Putnam
U.S. Core
Fund
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
10-31-99
[LOGO: BOSTON * LONDON * TOKYO]
The following report contains a list of your fund's portfolio holdings and
complete financial statements for the six months ended 10/31/99.
Additional details, including fund strategy, performance, and managers'
outlook, will be provided in the annual report, which will cover the 12
months ended 4/30/00.
A guide to the financial statements
These sections of the 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 for
the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that remain
in the portfolio -- any change in unrealized gains or losses over the
period.
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.
<TABLE>
<CAPTION>
The fund's portfolio
October 31, 1999 (Unaudited)
COMMON STOCKS (98.4%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Banks (3.6%)
- --------------------------------------------------------------------------------------------------------------------------
4,172 Firstar Corp. $ 122,539
Basic Industrial Products (3.5%)
- --------------------------------------------------------------------------------------------------------------------------
1,270 Minnesota Mining & Manufacturing Co. 120,729
Broadcasting (17.5%)
- --------------------------------------------------------------------------------------------------------------------------
4,450 AT&T Corp. -- Liberty Media Group, Class A (NON) 176,609
3,530 CBS Corp. (NON) 172,308
3,500 Infinity Broadcasting Corp., Class A (NON) 120,969
1,900 MediaOne Group Inc. (NON) 135,019
--------------
604,905
Business Equipment and Services (2.3%)
- --------------------------------------------------------------------------------------------------------------------------
4,826 Cendant Corp. (NON) 79,629
Computer Services and Software (9.9%)
- --------------------------------------------------------------------------------------------------------------------------
2,300 Electronic Data Systems Corp. 134,550
1,485 Microsoft Corp. (NON) 137,455
1,475 Oracle Corp. (NON) 70,155
--------------
342,160
Conglomerates (6.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,100 Corning Inc. 86,488
3,800 Tyco International Ltd. 151,763
--------------
238,251
Consumer Non Durables (3.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,830 Kimberly-Clark Corp. 115,519
Electronics and Electrical Equipment (15.8%)
- --------------------------------------------------------------------------------------------------------------------------
940 Applied Materials, Inc. (NON) 84,424
355 General Electric Co. 48,125
1,135 Intel Corp. 87,892
1,935 Motorola, Inc. 188,542
2,820 Rockwell International Corp. 136,594
--------------
545,577
Insurance and Finance (9.7%)
- --------------------------------------------------------------------------------------------------------------------------
750 American Express Co. 115,500
2,615 Citigroup, Inc. 141,537
700 Providian Financial Corp. 76,300
--------------
333,337
Oil and Gas (8.0%)
- --------------------------------------------------------------------------------------------------------------------------
5,475 Conoco, Inc. 150,220
3,320 Halliburton Co. 125,123
--------------
275,343
Packaging and Containers (2.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,785 Sealed Air Corp. (NON) 98,844
Paper and Forest Products (2.9%)
- --------------------------------------------------------------------------------------------------------------------------
2,410 Willamette Industries, Inc. 100,166
Pharmaceuticals (5.7%)
- --------------------------------------------------------------------------------------------------------------------------
2,400 Pfizer, Inc. 94,800
1,300 Warner-Lambert Co. 103,756
--------------
198,556
Retail (1.2%)
- --------------------------------------------------------------------------------------------------------------------------
1,560 TJX Cos., Inc. (The) 42,315
Telecommunications (5.2%)
- --------------------------------------------------------------------------------------------------------------------------
1,984 Lucent Technologies, Inc. 127,470
650 Sprint PCS (NON) 53,909
--------------
181,379
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $3,082,070) (b) $ 3,399,249
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $3,455,322.
(b) The aggregate identified cost on a tax basis is $3,114,952, resulting in gross unrealized appreciation and
depreciation of $394,275 and $109,978, respectively, or net unrealized appreciation of $284,297.
(NON) Non-income-producing security.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
October 31, 1999 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $3,082,070) (Note 1) $ 3,399,249
- -----------------------------------------------------------------------------------------------
Dividends receivable 537
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 1,643
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 134,210
- -----------------------------------------------------------------------------------------------
Receivable from Manager 8,442
- -----------------------------------------------------------------------------------------------
Total assets 3,544,081
Liabilities
- -----------------------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 2,245
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 70,027
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 636
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 476
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 3
- -----------------------------------------------------------------------------------------------
Other accrued expenses 15,372
- -----------------------------------------------------------------------------------------------
Total liabilities 88,759
- -----------------------------------------------------------------------------------------------
Net assets $3,455,322
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1, 4 and 5) $ 2,701,782
- -----------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (4,603)
- -----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments (Note 1) 440,964
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 317,179
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $3,455,322
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per share
($3,455,322 divided by 304,426 shares) $11.35
- -----------------------------------------------------------------------------------------------
Offering price per share (100/94.25 of $11.35)* $12.04
- -----------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group
sales, the offering price is reduced.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended October 31, 1999 (Unaudited)
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends $ 11,056
- -----------------------------------------------------------------------------------------------
Interest 181
- -----------------------------------------------------------------------------------------------
Total investment income 11,237
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 12,078
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 2,771
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 1,190
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 20
- -----------------------------------------------------------------------------------------------
Reports to shareholders 2,666
- -----------------------------------------------------------------------------------------------
Auditing 16,081
- -----------------------------------------------------------------------------------------------
Legal 1,616
- -----------------------------------------------------------------------------------------------
Postage 21
- -----------------------------------------------------------------------------------------------
Other 12
- -----------------------------------------------------------------------------------------------
Fees waived and reimbursed by Manager (Note 2) (19,201)
- -----------------------------------------------------------------------------------------------
Total expenses 17,254
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (1,414)
- -----------------------------------------------------------------------------------------------
Net expenses 15,840
- -----------------------------------------------------------------------------------------------
Net investment loss (4,603)
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 315,051
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (127,168)
- -----------------------------------------------------------------------------------------------
Net gain on investments 187,883
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 183,280
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
For the period
May 4, 1998
(commencement
Six months ended of operations)
October 31 to April 30
1999* 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment loss $ (4,603) $ (1,358)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments 315,051 139,736
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments (127,168) 444,347
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 183,280 582,725
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gain -- (12,478)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 21,256 680,539
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets 204,536 1,250,786
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of period (Note 5) $3,250,786 $2,000,000
- ---------------------------------------------------------------------------------------------------------------
End of period (including accumulated net investment loss
of $4,603 and $--, respectively) $3,455,322 $3,250,786
- ---------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
- ---------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share October 31 May 4, 1998+
operating performance (Unaudited) to April 30
- ---------------------------------------------------------------------------------------------------------------------------------
1999 1999
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $10.73 $8.50
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (a)(d) (.01) (.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments .63 2.29
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .62 2.28
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain -- (.05)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (.05)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $11.35 $10.73
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 5.78* 26.96*
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $3,455 $3,251
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c)(d) .50* .99*
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%)(d) (.13)* (.06)*
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 155.64* 267.29*
- ---------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding
during the period.
(b) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Includes amounts paid through expense offset arrangements (Note 2).
(d) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses for the fund reflect a
reduction of $0.06 and $0.07 per share for the periods ended October 31, 1999 and April 30, 1999, respectively. (Note 2).
</TABLE>
Notes to financial statements
October 31, 1999 (Unaudited)
Note 1
Significant accounting policies
Putnam U.S. Core Fund ("the fund") is one of a series of Putnam Funds
Trust ("the trust") which is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment
company. The fund invests primarily in common stocks of U.S. companies
that Putnam Investment Management, Inc., ("Putnam Management"), the fund's
manager, a wholly-owned subsidiary of Putnam Investments, Inc., believes
offer long-term growth potential in excess of market averages or are
undervalued compared to their true worth.
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 generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
of 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 stated at market value, which is determined using the last
reported sales price on its principal exchange, or if no sales are
reported -- as in the case of some securities traded over-the-counter --
the last reported bid price. Short-term investments having remaining
maturities of 60 days or less are stated at amortized cost, which
approximates market value. Other investments, including restricted
securities, are stated at fair value following procedures approved by the
Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam Management. These balances may be invested in one or more
repurchase agreements and/or short-term money market instruments.
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 accounted for 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
recorded on the ex-dividend date.
E) Line of credit The fund has entered into a committed line of credit
with certain banks. This line of credit agreement includes restrictions
that the fund maintain an asset coverage ratio of at least 300% and
borrowings must not exceed prospectus limitations. For the six months
ended October 31, 1999, the fund had no borrowings against the line of
credit.
F) 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.
G) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, 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.
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.
H) Expenses of the trust Expenses directly charged or attributable to any
fund will be paid from the assets of that fund. Generally, expenses of the
trust will be allocated among and charged to the assets of each fund on a
basis that the Trustees deem fair and equitable, which may be based on the
relative assets of each fund or the nature of the services performed and
relative applicability to each fund.
Note 2
Management fee, administrative
services, and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund.
Such fee is based on the following annual rates: 0.70% of the first $500
million of average net assets, 0.60% of the next $500 million, 0.55% of
the next $500 million, 0.50% of the next $5 billion, 0.475% of the next $5
billion, 0.455% of the next $5 billion, 0.44% of the next $5 billion, and
0.43% thereafter.
Putnam Management has agreed to limit its compensation (and, to the extent
necessary, bear other expenses) through August 30, 2000, to the extent
that expenses of the fund (exclusive of brokerage commissions, interest,
taxes, deferred organizational and extraordinary expense, credits from
Putnam Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments,
Inc. and payments under the Trust's distribution plan) would exceed an
annual rate of 1.00% of the fund's average net assets.
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 PFTC. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
Under the subcustodian contract between the subcustodian bank and PFTC,
the subcustodian bank has a lien on the securities of the fund to the
extent permitted by the fund's investment restrictions to cover any
advances made by the subcustodian bank for the settlement of securities
purchased by the fund. At October 31, 1999, the payable to the
subcustodian bank represents the amount due for cash advance for the
settlement of a security purchased.
For the six months ended October 31, 1999, fund expenses were reduced by
$1,414 under expense offset arrangements with PFTC. Investor servicing and
custodian fees reported in the Statement of operations exclude these
credits. The fund could have invested a portion of the assets utilized in
connection with the expense offset arrangements in an income producing
asset if it had not entered into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $100 has
been allocated to the fund, and an additional fee for each Trustee's
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 Compensation of Trustees in the Statement of
operations. Accrued pension liability is included in Payable for
compensation of Trustees in the Statement of assets and liabilities.
The fund has adopted a distribution plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The purpose of the Plan is
to compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of
Putnam Investments, Inc., for services provided and expenses incurred by
it in distributing shares of the fund. The Plan provides for payment by
the fund to Putnam Mutual Funds Corp. at an annual rate of up to 0.35% of
the fund's average net assets. The fund is not currently making any
payments pursuant to the plan.
For the six months ended October 31, 1999, Putnam Mutual Funds Corp.,
acting as underwriter received no net commissions from the sale of shares.
A deferred sales charge of up to 1% is assessed on certain redemptions of
shares. For the six months ended October 31, 1999, Putnam Mutual Funds
Corp., acting as underwriter received no monies on redemptions.
Note 3
Purchases and sales of securities
During the six months ended October 31, 1999, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $4,995,510 and $5,006,377, respectively. There were
no purchases and sales of U.S. government obligations.
Note 4
Capital shares
At October 31, 1999, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended October 31, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 16,919 $ 192,503
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
16,919 192,503
Shares repurchased (15,551) (171,247)
- -----------------------------------------------------------------------------
Net increase 1,368 $ 21,256
- -----------------------------------------------------------------------------
For the period May 4, 1998
(commencement of operations)
to April 30, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 80,253 $ 800,612
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,380 12,478
- -----------------------------------------------------------------------------
81,633 813,090
Shares repurchased (13,869) (132,551)
- -----------------------------------------------------------------------------
Net increase 67,764 $ 680,539
- -----------------------------------------------------------------------------
Note 5
Initial capitalization and
offering of shares
The Trust was established as a Massachusetts business trust on January 22,
1996. During the period January 22, 1996 to May 4, 1998, the fund had no
operations other than those related to organizational matters, including
the initial capital contribution of $2,000,000 and the issuance if 235,294
shares to Putnam Mutual Funds Corp. on May 1, 1998.
At October 31, 1999, Putnam Investments, Inc. owned 252,879 shares of the
fund (83.1% of shares outstanding), valued at $2,870,177.
Results of December 2, 1999 shareholder meeting
(Unaudited)
A meeting of shareholders of the fund was held on December 2, 1999.
A proposal to amend the fund's fundamental investment restriction with
respect to diversification was approved as follows: 281,497 votes for, and
0 votes against, with 0 abstentions and non-broker votes.
A proposal to amend the fund's fundamental investment restriction with
respect to investments in the voting securities of a single issuer was
approved as follows: 281,497 votes for, and 0 votes against, with 0
abstentions and non-broker votes.
Fund information
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Robert R. Beck
Vice President and Fund Manager
Michael Stack
Vice President and Fund Manager
Paul Marrkand
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam U.S. Core
Fund. It may also be used as sales literature when preceded or accompanied
by the current prospectus, which gives details of sales charges,
investment objectives, and operating policies of the fund, and the most
recent copy of Putnam's Quarterly Performance Summary. For more
information or to request a prospectus, call toll free: 1-800-225-1581.
You can also learn more at Putnam Investments' Web site: www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
56822 12/99
