Putnam
U.S. Core
Fund
SEMIANNUAL REPORT ON PERFORMANCE AND PORTFOLIO
10-31-00
[SCALE LOGO OMITTED]
The following report contains a list of your fund's portfolio holdings
and complete financial statements for the six months ended 10/31/00.
Additional details, including fund strategy, performance, and managers'
outlook, will be provided in the annual report, which will cover the 12
months ended 4/30/01.
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, 2000 (Unaudited)
COMMON STOCKS (98.8%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Aerospace/Defense (2.8%)
-------------------------------------------------------------------------------------------------------------------
3,750 United Technologies Corp. $ 261,797
Chemicals (2.0%)
-------------------------------------------------------------------------------------------------------------------
6,100 Dow Chemical Co. 186,813
Communications Equipment (4.9%)
-------------------------------------------------------------------------------------------------------------------
4,800 Cisco Systems, Inc. (NON) 258,600
3,000 Foundry Networks, Inc. (NON) 199,313
-------------
457,913
Computers (1.6%)
-------------------------------------------------------------------------------------------------------------------
1,300 Sun Microsystems, Inc. (NON) 144,138
Conglomerates (8.8%)
-------------------------------------------------------------------------------------------------------------------
7,790 General Electric Co. 426,989
6,900 Tyco International, Ltd. 391,144
-------------
818,133
Consumer Finance (1.5%)
-------------------------------------------------------------------------------------------------------------------
3,700 MBNA Corp. 138,981
Consumer Goods (3.4%)
-------------------------------------------------------------------------------------------------------------------
4,800 Kimberly-Clark Corp. 316,800
Electrical Equipment (3.6%)
-------------------------------------------------------------------------------------------------------------------
8,500 Rockwell International Corp. 334,156
Energy (4.9%)
-------------------------------------------------------------------------------------------------------------------
13,200 Baker Hughes, Inc. 453,750
Entertainment (3.0%)
-------------------------------------------------------------------------------------------------------------------
4,844 Viacom, Inc. Class B (NON) 275,503
Financial (9.5%)
-------------------------------------------------------------------------------------------------------------------
7,026 Citigroup, Inc. 369,743
8,600 Freddie Mac 516,000
-------------
885,743
Food (2.0%)
-------------------------------------------------------------------------------------------------------------------
8,800 Sara Lee Corp. 189,750
Insurance (4.1%)
-------------------------------------------------------------------------------------------------------------------
4,700 American General Corp. 378,350
Metals (0.6%)
-------------------------------------------------------------------------------------------------------------------
1,800 Alcoa, Inc. 51,638
Oil & Gas (4.2%)
-------------------------------------------------------------------------------------------------------------------
4,400 ExxonMobil Corp. 392,425
Paper & Forest Products (3.2%)
-------------------------------------------------------------------------------------------------------------------
8,200 International Paper Co. 300,325
Pharmaceuticals (14.6%)
-------------------------------------------------------------------------------------------------------------------
5,700 American Home Products Corp. 361,950
3,300 Merck & Co., Inc. 296,794
7,867 Pfizer, Inc. 339,756
6,474 Pharmacia Corp. 356,070
-------------
1,354,570
Regional Bells (6.4%)
-------------------------------------------------------------------------------------------------------------------
10,300 SBC Communications, Inc. 594,181
Software (13.4%)
-------------------------------------------------------------------------------------------------------------------
3,700 Amdocs Ltd. (NON) 239,806
5,000 Microsoft Corp. (NON) 344,375
5,520 Oracle Corp. (NON) 182,160
3,400 VERITAS Software Corp. (NON) 479,451
-------------
1,245,792
Telecommunications (4.3%)
-------------------------------------------------------------------------------------------------------------------
4,000 AT&T Corp. 92,750
7,000 Vodaphone Group PLC (United Kingdom) 297,938
-------------
390,688
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $8,427,771) (b) $ 9,171,446
-------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $9,285,990.
(b) The aggregate identified cost on a tax basis is $8,510,172,
resulting in gross unrealized appreciation and depreciation of $905,165
and $243,891, respectively, or net unrealized appreciation of $661,274.
(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, 2000 (Unaudited)
<S> <C>
Assets
-------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $8,427,771) (Note 1) $ 9,171,446
-------------------------------------------------------------------------------------------
Dividends receivable 1,781
-------------------------------------------------------------------------------------------
Receivable for securities sold 934,246
-------------------------------------------------------------------------------------------
Total assets 10,107,473
Liabilities
-------------------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 6,817
-------------------------------------------------------------------------------------------
Payable for securities purchased 788,568
-------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 8,071
-------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 2,140
-------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 1,000
-------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 13
-------------------------------------------------------------------------------------------
Other accrued expenses 14,874
-------------------------------------------------------------------------------------------
Total liabilities 821,483
-------------------------------------------------------------------------------------------
Net assets $ 9,285,990
Represented by
-------------------------------------------------------------------------------------------
Paid-in capital (Notes 1, 4 and 5) $7,946,824
-------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (12,687)
-------------------------------------------------------------------------------------------
Accumulated net realized gain on investments (Note 1) 608,178
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 743,675
-------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $ 9,285,990
Computation of net asset value and offering price
-------------------------------------------------------------------------------------------
Net asset value and redemption price per share
($9,285,990 divided by 728,250 shares) $12.75
-------------------------------------------------------------------------------------------
Offering price per share (100/94.25 of $12.75)* $13.53
-------------------------------------------------------------------------------------------
* 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, 2000 (Unaudited)
<S> <C>
Investment income:
-------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $5) $ 17,569
-------------------------------------------------------------------------------------------
Interest 4,505
-------------------------------------------------------------------------------------------
Total investment income 22,074
Expenses:
-------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 26,672
-------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 5,886
-------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 1,195
-------------------------------------------------------------------------------------------
Administrative services (Note 2) 20
-------------------------------------------------------------------------------------------
Reports to shareholders 2,572
-------------------------------------------------------------------------------------------
Auditing 9,521
-------------------------------------------------------------------------------------------
Other 3,681
-------------------------------------------------------------------------------------------
Fees waived and reimbursed by Manager (Note 2) (11,445)
-------------------------------------------------------------------------------------------
Total expenses 38,102
-------------------------------------------------------------------------------------------
Expense reduction (Note 2) (3,341)
-------------------------------------------------------------------------------------------
Net expenses 34,761
-------------------------------------------------------------------------------------------
Net investment loss (12,687)
-------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 111,948
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 123,292
-------------------------------------------------------------------------------------------
Net gain on investments 235,240
-------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $222,553
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six months ended Year ended
October 31 April 30
2000* 2000
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
--------------------------------------------------------------------------------------------------
Operations:
--------------------------------------------------------------------------------------------------
Net investment loss $ (12,687) $ (12,678)
--------------------------------------------------------------------------------------------------
Net realized gain on investments 111,948 869,713
--------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 123,292 176,036
--------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 222,553 1,033,071
--------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gain -- (486,718)
--------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 2,814,252 2,452,046
--------------------------------------------------------------------------------------------------
Total increase in net assets 3,036,805 2,998,399
Net assets
--------------------------------------------------------------------------------------------------
Beginning of year (Note 5) $6,249,185 $3,250,786
--------------------------------------------------------------------------------------------------
End of year (including accumulated net
investment loss of $12,687 and $--, respectively) $9,285,990 $6,249,185
--------------------------------------------------------------------------------------------------
* 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 Year ended May 4, 1998+
operating performance (Unaudited) April 30 to April 30
--------------------------------------------------------------------------------------------------
2000 2000 1999
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $12.34 $10.73 $8.50
--------------------------------------------------------------------------------------------------
Investment operations
--------------------------------------------------------------------------------------------------
Net investment loss (a)(d) (.02) (.04) (.01)
--------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments .43 3.16 2.29
--------------------------------------------------------------------------------------------------
Total from
investment operations .41 3.12 2.28
--------------------------------------------------------------------------------------------------
Less distributions:
--------------------------------------------------------------------------------------------------
From net realized gain -- (1.51) (.05)
--------------------------------------------------------------------------------------------------
Total distributions -- (1.51) (.05)
--------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.75 $12.34 $10.73
--------------------------------------------------------------------------------------------------
Ratios and supplemental data
--------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 3.32* 31.12 26.96*
--------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $9,286 $6,249 $3,251
--------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c)(d) .50* 1.00 .99*
--------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%)(d) (.17)* (.31) (.06)*
--------------------------------------------------------------------------------------------------
Portfolio turnover (%) 107.28* 256.50 267.29*
--------------------------------------------------------------------------------------------------
+ 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 and brokerage service 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 $0.02, $0.06 and $0.07 per share for the periods
ended October 31, 2000, April 30, 2000 and April 30, 1999, respectively (Note 2).
</TABLE>
NOTES TO FINANCIAL STATEMENTS
October 31, 2000 (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 non-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 in relation to underlying asset
values or earnings potential and have the potential for long-term
growth.
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. 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 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, except that certain dividends from
foreign securities are recorded as soon as the fund is informed of the
ex-dividend date. Non-cash dividends, if any, are recorded at the fair
market value of the securities received.
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, 2000, 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 April 30, 2001, 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, 2000, 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, 2000, fund expenses were reduced by
$3,341 under expense offset arrangements with PFTC and brokerage
service arrangements. 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 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 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 Retail Management, Inc., 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 Retail Management, Inc. 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, 2000, Putnam Retail Management,
Inc., acting as underwriter received no net commissions from the sale of
shares of the fund.
Note 3
Purchases and sales of securities
During the six months ended October 31, 2000, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $11,398,702 and $8,827,747, respectively. There
were no purchases and sales of U.S. government obligations.
Note 4
Capital shares
At October 31, 2000, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Six months ended October 31, 2000
---------------------------------------------------------------------------
Shares Amount
---------------------------------------------------------------------------
Shares sold 302,817 $3,850,148
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
---------------------------------------------------------------------------
302,817 3,850,148
Shares
repurchased (80,912) (1,035,896)
---------------------------------------------------------------------------
Net increase 221,905 $2,814,252
---------------------------------------------------------------------------
Year ended April 30, 2000
---------------------------------------------------------------------------
Shares Amount
---------------------------------------------------------------------------
Shares sold 185,522 $2,282,256
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 47,164 509,192
---------------------------------------------------------------------------
232,686 2,791,448
Shares
repurchased (29,399) (339,402)
---------------------------------------------------------------------------
Net increase 203,287 $2,452,046
---------------------------------------------------------------------------
Note 5
Initial capitalization and
offering of shares
The fund 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 of 235,294 shares to Putnam Mutual Funds Corp. on May 1, 1998.
At October 31, 2000, Putnam Investments, Inc. owned 269,813 shares of
the fund (37.0% of shares outstanding), valued at $3,440,116.
FUND INFORMATION
WEB SITE
www.putnaminvestments.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Retail Management, Inc.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
John A. Hill, 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, III
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
Stephen Oristaglio
Vice President
John J. Morgan, Jr.
Vice President
Robert R. Beck
Vice President and Fund Manager
Michael P. Stack
Vice President and Fund Manager
Paul E. Marrkand
Vice President and Fund Manager
Paul C. Warren
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Richard G. Leibovitch
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:
http://www.putnaminvestments.com.
Not FDIC Insured, May Lose Value, No Bank Guarantee
66581 21F 12/00
Putnam
Growth
Fund
SEMIANNUAL REPORT ON PERFORMANCE AND PORTFOLIO
10-31-00
[SCALE LOGO OMITTED]
The following report contains a list of your fund's portfolio holdings
and complete financial statements for the six months ended 10/31/00.
Additional details, including fund strategy, performance, and managers'
outlook, will be provided in the annual report, which will cover the 12
months ended 4/30/01.
<TABLE>
<CAPTION>
THE FUND'S PORTFOLIO
October 31, 2000 (Unaudited)
COMMON STOCKS (98.3%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Banking (0.6%)
-------------------------------------------------------------------------------------------------------------------
200 State Street Corp. $ 24,948
Biotechnology (4.8%)
-------------------------------------------------------------------------------------------------------------------
637 Amgen, Inc. (NON) 36,906
400 Celgene Corp. (NON) 25,750
652 Genentech, Inc. (NON) 53,790
953 MedImmune, Inc. (NON) 62,302
400 Millennium Pharmaceuticals, Inc. (NON) 29,025
-------------
207,773
Broadcasting (2.0%)
-------------------------------------------------------------------------------------------------------------------
610 Clear Channel Communications, Inc. (NON) 36,638
1,100 Echostar Communications Corp. Class A (NON) 49,775
-------------
86,413
Cable Television (1.1%)
-------------------------------------------------------------------------------------------------------------------
2,602 AT&T Corp. - Liberty Media Group Class A (NON) 46,836
Communications Equipment (16.0%)
-------------------------------------------------------------------------------------------------------------------
78 ADC Telecommunications, Inc. (NON) 1,667
375 Brocade Communications Systems (NON) 85,266
4,400 Cisco Systems, Inc. (NON) 237,045
725 Comverse Technology, Inc. (NON) 81,019
940 Corning, Inc. 71,910
398 Juniper Networks, Inc. (NON) 77,610
900 QUALCOMM, Inc. (NON) 58,598
774 Redback Networks, Inc. (NON) 82,383
-------------
695,498
Computers (8.5%)
-------------------------------------------------------------------------------------------------------------------
200 Ariba, Inc. (NON) 25,275
1,670 EMC Corp. (NON) 148,734
100 Handspring, Inc. (NON) 7,231
300 Network Appliance, Inc. (NON) 35,700
859 Sun Microsystems, Inc. (NON) 95,242
440 VeriSign, Inc. (NON) 58,080
-------------
370,262
Conglomerates (7.2%)
-------------------------------------------------------------------------------------------------------------------
4,044 General Electric Co. 221,662
1,658 Tyco International, Ltd. 93,988
-------------
315,650
Electronics (9.3%)
-------------------------------------------------------------------------------------------------------------------
900 Applied Micro Circuits Corp. (NON) 68,794
3,400 Intel Corp. 153,000
315 JDS Uniphase Corp. (NON) 25,653
334 PerkinElmer, Inc. 39,913
330 PMC-Sierra, Inc. (NON) 55,935
46 SDL, Inc. (NON) 11,926
687 Xilinx, Inc. (NON) 49,765
-------------
404,986
Energy (2.3%)
-------------------------------------------------------------------------------------------------------------------
540 BJ Services Co. (NON) 28,316
700 Nabors Industries, Inc. (NON) 35,630
200 R&B Falcon Corp. (NON) 5,000
600 Transocean Sedco Forex, Inc. 31,800
-------------
100,746
Entertainment (0.9%)
-------------------------------------------------------------------------------------------------------------------
655 Viacom, Inc. Class B (NON) 37,253
Health Care Services (1.7%)
-------------------------------------------------------------------------------------------------------------------
200 Quest Diagnostics, Inc. (NON) 19,250
500 United Health Group Incorporated 54,688
-------------
73,938
Insurance (1.2%)
-------------------------------------------------------------------------------------------------------------------
510 American International Group, Inc. 49,980
Investment Banking/Brokerage (1.8%)
-------------------------------------------------------------------------------------------------------------------
400 Goldman Sachs Group, Inc. (The) 39,925
500 Morgan Stanley, Dean Witter, Discover and Co. 40,156
-------------
80,081
Media (1.1%)
-------------------------------------------------------------------------------------------------------------------
611 Time Warner, Inc. 46,381
Medical Technology (2.7%)
-------------------------------------------------------------------------------------------------------------------
300 Allergan, Inc. 25,219
804 PE Corp.-PE Biosystems Group 94,068
-------------
119,287
Natural Gas Utilities (2.0%)
-------------------------------------------------------------------------------------------------------------------
1,050 Enron Corp. 86,166
Pharmaceuticals (9.6%)
-------------------------------------------------------------------------------------------------------------------
1,576 American Home Products Corp. 100,076
300 Andrx Group (NON) 21,600
190 Forest Laboratories, Inc. (NON) 25,175
600 IVAX Corp. (NON) 26,100
1,000 Lilly (Eli) & Co. 89,375
3,569 Pfizer, Inc. 154,136
-------------
416,462
Retail (3.2%)
-------------------------------------------------------------------------------------------------------------------
542 Home Depot, Inc. (The) 23,306
1,168 Intimate Brands, Inc. 27,886
742 RadioShack Corp. 44,242
943 Wal-Mart Stores, Inc. 42,789
-------------
138,223
Software (17.5%)
-------------------------------------------------------------------------------------------------------------------
600 Adobe Systems, Inc. 45,638
700 Agile Software Corp. (NON) 52,763
958 BEA Systems, Inc. (NON) 68,737
403 i2 Technologies, Inc. (NON) 68,510
192 Micromuse, Inc. (NON) 32,580
1,886 Microsoft Corp. (NON) 129,899
2,868 Oracle Corp. (NON) 94,644
500 Phone.com, Inc. (NON) 46,281
500 Rational Software Corp. (NON) 29,844
728 Siebel Systems, Inc. (NON) 76,395
827 VERITAS Software Corp. (NON) 116,620
-------------
761,911
Technology Services (1.8%)
-------------------------------------------------------------------------------------------------------------------
976 America Online, Inc. (NON) 49,220
500 Paychex, Inc. 28,344
-------------
77,564
Telecommunications (3.0%)
-------------------------------------------------------------------------------------------------------------------
1,683 Metromedia Fiber Network, Inc. Class A (NON) 31,977
718 Nextel Communications, Inc. Class A (NON) 27,598
1,185 Sprint Corp. (PCS Group) (NON) 45,178
700 XO Communications, Inc. (NON) 23,614
-------------
128,367
-------------
Total Common Stocks (cost $3,207,422) $ 4,268,725
<CAPTION>
SHORT-TERM INVESTMENTS (2.5%) (a) (cost 107,000)
PRINCIPAL AMOUNT VALUE
<S> <C> <C>
-------------------------------------------------------------------------------------------------------------------
$ 107,000 Interest in $680,000,000 joint repurchase agreement dated
October 31, 2000 with Morgan (J.P.) & Co., Inc. due
November 1, 2000 year with respect to various U.S.
Government obligations -- maturity value of $107,020
for an effective yield of 6.60% $ 107,000
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $3,314,422) (b) $ 4,375,725
-------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $4,344,087.
(b) The aggregate identified cost on a tax basis is $3,319,687,
resulting in gross unrealized appreciation and depreciation of
$1,245,906 and $189,868, respectively, or net unrealized appreciation of
$1,056,038.
(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, 2000 (Unaudited)
<S> <C>
Assets
-------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $3,314,422) (Note 1) $4,375,725
-------------------------------------------------------------------------------------------
Cash 79
-------------------------------------------------------------------------------------------
Dividends and other receivables 163
-------------------------------------------------------------------------------------------
Receivable for securities sold 13,342
-------------------------------------------------------------------------------------------
Total assets 4,389,309
Liabilities
-------------------------------------------------------------------------------------------
Payable for securities purchased 27,615
-------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 947
-------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 894
-------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 1,000
-------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 13
-------------------------------------------------------------------------------------------
Other accrued expenses 14,753
-------------------------------------------------------------------------------------------
Total liabilities 45,222
-------------------------------------------------------------------------------------------
Net assets $4,344,087
Represented by
-------------------------------------------------------------------------------------------
Paid-in capital (Notes 1, 4 and 5) $3,005,170
-------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (16,063)
-------------------------------------------------------------------------------------------
Accumulated net realized gain on investment (Note 1) 293,677
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,061,303
-------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $4,344,087
Computation of net asset value and offering price
-------------------------------------------------------------------------------------------
Net asset value and redemption price per share
($4,344,087 divided by 310,598 shares) $13.99
-------------------------------------------------------------------------------------------
Offering price per share (100/94.25 of $13.99)* $14.84
-------------------------------------------------------------------------------------------
* 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, 2000 (Unaudited)
<S> <C>
Investment income:
-------------------------------------------------------------------------------------------
Dividends $ 4,067
-------------------------------------------------------------------------------------------
Interest 657
-------------------------------------------------------------------------------------------
Total investment income 4,724
Expenses:
-------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 15,772
-------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 3,224
-------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 1,194
-------------------------------------------------------------------------------------------
Administrative services (Note 2) 20
-------------------------------------------------------------------------------------------
Reports to shareholders 1,960
-------------------------------------------------------------------------------------------
Auditing 10,852
-------------------------------------------------------------------------------------------
Legal 2,086
-------------------------------------------------------------------------------------------
Other 86
-------------------------------------------------------------------------------------------
Fees waived and reimbursed by Manager (Note 2) (12,747)
-------------------------------------------------------------------------------------------
Total expenses 22,447
-------------------------------------------------------------------------------------------
Expense reduction (Note 2) (1,660)
-------------------------------------------------------------------------------------------
Net expenses 20,787
-------------------------------------------------------------------------------------------
Net investment loss (16,063)
-------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 97,408
-------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (246,188)
-------------------------------------------------------------------------------------------
Net loss on investments (148,780)
-------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(164,843)
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six months ended Year ended
October 31 April 30
2000* 2000
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
--------------------------------------------------------------------------------------------------
Operations:
--------------------------------------------------------------------------------------------------
Net investment loss $ (16,063) $ (18,079)
--------------------------------------------------------------------------------------------------
Net realized gain on investments 97,408 336,405
--------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments (246,188) 695,380
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (164,843) 1,013,706
--------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 55,403 877,208
--------------------------------------------------------------------------------------------------
Total increase in net assets (109,440) 1,890,914
Net assets
--------------------------------------------------------------------------------------------------
Beginning of period (Note 5) 4,453,527 2,562,613
--------------------------------------------------------------------------------------------------
End of period (including accumulated net investment
loss of $16,063, and $-- respectively) $4,344,087 $4,453,527
--------------------------------------------------------------------------------------------------
*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 Year ended May 4, 1998+
operating performance (Unaudited) April 30 to April 30
---------------------------------------------------------------------------
2000 2000 1999
---------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $14.51 $10.42 $8.50
---------------------------------------------------------------------------
Investment operations
---------------------------------------------------------------------------
Net investment loss (a)(d) (.05) (.07) (.02)
---------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.47) 4.16 1.94
---------------------------------------------------------------------------
Total from
investment operations (.52) 4.09 1.92
---------------------------------------------------------------------------
Net asset value,
end of period $13.99 $14.51 $10.42
---------------------------------------------------------------------------
Ratios and supplemental data
---------------------------------------------------------------------------
Total return at
net asset value (%)(b) (3.58)* 39.25 22.59*
---------------------------------------------------------------------------
Net assets, end of period
(in thousands) $4,344 $4,454 $2,563
---------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c)(d) .50* 1.00 .99*
---------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%)(d) (.36)* (.55) (.20)*
---------------------------------------------------------------------------
Portfolio turnover (%) 59.81* 89.57 108.03*
---------------------------------------------------------------------------
+ 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
$0.04, $0.14 and $0.08 per share for the periods ending October 31,
2000, April 30, 2000 and April 30, 1999, respectively (Note 2).
</TABLE>
NOTES TO FINANCIAL STATEMENTS
October 31, 2000 (Unaudited)
Note 1
Significant accounting policies
Putnam Growth Fund (the "fund") is 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 will invest 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.
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 sale 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. 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 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, Inc.. 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. Non-cash dividends, if any, are
recorded at the fair market value of the securities received.
E) Line of credit 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. For the six months ended October 31, 2000, 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 April 30, 2001, 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.
For the six months ended October 31, 2000, fund expenses were reduced by
$1,660 under expense offset arrangements with PFTC and brokerage service
arrangements (only if applicable to your fund). 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 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 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 Retail Management, Inc., 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 Retail Management, Inc. 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, 2000, Putnam Retail Management, Inc., acting as
underwriter received no net commissions from the sale of shares of the
fund.
Note 3
Purchases and sales of securities
During the six months ended October 31, 2000, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $2,777,422 and $2,619,272, respectively. There
were no purchases and sales of U.S. government obligations.
Note 4
Capital shares
At October 31, 2000, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Six months ended October 31, 2000
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 17,441 $ 256,306
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
---------------------------------------------------------------------------
17,441 256,306
Shares
repurchased (13,781) (200,903)
---------------------------------------------------------------------------
Net increase 3,660 $ 55,403
---------------------------------------------------------------------------
Year ended April 30, 2000
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 67,935 $960,572
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
---------------------------------------------------------------------------
67,935 960,572
Shares
repurchased (7,002) (83,364)
---------------------------------------------------------------------------
Net increase 60,933 $877,208
---------------------------------------------------------------------------
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 of 235,294 shares to Putnam Mutual Funds Corp. on May 1, 1998.
At October 31, 2000, Putnam Investments, Inc. owned 235,294 shares of
the fund (75.8% of shares outstanding), valued at $3,291,763.
FUND INFORMATION
WEB SITE
www.putnaminvestments.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Retail Management, Inc.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
John A. Hill, 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, III
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
Stephen Oristaglio
Vice President
Robert R. Beck
Vice President and Fund Manager
Michael P. Stack
Vice President and Fund Manager
Paul E. Marrkand
Vice President and Fund Manager
Paul C. Warren
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Richard G. Leibovitch
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam Growth
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.putnaminvestments.com.
Not FDIC Insured, May Lose Value, No Bank Guarantee
66582 21E 12/00
