. notes 9 3/4s, 2009                478,888
       920,000 Von Hoffman Press, Inc. company
               guaranty 10 1/4s, 2009                                   982,100
       100,000 Von Hoffman Press, Inc. company
               guaranty FRN 10 3/8s, 2007                               100,750
       130,878 Von Hoffman Press, Inc. debs. 13s,
               2009 (PIK)                                               122,698
        62,000 Yell Finance BV sr. notes 10 3/4s,
               2011 (Netherlands)                                        71,300
                                                                 --------------
                                                                     15,085,073

Retail (0.9%)
- -------------------------------------------------------------------------------
        85,643 Advance Stores bank term loan FRN
               Ser. C, 3.983s, 2007  (acquired
               3/4/03, cost $85,643) (RES)                               85,879
       455,000 Asbury Automotive Group, Inc.
               company guaranty 9s, 2012                                455,000
       885,000 Autonation, Inc. company guaranty
               9s, 2008                                                 991,200
       335,000 Gap, Inc. (The) notes 6.9s, 2007                         360,125
       375,000 Hollywood Entertainment Corp. sr.
               sub. notes 9 5/8s, 2011                                  406,875
       840,000 J. Crew Operating Corp. 144A sr.
               sub. notes 10 3/8s, 2007                                 852,600
       575,000 JC Penney Co., Inc. notes 9s, 2012                       649,750
        30,000 JC Penney Co., Inc. notes 8s, 2010                        32,925
       320,000 JC Penney Co., Inc. notes Ser. MTNA,
               7.05s, 2005                                              332,800
     1,580,000 Saks, Inc. company guaranty 8 1/4s, 2008               1,730,100
       515,000 United Auto Group, Inc. company
               guaranty 9 5/8s, 2012                                    562,638
                                                                 --------------
                                                                      6,459,892

Technology (1.4%)
- -------------------------------------------------------------------------------
       630,000 AMI Semiconductor, Inc. company
               guaranty 10 3/4s, 2013                                   708,750
       149,250 Amkor Technologies, Inc. bank term
               loan FRN 5.1247s, 2006  (acquired
               4/17/03, cost $149,447) (RES)                            151,147
       390,000 Amkor Technologies, Inc. structured
               notes 12.58s, 2005  (issued by
               STEERS Credit Linked Trust 2000)                         409,500
       195,000 Avaya, Inc. sec. sr. notes 11 1/8s, 2009                 225,713
       785,000 DigitalNet Holdings Inc. 144A sr.
               notes 9s, 2010                                           832,100
EUR    580,000 Getronics NV sub. notes 13s, 2008 (Netherlands)          324,985
    $1,150,000 Iron Mountain, Inc. company guaranty
               8 5/8s, 2013                                           1,221,875
       170,000 Iron Mountain, Inc. company guaranty
               8 1/8s, 2008 (Canada)                                    176,375
       390,000 Iron Mountain, Inc. sr. sub. notes
               8 1/4s, 2011                                             405,600
       790,000 ON Semiconductor Corp. company
               guaranty 13s, 2008                                       900,600
       560,000 SCG Holding & Semiconductor Corp.
               company guaranty 12s, 2009                               583,800
       620,000 Seagate Technology Hdd Holdings
               company guaranty 8s, 2009 (Cayman Islands)               682,000
       144,297 Telex Communications Group, Inc. sr.
               sub. notes Ser. A, zero %, 2006                           79,363
       185,000 Xerox Capital Europe PLC company
               guaranty 5 7/8s, 2004 (United Kingdom)                   185,925
       535,000 Xerox Corp. company guaranty 9 3/4s, 2009                593,850
EUR    195,000 Xerox Corp. sr. notes 9 3/4s, 2009                       248,721
      $300,000 Xerox Corp. sr. notes 7 5/8s, 2013                       295,875
     1,785,000 Xerox Corp. sr. notes 7 1/8s, 2010                     1,778,306
                                                                 --------------
                                                                      9,804,485

Textiles (0.4%)
- -------------------------------------------------------------------------------
       560,000 Galey & Lord, Inc. company guaranty
               9 1/8s, 2008 (In default) (NON)                            4,200
       295,000 Levi Strauss & Co. bank term loan
               FRN 10s, 2009  (acquired 9/23/03,
               cost $295,000) (RES)                                     301,514
       940,000 Levi Strauss & Co. sr. notes
               12 1/4s, 2012                                            752,000
       460,000 Oxford Industries, Inc. 144A sr.
               notes 8 7/8s, 2011                                       489,900
       505,000 Russell Corp. company guaranty
               9 1/4s, 2010                                             536,563
       615,000 William Carter Holdings Co. (The)
               company guaranty Ser. B,  10 7/8s, 2011                  688,800
                                                                 --------------
                                                                      2,772,977

Tire & Rubber (--%)
- -------------------------------------------------------------------------------
       220,000 Goodyear Tire & Rubber Co. (The)
               notes 7.857s, 2011                                       184,800

Transportation (1.1%)
- -------------------------------------------------------------------------------
       445,000 Allied Holdings, Inc. company
               guaranty Ser. B, 8 5/8s, 2007                            413,850
       550,000 American Airlines, Inc. pass-through
               certificates Ser. 01-1, 6.817s, 2011                     462,000
        80,000 American Airlines, Inc. pass-through
               certificates Ser. 99-1,  7.024s, 2009                     76,800
       985,000 Calair, LLC/Calair Capital Corp.
               company guaranty 8 1/8s, 2008                            837,250
       320,000 Continental Airlines, Inc.
               pass-through certificates
               Ser. D, 7.568s, 2006                                     240,000
       930,000 CSX Corp. notes 6 1/4s, 2008                           1,041,083
       390,000 Delta Air Lines, Inc. pass-through
               certificates Ser. 00-1, 7.779s, 2005                     322,178
       267,352 Delta Air Lines, Inc. pass-through
               certificates Ser. 02-1, 7.779s, 2012                     216,555
       925,000 Evergreen International Aviation,
               Inc. 144A sec. notes 12s, 2010                           841,750
EUR    400,000 Fixed-Link Finance BV sec. notes
               Ser. B2-X, 7.85s, 2009 (Netherlands)                     321,347
      $910,000 Kansas City Southern Railway Co.
               company guaranty 9 1/2s, 2008                          1,003,275
       190,000 Kansas City Southern Railway Co.
               company guaranty 7 1/2s, 2009                            197,125
       135,000 Navistar International Corp. sr.
               notes Ser. B, 8s, 2008                                   137,700
       540,000 Northwest Airlines, Inc. company
               guaranty 7 5/8s, 2005                                    473,850
       261,692 NWA Trust sr. notes Ser. A, 9 1/4s, 2012                 259,730
       195,176 Pacer International, Inc. bank term
               loan FRN 4.4757s, 2010  (acquired
               6/10/03, cost $195,858) (RES)                            196,559
       190,000 Travel Centers of America, Inc.
               company guaranty 12 3/4s, 2009                           216,600
       620,000 United AirLines, Inc. debs. 9 1/8s,
               2012 (In default) (NON)                                   58,125
     1,370,337 US Air, Inc. pass-through
               certificates Ser. 93-A2,
               9 5/8s, 2004 (In default) (NON)                          479,618
                                                                 --------------
                                                                      7,795,395

Utilities & Power (3.9%)
- -------------------------------------------------------------------------------
        54,000 AES Corp. (The) sr. notes 8 7/8s, 2011                    53,730
        30,000 AES Corp. (The) sr. notes 8 3/4s, 2008                    30,075
     1,885,000 AES Corp. (The) 144A sec. notes
               8 3/4s, 2013                                           1,979,250
       940,000 Allegheny Energy Supply 144A bonds
               8 1/4s, 2012                                             827,200
       335,000 Allegheny Energy, Inc. notes 7 3/4s, 2005                336,675
       425,000 Avon Energy Partners Holdings 144A
               notes 7.05s, 2007  (United Kingdom)                      361,250
        40,000 Avon Energy Partners Holdings 144A
               notes 6.46s, 2008  (United Kingdom)                       36,237
       970,000 Calpine Canada Energy Finance
               company guaranty 8 1/2s,  2008 (Canada)                  697,188
       250,000 Calpine Corp. bank term loan FRN
               6.86s, 2007  (acquired 7/11/03, cost
               $250,000) (RES)                                          235,486
       460,000 Calpine Corp. sr. notes 8 3/4s, 2007                     342,700
       390,000 Calpine Corp. sr. notes 8 1/2s, 2011                     274,950
       700,000 Calpine Corp. sr. notes 7 7/8s, 2008                     493,500
     1,940,000 Calpine Corp. 144A sec. notes
               8 1/2s, 2010                                           1,784,800
       280,000 CenterPoint Energy Resources Corp.
               debs. 6 1/2s, 2008                                       297,817
       240,000 CenterPoint Energy Resources Corp.
               144A notes 7 7/8s, 2013                                  269,624
       150,000 CMS Energy Corp. pass-through
               certificates 7s, 2005                                    148,875
       600,000 CMS Energy Corp. sr. notes 8.9s, 2008                    621,000
       230,000 CMS Energy Corp. sr. notes 8 1/2s, 2011                  234,025
       180,000 CMS Energy Corp. 144A sr. notes
               7 3/4s, 2010                                             178,650
       295,000 Dynegy Holdings, Inc. sr. notes
               6 7/8s, 2011                                             247,063
     1,810,000 Dynegy Holdings, Inc. 144A sec.
               notes 10 1/8s, 2013                                    1,909,550
        40,000 Dynegy-Roseton Danskamme company
               guaranty Ser. A, 7.27s, 2010                              37,400
       265,000 Edison Mission Energy sr. notes 10s, 2008                233,200
       440,000 Edison Mission Energy sr. notes
               9 7/8s, 2011                                             376,200
       320,000 Edison Mission Energy sr. notes
               7.73s, 2009                                              260,800
       155,000 El Paso CGP Co. debs. 6 1/2s, 2008                       124,775
       200,000 El Paso CGP Co. notes 6 3/8s, 2009                       158,000
       275,000 El Paso Corp. notes Ser. MTN, 6.95s, 2007                240,625
       670,000 El Paso Corp. sr. notes 7 3/8s, 2012                     547,725
       365,000 El Paso Natural Gas Co. 144A sr.
               notes 7 5/8s, 2010                                       352,225
       925,000 El Paso Production Holding Co. 144A
               sr. notes 7 3/4s, 2013                                   878,750
       100,000 Gemstone Investor, Ltd. 144A company
               guaranty 7.71s, 2004                                      98,750
       380,323 Midland Funding II Corp. debs.
               Ser. A, 11 3/4s, 2005                                    413,602
       385,000 Midwest Generation LLC pass-through
               certificates Ser. A, 8.3s, 2009                          365,750
       270,000 Mirant Americas Generation, Inc. sr.
               notes 8.3s, 2011 (In default) (NON)                      211,950
       950,000 Mirant Americas Generation, Inc. sr.
               notes 7 5/8s, 2006 (In default) (NON)                    752,875
       280,000 Mirant Americas Generation, Inc. sr.
               notes 7.2s, 2008 (In default) (NON)                      221,900
       280,000 Mission Energy Holding Co. sec.
               notes 13 1/2s, 2008                                      184,800
       560,000 Nevada Power Co. 144A 2nd mtge. 9s, 2013                 578,200
       340,000 Northwest Pipeline Corp. company
               guaranty 8 1/8s, 2010                                    368,900
       145,000 Orion Power Holdings, Inc. sr. notes
               12s, 2010                                                163,850
       360,000 Pacific Gas & Electric Co. 144A sr.
               notes 7 3/8s, 2005 (In default) (NON)                    369,000
       855,000 PG&E Corp. 144A sec. notes 6 7/8s, 2008                  897,750
       160,000 PG&E Gas Transmission Northwest sr.
               notes 7.1s, 2005                                         164,400
       615,000 PSEG Energy Holdings, Inc. notes
               7 3/4s, 2007                                             611,925
       485,000 SEMCO Energy, Inc. 144A sr. notes
               7 3/4s, 2013                                             488,031
       565,000 Sierra Pacific Resources notes
               8 3/4s, 2005                                             526,863
        90,000 Southern California Edison Co. notes
               6 3/8s, 2006                                              94,500
       920,000 Southern California Edison Co. 144A
               1st mtge. 8s, 2007                                     1,028,100
       320,000 Teco Energy, Inc. notes 10 1/2s, 2007                    356,400
       160,000 Teco Energy, Inc. notes 7.2s, 2011                       157,600
       405,000 Teco Energy, Inc. notes 7s, 2012                         390,319
       365,000 Teco Energy, Inc. sr. notes 7 1/2s, 2010                 370,019
       595,000 Western Resources, Inc. sr. notes
               9 3/4s, 2007                                             664,913
       105,000 Williams Cos., Inc. (The) notes
               9 1/4s, 2004                                             107,100
       150,000 Williams Cos., Inc. (The) notes
               8 1/8s, 2012                                             156,000
       755,000 Williams Cos., Inc. (The) notes
               Ser. A, 6 3/4s, 2006                                     758,775
       545,000 Williams Cos., Inc. (The) notes
               6 1/2s, 2006                                             546,363
       705,000 Williams Cos., Inc. (The) sr. notes
               8 5/8s, 2010                                             747,300
       375,000 Williams Holdings Of Delaware notes
               6 1/2s, 2008                                             363,750
       120,000 Williams Products bank term loan FRN
               4.9s, 2007  (acquired 6/4/03, cost
               $120,000) (RES)                                          120,975
       926,682 York Power Funding 144A notes 12s,
               2007 (Cayman Islands) (In default) (NON)                 648,677
                                                                 --------------
                                                                     27,498,682
                                                                 --------------
               Total Corporate bonds and notes
               (cost $355,326,393)                                 $358,167,977

Foreign government bonds and notes (18.6%) (a)
Principal amount                                                          Value
- -------------------------------------------------------------------------------
    $6,890,000 Brazil (Federal Republic of) bonds
               2.188s, 2012                                          $5,512,000
     1,495,000 Brazil (Federal Republic of) unsub.
               10s, 2011                                              1,461,363
     3,000,000 Bulgaria (Republic of) 144A bonds
               8 1/4s, 2015                                           3,412,500
CAD  8,510,000 Canada (Government of) bonds 6s, 2011                  6,972,018
CAD  3,680,000 Canada (Government of) bonds
               Ser. WH31, 6s, 2008                                    2,991,466
      $900,000 Chile (Republic of) bonds 5 1/2s, 2013                   936,000
       364,629 Colombia (Republic of) bank guaranty
               9 3/4s, 2011                                             405,650
     1,040,000 Colombia (Republic of) bonds
               Ser. NOV, 9 3/4s, 2009                                 1,151,800
     5,305,000 Colombia (Republic of) notes
               10 3/4s, 2013                                          5,941,600
EUR    770,000 Colombia (Republic of) unsub. bonds
               Ser. 15A, 11 3/8s, 2008                                1,022,023
      $915,000 Dominican (Republic of) 144A notes
               9.04s, 2013                                              828,075
     1,000,000 Ecuador (Republic of) bonds
               Ser. REGS, 12s, 2012                                     827,500
     1,000,000 El Salvador (Republic of) 144A notes
               8 1/2s, 2011                                           1,090,000
EUR  8,330,000 Germany (Federal Republic of) bonds
               Ser. 95, 7 3/8s, 2005                                 10,319,331
EUR  1,345,000 Hellenic Greece (Republic of) bonds
               3 1/2s, 2008                                           1,585,558
      $185,000 Indonesia (Republic of) FRN 2.005s, 2006                 159,100
       460,000 Indonesia (Republic of) FRN 2.005s, 2005                 418,600
EUR  3,400,000 Italy (Government of) treasury bonds
               5 1/2s, 2010                                           4,400,798
NZD  9,290,000 New Zealand (Government of) bonds
               6 1/2s, 2013                                           5,776,485
NZD  5,804,000 New Zealand (Government of) bonds
               Ser. 709, 7s, 2009                                     3,667,473
    $1,635,000 Peru (Republic of) notes 9 1/8s, 2008                  1,908,863
EUR    355,000 Philippines (Republic of) 144A bonds
               9 1/8s, 2010                                             437,506
   $12,690,000 Russia (Federation of) unsub.
               8 1/4s, 2010                                          14,327,010
EUR    305,000 South Africa (Republic of) bonds
               5 1/4s, 2013                                             346,234
    $2,855,000 South Africa (Republic of) notes
               7 3/8s, 2012                                           3,237,570
EUR  1,000,000 Spain (Government of) bonds 5.4s, 2011                 1,292,373
SEK 30,690,000 Sweden (Government of) bonds 6 3/4s, 2014              4,699,830
SEK 26,915,000 Sweden (Government of) bonds Ser.
               3101, 4s, 2008                                         4,268,719
    $1,000,000 Turkey (Republic of) bonds 11 3/4s, 2010               1,141,500
     3,000,000 Turkey (Republic of) notes 9 7/8s, 2008                3,237,000
       401,804 Ukraine (Government of) sr. notes
               Ser. REGS, 11s, 2007                                     446,806
EUR    231,936 Ukraine (Government of) sr. notes
               Ser. REGS, 10s, 2007                                     292,186
      $730,000 Ukraine (Government of) sr. notes,
               7.65s, 2013                                              725,620
GBP  4,030,000 United Kingdom treasury bonds
               7 1/4s, 2007                                           7,448,231
GBP  6,900,000 United Kingdom treasury bonds
               7 1/2s, 2006                                          12,586,341
    $1,835,000 United Mexican States notes 7 1/2s, 2012               2,076,303
     8,440,000 United Mexican States notes 6 3/8s, 2013               8,874,660
       630,000 United Mexican States notes 4 5/8s, 2008                 642,600
     3,428,480 Venezuela (Republic of) FRB 1 7/8s, 2007               3,098,660
       465,000 Venezuela (Republic of) 144A notes
               10 3/4s, 2013                                            428,963
                                                                 --------------
               Total Foreign government bonds and
               notes (cost $116,502,678)                           $130,396,315

U.S. government and agency obligations (13.5%) (a)
Principal amount                                                          Value

U.S. Government and Agency Mortgage Obligations (9.8%)
- -------------------------------------------------------------------------------
               Federal National Mortgage
               Association Pass-Through
               Certificates
          $201 8 1/2s, March 1, 2006                                       $215
        24,529 8s, with due dates from October 1,
               2025 to July 1, 2028                                      26,638
        61,691 7 1/2s, December 1, 2029                                  65,851
       669,233 6 1/2s, August 1, 2032                                   697,636
    19,728,000 6 1/2s, TBA, October 1, 2032                          20,560,285
    12,489,400 5s, TBA, October 1, 2033                              12,489,400
               Government National Mortgage
               Association Pass-Through
               Certificates
     4,097,676 5s, with due dates from August 15,
               2033 to September 15, 2033                             4,109,116
    31,032,000 5s, TBA, October 1, 2033                              31,090,185
                                                                 --------------
                                                                     69,039,326

U.S. Treasury Obligations (3.7%)
- -------------------------------------------------------------------------------
               U.S. Treasury Notes
     7,500,000 6 1/2s, February 15, 2010                              8,900,100
    16,690,000 1 5/8s, March 31, 2005                                16,792,360
                                                                 --------------
                                                                     25,692,460
                                                                 --------------
               Total U.S. government and agency
               obligations (cost $93,386,439)                       $94,731,786

Asset-backed securities (7.7%) (a)
Principal amount                                                          Value
- -------------------------------------------------------------------------------
      $419,290 ABSC Nims Trust 144A Ser. 03-HE5,
               Class A, 7s, 2033                                       $409,856
               Ameriquest Mortgage Securities, Inc.
       104,000 FRB Ser. 03-10, 4.869s, 2012                              85,456
        83,000 FRB Ser. 03-8, Class MV6, 4.86s, 2033                     69,709
       164,000 FRN Ser. 03-AR3, Class M5, 4.87s, 2033                   155,480
       418,000 FRN Ser. 03-1, Class M4, 4.2s, 2033                      349,353
               Amortizing Residential Collateral Trust
    19,303,636 Ser. 02-BC1, Class A, IO, 6s, 2005                       744,486
       387,000 FRN Ser. 02-BC5, Class B, 3.37s, 2032                    330,462
       144,000 FRN Ser. 02-BC7, Class B3, 3.12s, 2032                   124,453
       507,040 AQ Finance NIM Trust Ser. 03-N1,
               Class Note, 9.37s, 2033                                  507,028
               AQ Finance NIM Trust 144A
       994,826 Ser. 03-N2, Class Note, 9.3s, 2033                       994,826
       213,000 Ser. 03-N9A, Class NOTE, 7.385s, 2033                    213,000
               Arc Net Interest Margin Trust 144A
       312,278 Ser. 02-8A, Class A1, 7 3/4s, 2032                       309,705
       158,470 Ser. 02-1A, Class A, 7 3/4s, 2032                        158,443
        98,135 Arc Net Interest Margin Trust Ser.
               02-5A, Class A, 7 3/4s, 2032                              97,503
       383,000 Arcap, Inc. 144A Ser. 03-1A, Class
               E, 6.33s, 2038 (R)                                       395,208
       180,000 Argent Securities, Inc. FRB Ser.
               03-W1, Class MV6, 4.87s, 2033                            142,128
               Asset Backed Funding Certificates 2031                   340,140
       434,000 FRB Ser. 03-WF1, Class M3, 4.17s, 2032                   434,000
       132,000 FRB Ser. 03-WF1, Class M4, 4.37s, 2032                   120,816
        63,513 Asset Backed Funding Corp. NIM Trust
               Ser. 02-WF1, 9.32s, 2032                                  63,513
       154,388 Asset Backed Funding Corp. NIM Trust
               144A Ser. 03-WF1,  Class N1, 8.35s, 2032                 154,388
               Asset Backed Securities Corp. Home
               Equity Loan Trust
       250,000 FRB Ser. 02-HE3, Class M4, 4.12s, 2032                   215,614
       159,000 FRB Ser. 03-HE5, Class M5, 5.37s, 2033                   137,202
       362,000 FRB Ser. 03-HE6, Class M6, 5.12s, 2033                   316,388
       372,000 FRN Ser. 03-HE1, Class M4, 5.62s, 2033                   324,655
       390,000 FRN Ser. 03-HE3, Class M5, 5.12s, 2033                   333,188
       806,000 FRN Ser. 03-HE2, Class M4, 4.97s, 2033                   776,130
       340,001 Aviation Capital Group Trust 144A
               FRB Ser. 03-2A, Class G1,  1.82s, 2033                   340,001
     1,845,000 Bank One Issuance Trust FRN Ser.
               02-C1, Class C1, 2.08s, 2009                           1,833,973
               Bayview Financial Acquisition Trust
       995,000 Ser. 02-CA, Class A, IO, 7.15s, 2004                      37,623
       710,870 FRN Ser. 01-DA, Class M3, 2.52s, 2031                    703,762
    34,465,189 Ser. 03-X, Class AIO1, IO, 1.36s, 2006                   506,207
               CDC Mortgage Capital Trust
       257,000 FRB Ser. 03-HE3, Class B3, 4.87s, 2033                   213,079
       349,997 FRN Ser. 03-HE2, Class B3, 4.87s, 2033                   298,238
        68,072 Chase Funding Net Interest Margin
               Ser. 02-2, 8 1/2s, 2035                                   67,868
               Chase Funding Net Interest Margin 144A
       157,932 Ser. 03-1A, Class NOTE, 8 3/4s, 2004                     158,406
       690,482 Ser. 03-4A, Class NOTE, 6 3/4s, 2036                     689,722
       390,845 Ser. 03-2A, Class NOTE, 8 3/4s, 2035                     388,773
               Conseco Finance Securitizations Corp.
       248,000 Ser. 00-2, Class A4, 8.48s, 2021                         258,209
     4,342,000 Ser. 00-4, Class A6, 8.31s, 2032                       3,848,182
     1,100,000 Ser. 00-6, Class M2, 8.2s, 2032                          550,000
        23,000 Ser. 01-04, Class A4, 7.36s, 2019                         21,848
        13,000 Ser. 01-3, Class A3, 5.79s, 2024                          12,831
       494,000 Ser. 01-3, Class A4, 6.91s, 2033                         455,212
     1,030,000 Ser. 01-4, Class B1, 9.4s, 2010                          360,500
     2,960,176 Ser. 02-1, Class A, 6.681s, 2032                       2,949,890
       300,000 Ser. 2001-3, Class M2, 7.44s, 2033                        99,000
       790,000 Consumer Credit Reference IDX
               Securities FRB Ser. 02-1A,  Class A,
               3.14s, 2007                                              787,346
               First Franklin Mortgage Loan Asset
               Backed Certificates
       169,000 Ser. 03-FF3, 4.12s, 2033                                 158,315
       187,000 FRB Ser. 03-FF4, Class M6, 4.92s, 2033                   170,141
               Granite Mortgages PLC
EUR  1,430,000 Ser. 03-2, Class 2C1, 5.2s, 2010
               (United Kingdom)                                       1,644,970
GBP  1,075,000 FRN Ser. 03-2, Class 3C, 4.956s,
               2043 (United Kingdom)                                  1,785,898
               Green Tree Financial Corp.
      $165,693 Ser. 99-3, 6.16s, 2031                                   168,248
     1,247,000 Ser. 99-5, Class A5, 7.86s, 2030                       1,114,047
               Greenpoint Manufactured Housing
     2,100,522 Ser. 00-3, Class IA, 8.45s, 2031                       1,826,624
        50,000 Ser. 99-5, Class A4, 7.59s, 2028                          50,806
               GSAMP Trust
       123,726 Ser. 02-HE2N, Class Note, 8 1/4s, 2032                   123,814
       214,000 FRB Ser. 03-FM1, Class B3, 5.62s, 2033                   190,995
       318,215 GSAMP Trust 144A Ser. 03-HE1N, Class
               NOTE, 7 1/4s, 2033                                       340,758
               Home Equity Asset Trust
       114,346 Ser. 02-1N, Class A, 8s, 2032                            112,917
       383,000 FRB Ser. 03-5, Class B3, 5.62s, 2033                     340,321
               Home Equity Asset Trust 144A
       691,565 Ser. 02-5N, Class A, 8s, 2033                            677,734
       278,000 Ser. 03-4N, Class A, 8s, 2033                            276,165
     1,260,000 LNR CDO, Ltd. Ser. 02-1A, Class FFL,
               3.87s, 2037                                            1,164,996
       598,632 Long Beach Asset Holdings Corp. 144A
               Ser. 03-2, Class N1,  7.627s, 2033                       598,632
       305,776 Long Beach Asset Holdings Corp. NIM
               Trust 144A Ser. 03-4, Class
               N1, 6.535s, 2033                                         305,681
       419,000 Long Beach Mortgage Loan Trust FRN
               Ser. 03-3, Class M4, 4.62s, 2033                         343,580
     1,046,356 Madison Avenue Manufactured Housing
               Contract FRN Ser. 02-A,  Class B1,
               4.37s, 2032                                              680,131
               Mastr Asset Backed Securities Trust
       136,000 FRB Ser. 03-NC1, 5.12s, 2033                             112,200
       205,000 FRB Ser. 03-OPT1, Class MV5, 4.62s, 2032                 179,831
       524,000 FRN Ser. 03-OPT2, Class M5, 4.87s, 2033                  462,983
               Merrill Lynch Mortgage Investors, Inc.
       351,000 Ser. 03-WM3N, Class N1, 8s, 2005                         347,702
       685,000 FRB Ser. 03-WMC1, Class B2, 4.12s, 2033                  648,181
       300,000 FRB Ser. 03-WMC3, Class B3, 4.12s, 2034                  252,750
               Mid-State Trust
       554,117 Ser. 10, Class B, 7.54s, 2036                            498,621
       440,795 Ser. 11, Class B, 8.221s, 2038                           423,232
               Morgan Stanley Capital I
       354,000 FRB Ser. 02-NC6, Class B2, 4.87s, 2032                   307,427
       398,000 FRB Ser. 03-NC10, Class B3, 4.869s, 2013                 331,646
       472,000 FRB Ser. 03-NC8, Class B3, 4.87s, 2033                   389,432
       399,000 FRN Ser. 03-NC6, Class B3, 4.87s, 2033                   332,138
               Morgan Stanley Dean Witter Capital I
       390,000 FRN Ser. 01-NC3, Class B1, 3.57s, 2031                   355,043
       358,000 FRN Ser. 01-NC4, Class B1, 3.62s, 2032                   325,014
       640,000 FRN Ser. 02-AM2, Class B1, 3.37s, 2032                   576,757
       355,000 FRN Ser. 02-HE1, Class B1, 2.92s, 2032                   332,571
        82,798 Morgan Stanley Dean Witter Capital I
               144A Ser. 01-NC4N,  Class Note,
               8 1/2s, 2032                                              82,884
       400,000 New Century Home Equity Loan Trust
               FRN Ser. 03-2, Class M4,  4.72s, 2033                    341,000
        77,228 NovaStar Caps Trust Ser. 02-C1,
               Class A, 7.15s, 2031                                      90,406
               Option One Mortgage Loan Trust
       375,000 FRB Ser. 03-6, Class M6, 4.62s, 2033                     321,768
       377,000 FRN Ser. 03-3, Class M6, 4.62s, 2033                     334,440
       175,709 Option One Mortgage Securities Corp.
               Ser. 02-2A, Class CFTS,  8.83s, 2032                     175,709
               Option One Mortgage Securities Corp. 144A
       168,583 Ser. 02-1, Class CTFS, 6 3/4s, 2032                      167,871
       187,911 Ser. 03-5, 6.9s, 2033                                    187,911
       233,129 Option One Mortgage Securities Corp.
               NIM Trust 144A Ser. 03-2B, Class N1,
               7.63s, 2033 (Cayman Islands)                             233,056
       963,377 Pass-Through Amortizing Credit Card
               Trust Ser. 02-1A, Class A4FL, 6.62s, 2012                960,015
     4,594,057 Residential Asset Mortgage Products,
               Inc. Ser. 03-RZ1, Class A,
               IO, 0.347s, 2005                                         313,688
       157,882 Rural Housing Trust Ser. 87-1, Class
               D, 6.33s, 2026                                           166,245
               SAIL Net Interest Margin Notes 144A
       445,599 Ser. 03-7A, Class A, 7s, 2033                            442,293
       482,153 Ser. 03-FF3A, Class A, 6 3/4s, 2033                      480,281
       138,000 Ser. 03-8A, Class A, 7s, 2033                            137,305
               Sasco Arc Net Interest Margin Notes 144A
       426,885 Ser. 03-3, Class A, 7 3/4s, 2033                         424,742
       157,519 Ser. 03-4, Class A, 7 1/2s, 2033
               (Cayman Islands)                                         157,353
       806,305 Ser. 03-5, Class A, 7.35s, 2033
               (Cayman Islands)                                         806,069
       760,239 Ser. 03-BC2A, Class A, 7 3/4s, 2033                      758,030
       140,366 Ser. 02-BC10, Class A, 7 3/4s, 2033                      139,090
       709,321 Ser. 03-AM1, Class A, 7 3/4s, 2033                       705,863
       275,880 Ser. 03-BC1, Class B, zero %, 2033                       197,556
       265,000 Saxon Asset Securities Trust FRB
               Ser. 03-3, Class M6, 6.656s, 2033                        228,438
       351,000 Saxon Net Interest Margin Trust 144A
               Ser. 03-A, Class A, 6 3/4s, 2033                         351,000
       140,000 SCF III Class A2, 2.31s, 2038                            140,000
       147,108 SHARP 144A Ser. 03-TC1N, 7 3/4s, 2033                    147,108
               Structured Asset Investment Loan Trust
       955,000 Ser. 03-BC1, Class M3, 4.12s, 2033                       946,495
       813,539 Ser. 03-BC1A, Class A, 7 3/4s, 2033                      809,585
     9,136,654 Ser. 03-BC2, Class A, IO, 6s, 2005                       588,864
       138,000 Ser. 03-BC2, Class B, 7s, 2033                           131,081
       368,000 FRN Ser. 03-BC3, Class B, 4.62s, 2033                    329,015
       395,000 Structured Asset Securities Corp.
               FRN Ser. 02-HF2, Class M3,  3.12s, 2032                  335,966
       390,000 TIAA Commercial Real Estate
               Securitization Ser. 02-1A, Class
               IV, 6.84s, 2037                                          328,804
       904,000 WALT 144A Ser. 03-1, Class D, 6s, 2010                   907,814
     2,877,000 Washington Mutual Ser. 03-S1, Class
               A11, IO, 5.5s, 2033                                      269,719
                                                                 --------------
               Total Asset-backed securities
               (cost $57,414,623)                                   $53,971,565

Collateralized mortgage obligations (5.4%) (a)
Principal amount                                                          Value
- -------------------------------------------------------------------------------
   $27,567,500 Deutsche Mortgage & Asset Receiving
               Corp. Ser. 98-C1,  Class X, IO,
               1.193s, 2023                                            $965,326
GBP  1,333,369 Hermione (European Loan Conduit No.
               14) 144A FRB Class A,  4.102s, 2011
               (Ireland)                                              2,215,126
               Federal National Mortgage Association
      $229,839 Ser. 98-51, Class SG, IO, 25.3s, 2022                     92,699
     1,380,109 Ser. 02-36, Class SJ, 17.325s, 2029                    1,540,704
       743,543 Ser. 03-W3, Class 1A3, 7 1/2s, 2042                      819,120
        13,826 Ser. 03-W2, Class 1A3, 7 1/2s, 2042                       15,232
       872,147 Ser. 01-T10, Class A2, 7 1/2s, 2041                      960,797
        22,387 Ser. 01-T8, Class A1, 7 1/2s, 2041                        24,662
     3,363,089 Ser. 01-T7, Class A1, 7 1/2s, 2041                     3,704,934
       495,604 Ser. 01-T3, Class A1, 7 1/2s, 2040                       545,979
     1,489,899 Ser. 01-T1, Class A1, 7 1/2s, 2040                     1,641,341
       595,502 Ser. 99-T2, Class A1, 7 1/2s, 2039                       656,033
       320,314 Ser. 00-T6, Class A1, 7 1/2s, 2030                       352,873
     1,477,160 Ser. 01-T4, Class A1, 7 1/2s, 2028                     1,627,307
         3,686 Ser. 02-W3, Class A5, 7 1/2s, 2028                         4,060
        60,895 Ser. 02-21, Class PS, IO, 7.08s, 2025                        400
     3,809,194 Ser. 02-9, Class MS, IO, 6.98s, 2032                     328,543
     2,990,215 Ser. 02-36, Class QH, IO, 6.93s, 2029                    191,929
       666,702 Ser. 02-29, Class SL, IO, 6.93s, 2029                     18,921
     1,738,377 Ser. 02-63, Class SN, IO, 6.88s, 2032                    152,108
     1,624,841 Ser. 02-52, Class SL, IO, 6.88s, 2032                    123,704
     2,800,603 Ser. 02-92, Class SA, IO, 6.83s, 2033                    341,323
     1,629,123 Ser. 03-7, Class SM, IO, 6.63s, 2023                      52,183
     4,083,268 Ser. 03-49, Class TS, IO, 6.58s, 2018                    553,155
     1,827,166 Ser. 03-14, Class KS, IO, 6.48s, 2017                    168,156
       901,145 Ser. 03-23, Class SC, IO, 6.43s, 2033                     49,000
     3,314,600 Ser. 03-41, Class SP, IO, 6.08s, 2015                    291,063
     9,623,799 Ser. 03-34, Class ES, IO, 5.88s, 2033                  1,005,988
     3,849,492 Ser. 03-34, Class SG, IO, 5.88s, 2033                    409,610
     2,479,464 Ser. 03-45, Class PI, IO, 5 1/2s, 2029                   283,589
               Federal National Mortgage Association
     6,996,681 Ser. 03-63, Class SE, IO, 5.48s, 2031                    834,136
    13,877,239 Ser. 03-W10, Class 3A, IO, 2.247s, 2043                  587,614
    11,561,749 Ser. 03-W10, Class 1A, IO, 2.227s, 2043                  494,987
     1,733,619 Ser. 318, Class 2, IO, 6s, 2032                          270,878
     4,814,741 Ser. 329, Class 2, IO, 5.5s, 2033                      1,008,110
       708,763 Ser. 01-74, Class MI, IO, 6s, 2015                        47,139
     1,620,244 Ser. 332, Class 2, IO, 6s, 2033                          302,791
     1,880,500 Ser. 03-24, Class IC, IO, 5s, 2015                       296,252
     1,347,490 Ser. 322, Class 2, IO, 6s, 2032                          210,545
     1,582,668 Ser. 03-58, IO, 6s, 2033                                 272,021
    11,358,216 Ser. 03-34, IO, 6s, 2032                               1,187,289
     2,017,407 Ser. 03-26, Class IG, IO, 6s, 2033                       338,546
     5,595,291 Ser. 03-23, Class AI, IO, 5s, 2017                       591,003
     3,361,422 Ser. 03-37, Class IC, IO, 5.5s, 2027                     352,961
        30,199 Ser. 02-27, Class IA, IO, 6s, 2013                           193
       232,904 Ser. 02-97, PO, zero %, 2033                             218,493
       288,149 Ser. 99-51, Class N, PO, zero %, 2029                    255,057
       219,009 Ser. 99-52, Class MO, PO, zero %, 2026                   213,544
       108,607 Ser. 96-5, Class PB, PO, zero %, 2024                    107,521
        17,227 Federal Home Loan Mortgage Corp.
               Structured Pass-Through  Securities
               Ser. T-58, Class 4A, 7 1/2s, 2043                         18,942
               Federal Home Loan Mortgage Corporation
     1,309,500 Ser. 2412, Class GS, FRN, 18.018s, 2032                1,532,115
     1,418,300 Ser. 2515, Class IG, IO, 5.5s, 2032                      428,353
     5,832,044 Ser. 216, IO, 6s, 2032                                   872,987
     2,707,400 Ser. 2448, Class SM, IO, 6.88s, 2032                     419,647
       729,500 Ser. 2590, Class IH, IO, 5.5s, 2028                      191,950
       786,443 Ser. 2448, Class SE, IO, 6.98s, 2029                      26,542
       546,555 Ser. 2478, Class SY, IO, 7.03s, 2021                      24,937
     2,942,623 Ser. 2579, Class GS, IO, 6.53s, 2017                     255,107
       715,360 Ser. 215, Class PO, PO, zero %, 2031                     653,437
       597,062 Ser. 2235, PO, zero %, 2030                              529,519
             3 Ser. 2078, Class KC, PO, zero % 2023                           3
    15,700,392 FFCA Secured Lending Corp. Ser.
               00-1, Class X, IO, 1.66s, 2027                         1,157,951
               Government National Mortgage Association
       523,605 Ser. 02-36, Class SD, IO, 7.03s, 2029                     10,636
     1,189,212 Ser. 02-51, Class SA, IO, 6.98s, 2032                     41,639
     1,450,144 Ser. 02-29, Class SX, IO, 6.93s, 2029                     41,682
     2,073,880 Ser. 01-43, Class SJ, IO, 6.48s, 2029                    106,161
       926,361 Ser. 01-43, Class SD, IO, 6.44s, 2028                     11,869
     3,421,470 Ser. 01-19, Class S, IO, 6.38s, 2031                     290,825
     4,960,900 Ser. 03-83, Class SI, IO, 5.38s, 2032                    448,806
     3,489,040 Ser. 02-47, Class SM, IO, 4.85s, 2032                    202,800
       239,748 Ser. 02-40, Class IB, IO, 6.5s, 2028                       4,158
       314,384 Ser. 98-2, Class EA, PO, zero %, 2028                    285,003
    10,427,652 Merrill Lynch Mortgage Investors,
               Inc. Ser. 96-C2, IO, 2.11s, 2028                         746,656
     3,169,881 Merrill Lynch Mortgage Trust 144A
               Ser. 02-MW1, Class XP, IO,  1.62s, 2034                  226,595
     5,450,228 Mortgage Capital Funding, Inc. Ser.
               97-MC2, Class X, IO, 1.54s, 2012                         212,333
               Strategic Hotel Capital, Inc. 144A
       605,000 Ser. 03-1, Class I, 3.52s, 2013                          605,000
     1,626,000 Ser. 03-1, Class H, 3.22s, 2013                        1,626,000
       180,000 Trizechahn Office Properties Trust
               144A Ser. 01-TZHA, Class D3, 6.943s, 2013                194,168
                                                                 --------------
               Total Collateralized mortgage
               obligations (cost $41,138,820)                       $37,890,766

Preferred stocks (1.1%) (a)
Number of shares                                                          Value
- -------------------------------------------------------------------------------
        10,732 Chevy Chase Preferred Capital Corp.
               Ser. A, $5.188 pfd.                                     $607,431
         3,150 Chevy Chase Savings Bank, Inc. $3.25 pfd.                 87,806
        23,612 CSC Holdings, Inc. Ser. M, $11.125
               cum. pfd.                                              2,476,309
        19,200 Diva Systems Corp. Ser. C, 6.00%
               cum. pfd.                                                    192
           212 Dobson Communications Corp. 13.00%
               pfd. (PIK)                                               222,600
         1,256 Dobson Communications Corp. 12.25%
               pfd. (PIK)                                             1,319,252
           320 First Republic Capital Corp. 144A
               10.50% pfd.                                              344,000
        11,765 Fitzgeralds Gaming Corp. zero % cum. pfd.                    118
        12,814 iStar Financial, Inc. $1.95 cum. pfd.                    320,350
            41 Leiner Health Products Ser. C, zero % pfd.                     1
        16,417 Lodgian, Inc. Ser. A, $7.06 cum.
               pfd. (PIK)                                               410,424
           100 Metrocall Holdings, Inc. Ser. A,
               15.00% cum. pfd.                                           1,100
         3,574 Microcell Telecommunications, Inc.
               zero % pfd. (Canada)                                      42,390
         1,337 North Atlantic Trading Co. 12.00%
               pfd. (PIK)                                                22,073
            17 NTL Europe, Inc. Ser. A, zero % cum. pfd.                     60
           105 Paxson Communications Corp. 13.25%
               cum. pfd. (PIK)                                          924,000
         1,301 Rural Cellular Corp. 12.25% pfd. (PIK)                   728,560
                                                                 --------------
               Total Preferred stocks
               (cost $8,619,060)                                     $7,506,666

Common stocks (0.9%) (a)
Number of shares                                                          Value
- -------------------------------------------------------------------------------
         2,305 Alderwoods Group, Inc. (NON)                             $17,864
       820,000 AMRESCO Creditor Trust (NON) (R)                          22,960
         1,770 Archibald Candy Corp. (NON)                                5,045
        14,080 Aurora Foods, Inc. (NON)                                   1,478
         2,880 Birch Telecom, Inc. (NON)                                  9,965
           493 Comdisco Holding Co., Inc. (NON)                          41,412
        36,832 Conseco, Inc. (NON)                                      665,186
     3,445,121 Contifinancial Corp. Liquidating
               Trust Units                                               34,451
        15,321 Covad Communications Group, Inc. (NON)                    84,725
        84,755 Dobson Communications Corp. (NON)                        688,211
        22,904 Fitzgeralds Gaming Corp. (NON)                               229
         1,807 Genesis Health Ventures, Inc. (NON)                       43,820
        34,403 Globix Corp. (NON)                                        86,008
         7,661 Jasper Energy 144A (NON)                                     479
        44,795 Laidlaw International, Inc. (NON)                        441,231
        19,451 Lodgian, Inc. (NON)                                      104,063
       120,000 Loewen Group International, Inc. (NON)                        12
         1,400 Mariner Health Care, Inc. (NON)                           17,080
         1,400 Mediq, Inc. (NON)                                            140
           166 Metrocall Holdings, Inc. (NON)                            24,070
            30 Microcell Telecommunications, Inc.
               Class A (Canada) (NON)                                       334
         3,552 Microcell Telecommunications, Inc.
               Class B (Canada) (NON)                                    42,155
       870,000 Morrison Knudsen Corp. (NON)                              93,525
        49,759 Pioneer Cos., Inc. (NON)                                 226,403
         7,016 Polymer Group, Inc. Class A (NON)                         60,618
           327 Premium Holdings (LP) 144A (NON)                           7,030
           715 PSF Group Holdings, Inc. 144A Class
               A (NON)                                                1,251,828
           167 Quorum Broadcast Holdings, Inc.
               Class E  (acquired 5/15/01, cost
               $166,516) (NON) (RES)                                     89,187
       120,076 Regal Entertainment Group 144A                         2,010,072
           110 Sterling Chemicals, Inc. (NON)                             1,678
           740 Sun Healthcare Group, Inc. (NON)                           5,365
       948,000 VFB LLC (NON)                                            180,120
         2,135 Washington Group International, Inc. (NON)                57,538
           249 WilTel Communications, Inc. (NON)                          3,979
         1,567 York Research Corp. 144A (NON)                                98
                                                                 --------------
               Total Common stocks
               (cost $15,255,121)                                    $6,318,359

Convertible bonds and notes (0.4%) (a)
Principal amount                                                          Value
- -------------------------------------------------------------------------------
      $115,000 AES Corp. (The) cv. sub. notes
               4 1/2s, 2005                                            $106,088
       895,000 American Tower Corp. cv. notes 5s, 2010                  808,856
       200,000 Amkor Technologies, Inc. cv. notes
               5 3/4s, 2006                                             190,250
     2,430,000 Cybernet Internet Services
               International, Inc. 144A cv. sr.
               disc. notes stepped-coupon zero %
               (13s, 8/15/04) 2009 (Denmark) (In
               default) (NON) (STP)                                       2,430
       230,000 DaVita, Inc. cv. sub. notes 7s, 2009                     240,063
       275,000 Kulicke & Soffa Industries, Inc. cv.
               sub. notes 4 3/4s, 2006                                  240,969
        18,000 Millicom International Cellular SA
               144A cv. bonds zero %,
               2006 (Luxembourg) (PIK)                                   36,000
     1,155,000 Nextel Communications, Inc. cv. sr.
               notes 6s, 2011                                         1,251,731
       310,000 Rogers Communications cv. debs. 2s,
               2005 (Canada)                                            277,838
                                                                 --------------
               Total Convertible bonds and notes
               (cost $4,743,584)                                     $3,154,225

Units (0.2%) (a)
Number of units                                                          Value
- -------------------------------------------------------------------------------
       600,000 Australis Media, Ltd. units 15 3/4s,
               2003 (Australia) (In default) (DEF) (NON)                    $60
     1,193,000 HMP Equity Holdings Corp. units zero %, 2008             578,605
       220,000 Tom Brown Inc. units 7 1/4s, 2013                        227,700
           950 XCL Equity Units zero %                                  133,333
       500,000 XCL, Ltd. 144A units 13 1/2s, 2004
               (In default) (NON)                                       150,000
                                                                 --------------
               Total Units (cost $2,067,129)                         $1,089,698

Convertible preferred stocks (0.1%) (a)
Number of shares                                                          Value
- -------------------------------------------------------------------------------
         9,140 Crown Castle International Corp.
               $3.125 cv. pfd.                                         $356,460
         1,991 Knology, Inc. 144A Ser. D, zero %
               cv. pfd.                                                      20
         3,800 LTV Corp. 144A $4.125 cv. pfd. (In
               default) (NON)                                                38
            48 Paxson Communications Corp. 144A
               9.75% cv. pfd. (PIK)                                     364,800
         6,847 Telex Communications, Inc. zero %
               cv. pfd. (In default) (NON)                                6,847
                                                                 --------------
               Total Convertible preferred stocks
               (cost $912,180)                                         $728,165

Warrants (--%) (a) (NON)                             Expiration
Number of warrants                                   date                 Value
- -------------------------------------------------------------------------------
         1,500 Comunicacion Celular SA 144A
               (Colombia)                            11/15/03            $1,500
         1,020 Dayton Superior Corp. 144A            6/15/09                255
           809 Diva Systems Corp. 144A               5/15/06                  8
             3 Doe Run Resources Corp. 144A          12/31/12                 1
           295 MDP Acquisitions PLC 144A (Ireland)   10/1/13                737
         2,199 Microcell Telecommunications
               (Canada)                              5/1/08               3,797
         1,319 Microcell Telecommunications
               (Canada)                              5/1/05               1,545
           390 Mikohn Gaming Corp. 144A              8/15/08                  4
           400 ONO Finance PLC 144A (United
               Kingdom)                              2/15/11                  1
           410 Pliant Corp. 144A                     6/1/10                 205
           491 Solutia, Inc. 144A                    7/15/09             12,275
         1,851 Sun Healthcare Group, Inc.            2/28/05                  1
         1,830 Travel Centers of America, Inc. 144A  5/1/09              18,300
         1,670 Ubiquitel, Inc. 144A                  4/15/10                 17
            30 Versatel Telecom NV (Netherlands)     5/15/08                  1
         1,317 Washington Group International, Inc.
               Ser. A                                1/25/06              6,650
         1,506 Washington Group International, Inc.
               Ser. B                                1/25/06              5,270
           814 Washington Group International, Inc.
               Ser. C                                1/25/06              2,483
           590 XM Satellite Radio Holdings, Inc.
               144A                                  3/15/10                  6
                                                                 --------------
               Total Warrants (cost $482,247)                           $53,056

Short-term investments (9.9%) (a)
Principal amount                                                          Value
- -------------------------------------------------------------------------------
    $1,752,000 U.S. Treasury Note zero %, November
               6, 2003 (SEG)                                         $1,750,180
       629,218 Short-term investments held as
               collateral for loaned  securities
               with yields ranging from 1.04% to
               1.19% and  due dates ranging from
               October 1, 2003 to  November 18,
               2003 (d)                                                 628,900
    33,912,000 Interest in $357,000,000 tri-party
               repurchase agreement  dated
               September 30, 2003 with UBS
               Securities, LLC due  October 1, 2003
               with respect to various U.S.
               Government  obligations -- maturity
               value of $33,913,017 for an
               effective  yield of 1.08%                             33,912,000
    33,000,000 Interest in $263,000,000 tri-party
               repurchase agreement  dated
               September 30, 2003 with Goldman
               Sachs & Co.  due October 1, 2003
               with respect to various U.S.
               Government obligations -- maturity
               value of $33,000,990  for an
               effective yield of 1.08%                              33,000,000
                                                                 --------------
               Total Short-term investments
               (cost $69,291,080)                                   $69,291,080
- -------------------------------------------------------------------------------
               Total Investments
               (cost $765,139,354)                                 $763,299,658
- -------------------------------------------------------------------------------

  (a) Percentages indicated are based on net assets of $700,693,933.

(DEF) Security is in default of principal and interest.

(NON) Non-income-producing security.

(STP) The interest or dividend rate and date shown parenthetically
      represent the new interest or dividend rate to be paid and the date the
      fund will begin accruing interest or dividend income at this rate.

(RES) Restricted, excluding 144A securities, as to public resale. The
      total market value of restricted securities held at September 30, 2003
      was $16,870,304 or 2.4% of net assets.

(PIK) Income may be received in cash or additional securities at the
      discretion of the issuer.

(SEG) This security was pledged and segregated with the custodian to
      cover margin requirements for futures contracts at September 30, 2003.

  (R) Real Estate Investment Trust.


  (d) See Note 1 to the financial statements.

      144A after the name of a security represents those exempt from
      registration under Rule 144A of the Securities Act of 1933. 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 shown at September 30, 2003.

DIVERSIFICATION BY COUNTRY

Distribution of investments by country of issue at September 30, 2003:
(as a percentage of Market Value)

     Brazil                      0.9%
     Canada                      2.9
     Colombia                    1.1
     France                      0.7
     Germany                     1.4
     Italy                       0.6
     Luxembourg                  0.6
     Malaysia                    0.7
     New Zealand                 1.2
     Russia                      2.4
     South Africa                0.5
     Sweden                      1.2
     United Kingdom              3.6
     United States              77.0
     Other                       5.2
     -------------------------------
     Total                     100.0%


Forward currency contracts to buy at September 30, 2003
(aggregate face value $57,307,924)

                         Market      Aggregate     Delivery     Unrealized
                          value     face value         date   appreciation
- --------------------------------------------------------------------------
Australian Dollar   $20,697,424    $19,866,055     12/17/03       $831,369
British Pound            45,604         43,636     12/17/03          1,968
Canadian Dollar         714,402        703,995     12/17/03         10,407
Danish Krone          1,098,488      1,023,418     12/17/03         75,070
Euro                  1,386,755      1,364,887     12/17/03         21,868
Japanese Yen         32,492,896     30,962,855     12/17/03      1,530,041
Swedish Krona           319,699        306,220     12/17/03         13,479
Swiss Franc             447,830        418,633     12/17/03         29,197
Taiwan Dollar         2,633,761      2,618,225     12/17/03         15,536
- --------------------------------------------------------------------------
                                                                $2,528,935

Forward currency contracts to sell at September 30, 2003
(aggregate face value $59,287,714)

                                                                Unrealized
                         Market      Aggregate     Delivery  appreciation/
                          value     face value         date (depreciation)
- --------------------------------------------------------------------------
British Pound        $7,362,196     $7,154,238     12/17/03     $(207,958)
Canadian Dollar       9,736,218      9,462,387     12/17/03      (273,831)
Euro                 26,169,133     24,416,724     12/17/03    (1,752,409)
Japanese Yen          1,612,567      1,613,486     12/17/03           919
New Zealand Dollar    9,226,829      8,850,632     12/17/03      (376,197)
Swedish Krona         8,518,827      7,790,247     12/17/03      (728,580)
- --------------------------------------------------------------------------
                                                              $(3,338,056)
- --------------------------------------------------------------------------

<TABLE>
<CAPTION>

Futures contracts outstanding at September 30, 2003

                                                                           Unrealized
                                       Market    Aggregate  Expiration  appreciation/
                                        value   face value        date (depreciation)
- -------------------------------------------------------------------------------------
<S>                              <C>          <C>             <C>        <C>
3 Month Eurodollar (short)        $33,939,375  $33,830,516      Sep-04     $(108,859)
3 Month Eurodollar (long)          33,073,425   32,916,066      Sep-06       157,359
3 Month Eurodollar (short)         32,561,100   32,488,712      Jun-04       (72,388)
3 Month Eurodollar (long)          31,708,050   31,643,449      Jun-06        64,601
Euro-Bobl 5 yr (long)              20,996,536   20,495,009      Dec-03       501,527
Euro-Bund 10 yr (long)             21,050,688   20,461,065      Dec-03       589,623
Interest Rate Swap 10 yr (long)     1,683,750    1,623,879      Dec-03        59,871
Japanese Government
Bond 10 yr (long)                  11,043,602   10,916,117      Dec-03       127,485
US Treasury Bond 20 yr (long)       1,570,188    1,469,011      Dec-03       101,177
US Treasury Note 10 yr (long)      46,193,875   43,986,206      Dec-03     2,207,669
US Treasury Note 5 yr (short)      26,438,219   25,786,719      Dec-03      (651,500)
- -------------------------------------------------------------------------------------
                                                                          $2,976,565
- -------------------------------------------------------------------------------------

</TABLE>

TBA sales commitments at September 30, 2003
(proceeds receivable $5,710,309)

                                 Principal        Settlement            Market
                                    amount              date             value
- ------------------------------------------------------------------------------
GNMA, 5s, October 2033          $5,773,000          10/22/03        $5,783,824
- ------------------------------------------------------------------------------

<TABLE>
<CAPTION>

Interest rate swap contracts outstanding at September 30, 2003
                                                         Notional       Termination        Unrealized
                                                           amount              date      appreciation
- ------------------------------------------------------------------------------------------------------
<S>                                                  <C>               <C>               <C>
Agreement with Merrill Lynch Capital Services,
Inc. dated November 17, 2000 to pay
semi-annually the notional amount multiplied
by the three month USD-LIBOR-BBA and
receive the notional amount multiplied
by 6.68%.                                              $6,500,000          11/21/05          $657,144

Agreement with Merrill Lynch Capital Services,
Inc. dated September 27, 2002 to receive
semi-annually the notional amount multiplied
by the six month JPY-LIBOR-BBA and pay
monthly the notional amount multiplied
by 0.399%.                                      JPY 2,443,000,000           10/1/07           224,261
- ------------------------------------------------------------------------------------------------------
                                                                                             $881,405
- ------------------------------------------------------------------------------------------------------

</TABLE>


<TABLE>
<CAPTION>

Credit default contracts outstanding at September 30, 2003
(premiums received $260,184)

                                                                           Notional            Market
                                                                             amount             value
- ------------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>
Agreement with Deutsche Bank effective July 18, 2003,
maturing on September 20, 2008, to receive a premium
equal to 9.795% times the notional amount. Upon a credit
default event of Petroleos Mexicanos, the fund makes a
payment of the proportional notional amount times the
difference between the par value and the then-market
value of Petroleos Mexicanos.                                              $415,000           $36,387

Agreement with Lehman Brothers Special Financing, Inc.
effective July 18, 2003, maturing on September 20, 2008
to receive a premium equal to 10.02% times the notional
amount. Upon a credit default event of Petroleos Mexicanos,
the fund makes a payment of the proportional notional
amount times the difference between the par value and the
then-market value of Petroleos Mexicanos.                                   415,000            37,143

Agreement with Deutsche Bank effective September 9, 2003,
maturing on September 20, 2013 to receive a premium equal to
21.44% times the notional amount. Upon a credit default event of
Petroleos Mexicanos, 7.375% due 12/12/14 the fund makes a
payment of the proportional notional amount times the
difference between the par value and the then-market
value of Petroleos Mexicanos.                                               830,000           172,748
- ------------------------------------------------------------------------------------------------------
                                                                                             $246,278
- ------------------------------------------------------------------------------------------------------

</TABLE>

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



Statement of assets and liabilities
September 30, 2003

Assets
- -------------------------------------------------------------------------------
Investments in securities, at value, including $608,709 of
securities on loan (identified cost $765,139,354) (Note 1)       $763,299,658
- -------------------------------------------------------------------------------
Cash                                                                  224,602
- -------------------------------------------------------------------------------
Foreign currency (cost $1,889,130) (Note 1)                         1,953,945
- -------------------------------------------------------------------------------
Dividends, interest and other receivables                          12,424,890
- -------------------------------------------------------------------------------
Receivable for securities sold                                     14,445,734
- -------------------------------------------------------------------------------
Receivable for variation margin (Note 1)                              543,744
- -------------------------------------------------------------------------------
Receivable for open forward currency contracts (Note 1)             2,539,645
- -------------------------------------------------------------------------------
Receivable for open swap contracts (Note 1)                           881,405
- -------------------------------------------------------------------------------
Receivable for closed forward currency contracts (Note 1)             644,261
- -------------------------------------------------------------------------------
Total assets                                                      796,957,884

Liabilities
- -------------------------------------------------------------------------------
Distributions payable to shareholders                               3,787,897
- -------------------------------------------------------------------------------
Payable for securities purchased                                   80,853,869
- -------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2)                        1,265,200
- -------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2)            109,036
- -------------------------------------------------------------------------------
Payable for Trustee compensation and expenses (Note 2)                 76,971
- -------------------------------------------------------------------------------
Payable for administrative services (Note 2)                              859
- -------------------------------------------------------------------------------
Payable for open forward currency contracts (Note 1)                3,348,766
- -------------------------------------------------------------------------------
Payable for closed forward currency contracts (Note 1)                117,037
- -------------------------------------------------------------------------------
Credit default contracts outstanding, at value (premiums
received $260,184) (Note 1)                                           246,278
- -------------------------------------------------------------------------------
TBA sales commitments at value (proceeds receivable
$5,710,309) (Note 1)                                                5,783,824
- -------------------------------------------------------------------------------
Collateral on securities loaned, at value (Note 1)                    628,900
- -------------------------------------------------------------------------------
Other accrued expenses                                                 45,314
- -------------------------------------------------------------------------------
Total liabilities                                                  96,263,951
- -------------------------------------------------------------------------------
Net assets                                                       $700,693,933

Represented by
- -------------------------------------------------------------------------------
Paid-in capital (Note 1)                                         $837,942,450
- -------------------------------------------------------------------------------
Undistributed net investment income (Note 1)                        7,010,795
- -------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (Note 1)                                   (145,595,513)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies                                   1,336,201
- -------------------------------------------------------------------------------
Total -- Representing net assets applicable to capital
shares outstanding                                               $700,693,933

Computation of net asset value
- -------------------------------------------------------------------------------
Net asset value per share ($700,693,933 divided by
100,313,083 shares)                                                     $6.99
- -------------------------------------------------------------------------------

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



Statement of operations
Year ended September 30, 2003

Investment income:
- -------------------------------------------------------------------------------
Interest (net of foreign tax of $3,912)                           $51,677,854
- -------------------------------------------------------------------------------
Dividends                                                           2,185,431
- -------------------------------------------------------------------------------
Securities lending                                                        314
- -------------------------------------------------------------------------------
Total investment income                                            53,863,599

Expenses:
- -------------------------------------------------------------------------------
Compensation of Manager (Note 2)                                    4,821,015
- -------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2)                        711,028
- -------------------------------------------------------------------------------
Trustee compensation and expenses (Note 2)                             25,275
- -------------------------------------------------------------------------------
Administrative services (Note 2)                                       12,144
- -------------------------------------------------------------------------------
Other                                                                 327,855
- -------------------------------------------------------------------------------
Total expenses                                                      5,897,317
- -------------------------------------------------------------------------------
Expense reduction (Note 2)                                            (19,936)
- -------------------------------------------------------------------------------
Net expenses                                                        5,877,381
- -------------------------------------------------------------------------------
Net investment income                                              47,986,218
- -------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3)                   10,355,022
- -------------------------------------------------------------------------------
Net realized gain on swap contracts (Note 1)                          653,321
- -------------------------------------------------------------------------------
Net realized loss on futures contracts (Note 1)                    (2,069,538)
- -------------------------------------------------------------------------------
Net realized gain on foreign currency transactions (Note 1)         3,392,416
- -------------------------------------------------------------------------------
Net realized gain on credit default contracts (Note 1)                157,278
- -------------------------------------------------------------------------------
Net unrealized depreciation of assets and liabilities in
- -------------------------------------------------------------------------------
foreign currencies during the year                                   (312,176)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investments, futures
contracts, swap contracts, credit default contracts and TBA
sale commitments during the year                                   60,619,220
- -------------------------------------------------------------------------------
Net gain on investments                                            72,795,543
- -------------------------------------------------------------------------------
Net increase in net assets resulting from operations             $120,781,761
- -------------------------------------------------------------------------------

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



Statement of changes in net assets

                                                             Year ended
                                                            September 30
Increase (decrease) in net assets                       2003             2002
- -------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------
Net investment income                            $47,986,218      $52,092,366
- -------------------------------------------------------------------------------
Net realized gain (loss) on investments and
foreign currency transactions                     12,488,499      (50,122,603)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investments
and assets and liabilities in foreign
currencies                                        60,307,044       24,243,905
- -------------------------------------------------------------------------------
Net increase in net assets resulting from
operations                                       120,781,761       26,213,668
- -------------------------------------------------------------------------------
Distributions to shareholders: (Note 1)
- -------------------------------------------------------------------------------
From net investment income                       (48,538,019)     (52,982,343)
- -------------------------------------------------------------------------------
From return of capital                                    --       (1,087,264)
- -------------------------------------------------------------------------------
Increase from issuance of common shares in
connection with reinvestment of
distributions                                        829,775          315,588
- -------------------------------------------------------------------------------
Total increase (decrease) in net assets           73,073,517      (27,540,351)

Net assets
- -------------------------------------------------------------------------------
Beginning of year                                627,620,416      655,160,767
- -------------------------------------------------------------------------------
End of year (including undistributed net
investment income of $7,010,795 and
distributions in excess of net investment
income of $5,846,674, respectively)             $700,693,933     $627,620,416

Number of fund shares
- -------------------------------------------------------------------------------
Shares outstanding at beginning of year          100,182,745      100,133,127
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions                        130,338           49,618
- -------------------------------------------------------------------------------
Shares outstanding at end of year                100,313,083      100,182,745
- -------------------------------------------------------------------------------

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



<TABLE>
<CAPTION>

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

Per-share                                                        Year ended September 30
operating performance                      2003            2002            2001            2000            1999
- ----------------------------------------------------------------------------------------------------------------
<S>                                     <C>             <C>             <C>             <C>             <C>
Net asset value,
beginning of period                       $6.26           $6.54           $7.13           $7.57           $8.14
- ----------------------------------------------------------------------------------------------------------------
Investment operations:
- ----------------------------------------------------------------------------------------------------------------
From net investment income (a)              .48             .52             .58             .63             .58
- ----------------------------------------------------------------------------------------------------------------
From net realized and unrealized
loss on investments                         .73            (.26)           (.57)           (.43)           (.47)
- ----------------------------------------------------------------------------------------------------------------
Total from
investment operations                      1.21             .26             .01             .20             .11
- ----------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------
From net
investment income                          (.48)           (.53)           (.46)           (.64)           (.56)
- ----------------------------------------------------------------------------------------------------------------
From return of capital                       --            (.01)           (.14)             --            (.12)
- ----------------------------------------------------------------------------------------------------------------
Total distributions                        (.48)           (.54)           (.60)           (.64)           (.68)
- ----------------------------------------------------------------------------------------------------------------
Net asset value,
end of period                             $6.99           $6.26           $6.54           $7.13           $7.57
- ----------------------------------------------------------------------------------------------------------------
Market value,
end of period                            $6.410          $6.380          $6.050          $6.438          $6.438
- ----------------------------------------------------------------------------------------------------------------
Total return at
market value (%)(b)                        8.35           14.81            3.06           10.72           (9.09)
- ----------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands)                         $700,694        $627,620        $655,161        $713,894        $757,533
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c)                   .89             .87             .90             .87             .93
- ----------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%)                  7.22            7.97            8.50            8.60            7.39
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover (%)                   141.60 (d)      193.33 (d)      111.45          116.71          133.72
- ----------------------------------------------------------------------------------------------------------------

  * Not annualized

(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) 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.

</TABLE>



Notes to financial statements
September 30, 2003

Note 1
Significant accounting policies

Putnam Master Intermediate Income Trust (the "fund") is registered under
the Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. 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 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 at fair value on the basis
of valuations furnished by an independent pricing service or dealers,
approved by the Trustees. 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, generally recognized by institutional traders,
between securities. For foreign investments, if trading or events
occurring in other markets after the close of the principal exchange in
which the securities are traded are expected to materially affect the
value of the investments, then those investments are valued, taking into
consideration these events, at their fair value following procedures
approved by the Trustees. Such valuations and procedures are reviewed
periodically by the Trustees. Securities quoted in foreign currencies
are translated into U.S. dollars at the current exchange rate.
Short-term investments having remaining maturities of 60 days or less
are valued at amortized cost, which approximates fair value. Other
investments, including restricted securities, are valued at fair value
following procedures approved by the Trustees. Such valuations and
procedures are reviewed periodically by the Trustees.

B) Joint trading account 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 issuers of high-grade short-term investments having
maturities of up to 397 days for collateral received under security
lending arrangements and up to 90 days for other cash investments.

C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the
market value of which at the time of purchase is required to be in an
amount at least equal to the resale price, including accrued interest.
Collateral for certain tri-party repurchase agreements is held at the
counterparty's custodian in a segregated account for the benefit of the
fund and the  counterparty. Putnam Management is responsible for
determining that the value of these underlying securities is at all
times at least equal to the resale price, including accrued interest.


D) Security transactions and related investment income Security
transactions are recorded on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis. Interest income is recorded on the accrual
basis. Dividend income is recognized on the ex-dividend date. Non-cash
dividends, if any, are recorded at the fair market value of the
securities received. All premiums/discounts are amortized /accreted on a
yield-to-maturity basis.

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

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). 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. Forward currency contracts outstanding at
period end 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. The fund may also write options on 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. 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.

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 are
listed after The fund's portfolio.

H) 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 market makers and the change, if
any, is recorded as unrealized gain or loss. Payments made or received
are recognized as part of interest income. A portion of the payments
received or made upon early termination are recognized as realized gain
or loss. 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. Interest rate swap
contracts outstanding at period end are listed after The fund's
portfolio.

I) Credit default contracts The fund may enter into credit default
contracts where one party, the protection buyer, makes an upfront
payment to a counter party, the protection seller, in exchange for the
right to receive a contingent payment as a result of a credit event
related to a specified security or index. The upfront payment received
by the fund, as the protection seller, is recorded as a liability on the
fund's books. The credit default 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 as a
result of a credit event or termination of the contract are recognized,
net of a proportional amount of the upfront payment, as realized gains
or losses. In addition to bearing the risk that the credit event will
occur, the fund could be exposed to market risk due to unfavorable
changes in interest rates or in the price of the underlying security or
index, the possibility that the fund may be unable to close out its
position at the same time or at the same price as if it had purchased
comparable publicly traded securities or that the counterparty may
default on its obligation to perform. Credit default contracts
outstanding at period end are listed after The fund's portfolio.

J) 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 the current market value of the
underlying securities, according to the procedures described under
"Security valuation" above.

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.

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

Unsettled TBA sale commitments are valued at the current market 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 are listed after The fund's portfolio.

L) Security lending The fund may lend securities, through its agents, to
qualified borrowers in order to earn additional income. The loans are
collateralized by cash and/or securities in an amount at least equal to
the market value of the securities loaned. The market value of
securities loaned is determined daily and any additional required
collateral is allocated to the fund on the next business day. The risk
of borrower default will be borne by the fund's agents; the fund will
bear the risk of loss with respect to the investment of the cash
collateral. Income from securities lending is included in investment
income on the Statement of operations. At September 30, 2003, the value
of securities loaned amounted to $608,709. The fund received cash
collateral of $628,900 which is pooled with collateral of other Putnam
funds into 36 issuers of high grade short-term investments.

M) 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 applicable to regulated
investment companies. It is also the intention of the fund to distribute
an amount sufficient to avoid imposition of any excise tax under Section
4982 of the Internal Revenue Code of 1986, 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, 2003, the fund had a capital loss carryover of
$139,616,926 available to the extent allowed by tax law to offset future
capital gains, if any. The amount of the carryover and the expiration
dates are:

Loss Carryover      Expiration
- ---------------------------------------
    $2,792,982      September 30, 2004
     1,554,563      September 30, 2005
    10,039,981      September 30, 2007
    25,640,537      September 30, 2008
    24,593,458      September 30, 2009
    27,431,170      September 30, 2010
    47,564,235      September 30, 2011

Pursuant to federal income tax regulations applicable to regulated
investment companies, the fund has elected to defer to its fiscal year
ending September 30, 2004, $3,314,449 of losses recognized during the
period November 1, 2002 to September 30, 2003.

N) 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 losses on wash sale transactions, foreign currency gains
and losses, post-October loss deferrals, the expiration of a capital
loss carryover, dividends payable, defaulted bond interest, realized and
unrealized gains and losses on certain futures contracts, market
discount, and interest on payment-in-kind 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 September 30, 2003, the
fund reclassified $13,409,271 to increase undistributed net investment
income and $7,132,420 to decrease paid-in-capital, with an increase to
accumulated net realized losses of $6,276,851.

The tax basis components of distributable earnings and the federal tax
cost as of period end were as follows:

Unrealized appreciation            $42,917,213
Unrealized depreciation            (46,984,073)
                                  ------------
Net unrealized depreciation         (4,066,860)
Undistributed ordinary income       12,509,386
Capital loss carryforward         (139,616,926)
Post October loss                   (3,314,449)
Cost for federal income
tax purposes                      $767,366,518


Note 2
Management fee, administrative
services and other transactions

Putnam Management is paid for management and investment advisory
services quarterly based on the average net assets of the fund. Such fee
is based on the following annual rates: 0.75% of the first $500 million
of average weekly net assets, 0.65% of the next $500 million, 0.60% of
the next $500 million, and 0.55% thereafter.

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. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.

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, 2003,
the fund's expenses were reduced by $19,936 under these arrangements.

Each independent Trustee of the fund receives an annual Trustee fee, of
which $1,144 has been allocated to the fund, and an additional fee for
each Trustees meeting attended. Trustees receive additional fees for
attendance at certain committee meetings.

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

The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as a Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and
meeting fees for the three years preceding retirement. Pension expense
for the fund is included in Trustees compensation and expenses in the
Statement of operations. Accrued pension liability is included in
Payable for Trustees compensation and expenses in the Statement of
assets and liabilities.


Note 3
Purchases and sales of securities

During the year ended September 30, 2003, cost of purchases and proceeds
from sales of investment securities other than U.S. government
obligations and short-term investments aggregated $961,981,975 and
$1,006,790,695, respectively. Purchases and sales of U.S. government
obligations aggregated $427,384,969 and $425,917,066, respectively.


Note 4
Regulatory matters and litigation

On November 13, 2003, Putnam Management agreed to entry of an order by the
Securities and Exchange Commission in partial resolution of administrative
and cease-and-desist proceedings initiated by the SEC on October 28, 2003
in connection with alleged excessive short-term trading by certain
investment professionals. Under the order, Putnam Management will institute
new employee trading restrictions and enhanced employee trading compliance,
retain an independent compliance consultant, and take other remedial
actions. Putnam Management neither admitted nor denied the order's findings
that it willfully violated provisions of the securities laws. A civil
monetary penalty and other monetary relief, if any, will be determined at a
later date. Putnam Management, and not the investors in any Putnam fund,
will bear all costs, including civil penalties and associated legal fees.
Administrative proceedings initiated by the Commonwealth of Massachusetts
on October 28, 2003 against Putnam Management in connection with alleged
market timing activities by Putnam employees and by participants in some
Putnam-administered 401(k) plans are pending. The SEC's and Commonwealth's
allegations also serve as the general basis for numerous lawsuits,
including purported class action lawsuits, filed against Putnam Management
and certain related parties. Based on currently available information,
Putnam Management believes that the pending actions are not likely to
materially affect its ability to provide investment management services to
its clients, including the Putnam funds.

Review of these matters by counsel for Putnam Management and by separate
independent counsel for the Putnam funds and their independent Trustees
is continuing. In addition, Marsh & McLennan Companies, Inc., Putnam
Management's parent company, has engaged counsel to conduct a separate
review of Putnam Management's trading policies and controls.



Federal tax information
(Unaudited)

The fund has designated 3.03% of the distributions from net investment
income as qualifying for the dividends received deduction for
corporations.

For its tax year ended September 30, 2003, the fund hereby designates
2.19%, or the maximum amount allowable, of its net taxable income as
qualified dividends taxed at individual net capital gain rates.

The Form 1099 you receive in January 2004 will show the tax status of
all distributions paid to your account in calendar 2003.


Results of June 12, 2003 shareholder meeting
(Unaudited)

An annual meeting of shareholders of the fund was held on June 12, 2003.
At the meeting, each of the nominees for Trustees was elected, as
follows:

                                                           Votes
                                     Votes for          withheld
- ----------------------------------------------------------------
Jameson A. Baxter                   92,175,160         2,589,781
Charles B. Curtis                   92,192,830         2,572,112
John A. Hill                        92,195,839         2,569,102
Ronald J. Jackson                   92,221,055         2,543,887
Paul L. Joskow                      92,182,800         2,582,141
Elizabeth T. Kennan                 92,174,503         2,590,438
John H. Mullin, III                 92,178,436         2,586,505
Robert E. Patterson                 92,198,075         2,566,867
George Putnam, III                  92,187,867         2,577,074
A.J.C. Smith                        92,182,051         2,582,891
W. Thomas Stephens                  92,166,247         2,598,694
W. Nicholas Thorndike               92,124,495         2,640,446

All tabulations are rounded to nearest whole number.

About the Trustees

Jameson A. Baxter (9/6/43), Trustee since 1994

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), 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 (4/27/40), 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).

Prior to May 1997, Mr. Curtis was Deputy Secretary 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 Securities and
Exchange Commission.

John A. Hill (1/31/42), Trustee since 1985 and Chairman since 2000

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

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

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.

Ronald J. Jackson (12/17/43), Trustee since 1996

Mr. Jackson is a private investor.

Mr. Jackson is President of the Kathleen and Ronald J. Jackson
Foundation (a charitable trust). He is also a member of the Board of
Overseers of WGBH (a public television and radio station) as well as a
member of the Board of Overseers of the Peabody Essex Museum.

Mr. Jackson is the former Chairman, President, and Chief Executive
Officer of Fisher-Price, Inc. (a major toy manufacturer), from which he
retired in 1993. He previously served as President and Chief Executive
Officer of Stride-Rite, Inc. (a manufacturer and distributor of
footwear) and of Kenner Parker Toys, Inc. (a major toy and game
manufacturer). Mr. Jackson was President of Talbots, Inc. (a distributor
of women's apparel) and has held financial and marketing positions with
General Mills, Inc. and Parker Brothers (a toy and game company). Mr.
Jackson is a graduate of the University of Michigan Business School.

Paul L. Joskow (6/30/47), 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 Transco (a UK-based
holding company with interests in electric and gas transmission and
distribution, and telecommunications infrastructure). He also serves 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 B.A. from
Cornell University.

Elizabeth T. Kennan (2/25/38), Trustee since 1992

Dr. Kennan is a partner in and Chairman of Cambus-Kenneth Bloodstock,
LLC (cattle and thoroughbred horses). She is President Emeritus of Mount
Holyoke College.

Dr. Kennan serves as a Trustee of Northeast Utilities and is 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
Centre College and of Midway College in Midway, Kentucky. She is also 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.

John H. Mullin, III (6/15/41), Trustee since 1997

Mr. Mullin is the Chairman and CEO of Ridgeway Farm (a limited liability
company engaged in timber and farming).

Mr. Mullin serves as a Director of Alex. Brown Realty, Inc., The Liberty
Corporation (a broadcasting company), Progress Energy, Inc. (a utility
company, formerly known as Carolina Power & Light), and Sonoco Products,
Inc. (a packaging company). Mr. Mullin is Trustee Emeritus of Washington
& Lee University, where he served as Chairman of the Investment
Committee. Prior to May 2001, he was a Director of Graphic Packaging
International Corp.

Mr. Mullin also served as a Director of Dillon, Read & Co., Inc. until
October 1997 and The Ryland Group, Inc. until January 1998. Mr. Mullin
is a graduate of Washington & Lee University and The Wharton Graduate
School, University of Pennsylvania.

Robert E. Patterson (3/15/45), Trustee since 1984

Mr. Patterson is Senior Partner of Cabot Properties, L.P. and Chairman
of Cabot Properties, Inc.

Mr. Patterson serves as Chairman of the Joslin Diabetes Center, as a
Trustee of Sea Education Association, and as a Director of Brandywine
Trust Company. Prior to December 2001, he was President and Trustee of
Cabot Industrial Trust (a publicly traded real estate investment trust).
Prior to February 1998, Mr. Patterson was Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership (a
registered investment advisor 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) and as a Senior Vice President of the Beal Companies (a
real estate management, investment, and development firm).

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 (9/2/42), Trustee since 1997

Mr. Stephens serves on a number of corporate boards.

Mr. Stephens serves as a Director of Xcel Energy Incorporated (a public
utility company), TransCanada Pipelines Limited, Norske Canada, Inc. (a
paper manufacturer), and Qwest Communications. 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.

W. Nicholas Thorndike (3/28/33), Trustee since 1992

Mr. Thorndike serves on the boards of various corporations and
charitable organizations.

Mr. Thorndike is a Director of Courier Corporation (a book publisher and
manufacturer) and The Providence Journal Co. (a newspaper publisher). He
is also a Trustee of Northeastern University and an honorary Trustee of
Massachusetts General Hospital, where he previously served as Chairman
and President. Prior to September 2000, he was a Director of Bradley
Real Estate, Inc.; prior to April 2000, he was a Trustee of Eastern
Utilities Associates; and prior to December 2001, he was a Trustee of
Cabot Industrial Trust.

Mr. Thorndike has also served as Chairman of the Board and Managing
Partner of Wellington Management Company/Thorndike, Doran, Paine & Lewis
(a registered investment advisor that manages mutual funds and
institutional assets), as a Trustee of the Wellington Group of Funds
(currently The Vanguard Group), and as Chairman and a Director of Ivest
Fund, Inc. Mr. Thorndike is a graduate of Harvard College.

George Putnam, III* (8/10/51), 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 advisor). He is a Trustee of St. Mark's School, 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
Price & Rhoads in Philadelphia. He is a graduate of Harvard College,
Harvard Business School, and Harvard Law School.

A.J.C. Smith* (4/13/34), Trustee since 1986

Mr. Smith is Chairman of Putnam Investments and a Director of Marsh &
McLennan Companies, Inc.

Mr. Smith is also a Director of Trident Corp. (a limited partnership
with over thirty institutional investors). He is also a Trustee of the
Carnegie Hall Society, the Educational Broadcasting Corporation, and the
National Museums of Scotland. He is Chairman of the Central Park
Conservancy and a Member of the Board of Overseers of the Joan and
Sanford I. Weill Graduate School of Medical Sciences of Cornell
University. Prior to May 2000 and November 1999, Mr. Smith was Chairman
and CEO, respectively, of Marsh & McLennan Companies, Inc.


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

  As of September 30, 2003, there were 102 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. Putnam, III, and Smith are deemed "interested persons" by virtue
  of their positions as officers or shareholders of the fund or Putnam
  Management, Putnam Retail Management, or Marsh & McLennan Companies,
  Inc. George Putnam, III is the President of your fund and each of the
  other Putnam funds. Mr. Smith serves as a Director of Marsh & McLennan
  Companies, Inc.


Officers

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

Charles E. Porter (7/26/38)
Executive Vice President, Treasurer
and Principal Financial Officer
Since 1989

Managing Director, Putnam Investments
and Putnam Management

Patricia C. Flaherty (12/1/46)
Senior Vice President
Since 1993

Senior Vice President, Putnam Investments and Putnam
Management

Karnig H. Durgarian (1/13/56)
Vice President and Principal Executive Officer
Since 2002

Senior Managing Director, Putnam Investments

Steven D. Krichmar (6/27/58)
Vice President and Principal Financial Officer
Since 2002

Managing Director, Putnam Investments. Prior to July 2001,
Partner, PricewaterhouseCoopers LLP

Michael T. Healy (1/24/58)
Assistant Treasurer and Principal
Accounting Officer
Since 2000

Managing Director, Putnam Investments

Beth S. Mazor (4/6/58)
Vice President
Since 2002

Senior Vice President, Putnam Investments

Gordon H. Silver (7/3/47)
Vice President
Since 1990

Senior Managing Director, Putnam Investments, Putnam
Management and Putnam Retail Management

Mark C. Trenchard (6/5/62)
Vice President and BSA Compliance Officer
Since 2002

Senior Vice President, Putnam Investments

William H. Woolverton (1/17/51)
Vice President and Chief Legal Officer
Since 2003

Managing Director, Putnam Investments, Putnam Management and
Putnam Retail Management

Judith Cohen (6/7/45)
Clerk and Assistant Treasurer
Since 1993

Clerk and Assistant Treasurer, The Putnam Funds

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


Fund information

About Putnam Investments

One of the largest mutual fund families in the United States, Putnam
Investments has a heritage of investment leadership dating back to Judge
Samuel Putnam, whose Prudent Man Rule has defined fiduciary tradition
and practice since 1830. Founded over 65 years ago, Putnam Investments
was built around the concept that a balance between risk and reward is
the hallmark of a well-rounded financial program. We presently manage
over 100 mutual funds in growth, value, blend, fixed income, and
international.

Investment Manager

Putnam Investment
Management, LLC
One Post Office Square
Boston, MA 02109

Marketing Services

Putnam Retail Management
One Post Office Square
Boston, MA 02109

Custodian

Putnam Fiduciary Trust Company

Legal Counsel

Ropes & Gray LLP

Independent Auditors

KPMG LLP

Trustees

John A. Hill, Chairman
Jameson Adkins Baxter
Charles B. Curtis
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike

Officers

George Putnam, III
President

Charles E. Porter
Executive Vice President,
Treasurer and Principal
Financial Officer

Patricia C. Flaherty
Senior Vice President

Karnig H. Durgarian
Vice President and Principal
Executive Officer

Steven D. Krichmar
Vice President and Principal
Financial Officer

Michael T. Healy
Assistant Treasurer and
Principal Accounting Officer

Beth S. Mazor
Vice President

Gordon H. Silver
Vice President

Mark C. Trenchard
Vice President and BSA
Compliance Officer

William H. Woolverton
Vice President and
Chief Legal Officer

Judith Cohen
Clerk and Assistant Treasurer


Call 1-800-225-1581 weekdays from 9 a.m. to 5 p.m. Eastern Time, or
visit our Web site (www.putnaminvestments.com) any time for up-to-date
information about the fund's NAV.




[LOGO OMITTED]

PUTNAM INVESTMENTS

The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109

- ----------------------
PRSRT STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ----------------------

Do you want to save paper and receive this document faster? Shareholders
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203400  074  11/03




Item 2. Code of Ethics:
- -----------------------
All officers of the Fund, including its 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.

Item 3. Audit Committee Financial Expert:
- -----------------------------------------
The Funds' Audit and Pricing 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 Pricing 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 all members of the Funds' Audit and Pricing Committee meet the
financial literacy requirements of the New York Stock Exchange's rules
and that Mr. Patterson and Mr. Stephens qualify as "audit committee
financial experts" (as such term has been defined by the Regulations)
based on their review of their pertinent experience and education.
Certain other Trustees, although not on the Audit and Pricing Committee,
would also qualify as "audit committee financial experts."  The SEC has
stated that the designation or identification of a person as an audit
committee financial expert pursuant to this Item 3 of Form N-CSR does
not impose on such person any duties, obligations or liability that are
greater than the duties, obligations and liability imposed on such
person as a member of the Audit and Pricing Committee and the Board of
Trustees in the absence of such designation or identification.

Item 4. Principal Accountant Fees and Services:
- -----------------------------------------------
Not applicable

Items 5-6. [Reserved]
- ---------------------

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 a
particular issue. 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.

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, although
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 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 which
have been 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 foreign issuers.

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 the Funds'
intent to hold corporate boards accountable for their actions in
promoting shareholder interests, the Funds' proxies generally will be
voted in support of decisions reached by independent boards of
directors. Accordingly, the Funds' proxies will be voted for
board-approved proposals, except as follows:

A. Matters Relating to the Board of Directors
- ---------------------------------------------
The board of directors has the important role of overseeing management
and its performance on behalf of shareholders. The Funds' proxies will
be voted for the election of the company's nominees for directors and
for board-approved proposals on other matters relating to the board of
directors (provided that such nominees and other matters have been
approved by an independent nominating committee), 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; or

* The board does not have nominating, audit and compensation committees
composed solely of independent directors.

Commentary:  While these requirements will likely become mandatory for
most public companies in the near future as a result of pending NYSE and
NASDAQ rule proposals, the Funds' Trustees believe that there is no
excuse for public company boards that fail to implement these vital
governance reforms at their next annual meeting. For these purposes, an
"independent director" is a director who meets all requirements to serve
as an independent director of a company under the pending NYSE rule
proposals (i.e., no material business relationships with the company, no
present or recent employment relationship with the company (including
employment of immediate family members) and, in the case of audit
committee members, no compensation for non-board services). As
indicated below, the Funds will generally vote on a case-by-case basis
on board-approved proposals where the board fails to meet these basic
independence standards.

* 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:  The Funds' Trustees believe that receipt of compensation
for services other than service as a director raises significant
independence issues. The Funds will withhold votes for any nominee for
director who is considered an independent director by the company and
who receives such compensation.

* The Funds will withhold votes for the entire board of directors if the
board has more than 19 members or fewer than five members, absent
special circumstances.

Commentary:  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.

* The Funds will vote on a case-by-case basis in contested elections of
directors.

* The Funds will withhold votes for any nominee for director who attends
less than 75% of board and committee meetings without valid reasons for
the absences (i.e., illness, personal emergency, etc.).

Commentary:  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.

* The Funds will withhold votes for any nominee for director of a public
company (Company A) who 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").

Commentary:  The Funds' Trustees believe that interlocking directorships
are inconsistent with the degree of independence required for outside
directors of public companies.

Board independence depends not only on its members' individual
relationships, but also 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 that, 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.

* 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.

B. 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 plans which
will result in an average annual dilution of 1.67% or less (including
all equity-based plans).

* The Funds will vote against stock option plans that permit 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 employee stock purchase
plans that have 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 proposals relating to
executive compensation, the Funds will consider whether the proposal has
been approved by an independent compensation committee of the board.

C. Capitalization
- -----------------
Many proxy proposals involve changes in a company's capitalization,
including the authorization of additional 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 each 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 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
impact a shareholder's investment and warrant a case-by-case
determination.

D. 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 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, generally speaking, shareholders must
carefully consider the reasons for a reincorporation into another
jurisdiction, including especially offshore jurisdictions.

E. 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 adoption
of a shareholder rights plan, requiring supermajority voting on
particular issues, adoption of fair price provisions, issuance of blank
check preferred stock and creating 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 (commonly referred to as "poison
pills"); 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.

F. Other Business Matters
- -------------------------
Many proxies involve approval of routine business matters, such as
changing the 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 which 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 a company's corporate governance structure or to change
some aspect of its business operations. The Funds 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 Fund's 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 Foreign Issuers
- -------------------------------------
Many of the Funds invest on a global basis and, as a result, they may be
required to vote shares held in foreign issuers - i.e., issuers that are
incorporated under the laws of a foreign jurisdiction and that are not
listed a U.S. securities exchange or the NASDAQ stock market. Because
foreign 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 foreign
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 foreign
issuers. The Funds will vote proxies of foreign issuers in accordance
with the foregoing guidelines where applicable, except as follows:

* The Funds will vote for shareholder proposals calling for a majority
of the 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 case-by-case basis on proposals relating to (1)
the issuance of common stock in excess of 20% of a company's outstanding
common stock where shareholders do not have preemptive rights, or (2)
the issuance of common stock in excess of 100% of a company's
outstanding common stock where shareholders have preemptive rights.

Commentary:  In many non-U.S. markets, shareholders who vote proxies for
shares of a foreign issuer are not able to trade in that company's stock
within a given period of time 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.


As adopted March 14, 2003




Proxy Voting Procedures of the Putnam Funds
- -------------------------------------------

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 which need to be handled on a
case-by-case basis. The Committee annually reviews and recommends for
approval by the Trustees 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 ("Fund
Administration"), independent legal counsel, and an independent proxy
voting service. The Trustees also receive assistance from Putnam
Investment Management, LLC ("Putnam Management"), the Funds' investment
adviser, 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 which, while governed by a guideline, appear 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 Fund Administration 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 Fund
Administration, 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 the Senior
Vice President of Fund Administration, the Executive Vice President of
Fund Administration 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 the Senior Vice President
and/or Executive Vice President 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, the Senior Vice President
and/or the Executive Vice President 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 14, 2003



Item 8. [Reserved]
- ------------------

Item 9. Controls and Procedures:
- --------------------------------

(a) The registrant's principal executive officer and principal financial
officers have concluded, based on their evaluation of the effectiveness
of the design and operation of the registrant's disclosure controls and
procedures as of a date within 90 days of the filing date of this report
on Form N-CSR, that the design and operation of such procedures are
effective to provide reasonable assurance that information required to
be disclosed by the investment company in the reports that it files or
submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized, and reported within the time periods specified in
the Commission's rules and forms.

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

Item 10. Exhibits:
- ------------------

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

(b) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Investment Company Act of 1940, as amended, and the officer
certifications as required by Section 906 of the Sarbanes-Oxley Act of 2002
are filed herewith.


SIGNATURES

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

NAME OF REGISTRANT

By (Signature and Title):            /s/Michael T. Healy
                                     --------------------------
                                     Michael T. Healy
                                     Principal Accounting Officer
Date: November 25, 2003



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

By (Signature and Title):            /s/Karnig H. Durgarian
                                     ---------------------------
                                     Karnig H. Durgarian
                                     Principal Executive Officer
Date: November 25, 2003



By (Signature and Title):            /s/Charles E. Porter
                                     ---------------------------
                                     Charles E. Porter
                                     Principal Financial Officer
Date: November 25, 2003



By (Signature and Title):            /s/Steven D. Krichmar
                                     ---------------------------
                                     Steven D. Krichmar
                                     Principal Financial Officer
Date: November 25, 2003

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>3
<FILENAME>exnn2.txt
<DESCRIPTION>EX-99.CERT
<TEXT>
Certifications
- --------------
I, Charles E. Porter, a 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. Each registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in rule 30a-3(c) under the Investment Company Act) for the
registrants 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 are being prepared;

b) 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 this report (the "Evaluation
Date") based on such evaluation; and

c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal half-year (the registrant's second fiscal half-year
in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.

5. Each registrant's other certifying officers 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 controls 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
controls.

/s/Charles E. Porter        Date: November 25, 2003
- ----------------------      ------------------------
Charles E. Porter, Principal Financial Officer



Certifications
- --------------
I, Karnig H. Durgarian, the principal executive officer of the funds
listed on Attachment A, certify that:

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

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

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

4. Each registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in rule 30a-3(c) under the Investment Company Act) for the
registrants 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 are being prepared;

b) 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 this report (the "Evaluation
Date") based on such evaluation; and

c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal half-year (the registrant's second fiscal half-year
in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.

5. Each registrant's other certifying officers 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 controls 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
controls.

/s/Karnig H. Durgarian      Date: November 25, 2003
- ----------------------      ------------------------
Karnig H. Durgarian, Principal Executive Officer



Certifications
- --------------
I, Steven D. Krichmar, a 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. Each registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in rule 30a-3(c) under the Investment Company Act) for the
registrants 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 are being prepared;

b) 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 this report (the "Evaluation
Date") based on such evaluation; and

c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal half-year (the registrant's second fiscal half-year
in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.

5. Each registrant's other certifying officers 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 controls 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
controls.

/s/Steven D. Krichmar       Date: November 25, 2003
- ----------------------      ------------------------
Steven D. Krichmar, Principal Financial Officer



Attachment A
- --------------
010 Putnam Money Market Fund
011 Putnam Tax Exempt Income Fund
027 Putnam California Tax Exempt Income Fund
032 Putnam U.S. Government Income Trust
033 Putnam American Government Income Fund
051 Putnam Municipal Income Fund
054 Putnam High Yield Municipal Trust
062 Putnam Tax Exempt Money Market Fund
074 Putnam Master Intermediate Income Trust
075 Putnam Diversified Income Trust
539 Putnam International New Opportunities Fund
250/259/264 Putnam Asset Allocation Funds

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906 CERT
<SEQUENCE>4
<FILENAME>exnos3.txt
<DESCRIPTION>EX-99.906 CERT
<TEXT>
Section 906 Certifications
- ---------------------------
I, Charles E. Porter, a 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, 2003 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, 2003 fairly presents, in all
material respects, the financial condition and results of operations of
the Funds listed on Attachment A.

/s/Charles E. Porter        Date: November 25, 2003
- ----------------------      ------------------------
Charles E. Porter, Principal Financial Officer



Section 906 Certifications
- ---------------------------
I, Karnig H. Durgarian, 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, 2003 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, 2003 fairly presents, in all
material respects, the financial condition and results of operations of
the Funds listed on Attachment A.

/s/Karnig H. Durgarian      Date: November 25, 2003
- ----------------------      ------------------------
Karnig H. Durgarian, Principal Executive Officer



Section 906 Certifications
- ---------------------------
I, Steven D. Krichmar, a 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, 2003 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, 2003 fairly presents, in all
material respects, the financial condition and results of operations of
the Funds listed on Attachment A.

/s/Steven D. Krichmar       Date: November 25, 2003
- ----------------------      ------------------------
Steven D. Krichmar, Principal Financial Officer



Attachment A
- --------------
010 Putnam Money Market Fund
011 Putnam Tax Exempt Income Fund
027 Putnam California Tax Exempt Income Fund
032 Putnam U.S. Government Income Trust
033 Putnam American Government Income Fund
051 Putnam Municipal Income Fund
054 Putnam High Yield Municipal Trust
062 Putnam Tax Exempt Money Market Fund
074 Putnam Master Intermediate Income Trust
075 Putnam Diversified Income Trust
539 Putnam International New Opportunities Fund
250/259/264 Putnam Asset Allocation Funds

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CODE ETH
<SEQUENCE>5
<FILENAME>md.txt
<TEXT>

THE PUTNAM FUNDS

Code of Ethics


Each of The Putnam Funds (the "Funds") has determined to adopt this Code
of Ethics with respect to certain types of personal securities
transactions by officers and Trustees of the Funds which might be deemed
to create possible conflicts of interest and to establish reporting
requirements and enforcement procedures with respect to such
transactions.

I. Rules Applicable to Officers and Trustees
   Affiliated with Putnam Investments, Inc.

A.  Incorporation of Adviser's Code of Ethics.  The provisions of the
Code of Ethics for employees of Putnam Investments, Inc. and its
Subsidiaries (the "Putnam Investments Code of Ethics"), which is
attached as Appendix A hereto, are hereby incorporated herein as the
Funds' Code of Ethics applicable to officers and Trustees of the Funds
who are employees of the Funds or officers, directors or employees of
Putnam Investments, Inc. or its subsidiaries.  A violation of the Putnam
Investments Code of Ethics shall constitute a violation of the Funds'
Code.

B.  Reports.  Officers and Trustees of each of the Funds who are made
subject to the Putnam Investments Code of Ethics pursuant to the
preceding paragraph shall file the reports required by the Putnam
Investments Code of Ethics with the Compliance Director designated
therein.  A report filed with the Compliance Director shall be deemed to
be filed with each of the Funds of which the reporting individual is an
officer or Trustee.

C.  Review.  (1)  The Compliance Director shall compare the reported
personal securities transactions with completed and contemplated
portfolio transactions of each of the Funds to determine whether a
violation of this Code may have occurred.  Before making any
determination that a violation has been committed by any person, the
Compliance Director shall give such person an opportunity to supply
additional explanatory material.

(2)  If the Compliance Director determines that a violation of this Code
has or may have occurred, he shall submit his written determination,
together with the confidential quarterly report and any additional
explanatory material provided by the individual, to the Chairman of the
Funds, who shall make an independent determination of whether a
violation has occurred.

D.  Sanctions.  If the Chairman of the Funds finds that a violation has
occurred, he shall report the violation and any sanction imposed under
the Putnam Code of Ethics to the Trustees of the Funds who may impose
such additional sanctions as they deem appropriate.  If a securities
transaction of the Chairman is under consideration, the Vice Chairman of
the Funds shall act in all respects in the manner prescribed herein for
the Chairman.


II. Rules Applicable to Unaffiliated Trustees

A.  Definitions.

(1) "Beneficial ownership" shall be interpreted in the same manner as
    it would be in determining whether a person is subject to the provisions
    of Section 16 of the Securities Exchange Act of 1934 and the rules and
    regulations thereunder.  Application of this definition is explained in
    more detail in Exhibit A hereto.

(2) "Control" means the power to exercise a controlling influence over
    the management or policies of a company, unless such power is solely the
    result of an official position with such company.

(3) "Interested Trustee" means a Trustee of a Fund who is an "interested
    person" of the Fund within the meaning of the Investment Company Act.

(4) "Purchase or sale of a security" includes, among other things, the
    writing of an option to purchase or sell a security.

(5) "Security" shall have the same meaning as that set forth in Section
    2(a)(36) of the Investment Company Act (in effect, all securities)
    except that it shall not include securities issued by the Government of
    the United States or an agency thereof, bankers' acceptances, bank
    certificates of deposit, commercial paper and shares of registered
    open-end investment companies.

(6) "Unaffiliated Trustee" means a Trustee who is not made subject to
    the Putnam Investments Code of Ethics pursuant to Part I hereof.

B. Prohibited Purchases and Sales.  No Unaffiliated Trustee of any of
the Funds shall purchase or sell, directly or indirectly, any security
in which he has or by reason of such transaction acquires, any direct or
indirect beneficial ownership and which to his actual knowledge at the
time of such purchase or sale:

(1) is being considered for purchase or sale by the Fund;

(2) is being purchased or sold by the Fund; or

(3) was purchased or sold by the Fund within the most recent five days
if such person participated in the recommendation to, or the decision
by, Putnam Management to purchase or sell such security for the Fund.


C.  Exempted Transactions.  The prohibitions of Section   II-B of this
Code shall not apply to:

(1)  purchases or sales effected in any account over which the
Unaffiliated Trustee has no direct or indirect influence or control;

(2)  purchases or sales which are non-volitional on the part of either
the Unaffiliated Trustee or the Fund;

(3)  purchases which are part of an automatic dividend reinvestment
plan;

(4)  purchases effected upon the exercise of rights issued by an issuer
pro rata to all holders of a class of its securities, to the extent such
rights were acquired from such issuer, and sales of such rights so
acquired;

(5)  purchases or sales other than those exempted in (1) through (4)
above which do not cause the Unaffiliated Trustee to gain improperly a
personal benefit through his relationship with the Fund and are only
remotely potentially harmful to a Fund because they would be very
unlikely to affect a highly institutional market, and are previously
approved by the Compliance Director under the Putnam Code of Ethics or
the Chairman of the Funds, which approval shall be confirmed in writing.


D.  Reporting.  (1)  Whether or not one of the exemptions listed in
Section II-C applies, every Unaffiliated Trustee of a Fund shall file
with the Chairman of the Funds a report containing the information
described in Section II-D(2) of this Code with respect to transactions
in any security in which such Unaffiliated Trustee has, or by reason of
such transaction acquires, any direct or indirect beneficial ownership,
if such Trustee, at the time of that transaction, knew or, in the
ordinary course of fulfilling his official duties as a Trustee of the
Fund, should have known that, during the 15-day period immediately
preceding or after the date of the transaction by the Trustee:

(a)  such security was or is to be purchased or sold by the Fund or

(b)  such security was or is being considered for purchase or sale by the Fund;

provided, however, that an Unaffiliated Trustee shall not be required to
make a report with respect to transactions effected for any account over
which such person does not have any direct or indirect influence or
control.

(2)  Every report shall be made not later than 10 days after the end of
the calendar quarter in which the transaction to which the report
relates was effected, and shall contain the following information:

(a)  The date of the transaction, the title and the number of shares, and the
     principal amount of each security involved;

(b)  The nature of the transaction (i.e., purchase, sale or any other type of
     acquisition or disposition);

(c)  The price at which the transaction was effected; and

(d)  The name of the broker, dealer or bank with or through whom the
     transaction was effected.

(3)  Every report concerning a purchase or sale prohibited under Section
II-B hereof with respect to which the reporting person relies upon one
of the exemptions provided in Section IIC shall contain a brief
statement of the exemption relied upon and the circumstances of the
transaction.

(4)  Any such report may contain a statement that the report shall not
be construed as an admission by the person making such report that he
has any direct or indirect beneficial ownership in the security to which
the report relates.

(5)  Notwithstanding anything to the contrary contained herein, an
Unaffiliated Trustee who is an Interested Trustee shall also file the
reports required by Rule 17j-1(c)(1) under the Investment Company Act of
1940.


E.  Review.  (1)  The Chairman of the Funds shall compare the reported
personal securities transactions with completed and contemplated
portfolio transactions of the Funds to determine whether any transaction
("Reviewable Transactions") listed in Section II-B (disregarding
exemptions provided by Section II-C(1) through (5)) may have occurred.

(2)  If the Chairman determines that a Reviewable Transaction may have
occurred, he shall then determine whether a violation of this Code may
have occurred, taking into account all the exemptions provided under
Section II-C.  Before making any determination that a violation has
occurred, the Chairman shall give the person involved an opportunity to
supply additional information regarding the transaction in question.

F.  Sanctions.  If the Chairman determines that a violation of this Code
has occurred, he shall so advise a committee consisting of the
Unaffiliated Trustees, other than the person whose transaction is under
consideration, and shall provide the committee with a report of the
matter, including any additional information supplied by such person.
The committee may impose such sanction as it deems appropriate.


III.  Miscellaneous.

A.  Amendments to The Putnam Companies Code of Ethics.  Any amendment to
the Putnam Companies Code of Ethics shall be deemed an amendment to
Section I-A of this Code effective 30 days after written notice of such
amendment shall have been received by the Chairman of the Funds, unless
the Trustees of the Funds expressly determine that such amendment shall
become effective at an earlier or later date or shall not be adopted.

B.  Records.  The Funds shall maintain records in the manner and to the
extent set forth below, which records may be maintained on microfilm
under the conditions described in Rule 31a-2(f)(1) under the Investment
Company Act and shall be available for examination by representatives of
the Securities and Exchange Commission.

(1)  A copy of this Code and any other code which is, or at any time
within the past five years has been, in effect shall be preserved in an
easily accessible place;

(2)  A record of any violation of this Code and of any action taken as a
result of such violation shall be preserved in an easily accessible
place for a period of not less than five years following the end of the
fiscal year in which the violation occurs;

(3)  A copy of each report made by an officer or Trustee pursuant to
this Code shall be preserved for a period of not less than five years
from the end of the fiscal year in which it is made, the first two years
in an easily accessible place; and

(4)  A list of all person who are, or within the past five years have
been, required to make reports pursuant to this Code shall be maintained
in an easily accessible place.


C.  Confidentiality.  All reports of securities transactions and any
other information filed with any Fund pursuant to this Code shall be
treated as confidential, but are subject to review as provided herein
and by personnel of the Securities and Exchange Commission.

D.  Interpretation of Provisions.  The Directors and Trustees may from
time to time adopt such interpretations of this Code as they deem
appropriate.

E.  Delegation by Chairman.  The Chairman of the Funds may from time to
time delegate any or all of his responsibilities under this Code, either
generally or as to specific instances, to such officer or Trustee of the
Funds as he may designate.


As revised
July 8, 1994




Code of Ethics

PUTNAM INVESTMENTS

[SCALE LOGO OMITTED]


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 clients, or to do anything that could damage or erode
the trust our clients place in Putnam and its employees.

44156  9/2003



* Table of Contents

Overview                                                            iii

Preamble                                                            vii

Definitions:   Code of Ethics                                        ix

Section I.   Personal Securities Rules for All Employees              1

A.   Restricted List                                                  1
B.   Prohibited Transactions                                          6
C.   Discouraged Transactions                                        10
D.   Exempted Transactions                                           11

Section II.  Additional Special Rules for Personal Securities
             Transactions of Access Persons and Certain Investment
             Professionals                                           13

Section III. Prohibited Conduct for All Employees                    19

Section IV.  Special Rules for Officers and Employees of Putnam
             Investments Limited.                                    31

Section V.   Reporting Requirements for All Employees                33

Section VI.  Education Requirements                                  37

Section VII. Compliance and Appeal Procedures                        39

Appendix A                                                           41

Preamble                                                             43
Definitions: Insider Trading                                         45
Section 1.   Rules Concerning Inside Information                     47
Section 2.   Overview of Insider Trading                             51


Appendix B.  Policy Statement Regarding Employee Trades in
             Shares of Putnam Closed-End Funds                       57

Appendix C.  Clearance Form for Portfolio Manager Sales Out of
             Personal Account of Securities Also Held by Fund
             (For compliance with "Contra-Trading" Rule)             59

Appendix D.  Procedures for Approval of New Financial Instruments    61

Appendix E.  AIMR Code of Ethics and Standards of Professional
             Responsibility                                          63

Index                                                                71


* Overview

Every Putnam employee is required, as a condition of continued
employment, to read, understand, and comply with the entire Code of
Ethics. Additionally, employees are expected to comply with the policies
and procedures contained within the Putnam Employee Handbook, which can
be accessed on-line through www.ibenefitcenter.com.  This Overview is
provided only as a convenience and is not intended to substitute for a
careful reading of the complete document.

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 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 bans on personal trading, reductions in salary
increases or bonuses, disgorgement of trading profits, suspension of
employment, and termination of employment.

- -- Insider trading:

   Putnam employees are forbidden to buy or sell any security while
   either Putnam or the employee is in possession of 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 and
   substantial fines.

- -- 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 without prior
   approval of the Code of Ethics Officer, and Putnam employees may not
   be members of investment clubs.

- -- 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.

- -- Personal securities trading:

   Putnam employees may not buy or sell any security for their own
   account without clearing the proposed transaction in advance through
   the on-line pre-clearance system or with the Code of Ethics
   Administrator.

   Certain securities are excepted from this requirement (e.g., Marsh &
   McLennan stock and shares of open-end (not closed-end) Putnam Funds).

   Clearance must be obtained in advance, between 11:30 a.m. and 4:00
   p.m. EST on the day of the trade.  Clearance may be obtained between
   9:00 a.m. and 4:00 p.m. on the day of the trade for up to 1,000
   shares of stock of an issuer whose capitalization exceeds $5 billion.
   A clearance is valid only for the day it is obtained.  The Code also
   strongly discourages excessive trading by employees for their own
   account (i.e., more than 10 trades in any calendar quarter). Trading
   in excess of this level will be reviewed with the Code of Ethics
   Oversight Committee.

- -- Short Selling:

   Putnam employees are prohibited from short selling any security,
   whether or not it is held in a Putnam client portfolio, except that
   short selling against broad market indexes and "against the box" are
   permitted.

- -- Confirmations of trading and periodic account statements:

   All Putnam employees must have their brokers send confirmations of
   personal securities transactions, including transactions of immediate
   family members and accounts over which the employee has investment
   discretion, to the Code of Ethics Officer. Employees must contact the
   Code of Ethics Administrator to obtain an authorization letter from
   Putnam for setting up a personal brokerage account.


- -- Quarterly and annual reporting:

   Certain Putnam employees (so-called "Access Persons" as defined by
   the SEC and in the Code of Ethics) must report all their securities
   transactions in each calendar quarter to the Code of Ethics Officer
   within 10 days after the end of the quarter.   All Access Persons
   must disclose all personal securities holdings upon commencement of
   employment and thereafter on an annual basis.  You will be notified
   if these requirements apply to you. If these requirements apply to
   you and you fail to report as required, salary increases and bonuses
   will be reduced.

- -- IPOs and private placements:

   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.

- -- Procedures for Approval of New Financial Instruments:

   No new types of securities or instruments may be purchased for any
   Putnam fund or other client account without the prior approval of the
   Risk Management Committee.

- -- 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:

- -- "60-Day Holding Period". 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 60 calendar days.

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

- -- "Blackout" Rules. No portfolio manager may sell any security or
   related derivative security for her personal account until 7 calendar
   days have passed since the most recent purchase of that security or
   related derivative security by any portfolio she manages. No portfolio
   manager may buy any security or related derivative security for his
   personal account until 7 calendar days have passed since the most recent
   sale of that security or related derivative security by any portfolio he
   manages.

- -- "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 a
   CIO and the Code of Ethics Officer.

- -- No manager may cause a Putnam client to take action for the manager's own
   personal benefit.

- -- SIMILAR RULES LIMIT PERSONAL SECURITIES TRANSACTIONS BY ANALYSTS,
   CO-MANAGERS, AND CHIEF INVESTMENT OFFICERS. PLEASE READ THESE RULES
   CAREFULLY. YOU ARE RESPONSIBLE FOR UNDERSTANDING THE RESTRICTIONS.

This Overview is qualified in its entirety by the provisions of the Code
of Ethics. The Code requires that all Putnam employees read, understand,
and comply with the entire Code of Ethics.


* Preamble

It is the personal responsibility of every Putnam employee to avoid any
conduct that would create a conflict, or even the appearance of a
conflict, with our clients, or embarrass Putnam in any way. This is the
spirit of the Code of Ethics. In accepting employment at Putnam, every
employee also 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.

Sanctions will be imposed for violations of the Code of Ethics,
including the Code's reporting requirements. Sanctions may include bans
on personal trading, reductions in salary increases or bonuses,
disgorgement of trading profits, suspension of employment and
termination of employment.

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 adviser and its clients. Having
an effective Code of Ethics is good business practice, as well. 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 before personal interests.

Putnam has had a Code of Ethics for many years. The first Putnam Code
was written more than 30 years ago by George Putnam. It has been revised
periodically, and was re-drafted in its entirety in 1989 to take account
of legal and regulatory developments in the investment advisory
business. Since 1989, the Code has been revised regularly to reflect
developments in our business and the law.

The Code that follows represents a balancing of important interests. On
the one hand, as a registered investment adviser, 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 are so attenuated as to be 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 in advance, the
Code also contains certain 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 seek 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 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
such disciplinary action, including financial penalties and termination
of employment, as determined by the Code of Ethics Oversight Committee
or the Chief Executive Officer of Putnam Investments.


* Definitions:   Code of Ethics

The words given below are defined specifically for the purposes of Putnam's
Code of Ethics.

Gender references in the Code of Ethics alternate.

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., including the dates from and to which the
measurement is made.

Access Persons. Access Persons are (i) all officers of Putnam Investment
Management, LLC (the investment manager of Putnam's mutual funds), (ii)
all employees within Putnam's Investment Division, and (iii) all other
employees of Putnam who, in connection with their regular duties, have
access to information regarding purchases or sales of portfolio
securities by a Putnam mutual fund, or who have access to information
regarding recommendations with respect to such purchases or sales.

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 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 General Counsel or such other person as is
designated by the President of Putnam Investments. If the Code of Ethics
Officer is unavailable, the Deputy Code of Ethics Officer (to be
appointed by the Code of Ethics Officer) shall act in his stead.

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

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

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

Private placement. Any offering of a security not to the public, but to
sophisticated investors who have access to the kind of information which
would be contained in a prospectus, and which does not require
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, and
includes the writing of an option.

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

Putnam client. Any of the Putnam Funds, or any advisory, trust, or other
client of Putnam.

Putnam employee (or "employee"). Any employee of Putnam.

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

Security. Any type or class of equity or debt security and any rights
relating to a security, such as put and call options, warrants, and
convertible securities. Unless otherwise noted, the term "security" does
not include: currencies, direct and indirect obligations of the U.S.
government and its agencies, commercial paper, certificates of deposit,
repurchase agreements, bankers' acceptances, any other money market
instruments, shares of open-end mutual funds (including Putnam open-end
mutual funds), exchange traded index funds containing a portfolio or
securities of 25 or more issuers (e.g., SPDRs, WEBs, QQQs), securities
of The Marsh & McLennan Companies, Inc., commodities, and any option on
a broad-based market index or an exchange-traded futures contract or
option thereon.

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.


* Section I.   Personal Securities Rules for All Employees

A.   Restricted List

RULE 1

No Putnam employee shall purchase or sell for his personal account any
security without prior clearance obtained through Putnam's Intranet
pre-clearance system (in the "Workplace Community" section of
ibenefitcenter.com) or from the Code of Ethics Administrator. No
clearance will be granted for securities appearing on the Restricted
List. Securities shall 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
    or sale for any Putnam client;

(b) with respect to voting securities of corporations in the banking, savings
    and loan, communications, or gaming (i.e., casinos) industries, when
    holdings of Putnam clients 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) the circumstances described in the Policy Statement Concerning Insider
    Trading Prohibitions, attached as Appendix A.

Reminder: Securities for an employee's "personal account" include
securities owned by certain family members of a Putnam employee. Thus,
this Rule prohibits certain trades by family members of Putnam
employees. See Definitions.

Compliance with this rule does not exempt an employee from complying
with any other applicable rules of the Code, such as those described in
Section III. In particular, Access Persons and certain investment
professionals must comply with the special rules set forth in Section
II.

EXCEPTIONS

A. "Large Cap" Exception. 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 a Putnam employee may purchase or sell up to 1,000
   shares of the security per day for his personal account. This exception
   does not apply if the security appears on the Restricted List in the
   circumstances described in subpart (b), (c), or (d) of Rule 1.

B. Investment Grade Or Higher Fixed-Income Exception. If a security being
   traded or considered for trade for a Putnam client is a non-convertible
   fixed-income security which bears a rating of BBB (Standard & Poor's) or
   Baa (Moody's) or any comparable rating or higher, then a Putnam employee
   may purchase or sell that security for his personal account without regard
   to the activity of Putnam clients. This exception does not apply if the
   security has been placed on the Restricted List in the circumstances
   described in subpart (b), (c), or (d) of Rule 1.

C. Pre-Clearing Transactions Effected by Share Subscription. The purchase and
   sale 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 a 1,000 share limit. The following are procedures to
   comply with Rule 1 when effecting a purchase or sale of shares by
   subscription:

(a) 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. At the time of pre-clearance, the
    employee 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).

(b) The subscription for any purchase or sale of shares must be reported on
    the employee's quarterly personal securities transaction report, noting
    the trade was accomplished by subscription.

(c) As 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.


 SANCTION GUIDELINES

A. Failure to Pre-Clear a Personal Trade

1. First violation: One month trading ban with written warning that a future
   violation will result in a longer trading ban.

2. Second violation: Three month trading ban and written notice to Managing
   Director of the employee's division.

3. Third violation: Six month trading ban with possible longer or permanent
   trading ban based upon review by Code of Ethics Oversight Committee.

B. Failure to Pre-Clear Securities on the Restricted List

1. First violation: Disgorgement of any profit from the transaction, one month
   trading ban, and written warning that a future violation will result in a
   longer trading ban.

2. Second violation: Disgorgement of any profit from the transaction, three
   month trading ban, and written notice to Managing Director of the
   employee's division.

3. Third violation: Disgorgement of any profit from the transaction, and six
   month trading ban with possible longer or permanent trading ban based upon
   review by Code of Ethics Oversight Committee.

NOTE: These are the sanction guidelines for successive failures to
pre-clear personal trades within a 2-year period.  The Code of Ethics
Oversight Committee retains the right to increase or decrease the
sanction for a particular violation in light of the circumstances.  The
Committee's belief that an employee intentionally has violated the Code
of Ethics will result in more severe sanctions than outlined in the
guidelines above.  The sanctions described in Paragraph B apply to
Restricted List securities that are: (i) small cap stocks (i.e., stocks
not entitled to the "Large Cap" exception) and (ii) large cap stocks
that exceed the daily 1,000 share maximum permitted under the "Large
Cap" exception. Failure to pre-clear an otherwise permitted trade of up
to 1,000 shares of a large cap security is subject to the sanctions
described above in Paragraph A.

IMPLEMENTATION

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

B. Consulting Restricted List.  An employee wishing to trade any security for
   his personal account shall first obtain clearance through Putnam's
   Intranet pre-clearance system.  The system may be accessed from your
   desktop computer through the Putnam ibenefitcenter
   (https://www.ibenefitcenter.com) Workplace Community tab, Employee
   Essentials menu.  Employees may pre-clear all securities between 11:30 a.m.
   and 4:00 p.m. EST, and may pre-clear purchases or sales of up to 1,000
   shares of issuers having a market capitalization of more than $5 billion
   between 9:00 a.m. and 4:00 p.m. EST.   Requests to make personal securities
   transactions may not be made using the system or presented to the Code of
   Ethics Administrator after 4:00 p.m.

The pre-clearance system will inform the employee whether the security
may be traded and whether trading in the security is subject to the
"Large Cap" limitation.  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.

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 pre-clearance 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 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.

C. Removal of Securities from Restricted List. Securities shall be removed
   from the Restricted List when: (a) in the case of securities on the
   Restricted List pursuant to Rule 1(a), they are no longer being purchased
   or sold for a Putnam client or actively considered for purchase or sale
   for a Putnam client; (b) in the case of securities on the Restricted List
   pursuant to Rule 1(b), the holdings of Putnam clients fall below the
   applicable threshold designated in that Rule, or at such earlier time as
   the Code of Ethics Officer deems appropriate; or (c) in the case of
   securities on the Restricted List pursuant to Rule 1(c) or 1(d), when
   circumstances no longer warrant restrictions on personal trading.

COMMENTS

1. Pre-Clearance. Subpart (a) of this Rule 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.

2. 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 not hold more than 10% of the
   voting securities of any issuer (5% for public utilities). Because of the
   risk that the personal holdings of Putnam employees may be aggregated with
   Putnam holdings for these purposes, subpart (b) of this Rule limits personal
   trades in these areas. The 7% limit (4% for public utilities) will allow the
   regulatory limits to be observed.

3. Options. For the purposes of this Code, options are treated like the
   underlying security. See Definitions. Thus, an employee may not purchase,
   sell, or "write" option contracts for a security that is on the Restricted
   List. A securities index will not be put on the Restricted List simply
   because one or more of its underlying securities have been put on the
   Restricted List.  The 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 sale of securities obtained through
   the exercise of options must be pre-cleared.

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

5. Tender Offers. This Rule does not prohibit an employee from tendering
   securities from his personal account in response to an any-and-all tender
   offer, even if Putnam clients are also tendering securities. A Putnam
   employee is, however, prohibited from tendering securities from his
   personal account in response to a partial tender offer, if Putnam clients
   are also tendering securities.

B. Prohibited Transactions


RULE 1

Putnam employees are prohibited from short selling any security, whether
or not the security is held in a Putnam client portfolio.

EXCEPTIONS

Short selling against broad market indexes (such as the Dow Jone
Industrial Average, the NASDAQ index and the S&P 100 and 500 indexes)
and short selling "against the box" are permitted.

RULE 2

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.

IMPLEMENTATION

A. General Implementation. An employee shall inquire, before any purchase
   of a security for her personal account, whether the security to be
   purchased is being offered pursuant to an initial public offering. If
   the security is offered through an initial public offering, the employee
   shall refrain from purchasing that security for her personal account
   unless the exception applies.


B. Administration of Exception. If the employee believes the exception
   applies, she shall consult the Code of Ethics Administrator concerning
   whether the security appears on the Restricted List and if so, whether
   it is eligible for this exception.

COMMENTS

1. 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.

2. Purchases of securities in the immediate after-market of an initial
   public offering are not prohibited, provided they do not constitute
   violations of other portions 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."

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

RULE 3

No Putnam employee shall purchase any security for his personal account
in a limited private offering or private placement.

COMMENTS

1. 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 prevent
   Putnam employees from being subject to efforts to curry favor by those
   who seek to do business with Putnam.

2. 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.

3. 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.

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

4. 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.

5. Limited partnership interests are frequently sold in private placements.
   An employee should assume that investment in a limited partnership is
   barred by these rules, unless the employee has obtained, in advance of
   purchase, a written exemption under the ad hoc exemption set forth in
   Section I.D., Rule 2. The procedure for obtaining an ad hoc exemption is
   described in Section VII, Part 4.

6. 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

No Putnam employee shall purchase or sell any security for her personal
account or for any Putnam client account while in possession of
material, nonpublic information concerning the security or the issuer.

EXCEPTIONS

NONE. Please read Appendix A, Policy Statement Concerning Insider
Trading Prohibitions.

RULE 5

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
which transaction may have a significant relationship to any action
taken by a Putnam client.

EXCEPTIONS

None.

IMPLEMENTATION

It shall be the responsibility of every Putnam employee to make inquiry
prior to any personal transaction sufficient 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 closed-end Putnam funds is
attached as Appendix B.

RULE 6

No Putnam employee shall engage in market timing strategies within
Putnam mutual funds, including within Putnam's Profit Sharing Retirement
Plan accounts and deferred compensation accounts.

EXCEPTIONS

None.

COMMENTS

"Market timing" occurs when a person frequently purchases and sells
shares of mutual funds based upon the activity of equity markets on the
days that the purchases and sales are effected.  Putnam has determined
that market timing has  a detrimental effect on the performance of the
mutual funds managed by Putnam, and Putnam has taken steps to reduce
instances of market timing by brokers and shareholders in the mutual
funds.  Putnam therefore expects that Putnam employees will avoid making
frequent trades into and out of the Putnam mutual funds, including
transactions made within Putnam's Profit Sharing Retirement Plan and
other deferred compensation vehicles.

C. Discouraged Transactions

RULE 1

Putnam employees are strongly discouraged from engaging in naked option
transactions for their personal accounts.

EXCEPTIONS

None.

COMMENT

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,
nonpublic information is prohibited. See Appendix A, Policy Statement
Concerning Insider Trading Prohibitions.

RULE 2

Putnam employees are strongly discouraged from engaging in excessive
trading for their personal accounts.

EXCEPTIONS

None.

COMMENTS

1. 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 the likelihood of
   Putnam achieving better investment results for its clients over the
   long term will be increased if Putnam employees rely on their investment
   -- as opposed to 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.

2. Although this Rule does not define excessive trading, employees should
   be aware that if their trades exceed 10 trades per quarter the trading
   activity will be reviewed by the Code of Ethics Oversight Committee.

D. Exempted Transactions

RULE 1

Transactions which 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.

EXCEPTIONS

None.

COMMENTS

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

2. Examples of involuntary personal securities transactions include:

(a) sales out of the brokerage account of a Putnam employee as a result
    of 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.

3. 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.

4. 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, Part 3.

RULE 2

Transactions which have been determined in writing by the Code of Ethics
Officer before the transaction occurs to be no more than remotely
potentially 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.

EXCEPTIONS

N.A.

IMPLEMENTATION

An employee may seek an ad hoc exemption under this Rule by following
the procedures in Section VII, Part 4.

COMMENTS

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

2. 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.


* Section II. Additional Special Rules for Personal Securities
              Transactions of Access Persons and Certain Investment
              Professionals

Access Persons (including all Investment Professionals and other employees
as defined on page ix)

RULE 1 ("60-DAY" 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 60 calendar days.

EXCEPTIONS

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

1. The 60-Day Rule applies to all Access Persons, as defined in the
   Definitions section of the Code.

2. Calculation of whether there has been a profit is based upon the
   market prices of the securities.  The calculation is not net of
   commissions or other sales charges.

3. As an example, an Access Person would not be permitted to sell a
   security at $12 that he purchased within the prior 60 days for $10.
   Similarly, an Access Person would not be permitted to purchase a
   security at $10 that she had sold within the prior 60 days for $12.
   If the proposed transaction would be made at a loss, it would be
   permitted if the pre-clearance requirements are met. See, Section I,
   Rule 1.

COMMENTS

1. 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.

2. Although Chief Investment Officers, Portfolio Managers, and Analysts
   may sell securities at a profit within 60 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.

3. Access Persons occasionally make a series of transactions in securities
   over extended periods of time. For example, an Access Person bought
   100 shares of Stock X on Day 1 at $100 per share and then bought 50
   additional shares on Day 45 at $95 per share. On Day 75, the Access
   Person sold 20 shares at $105 per share. The question arises whether
   the Access Person violated the 60-Day Rule. The characterization of
   the employee's tax basis in the shares sold determines the analysis.
   If, for personal income tax purposes, the Access Person characterizes
   the shares sold as having a basis of $100 per share (i.e., shares
   purchased on Day 1), the transaction would be consistent with the 60-Day
   Rule. However, if the tax basis in the shares is $95 per share (i.e.,
   shares purchased on Day 45), the transaction would violate the 60-Day Rule.

Certain Investment Professionals

RULE 2 ("7-DAY" RULE)

(a) Portfolio Managers: 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 shall sell any such security or related derivative security purchased
in a transaction for his personal account within the preceding seven
calendar days.

(b) Co-Managers: Before a portfolio manager places an order to buy a
security for any Putnam client he manages, his co-manager shall sell any
such security or related derivative security purchased in transaction
for his personal account within the preceding seven calendar days.

(c) Analysts: Before an analyst makes a buy recommendation for a
security (including designation of a security for inclusion in the
portfolio of the Putnam Research Fund), he shall sell any such security
or related derivative security purchased in a transaction for his
personal account within the preceding seven calendar days.

EXCEPTIONS

None.

COMMENTS

1. 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 7 days following the
purchase of that security for his or her personal account.

2. 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.

3. This Rule is designed to avoid even the appearance of a conflict of
interest between an investment professional and a Putnam client. A more
stringent rule is warranted because, with their greater knowledge and
control, these investment professionals are in a better position than
other employees to create an appearance of manipulation of Putnam client
accounts for personal benefit.

4. "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 a Chief
Investment Officer with respect to an account she manages) 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 recommendation for that security
or related derivative security (including designation of a security for
inclusion in the portfolio of the 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 recommendation for that security or related derivative security
(including the removal of a security from the portfolio of the Putnam
Research Fund).

EXCEPTIONS

None.

COMMENTS

1. This Rule applies to portfolio managers (including Chief Investment
Officers with respect to accounts they manage) in connection with to any
transaction (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 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 7 days
preceding a transaction in that security for his or her personal
account.

2. 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.

3. Trades by a Putnam portfolio manager for her personal account in the
"same direction" as the Putnam client portfolio she manages, and trades
by an analyst for his personal account in the "same direction" as his
recommendation, do not present the same danger, so long as any "same
direction" trades do not violate other provisions of the Code or the
Policy Statements.

RULE 4 ("CONTRA TRADING" RULE)

(a) Portfolio Managers: No portfolio manager shall, without prior
clearance, 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, sell out of his personal account securities or
related derivative securities held in any Putnam client portfolio
managed in his investment group.

EXCEPTIONS

None, unless prior clearance is given.

IMPLEMENTATION

A. Individuals Authorized to Give Approval. Prior to engaging in any
   such sale, a portfolio manager shall seek approval, in writing, of the
   proposed sale. In the case of a portfolio manager or director, 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 the
   date 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, director, 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 within twenty-four 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.

RULE 5

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.

EXCEPTIONS

None.

COMMENTS

1. 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 "Definitions").
   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, although U.S. government obligations are excluded from
   the definition of "security."

2. 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, Part 3.


* Section III.   Prohibited Conduct for All Employees

RULE 1

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

EXCEPTIONS

None.

COMMENTS

1. Putnam may report to the appropriate legal authorities conduct by
   Putnam employees that violates this rule.

2. 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

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

EXCEPTIONS

None.

COMMENTS

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

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

RULE 3

No Putnam employee shall seek or accept gifts, favors, preferential
treatment, or special arrangements of material value from any
broker-dealer, investment adviser, financial institution, corporation,
or other entity, or from any existing or prospective supplier of goods
or services to Putnam or Putnam Funds. Specifically, any gift over $100
in value, or any accumulation of gifts which in aggregate exceeds $100
in value from one source in one calendar year, is prohibited. Any Putnam
employee who is offered or receives an item prohibited by this Rule must
report the details in writing to the Code of Ethics Officer.

EXCEPTIONS

None.

COMMENTS

1. This rule is intended to permit only proper types of customary business
   amenities. Listed below are examples of items that would be permitted
   under proper circumstances and of items that are prohibited under this
   rule. These examples are illustrative and not all-inclusive.
   Notwithstanding these examples, a Putnam employee may not, under any
   circumstances, accept anything that could create the appearance of any
   kind of 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.

2. This rule also applies to gifts or "favors" of material value that an
   investment professional may receive from a company or other entity being
   researched or considered as a possible investment for a Putnam client
   account.

3. Among items not considered of "material value" which, under proper
   circumstances, would be considered permissible are:

(a) Occasional lunches or dinners conducted for business purposes;

(b) Occasional cocktail parties or similar social gatherings conducted for
    business purposes;

(c) Occasional attendance at theater, sporting or other entertainment events
    conducted for business purposes; and

(d) Small gifts, usually in the nature of reminder advertising, such as pens,
    calendars, etc., with a value of no more than $100.

4. Among items which are considered of "material value" and which are
   prohibited are:

(a) Entertainment of a recurring nature such as sporting events, theater,
    golf games, etc.;

(b) The cost of transportation to a locality outside the Boston metropolitan
    area, and lodging while in another locality, unless such attendance and
    reimbursement arrangements have received advance written approval of the
    Code of Ethics Officer;

(c) Personal loans to a Putnam employee on terms more favorable than those
    generally available for comparable credit standing and collateral; and

(d) 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. 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 Part 3 of Section VII.

RULE 4

No Putnam employee may 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.

EXCEPTIONS

None.

COMMENT

Although the rule does not specifically address political contributions,
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 fund-raisers) on behalf of Putnam, and no employee
will be reimbursed by Putnam for such contributions made by the employee
personally.

RULE 5

No contributions may be made with corporate funds to any political party
or campaign, whether directly or by reimbursement to an employee for the
expense of such a contribution. No Putnam employee shall solicit any
charitable, political or other contributions using Putnam letterhead or
making reference to Putnam in the solicitation. No Putnam employee shall
personally solicit any such contribution while on Putnam business.

EXCEPTIONS

None.

COMMENT

1. 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.

2. This rule does not prohibit solicitation on personal letterhead by Putnam
   employees. Nonetheless, Putnam employees should use discretion in
   soliciting contributions from individuals or entities who provide services
   to Putnam. There should never be a suggestion that any service provider
   must contribute to keep Putnam's business.

RULE 6

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 without a valid business purpose.

EXCEPTIONS

None.

COMMENT

All information about Putnam and Putnam clients is strictly
confidential. Putnam research information should not be disclosed
unnecessarily and never for personal gain.

RULE 7

No Putnam employee shall serve as officer, employee, director, trustee
or general partner of a corporation or entity other than Putnam, without
prior approval of the Code of Ethics Officer.

EXCEPTION

Charitable or Non-profit Exception. This Rule shall not prevent any
Putnam employee from serving as officer, director, or trustee of a
charitable or not-for-profit institution, provided that the employee
abides by the spirit of 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.

COMMENTS

1. 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.

2. 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

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

EXCEPTIONS

Charitable or Religious Exception. This Rule shall not prevent any
Putnam employee from serving as 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.

Family Trust or Estate Exception.  This Rule shall not prevent any
Putnam employee from serving as fiduciary with respect to a family trust
or estate, so 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

No Putnam employee may be a member of any investment club.

EXCEPTIONS

None.

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 x).

RULE 10

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
president of Putnam Investments.

EXCEPTIONS

None.

RULE 11

No new types of securities or instruments may be purchased for a Putnam
fund or other client account without following the procedures set forth
in Appendix D.

EXCEPTIONS

None.

COMMENT

See Appendix D.

RULE 12

No employee may create or participate in the creation of any record that
is intended to mislead anyone or to conceal anything that is 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.

EXCEPTIONS

None.

COMMENTS

1. 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.

2. 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 13

No employee should have any direct or indirect (including by a family
member or close relative) personal financial interest (other than normal
investments not material to the employee in the entity's publicly traded
securities) in any business, with which Putnam has dealings unless such
interest is disclosed and approved by the Code of Ethics Officer.

RULE 14

No employee shall, with respect to any affiliate of Putnam that provides
investment advisory services and is listed below in Comment 4 to this
Rule, as revised from time to time (each an "NPA"),

(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 without a valid business purpose,

(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 by virtue of service as a
director or officer of the NPA.

COMMENTS

1. 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 would 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 adviser or subadviser to the NPA or one of its products,
   in which case normal Putnam aggregation rules apply.

2. 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.

3. 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.

4. Entities that are currently non-Putnam affiliates within the scope of this
   Rule are: Cisalpina Gestioni, S.p.A., PanAgora Asset Management Inc.,
   PanAgora Asset Management Ltd., Nissay Asset Management Co., Ltd.,
   Thomas H. Lee Partners, L.P., Ampega Asset Management, GMBH, and Sceptre
   Investment Counsel, Ltd.

RULE 15

No employee shall use computer hardware, software, data, Internet,
electronic mail, voice mail, electronic messaging ("e-mail" or "cc:
Mail"), or telephone communications systems in a manner that is
inconsistent with their use as set forth in policy statements governing
their use that are adopted from time to time by Putnam. No employee
shall introduce a computer "virus" or computer code that may result in
damage to Putnam's information or computer systems.

EXCEPTIONS

None.

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 on-line
Employee Handbook is located in the Putnam ibenefitcenter
(https://www.ibenefitcenter.com) at the "Policies and Procedures"
section of the "Workplace Community" tab.

RULE 16

All employees must follow and abide by the spirit of the Code of Ethics
and the Standards of Professional Conduct of the Association of
Investment Management and Research (AIMR).  The texts of the AIMR Code
of Ethics and Standards of Professional Conduct are set forth in Exhibit
E.

RULE 17

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

Putnam Employees.  Non-public personal information may be disclosed to
Putnam employees 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.

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.

Broker or Adviser 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.

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

1. 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 that 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.2.   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.

3. 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.

4. 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 General Counsel
   and, in the event of a breach of computerized data, Putnam's Chief
   Technology Officer.

RULE 18

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 General Counsel and Chief Financial Officer.

RULE 19

All employees must comply with the record retention requirements
applicable to the business unit.

COMMENT

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.


* Section IV.   Special Rules for Officers and Employees of Putnam
                Investments Limited
RULE 1

In situations subject to Section I.A., Rule 1 (Restricted List Personal
Securities Transactions), the Putnam Investments Limited. ("PIL") employee
must obtain clearance not only as provided in that rule, but also from PIL's
Compliance Officer or her designee, who must approve the transaction before
any trade is placed and record the approval.

EXCEPTIONS

None.

IMPLEMENTATION

Putnam's Code of Ethics Administrator in Boston (the "Boston
Administrator") has also been designated the Assistant Compliance
Officer of PIL and has been delegated the right to approve or disapprove
personal securities transactions in accordance with the foregoing
requirement. Therefore, approval from the Code of Ethics Administrator
for PIL employees to make personal securities investments constitutes
approval under the Code of Ethics and also for purposes of compliance
with IMRO, the U.K. self-regulatory organization that regulates PIL.

The position of London Code of Ethics Administrator (the "London
Administrator") has also been created (Jane Barlow is the current London
Administrator). All requests for clearances must be made by e-mail to
the Boston Administrator copying the London Administrator. The e-mail
must include the number of shares to be bought or sold and the name of
the broker(s) involved. Where time is of the essence clearances can be
made by telephone to the Boston Administrator but they must be followed
up by e-mail.

Both the Boston and London Administrators will maintain copies of all
clearances for inspection by senior management and regulators.

RULE 2

No PIL employee may trade with any broker or dealer unless that broker
or dealer has sent a letter to the London Administrator agreeing to
deliver copies of trade confirmations 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.

EXCEPTIONS

None.

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 London Administrator of the names of
all brokers and dealers with whom they trade prior to trading. The
London Administrator will send a letter to the broker(s) in question
requesting them to agree to deliver copies of confirms to PIL. The
London Administrator will forward copies of the confirms to the Boston
Administrator. PIL employees may trade with a broker only when the
London Administrator has received the signed agreement from that broker.

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.

EXCEPTIONS

None.

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
sign an annual certification as to compliance.


* Section V.   Reporting Requirements for All Employees

Reporting of Personal Securities Transactions

RULE 1

Each Putnam employee shall ensure that broker-dealers send all
confirmations of securities transactions for his personal accounts to
the Code of Ethics Officer. (For the purpose of this Rule, "securities"
shall include securities of The Marsh & McLennan Companies, Inc., and
any option on a security or securities index, including broad-based
market indexes.)

EXCEPTIONS

None.

IMPLEMENTATION

1. Putnam employees must instruct their broker-dealers to send
   confirmations to Putnam and must follow up with the broker-dealer
   on a reasonable basis to ensure that the instructions are being
   followed. Putnam employees should contact the Code of Ethics
   Administrator to obtain a letter from Putnam authorizing the setting
   up of a personal brokerage account. Confirmations should be submitted
   to the Code of Ethics Administrator. (Specific procedures apply to
   employees of Putnam Investments Limited ("PIL"). Employees of PIL
   should contact the London Code of Ethics Administrator.) 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.

COMMENTS

1. "Transactions for personal accounts" is defined broadly to include more
   than transaction in accounts under an employee's own name. See Definitions.

2. A confirmation is required for all personal securities transactions,
   whether or not exempted or excepted by this Code.

3. 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.

RULE 2

Every Access Person shall file a quarterly report, within ten calendar
days of the end of each quarter, recording all purchases and sales of
any securities for personal accounts as defined in the Definitions. (For
the purpose of this Rule, "securities" shall include any option on a
security or securities index, including broad-based market indexes.)

EXCEPTIONS

None.

IMPLEMENTATION

All employees required to file such a report will receive by e-mail a
blank form at the end of the quarter from the Code of Ethics
Administrator. The form will specify the information to be reported. The
form shall also contain a representation that employees have complied
fully with all provisions of the Code of Ethics.

COMMENT

1. The date for each transaction required to be disclosed in the quarterly
   report is the trade date for the transaction, not the settlement date.

2. If the requirement to file a quarterly report applies to you and you
   fail to report within the required 10-day period, salary increases and
   bonuses will be reduced in accordance with guidelines stated in the form.

Reporting of Personal Securities Holdings

RULE 3

Access Persons must disclose all personal securities holdings to the
Code of Ethics Officer upon commencement of employment and thereafter on
an annual basis.

EXCEPTIONS

None.

COMMENT

These requirements are mandated by SEC regulations and are designed to
facilitate the monitoring of personal securities transactions.  Putnam's
Code of Ethics Administrator will provide Access Persons with the form
for making these reports and the specific information that must be
disclosed at the time that the disclosure is required.

Other Reporting Policies

The following rules are designed to ensure that Putnam's internal
Control and Reporting professionals are aware of all items that might
need to be addressed by Putnam or reported to appropriate entities.

RULE 4

If a Putnam employee suspects that fraudulent or other irregular
activity might be occurring at Putnam, the activity must 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 or Putnam's General Counsel.


RULE 5

Putnam employees must report all communications from regulatory or
government agencies (federal, state, or local) to the Managing Director
in charge of their business unit.  Managing Directors who are notified
of any such communication must immediately report it in writing to
Putnam's Chief Financial Officer or Putnam's General Counsel.

RULE 6

All claims, circumstances or situations that could give rise to a claim
against Putnam that come to the attention of a Putnam employee must be
reported through the employee's management structure up to the Managing
Director in charge of the employee's business unit.  Managing Directors
who are notified of any such claim, circumstance or situation that might
give rise to a claim against Putnam for more than $100,000 must
immediately report in writing it to Putnam's Chief Financial Officer or
Putnam's General Counsel.

RULE 7

All possible violations of law or regulations at Putnam that come to the
attention of a Putnam employee must be reported immediately to the
Managing Director in charge of the 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 or Putnam's General
Counsel.

RULE 8

Putnam employees must report all requests by anyone for Putnam to
participate in or cooperate with an international boycott to the
Managing Director in charge of their business unit.  Managing Directors
who are notified of any such request must immediately report it in
writing to Putnam's Chief Financial Officer or Putnam's General Counsel.

RULE 9

If a Putnam employee believes that there has been a violation of any of
the rules of the Code of Ethics, that employee must promptly notify the
Code of Ethics Officer, Bill Woolverton, or the Deputy Code of Ethics
Officer, Andy Hachey, of the violation.


* Section VI.   Education Requirements

Every Putnam employee has an obligation to fully understand the
requirements of the Code of Ethics. The Rules set forth below are
designed to enhance this understanding.

RULE 1

A copy of the Code of Ethics will be distributed to every Putnam
employee periodically.  All Access Persons will be required to certify
periodically 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

Every investment professional will attend a meeting periodically at
which the Code of Ethics will be reviewed.


* Section VII.   Compliance and Appeal Procedures

1. Assembly of Restricted List. The Code of Ethics Administrator will
   coordinate the assembly and maintenance of the Restricted List. The
   list will be assembled each day by 11:30 a.m. EST.  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.  Note that pre-clearance may be obtained
   after 9:00 a.m. for purchases or sales of up to 1,000 shares of
   issuers having a market capitalization in excess of $5 billion.

2. 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" limitation.  The pre-clearance system and the Code of
   Ethics Administrator will be able to tell an employee whether a security
   is on the Restricted List.  No other information about the Restricted
   List is available through the pre-clearance system.  The Code of Ethics
   Administrator shall not be authorized to answer any questions about the
   Restricted List, or to render an opinion about the propriety of a
   particular personal securities transaction. Any such questions shall be
   directed to the Code of Ethics Officer.

3. 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
   shall request a determination from the Code of Ethics Officer.

4. Request for Ad Hoc Exemption. Any employee who wishes to obtain an ad hoc
   exemption under Section I.D., Rule 2, shall 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 Part 3 of
   this Section, and shall 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 every effort to promptly render a
   written determination concerning the request for an ad hoc exemption.

5. 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.

6. Information Concerning Identity of Compliance Personnel. The names of Code
   of Ethics personnel are available by contacting the Legal and Compliance
   Department.



Appendix A

Policy Statement Concerning Insider Trading Prohibitions


PUTNAM INVESTMENTS

[SCALE LOGO OMITTED]


* Preamble

Putnam has always forbidden trading on material nonpublic information
("inside information") by its employees. Tougher federal laws make it
important for Putnam to restate that prohibition in the strongest
possible terms, and to establish, maintain, and enforce written policies
and procedures to prevent the misuse of material nonpublic information.

Unlawful trading while in possession of inside information can be a
crime. Today, federal law provides that an individual convicted of
trading on inside information go to jail for some 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 and penalties of up to three times those
profits. In addition, private plaintiffs can seek recovery for harm
suffered by them. The inside trader is not the only one 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 1 of this Policy Statement contains rules concerning inside
information. Section 2 contains a discussion of what constitutes
unlawful insider trading.

Neither material nonpublic information nor unlawful insider trading is
easy to define. Section 2 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 nonpublic 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. If an employee has failed to consult the Code of Ethics
Officer, Putnam will not excuse employee misuse of inside information on
the ground 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.


* Definitions:   Insider Trading

Gender references in Appendix A alternate.

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.

Code of Ethics Officer. The Putnam officer who has been assigned the
responsibility of enforcing and interpreting this Policy Statement. The
Code of Ethics Officer shall be the General Counsel or such other person
as is designated by the President of Putnam Investments. If he is
unavailable, the Deputy Code of Ethics Officer (to be appointed by the
Code of Ethics Officer) shall act in his stead.

Immediate family. Spouse, 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, LLC, and its subsidiaries, any
one of which shall be a "Putnam company."

Putnam client. Any of the Putnam Funds, or any advisory or trust client
of Putnam.

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
indices. (Note: The definition of "security" in this Policy Statement
varies significantly from that in the Code of Ethics. For example, the
definition in this Policy Statement specifically includes securities of
The Marsh & McLennan Companies, Inc.)

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
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.

Officers and employees of Putnam Investments Limited ("PIL") must also
consult the relevant procedures on compliance with U.K. insider dealing
legislation set forth in PEL's Compliance Manual (see Rule 3 of Section
IV of the Code of Ethics).


* Section 1.   Rules Concerning Inside Information

RULE 1

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

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, nonpublic 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

1. Rule 1 concerns the conduct of an employee when Putnam possesses
   material nonpublic information. Rule 2 concerns the conduct of an
   employee who herself possesses material, nonpublic information about
   a security that is not yet on the Red List.

2. If an employee has any question as to whether information she possesses
   is material and/or nonpublic information, she must contact the Code of
   Ethics Officer 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, nonpublic information for the
   purposes of this Policy Statement. An employee's mistaken belief that
   the information was not material nonpublic information will not excuse a
   violation of this Policy Statement.

RULE 3

Any Putnam employee who believes he may have received material,
nonpublic information concerning a security or the issuer shall
immediately report the information to the Code of Ethics Officer 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.

EXCEPTION

This rule shall not apply to material, nonpublic information obtained by
Putnam employees who are directors or trustees of publicly traded
companies, to the extent that such information is received in their
capacities as directors or trustees, and then only to the extent such
information is not communicated to anyone else within the Putnam
organization.

IMPLEMENTATION

1. In order to make any use of potential material, nonpublic 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,
   nonpublic information to the Code of Ethics Officer, the Code of Ethics
   Officer will evaluate whether information constitutes material,
   nonpublic 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.

2. 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 to make the evaluation described in the foregoing
   paragraph, 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. The Code of Ethics Officer may place the affected security or
   securities on the Red List pending the completion of his evaluation.

3. 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.


* Section 2.   Overview of Insider Trading

A. 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.

B. What constitutes unlawful insider trading?

   The basic definition of unlawful insider trading is trading on material,
   nonpublic information (also called "inside information") by an individual
   who has a duty not to "take advantage" of the information. What does this
   definition mean? The following sections help explain the definition.

1. 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 which 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.


2. What is nonpublic information?

   Information is nonpublic 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 Economic Services, The Wall Street Journal, or
   other publications of general circulation would be considered public.

3. 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 nonpublic 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.

a. 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 adviser 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 nonpublic.

COMMENT

Neither the investment adviser, its employees, nor clients can trade on
the basis of that information, because the investment adviser and its
employees could be considered "temporary insiders" of Acme.

b. 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, nonpublic
   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, nonpublic information.

EXAMPLE

The chief financial 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 nonpublic.

COMMENT

The chief financial 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.

c. Tippers and Tippees. A person (the "tippee") who receives material,
   nonpublic 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, such as money, affection, or friendship.

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, nonpublic. 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 (here, out of love and affection for his daughter).
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 which 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 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 always right.

C. 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 nonpublic information.

   In addition, individuals other than those who actually trade on inside
   information can be liable for trades of others. A tipper can be liable
   if (a) he provided the information in exchange for a personal benefit in
   breach of a duty and (b) the recipient of the information (the "tippee")
   traded while in possession of the information.

   Most importantly, a controlling person can be liable if the controlling
   person "knew or recklessly disregarded" the fact that the controlled
   person was likely to engage in misuse of inside information and failed to
   take appropriate steps to prevent it. Putnam is a "controlling person" of
   its employees. In addition, certain supervisors may be "controlling
   persons" of those employees they supervise.

EXAMPLE

A supervisor of an analyst learns that the analyst has, over a long
period of time, secretly received material inside information from Acme,
Inc.'s chief financial 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 are
discussed in the following section.)

D. 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
   penalties below, even if he does not personally benefit from the violation.
   Penalties include:

- -- jail sentences (of which at least one to three years must be served)

- -- criminal penalties for individuals of up to $1,000,000, and for corporations
   of up to $2,500,000

- -- injunctions permanently preventing an individual from working in the
   securities industry

- -- injunctions ordering an individual to pay over profits obtained from
   unlawful insider trading

- -- civil penalties of up to three times 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 of up to the
   greater of $1,000,000 or three times the amount of profit gained or loss
   avoided

- -- 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.


* Appendix B.   Policy Statement Regarding Employee Trades in Shares of
                Putnam Closed-End Funds

1. Pre-clearance for all employees

Any purchase or sale of Putnam closed-end fund shares by a Putnam
employee must be pre-cleared by the Code of Ethics Officer or, in his
absence, the Deputy Code of Ethics Officer. A list of the closed-end
funds can be obtained from the Code of Ethics Administrator. Trading in
shares of closed-end funds is subject to all the rules of the Code of
Ethics.

2. Special Rules Applicable to Managing Directors of Putnam Investment
   Management, LLC and officers of the Putnam Funds

Please be aware that any employee who is a Managing Director 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 or Deputy
Code of Ethics Officer for further information.

3. Reporting by all employees

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.

Please contact the Code of Ethics Officer or Deputy Code of Ethics
Officer if there are any questions regarding these matters.


* Appendix C.   Clearance Form for Portfolio Manager Sales Out of Personal
  Account of Securities Also Held by Fund (For compliance with
  "Contra-Trading" Rule)

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:
                          ---------------------------------      --------

* Appendix D.   Procedures for Approval of New Financial Instruments

1. Summary

a. Putnam has adopted procedures for the introduction of new instruments and
   securities, focusing on, but not limited to, derivatives.

b. No new types of securities or instruments may be purchased for any
   Putnam fund or other client account without the approval of Putnam's New
   Securities Review Committee ("NSRC").

c. Putnam publishes from time to time a list of approved derivatives. The
   purchase of any derivative not listed is prohibited without specific
   authorization from the NSRC.

2. Procedures

a. Introduction. The purchase and sale of financial instruments that have not
   been used previously at Putnam raise significant investment, business,
   operational, and compliance issues. In order to address these issues in a
   comprehensive manner, Putnam has adopted the following procedures for
   obtaining approval of the use of new instruments or investments. In
   addition, to provide guidance regarding the purchase of derivatives,
   Putnam publishes from time to time a list of approved derivatives. Only
   derivatives listed may be used for Putnam funds or accounts unless
   specifically authorized by the NSRC.

b. Process of approval. An investment professional wishing to purchase a new
   type of investment should discuss it with the Investment Division's
   Administrative office (the current contact is Julie Malloy). Investment
   Division Administration will coordinate a review of a new instrument by
   appropriate NSRC members from an investment, operational and compliance
   perspective, including the review of instruments by the Administrative
   Services Division of PFTC. Based on this review, the NSRC will then
   approve or disapprove the proposed new investment. Investment
   professionals must build in adequate time for this review before planned
   use of a new instrument. Further, the approval of the NSRC is only a
   general one. Individual fund and account guidelines must be reviewed in
   accordance with standard compliance procedures to determine whether
   purchase is permitted. In addition, if the instrument involves legal
   documentation, that documentation must be reviewed and be completed before
   trading. The NSRC may prepare a compliance and operational manual for the
   new derivative.

3. Violations

a. Putnam's Operating Committee has determined that adherence to rigorous
   internal controls and procedures for novel securities and instruments is
   necessary to protect Putnam's business standing and reputation. Violation
   of these procedures will be treated as violation of both compliance
   guidelines and Putnam's Code of Ethics.  Putnam encourages questions and
   expects that these guidelines will be interpreted conservatively.


Appendix E.  AIMR Code of Ethics and Standards of Professional Conduct

The Code of Ethics (Full Text)

Members of the Association for Investment Management and Research shall:


1. Act with integrity, competence, dignity, and in an ethical manner when
   dealing with the public, clients, prospects, employers, employees, and
   fellow members.

2. Practice and encourage others to practice in a professional and ethical
   manner that will reflect credit on members and their profession.

3. Strive to maintain and improve their competence and the competence
   of others in the profession.

4. Use reasonable care and exercise independent professional judgment.


The Standards of Professional Conduct

All members of the Association for Investment Management and Research and
the holders of and candidates for the Chartered Financial Analyst designation
are obligated to conduct their activities in accordance with the following Code
of Ethics. Disciplinary sanctions may be imposed for violations of the Code and
Standards.


Fundamental Responsibilities

Relationships with and Responsibilities to a Profession

Relationships with and Responsibilities to an Employer

Relationships with and Responsibilities to Clients and Prospects

Relationships with and Responsibilities to the Public

Standards of Practice Handbook


Standard I: Fundamental Responsibilities

Members shall:

A. Maintain knowledge of and comply with all applicable laws, rules, and
regulations (including AIMR's Code of Ethics and Standards of Professional
Conduct) of any government, governmental agency, regulatory organization,
licensing agency, or professional association governing the members'
professional activities.

B. Not knowingly participate in or assist any violation of such laws, rules, or
regulations.

Standard II: Relationships with and Responsibilities to the Profession

A. Use of Professional Designation.

1. AIMR members may reference their membership only in a dignified and
judicious manner. The use of the reference may be accompanied by an
accurate explanation of the requirements that have been met to obtain
membership in these organizations.

2. Those who have earned the right to use the Chartered Financial Analyst
designation may use the marks "Chartered Financial Analyst" or "CFA" and
are encouraged to do so, but only in a proper, dignified, and judicious
manner. The use of the designation may be accompanied by an accurate
explanation of the requirements that have been met to obtain the right to
use the designation.

3. Candidates in the CFA Program, as defined in the AIMR Bylaws, may
reference their participation in the CFA Program, but the reference must
clearly state that an individual is a candidate in the CFA Program and
cannot imply that the candidate has achieved any type of partial
designation.

B. Professional Misconduct.

1. Members shall not engage in any professional conduct involving
dishonesty, fraud, deceit, or misrepresentation or commit any act that
reflects adversely on their honesty, trustworthiness, or professional
competence.

2. Members and candidates shall not engage in any conduct or commit any
act that compromises the integrity of the CFA designation or the integrity
or validity of the examinations leading to the award of the right to use
the CFA designation.

C. Prohibition against Plagiarism.

Members shall not copy or use, in substantially the same form as the
original, material prepared by another without acknowledging and
identifying the name of the author, publisher, or source of such
material. Members may use, without acknowledgment, factual information
published by recognized financial and statistical reporting services or
similar sources.

Standard III: Relationships with and Responsibilities to the Employer

A. Obligation to Inform Employer of Code and Standards. Members shall:

1. Inform their employer in writing, through their direct supervisor,
that they are obligated to comply with the Code and Standards and are
subject to disciplinary sanctions for violations thereof.

2. Deliver a copy of the Code and Standards to their employer if the
employer does not have a copy.

B. Duty to Employer. Members shall not undertake any independent
practice that could result in compensation or other benefit in
competition with their employer unless they obtain written consent from
both their employer and the persons or entities for whom they undertake
independent practice.

C. Disclosure of Conflicts to Employer. Members shall:

1. Disclose to their employer all matters, including beneficial
ownership of securities or other investments, that reasonably could be
expected to interfere with their duty to their employer or ability to
make unbiased and objective recommendations.

2. Comply with any prohibitions on activities imposed by their employer if a
conflict of interest exists.

D. Disclosure of Additional Compensation Arrangements. Members shall
disclose to their employer in writing all monetary compensation or other
benefits that they receive for their services that are in addition to
compensation or benefits conferred by a member's employer.

E. Responsibilities of Supervisors. Members with supervisory
responsibility, authority, or the ability to influence the conduct of
others shall exercise reasonable supervision over those subject to their
supervision or authority to prevent any violation of applicable
statutes, regulations, or provisions of the Code and Standards. In so
doing, members are entitled to rely on reasonable procedures to detect
and prevent such violations.

Standard IV: Relationships with and Responsibilities to Clients and
Prospects

A. Investment Process.

A.1 Reasonable Basis and Representations. Members shall:

a.  Exercise diligence and thoroughness in making investment
recommendations or in taking investment actions.

b. Have a reasonable and adequate basis, supported by appropriate
research and investigation, for such recommendations or actions.

c. Make reasonable and diligent efforts to avoid any material
misrepresentation in any research report or investment recommendation.

d. Maintain appropriate records to support the reasonableness of such
recommendations or actions.

A.2  Research Reports. Members shall:

a. Use reasonable judgment regarding the inclusion or exclusion of relevant
factors in research reports.

b. Distinguish between facts and opinions in research reports.

c. Indicate the basic characteristics of the investment involved when
preparing for public distribution a research report that is not directly
related to a specific portfolio or client.

A.3  Independence and Objectivity. Members shall use reasonable care and
judgment to achieve and maintain independence and objectivity in making
investment recommendations or taking investment action.

B. Interactions with Clients and Prospects.

B.1  Fiduciary Duties. In relationships with clients, members shall use
particular care in determining applicable fiduciary duty and shall
comply with such duty as to those persons and interests to whom the duty
is owed. Members must act for the benefit of their clients and place
their clients' interests before their own.

B.2  Portfolio Investment Recommendations and Actions. Members shall:

a. Make a reasonable inquiry into a client's financial situation,
investment experience, and investment objectives prior to making any
investment recommendations and shall update this information as
necessary, but no less frequently than annually, to allow the members to
adjust their investment recommendations to reflect changed
circumstances.

b. Consider the appropriateness and suitability of investment
recommendations or actions for each portfolio or client. In determining
appropriateness and suitability, members shall consider applicable
relevant factors, including the needs and circumstances of the portfolio
or client, the basic characteristics of the investment involved, and the
basic characteristics of the total portfolio. Members shall not make a
recommendation unless they reasonably determine that the recommendation
is suitable to the client's financial situation, investment experience,
and investment objectives.

c. Distinguish between facts and opinions in the presentation of investment
recommendations.

d. Disclose to clients and prospects the basic format and general
principles of the investment processes by which securities are selected
and portfolios are constructed and shall promptly disclose to clients
and prospects any changes that might significantly affect those
processes.

B.3  Fair Dealing. Members shall deal fairly and objectively with all
clients and prospects when disseminating investment recommendations,
disseminating material changes in prior investment recommendations, and
taking investment action.

B.4  Priority of Transactions. Transactions for clients and employers
shall have priority over transactions in securities or other investments
of which a member is the beneficial owner so that such personal
transactions do not operate adversely to their clients' or employer's
interests. If members make a recommendation regarding the purchase or
sale of a security or other investment, they shall give their clients
and employer adequate opportunity to act on their recommendations before
acting on their own behalf. For purposes of the Code and Standards, a
member is a "beneficial owner" if the member has

a. a direct or indirect pecuniary interest in the securities;

b. the power to vote or direct the voting of the shares of the securities or
investments;

c. the power to dispose or direct the disposition of the security or
investment.

B.5  Preservation of Confidentiality. Members shall preserve the
confidentiality of information communicated by clients, prospects, or
employers concerning matters within the scope of the client-member,
prospect-member, or employer-member relationship unless a member
receives information concerning illegal activities on the part of the
client, prospect, or employer.

B.6  Prohibition against Misrepresentation. Members shall not make any
statements, orally or in writing, that misrepresent

a. the services that they or their firms are capable of performing;

b. their qualifications or the qualifications of their firm;

c. the member's academic or professional credentials.

Members shall not make or imply, orally or in writing, any assurances or
guarantees regarding any investment except to communicate accurate
information regarding the terms of the investment instrument and the
issuer's obligations under the instrument.

B.7  Disclosure of Conflicts to Clients and Prospects. Members shall
disclose to their clients and prospects all matters, including
beneficial ownership of securities or other investments, that reasonably
could be expected to impair the members' ability to make unbiased and
objective recommendations.

B.8  Disclosure of Referral Fees. Members shall disclose to clients and
prospects any consideration or benefit received by the member or
delivered to others for the recommendation of any services to the client
or prospect.

Standard V: Relationships with and Responsibilities to the Public

A. Prohibition against Use of Material Nonpublic Information. Members
who possess material nonpublic information related to the value of a
security shall not trade or cause others to trade in that security if
such trading would breach a duty or if the information was
misappropriated or relates to a tender offer. If members receive
material nonpublic information in confidence, they shall not breach that
confidence by trading or causing others to trade in securities to which
such information relates. Members shall make reasonable efforts to
achieve public dissemination of material nonpublic information disclosed
in breach of a duty.

B. Performance Presentation.

1. Members shall not make any statements, orally or in writing, that
misrepresent the investment performance that they or their firms have
accomplished or can reasonably be expected to achieve.

2. If members communicate individual or firm performance information
directly or indirectly to clients or prospective clients, or in a manner
intended to be received by clients or prospective clients, members shall
make every reasonable effort to assure that such performance information
is a fair, accurate, and complete presentation of such performance.


* Index

"7-Day Rule"
for transactions by managers, analysts and CIOs, 14

"60-Day Rule", 13

Access Persons
  definition, ix
  special rules on trading, 13, 33

AIMR Code of Ethics and Standards of
   Professional Conduct, 63

Analysts
special rules on trading by, 13

Appeals
Procedures, 39

Bankers' acceptances
excluded from securities, x

Blackout rule
on trading by portfolio managers, analysts and CIOs, 15

Boycotts
reporting of requests to participate, 35

Bribes, 21

CDs
excluded from securities, x

Claims against Putnam
reporting of, 35

Clearance
how long pre-clearance is valid, 4
required for personal securities transactions, 1

Closed-end funds
rules on trading, 57

Commercial paper
excluded from securities, x

Commodities (other than securities indices)
excluded from securities, x

Computer use
compliance with corporate policies required, 27

Confidentiality
required of all employees, 22, 27

Confirmations
of personal transactions required, 33

Conflicts of interest
with Putnam and Putnam clients prohibited, 19

Contra-trading rule
transactions by managers and CIOs, 16

Convertible securities
defined as securities, x

Currencies
excluded as securities, x

Director
serving as for another entity prohibited, 23

Employee
serving as for another entity prohibited, 23

Excessive trading (over 10 trades)
by employees strongly discouraged, 10

Exchange traded index funds, excluded from securities, x

Exemptions
basis for, 11

Family members
covered in personal securities transactions, x, 45

Fiduciary
serving as for another entity prohibited, 23

Fraudulent or irregular activities
reporting of, 35

Gifts
restrictions on receipt of by employees, 19

Government or regulatory agencies
reporting of communications from, 35

Holdings
disclosure of by Access Persons, 34

Initial public offerings/IPOs
purchases in prohibited, 6

Insider trading
policy statement and explanations, 41
prohibited, 9

Investment clubs
prohibited, 24

Investment Grade Exception
for clearance of fixed income securities on Restricted List, 2

Involuntary personal securities transactions
exempted, 11
exemption defined, 6

Large Cap Exception
for clearance of securities on Restricted List, 1

Market Timing, prohibition against, 9

Marsh & McLennan Companies stock
excluded from securities, x

Money market instruments
excluded from securities, x

Mutual fund shares (open end)
excluded from securities, x

Naked options
by employees discouraged, 10

New financial instruments
procedures for approval, 61

Non-Putnam affiliates (NPAs)
transactions and relationships with, 25

Officer
serving as for another entity prohibited, 26

Options
defined as securities, x
relationship to securities on Restricted or Red Lists, 5

Partner
serving as general partner of another entity prohibited, 23

Partnerships
covered in personal securities transactions, x, 45

Personal securities transaction
defined, x, 45

Pink sheet reports
quarterly reporting requirements, 34

Political contributions, 22

Portfolio managers
special rules on trading by, 13

Privacy Policy, 27

Private offerings or placements
purchases of prohibited, 7

Putnam Investments Limited
special rules for, 31

Quarterly Report of securities transactions, 34

Repurchase agreements
excluded from securities, x

Sale
defined, x, 45

Sanctions, viii
for failure to pre-clear properly, 3

Shares by subscription
procedures to preclear the purchase and sales of Shares by Subscription, 2

Short sales
by employees prohibited conduct, 6

Tender offers
partial exemption from clearance rules, 6

Trustee
serving as for another entity prohibited, 23

Trusts
covered in personal securities transactions, x, 45

U.S. government obligations
excluded from securities, x

Violations of Law
reporting of, 35

Warrants
defined as securities, x

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
