PROSPECTUS
JANUARY 1, 1996 ,
AS REVISED AUGUST 12, 1996
PUTNAM GLOBAL NATURAL RESOURCES FUND
CLASS A, B AND M SHARES
INVESTMENT STRATEGY: GROWTH
This prospectus explains concisely what you should know before
investing in Putnam Global Natural Resources Fund (the
"fund"). Please read it carefully and keep it for future
reference. You can find more detailed information in the January
1, 1996 statement of additional information (the "SAI"), as
amended from time to time. For a free copy of the SAI or other
information, call Putnam Investor Services at 1-800-225-1581.
The SAI has been filed with the Securities and Exchange
Commission and is incorporated into this prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND INVOLVE RISK, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
BOSTON * LONDON * TOKYO<PAGE>
ABOUT THE FUND
EXPENSES SUMMARY
.............................................................4
This section describes the sales charges, management fees, and
annual operating expenses that apply to the fund's various
classes of shares. Use it to help you estimate the impact of
transaction costs on your investment over time.
FINANCIAL HIGHLIGHTS
............................................................5<
/R>
Study this table to see, among other things, how the fund
performed each year for the past 10 years or since it began
investment operations if it has been in operation for less than
10 years.
OBJECTIVE
.............................................................8
Read this section to make sure the fund's objective is consistent
with your own.
HOW THE FUND PURSUES ITS OBJECTIVE
.............................................................8
This section explains in detail how the fund seeks its investment
objective. RISK FACTORS. All investments entail some risk.
Read this section to make sure you understand certain risks that
may be involved when investing in the fund.
HOW PERFORMANCE IS SHOWN
.............................................................1
5
This section describes and defines the measures used to assess
the fund's performance. All data are based on the fund's past
investment results and do not predict future performance.
HOW THE FUND IS MANAGED
.............................................................1
6
Consult this section for information about the fund's management,
allocation of the fund's expenses, and how purchases and sales of
securities are made for the fund.
ORGANIZATION AND HISTORY
.............................................................1
6
In this section, you will learn when the fund was introduced, how
it is organized, how it may offer shares, and who its Trustees
are.
ABOUT YOUR INVESTMENT
ALTERNATIVE SALES ARRANGEMENTS
..............................................................
18
Read this section for descriptions of the classes of shares this
prospectus offers and for points you should consider when making
your choice.
HOW TO BUY SHARES
..............................................................
.19
This section describes the ways you may purchase shares and tells
you the minimum amounts required to open various types of
accounts. It explains how sales charges are determined and how
you may become eligible for reduced sales charges on each class
of shares.
DISTRIBUTION PLANS
..............................................................
.24
This section tells you what distribution fees are charged against
each class of shares.
HOW TO SELL SHARES
..............................................................
.25
In this section you can learn how to sell shares of the fund,
either directly to the fund or through an investment dealer.
HOW TO EXCHANGE SHARES
..............................................................
.
Find out in this section how you may exchange shares of the fund
for shares of other Putnam funds. The section also explains how
exchanges can be made without sales charges and the conditions
under which sales charges may be required.
HOW THE FUND VALUES ITS SHARES
..............................................................
.
This section explains how the fund determines the value of its
shares.
HOW THE FUND MAKES DISTRIBUTIONS TO SHAREHOLDERS; TAX
INFORMATION
..............................................................
.
This section describes the various options you have in choosing
how to receive dividends from the fund. It also discusses the
federal tax status of the payments and counsels shareholders to
seek specific advice about their own situation.
ABOUT PUTNAM INVESTMENTS, INC.
Read this section to learn more about the companies that provide
the marketing, investment management, and shareholder account
services to Putnam funds and their shareholders.
<PAGE>
ABOUT THE FUND
EXPENSES SUMMARY
Expenses are one of several factors to consider when investing.
The following table summarizes your maximum transaction costs
from investing in the fund and expenses incurred in the most
recent fiscal year. The examples show the cumulative expenses
attributable to a hypothetical $1,000 investment over specified
periods.
CLASS A CLASS B CLASS M
SHARES SHARES SHARES
SHAREHOLDER TRANSACTION
EXPENSES
Maximum sales charge
imposed on purchases
(as a percentage of
offering price) 5.75% NONE* 3.50%*
Deferred sales charge 5.0 in the first
(as a percentage year, declining
of the lower of to 1.0% in the
original purchase sixth year, and
price or redemption eliminated
proceeds) NONE** thereafter NONE
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Total fund
Management 12b-1 Other operating
fees fees expenses expenses
- ---------- ----- -------- ----------
Class A .70% 0.25% .18% 1.13%
Class B .70% 1.00% .17% 1.87%
Class M .70% 0.75% .18% 1.63%
The table is provided to help you understand the expenses of
investing in the fund and your share of the operating expenses
that the fund incurs. The 12b-1 fees for class M shares reflect
the amount currently payable under the class M distribution plan.
For class M shares, management fees and "Other expenses" are
based on the corresponding expenses for class A shares. <PAGE>
EXAMPLES
Your investment of $1,000 would incur the following expenses,
assuming 5% annual return and, except as indicated, redemption at
the end of each period:
1 3 5 10
year years years years
CLASS A $68 $91 $116 $187
CLASS B $69 $89 $121 $200***
CLASS B (NO REDEMPTION) $19 $59 $101 $200***
CLASS M $51 $85 $121 $210
The examples do not represent past or future expense levels.
Actual expenses may be greater or less than those shown. Federal
regulations require the examples to assume a 5% annual return,
but actual annual return varies.
* The higher 12b-1 fees borne by class B and class M
shares may cause long-term shareholders to pay more than
the economic equivalent of the maximum permitted front-
end sales charge on class A shares.
** A deferred sales charge of up to 1.00% is assessed on
certain redemptions of class A shares that were
purchased without an initial sales charge. See "How to
buy shares -- class A shares."
*** Reflects conversion of class B shares to class A shares
(which pay lower ongoing expenses) approximately eight
years after purchase. See"Alternative sales
arrangements."
FINANCIAL HIGHLIGHTS
The following table presents per share financial information for
class A, B and M shares. This information has been audited and
reported on by the fund's independent accountants. The Report of
independent accountants and financial statements included in the
fund's annual report to shareholders for the 1995 fiscal year are
incorporated by reference into this prospectus. The fund's
annual report, which contains additional unaudited performance
information, is available without charge upon request.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
(The table appears on pa<PAGE>
ge 5a)
<PAGE>
OBJECTIVE
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
JULY 3, 1995 FEBRUARY 1, 1994
(COMMENCEMENT (COMMENCEMENT OF
OF OPERATIONS) TO YEAR ENEDED OPERATIONS) TO
AUGUST 31 AUGUST 31 AUGUST 31 YEAR ENDED AUGUST 31
1995 1995 1994* 1995 1994 1993 1992 1991
CLASS M CLASS B CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $15.59 $14.65 $14.78 $14.73 $20.51 $17.57 $17.74 $17.94
INVESTMENT OPERATIONS
Net investment income .03 .16 .13 .29 .19 .23 .35 .46
Net realized and unrealized
gain (loss) on investments .45 1.33 (.26) 1.31 (2.37) 3.41 .44 .59
TOTAL FROM INVESTMENT OPERATIONS .48 1.49 (.13) 1.60 (2.18) 3.64 .79 1.05
LESS DISTRIBUTIONS FROM:
Net investment income -- (.20) -- (.24) (.19) (.18) (.39) (.52)
Net realized gain on investments -- -- -- -- (2.91) (.52) (.57) (.73)
In excess of net realized gain
on investments -- -- -- -- (.50) -- -- --
TOTAL DISTRIBUTIONS -- -- -- (.24) (3.60) (.70) (.96) (1.25)
NET ASSET VALUE, END OF PERIOD $16.07 $15.94 $14.65 $16.09 $14.73 $20.51 $17.57 $17.74
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (b) 3.08(c) 10.38 (.88)(c) 11.10 (9.67) 21.79 5.12 6.62
NET ASSETS, END OF PERIOD
(in thousands) $46 $29,916 $10,244 $135,330 $129,449 $133,585 $109,705 $125,607
Ratio of expenses to
average net assets (%) .28(c) 1.87 1.11(c) 1.13 1.24 1.18 1.61 1.53
Ratio of net investment income
to average net assets (%) .44(c) 1.20 .90(c) 1.89 1.24 1.25 2.13 2.65
Portfolio turnover (%) 42.75 42.75 189.83 42.75 189.83 170.54 28.33 38.03
<FN>
* Per share net investment income has been determined on the basis of the weighted average number of share outstanding
during the period.
(a) Reflects expense limitations applicable during these periods. As a result of such limitations, expenses of the fund
for the years ended August 31, 1988 and 1987 reflect per share reductions of $.01 and $.03, respectively.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Not annualized.
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (continued)
(For a share outstanding throughout the period)
YEAR ENDED AUGUST 31
1990 1989 1988 1987 1986
CLASS A
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $17.06 $13.25 $15.55 $11.14 $11.98
INVESTMENT OPERATIONS
Net investment income .49 .45 .37(a) .44(a) .18
Net realized and unrealized
gain (loss) on investments 1.13 3.70 (2.22) 4.44 (.75)
TOTAL FROM INVESTMENT OPERATIONS 1.62 4.15 (1.85) 4.88 (.57)
LESS DISTRIBUTIONS FROM:
Net investment income (.54) (.34) (.41) (.42) (.27)
Net realized gain on investments (.20) -- (.04) (.05) --
In excess of net realized gain
on investments -- -- -- -- --
TOTAL DISTRIBUTIONS (.74) (.34) (.45) (.47) (.27)
NET ASSET VALUE, END OF PERIOD $17.94 $17.06 $13.25 $15.55 $11.14
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (b) 9.72 31.64 (11.67) 44.87 (4.81)
NET ASSETS, END OF PERIOD
(in thousands) $137,669 $116,042 $107,932 $146,755 $34,860
Ratio of expenses to average
net assets (%) 1.50 1.40 1.47(a) 1.42(a) 1.77
Ratio of net investment income
to average net assets (%) 2.82 2.93 2.73(a) 3.46(a) 1.57
Portfolio turnover (%) 48.19 60.29 86.04 179.58 216.22
<FN>
* Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
(a) Reflects expense limitations applicable during these periods. As a result of such limitations, expenses of the fund
for the years ended August 31, 1988 and 1987 reflect per share reductions of $.01 and $.03, respectively.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Not annualized.
</FN>
</TABLE>
Putnam Global Natural Resources Fund seeks capital
appreciation by investing at least 80% of its assets (other than
U.S. government securities, short-term debt obligations, and cash
or money market instruments) in common stocks and other
securities of companies in the energy and other natural resources
industries, except when Putnam Investment Management, Inc., the
fund's investment manager ("Putnam Management"), believes
alternative strategies are appropriate to protect the fund
against a market decline. Current income is only an incidental
consideration. The fund concentrates its investments in a
limited group of industries and is not intended to be a complete
investment program. There is no assurance the fund will achieve
its objective.
HOW THE FUND PURSUES ITS OBJECTIVE
BASIC INVESTMENT STRATEGY
PUTNAM GLOBAL NATURAL RESOURCES FUND INVESTS MAINLY IN
COMMON STOCKS OF COMPANIES IN THE ENERGY AND OTHER NATURAL
RESOURCES INDUSTRIES, BUT MAY ALSO INVEST A PORTION OF ITS ASSETS
IN OTHER INDUSTRIES AND MAY INVEST IN FIXED-INCOME SECURITIES.
The fund seeks to purchase securities that will rise in value.
The fund invests primarily in common stocks, but may also
purchase convertible bonds, convertible preferred stocks,
warrants, preferred stocks and debt securities regardless of
credit rating, if Putnam Management believes they would help
achieve the fund's objective of capital appreciation. Securities
in the lower-rated categories are considered to be primarily
speculative. The fund may also hold a portion of its assets in
cash and money market instruments.
The fund follows a global investment strategy. The fund may
at times invest up to 100% of its assets in securities
principally traded in securities markets outside the United
States, and will, under normal market conditions, invest at least
65% of its total assets in issuers located in at least three
different countries, one of which maybe the United States.
At times Putnam Management may judge that conditions in the
securities markets make pursuing the fund's basic investment
strategy inconsistent with the best interests of its
shareholders. At such times Putnam Management may temporarily
use alternative strategies, primarily designed to reduce
fluctuations in the value of the fund's assets. In implementing
these "defensive" strategies, the fund may invest without limit
in securities of foreign or domestic companies in any
industry, including debt securities and preferred stocks,
in cash or money market instruments, or in any other
securities Putnam Management considers consistent with such
defensive strategies. For defensive purposes, the fund may
also invest without limit in issuers located in the United
States. It is impossible to predict when, or for how long,
the fund will use such alternative strategies.
THE ENERGY AND OTHER NATURAL RESOURCES INDUSTRIES
THE FUND PROVIDES INVESTORS WITH A DIVERSIFIED PORTFOLIO OF
COMPANIES IN THE ENERGY AND OTHER NATURAL RESOURCES INDUSTRIES.
These industries include companies that Putnam Management
considers to be principally engaged in the discovery,
development, production or distribution of energy or other
natural resources, the development of technologies for the
production or efficient use of energy and other natural
resources, or the furnishing of related supplies or services.
Such companies may:
o PARTICIPATE IN THE DISCOVERY AND DEVELOPMENT OF NATURAL
RESOURCES.
o OWN OR PRODUCE NATURAL RESOURCES.
o PROVIDE NATURAL RESOURCES TRANSPORTATION, DISTRIBUTION OR
PROCESSING SERVICES.
o CONTRIBUTE NEW TECHNOLOGIES FOR THE PRODUCTION OR EFFICIENT
USE OF NATURAL RESOURCES.
o OWN OR CONTROL OIL, GAS, OR OTHER MINERAL LEASES (WHICH MAY
OR MAY NOT PRODUCE RECOVERABLE ENERGY OR RESOURCES), RIGHTS
OR ROYALTY INTERESTS.
o PROVIDE SERVICES OR SUPPLIES RELATED TO NATURAL RESOURCES
SUCH AS DRILLING, WELL SERVICING, CHEMICALS, PARTS AND
EQUIPMENT.
Putnam Management deems a particular company to be "principally
engaged" in these industries if at the time of investment Putnam
Management determines that at least 50% of the company's assets,
revenues or profits are derived from these industries. Under
normal market conditions the fund will invest at least 65% of its
assets in securities of issuers principally engaged in these
industries.
RISK FACTORS
WHILE THE FUND'S PORTFOLIO WILL NORMALLY INCLUDE SECURITIES OF
ESTABLISHED SUPPLIERS OF TRADITIONAL PRODUCTS AND SERVICES, THE
FUND MAY ALSO INVEST IN SMALLER COMPANIES WHICH MAY BENEFIT FROM
THE DEVELOPMENT OF NEW PRODUCTS AND SERVICES. While many major
U.S. corporations are involved in the energy and natural
resources industries, smaller and less seasoned companies
represent a substantial portion of this field. These smaller
companies may present greater opportunities for capital
appreciation, but may also involve greater risks. They may have
limited product lines, markets or financial resources, or may
depend on a limited management group. Their securities may trade
less frequently and in more limited volume than the securities of
larger, more established companies, and only in the over-the-
counter market or on a regional securities exchange. As a
result, the prices of these securities may fluctuate more sharply
than the prices of securities of other issuers.
There may be less publicly available information about smaller
companies or less market interest in their securities than in the
case of larger companies, and it may take a longer period of time
for the prices of such securities to reflect the full value of
their issuers' underlying earnings potential or assets.
BECAUSE THE FUND'S INVESTMENTS ARE CONCENTRATED IN THE ENERGY AND
NATURAL RESOURCES INDUSTRIES, THE VALUE OF ITS SHARES IS
ESPECIALLY AFFECTED BY FACTORS RELATING TO THOSE INDUSTRIES, AND
MAY FLUCTUATE MORE WIDELY THAN THE VALUE OF SHARES OF A FUND
WHICH INVESTS IN A BROADER RANGE OF INDUSTRIES. For example,
changes in crude oil prices may affect both those industries
which produce, refine and distribute petroleum products and
industries which supply alternate sources of energy. In
addition, certain of these industries are generally subject to
greater government regulation than many other industries;
therefore, changes in regulatory policies may have a material
effect on the business of companies in these industries.
FOREIGN INVESTMENTS
THE FUND MAY INVEST WITHOUT LIMIT IN SECURITIES
PRINCIPALLY TRADED IN FOREIGN MARKETS. Since foreign
securities are normally denominated and traded in foreign
currencies, the values of the fund's assets may be affected
favorably or unfavorably by currency exchange rates and exchange
control regulations. There may be less information publicly
available about a foreign company than about a U.S. company, and
foreign companies are not generally subject to accounting,
auditing, and financial reporting standards and practices
comparable with those in the United States.
The securities of some foreign companies are less liquid and at
times more volatile than securities of comparable U.S. companies.
Foreign brokerage commissions and other fees are also generally
higher than those in the United States. Foreign settlement
procedures and trade regulations may involve certain risks (such
as delay in payment or delivery of securities or in the recovery
of fund assets held abroad) and expenses not present in the
settlement of domestic investments.
In addition, there may be a possibility of nationalization or
expropriation of assets, imposition of currency exchange
controls, confiscatory taxation, political or financial
instability and diplomatic developments that could affect the
value of investments in certain foreign countries.
Legal remedies available to investors in certain foreign
countries may be more limited than those available with respect
to investments in the United States or in other foreign
countries. The laws of some foreign countries may limit
investments in securities of certain issuers located in those
foreign countries. Special tax considerations apply to foreign
securities.
The risks described above including the risks of
nationalization and expropriation of assets, unanticipated
political or social developments, limited liquidity and
volatility, and currency fluctuations, are increased
to the extent that the fund invests in securities issued
by underdeveloped and developing countries , which
are sometimes referred to as "emerging Markets," and issuers
located in such countries. In addition, many emerging market
countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years, and continued
inflation for many years, and continued inflation may adversely
affect the economies and securities markets of such
countries.
A MORE DETAILED EXPLANATION OF FOREIGN INVESTMENTS, AND THE RISKS
AND SPECIAL TAX CONSIDERATIONS ASSOCIATED WITH THEM, IS INCLUDED
IN THE SAI.
PORTFOLIO TURNOVER
The length of time the fund has held a particular security is not
generally a consideration in investment decisions. A change in
the securities held by the fund is known as "portfolio turnover."
As a result of the fund's investment policies, under certain
market conditions the fund's portfolio turnover rate may be
higher than that of other mutual funds.
Portfolio turnover generally involves some expense to the fund,
including brokerage commissions or dealer mark-ups and other
transaction costs on the sale of securities and reinvestment in
other securities. These transactions may result in realization
of capital gains. Portfolio turnover rates for the ten most
recent fiscal years are shown in the section "Financial
highlights."
FOREIGN CURRENCY EXCHANGE TRANSACTIONS
THE FUND MAY ENGAGE IN FOREIGN CURRENCY EXCHANGE TRANSACTIONS TO
PROTECT AGAINST UNCERTAINTY IN THE LEVEL OF FUTURE EXCHANGE
RATES. Putnam Management may engage in foreign currency exchange
transactions in connection with the purchase and sale of
portfolio securities ("transaction hedging") and to protect
against changes in the value of specific portfolio positions
("position hedging").
The fund may engage in transaction hedging to protect against a
change in foreign currency exchange rates between the date on
which the fund contracts to purchase or sell a security and the
settlement date, or to "lock in" the U.S. dollar equivalent of a
dividend or interest payment in a foreign currency. The fund may
purchase or sell a foreign currency on a spot (or cash) basis at
the prevailing spot rate in connection with the settlement of
transactions in portfolio securities denominated in that foreign
currency.
If conditions warrant, for transaction hedging purposes the fund
may also enter into contracts to purchase or sell foreign
currencies at a future date ("forward contracts") and, if the
fund's shareholders approve such changes at the fund's
shareholder meeting as described below, purchase and sell foreign
currency futures contracts. A foreign currency forward contract
is a negotiated agreement to exchange currency at a future time
at a rate or rates that may be higher or lower than the spot
rate. Foreign currency futures contracts are standardized
exchange-traded contracts and have margin requirements. In
addition, if the shareholders approve such changes at the fund's
shareholder meeting, for transaction hedging purposes the fund
may also purchase or sell exchange-listed and over-the-counter
call and put options on foreign currency futures contracts and on
foreign currencies.
The fund may engage in position hedging to protect against the
decline in the value relative to the U.S. dollar of the
currencies in which its portfolio securities are denominated or
quoted (or an increase in the value of the currency in which the
securities the fund intends to buy are denominated, when the fund
holds cash or short-term investments). For position hedging
purposes, the fund may, if approved, purchase or sell foreign
currency futures contracts, foreign currency forward contracts
and options on foreign currency futures contracts and on foreign
currencies on exchanges or in over-the-counter markets. In
connection with position hedging, the fund may also purchase or
sell foreign currency on a spot basis.
The fund's currency hedging transactions may call for the
delivery of one foreign currency in exchange for another foreign
currency and may at times not involve currencies in which its
portfolio securities are then denominated. Putnam Management
will engage in such "cross hedging" activities when it believes
that such transactions provide significant hedging opportunities
for the fund. Cross hedging transactions by the fund involve the
risk of imperfect correlation between changes in the values of
the currencies to which such transactions relate and changes in
the value of the currency or other asset or liability which is
the subject of the hedge.
The decision as to whether and to what extent the fund will
engage in foreign currency exchange transactions will depend on a
number of factors, including prevailing market conditions, the
composition of the fund's portfolio and the availability of
suitable transactions. Accordingly there can be no assurance
that the fund will engage in foreign currency exchange
transactions at any given time or from time to time. The use of
options and futures involves certain special risks. See "Futures
and options."
FUTURES AND OPTIONS
THE FUND MAY BUY AND SELL STOCK INDEX FUTURES CONTRACTS. An
"index future" is a contract to buy or sell units of a particular
stock index at an agreed price on a specified future date.
Depending on the change in value of the index between the time
the fund enters into and terminates an index future transaction,
the fund realizes a gain or loss. In addition to or as an
alternative to purchasing or selling index futures, the fund may
buy and sell call and put options on index futures or stock
indexes. The fund may engage in index futures and options
transactions for hedging purposes and for non-hedging purposes,
such as to adjust its exposure to relevant markets or as
substitute for direct investment.
THE USE OF FUTURES AND RELATED OPTIONS INVOLVES CERTAIN SPECIAL
RISKS. FUTURES AND OPTIONS TRANSACTIONS INVOLVE COSTS AND MAY
RESULT IN LOSSES.
Certain risks arise because of the possibility of imperfect
correlations between movements in the prices of index futures and
options and movements in the prices of the underlying currency or
index or of the portfolio securities that are the subject of a
hedge. The successful use of the strategies described above
further depends on Putnam Management's ability to forecast market
movements correctly.
Other risks arise from the potential inability to close out index
futures or options positions. There can be no assurance that a
liquid secondary market will exist for any future or option at
any particular time. The use of futures and options transactions
for purposes other than hedging entails greater risks. Certain
provisions of the Internal Revenue Code and certain regulatory
requirements may limit the use of index futures and options
transactions. In addition, because the markets for certain
options and futures contracts in which the fund will invest
(including markets located in foreign countries) are relatively
new and still developing and may be subject to regulatory
restraints, the fund's ability to engage in transactions using
such investments may be limited.
The fund generally expects that its options and future
transactions will be conducted on recognized exchanges. In
certain instances, however, the fund may purchase and sell
options in the over-the-counter markets. The fund's ability to
terminate options in the over-the-counter markets maybe e more
limited than for exchange-traded options and may also involve the
risk that securities dealers participating in such transactions
would be unable to meet their obligations to the fund. The fund's
hedging transactions may affect the character or amount of the
fund's distribution.
A MORE DETAILED EXPLANATION OF INDEX FUTURES AND OPTIONS
TRANSACTIONS, INCLUDING THE RISKS ASSOCIATED WITH THEM, IS
INCLUDED IN THE SAI.
OTHER INVESTMENT PRACTICES
The fund may also engage in the following investment practices,
each of which involves certain special risks. The SAI contains
more detailed information about these practices, including
limitations designed to reduce these risks.
SECURITIES LOANS, REPURCHASE AGREEMENTS AND FORWARD COMMITMENTS.
The fund may lend portfolio securities amounting to not more than
25% of its assets to broker-dealers and may enter into repurchase
agreements on up to 25% of its assets. These transactions must
be fully collateralized at all times. The fund may also purchase
securities for future delivery, which may increase its overall
investment exposure and involves a risk of loss if the value of
the securities declines prior to the settlement date. These
transactions involve some risk to the fund if the other party
should default on its obligation and the fund is delayed or
prevented from recovering the collateral or completing the
transaction.
DERIVATIVES
Certain of the instruments in which the fund will invest, such as
futures contracts, options and forward contracts, are
considered to be "derivatives." Derivatives are financial
instruments whose value depends upon, or is derived from, the
value of an underlying asset, such as a security or an index.
Further information about these instruments and the risks
involved in their use is included elsewhere in this prospectus
and in the SAI.
DIVERSIFICATION
The fund is a "diversified" investment company under the
Investment Company Act of 1940. This means that with respect to
75% of its total assets the fund may not invest more than 5% of
its total assets in the securities of any one issuer (except U.S.
government securities). The remaining 25% of the fund's total
assets is not subject to this restriction. To the extent the
fund invests a significant portion of its assets in the
securities of a particular issuer, the fund will be subject to an
increased risk of loss if the market value of such issuer's
securities declines.
LIMITING INVESTMENT RISK
SPECIFIC INVESTMENT RESTRICTIONS HELP TO LIMIT INVESTMENT
RISKS FOR THE FUND'S SHAREHOLDERS. These restrictions
prohibit the fund , with respect to 75% of its total
assets, from acquiring more than 10% of the voting securities
of any one issuer. They also prohibit the fund
from investing more than:
(a) (with respect to 75% of its assets ) 5% of its total
assets in securities of any one issuer (other than the U.S.
government or its agencies or instrumentalities);*
(b) 25% of its total assets in any one industry,
excluding the energy and natural resources industries and the
U.S. government, its agencies, or instrumentalities;*
(c) 5% of its total assets in warrants or more than
2% of its total assets in warrants not listed
on the New York or American Stock Exchanges.
(d) 15% of its net assets in any combination of securities
that are not readily marketable, in securities restricted as to
resale (excluding securities determined by the Trustees (or the
person designated by the Trustees to make such determinations) to
be readily marketable), and in repurchase agreements maturing in
more than seven days.
Restrictions marked with an asterisk (*) above are summaries of
fundamental investment policies. See the SAI for the full text
of these policies and the fund's other fundamental investment
policies. Except for investment policies designated as
fundamental in this prospectus or the SAI, the investment
policies described in this prospectus and in the SAI are not
fundamental investment policies. The Trustees may change any
non-fundamental investment policies without shareholder approval.
As a matter of policy, the Trustees would not materially change
the fund's investment objective without shareholder approval.
HOW PERFORMANCE IS SHOWN
THE FUND'S INVESTMENT PERFORMANCE MAY FROM TIME TO TIME BE
INCLUDED IN ADVERTISEMENTS ABOUT THE FUND. "Total return" for
the one-, five- and ten-year periods (or for the life of a class,
if shorter) through the most recent calendar quarter represents
the average annual compounded rate of return on an investment of
$1,000 in the fund invested at the maximum public offering price
(in the case of class A and class M shares) or reflecting the
deduction of any applicable contingent deferred sales charge (in
the case of class B shares). Total return may also be presented
for other periods or based on investment at reduced sales charge
levels. Any quotation of investment performance not reflecting
the maximum initial sales charge or contingent deferred sales
charge would be reduced if the sales charge were used.
ALL DATA ARE BASED ON PAST INVESTMENT RESULTS AND DO NOT PREDICT
FUTURE PERFORMANCE.
Investment performance, which will vary, is based on many
factors, including market conditions, the composition of the
fund's portfolio, the fund's operating expenses and which class
of shares the investor purchases. Investment performance also
often reflects the risks associated with the fund's investment
objective and policies. These factors should be considered when
comparing the fund's investment results with those of other
mutual funds and other investment vehicles.
Quotations of investment performance for any period when an
expense limitation was in effect will be greater than if the
limitation had not been in effect. The fund's performance may be
compared to that of various indexes. See the SAI.
HOW THE FUND IS MANAGED
THE TRUSTEES OF THE FUND ARE RESPONSIBLE FOR GENERALLY OVERSEEING
THE CONDUCT OF THE FUND'S BUSINESS. Subject to such policies as
the Trustees may determine, Putnam Management furnishes a
continuing investment program for the fund and makes investment
decisions on its behalf. Subject to the control of the Trustees,
Putnam Management also manages the fund's other affairs and
business.
The fund pays Putnam Management a quarterly fee for these
services based on the fund's average net assets. See "Expenses
summary" and the SAI.
The following officer of Putnam Management has had primary
responsibility for the day-to-day management of the fund's
portfolio since the year stated below:
Business experience
Year (at least 5 years)
----- -----------------
Jeanne L. Mockard 1994 Employed as an investment
Senior Vice President professional by Putnam
Management since 1990.
The fund pays all expenses not assumed by Putnam Management,
including Trustees' fees, auditing, legal, custodial, investor
servicing and shareholder reporting expenses, and payments under
its distribution plans (which are in turn allocated to the
relevant class of shares). The fund also reimburses Putnam
Management for the compensation and related expenses of certain
officers of the fund and their staff who provide administrative
services to the fund. The total reimbursement is determined
annually by the Trustees.
Putnam Management places all orders for purchases and sales of
the fund's securities. In selecting broker-dealers, Putnam
Management may consider research and brokerage services furnished
to it and its affiliates. Subject to seeking the most favorable
price and execution available, Putnam Management may consider
sales of shares of the fund (and, if permitted by law, of the
other Putnam funds) as a factor in the selection of broker-
dealers.
ORGANIZATION AND HISTORY
Putnam Global Natural Resources Fund is a Massachusetts
business trust organized on February 1, 1985, as a
successor to Eberstadt Energy-Resources Fund, Inc., a Maryland
corporation organized in May, 1980. Prior to August 12, 1996,
the fund was known ass the Putnam Natural Resources Fund. A
copy of the Agreement and Declaration of Trust, which is governed
by Massachusetts law, is on file with the Secretary of State of
Commonwealth of Massachusetts. Prior to June 30, 1994,
the fund was known as Putnam Energy-Resources Trust.
The fund is an open-end, diversified management investment
company with an unlimited number of authorized shares of
beneficial interest. Shares of the fund may be divided without
shareholder approval into two or more series of shares
representing separate investment portfolios.
Any such series of shares may be divided without shareholder
approval into two or more classes of shares having such
preferences and special or relative rights and privileges as the
Trustees determine. The fund's shares are currently divided into
three classes. Only the fund's class A, B and M shares are
offered by this prospectus. The fund may also offer other
classes of shares with different sales charges and expenses.
Because of these different sales charges and expenses, the
investment performance of the classes will vary. For more
information, including your eligibility to purchase any other
class of shares, contact your investment dealer or Putnam Mutual
Funds (at 1-800-225-1581).
Each share has one vote, with fractional shares voting
proportionally. Shares of each class will vote together as a
single class except when otherwise required by law or as
determined by the Trustees. Shares are freely transferable, are
entitled to dividends as declared by the Trustees, and, if the
fund were liquidated, would receive the net assets of the fund.
The fund may suspend the sale of shares at any time and may
refuse any order to purchase shares. Although the fund is not
required to hold annual meetings of its shareholders,
shareholders holding at least 10% of the outstanding shares
entitled to vote have the right to call a meeting to elect or
remove Trustees, or to take other actions as provided in the
Agreement and Declaration of Trust.
If you own fewer shares than a minimum amount set by the Trustees
(presently 20 shares), the fund may choose to redeem your shares.
You will receive at least 30 days' written notice before the fund
redeems your shares, and you may purchase additional shares at
any time to avoid a redemption. The fund may also redeem shares
if you own shares above a maximum amount set by the Trustees.
There is presently no maximum, but the Trustees may establish one
at any time, which could apply to both present and future
shareholders.
THE FUND'S TRUSTEES: GEORGE PUTNAM,* CHAIRMAN. President of the
Putnam funds. Chairman and Director of Putnam Management and
Putnam Mutual Funds Corp. ("Putnam Mutual Funds"). Director,
Marsh & McLennan Companies, Inc.; WILLIAM F. POUNDS, VICE
CHAIRMAN. Professor of Management, Alfred P. Sloan School of
Management, Massachusetts Institute of Technology; JAMESON ADKINS
BAXTER, President, Baxter Associates, Inc.; HANS H. ESTIN, Vice
Chairman, North American Management Corp.; JOHN A. HILL,
Chairman and Managing Director, First Reserve
Corporation; RONALD J. JACKSON, Former Chairman, President and
Chief Executive Officer of Fisher-Price, Inc., Trustee of Salem
Hospital and Overseer of the Peabody Essex Museum; ELIZABETH
T. KENNAN, President Emeritus and Professor, Mount Holyoke
College; LAWRENCE J. LASSER,* Vice President of the Putnam funds.
President, Chief Executive Officer and Director of Putnam
Investments, Inc. and Putnam Management. Director, Marsh &
McLennan Companies, Inc.; ROBERT E. PATTERSON, Executive Vice
President and Director of Acquisitions , Cabot Partners
Limited Partnership; DONALD S. PERKINS,* Director of various
corporations, including Cummins Engine Company, Lucent
Technologies, Inc., Springs Industries, Inc. and Time Warner
Inc.; GEORGE PUTNAM, III,* President, New Generation Research,
Inc.; ELI SHAPIRO, Alfred P. Sloan Professor of Management,
Emeritus, Alfred P. Sloan School of Management, Massachusetts
Institute of Technology; A.J.C. SMITH,* Chairman and Chief
Executive Officer , Marsh & McLennan Companies, Inc.; and
W. NICHOLAS THORNDIKE, Director of various corporations and
charitable organizations, including Data General Corporation,
Bradley Real Estate, Inc. and Providence Journal Co. Also,
Trustee of Massachusetts General Hospital and Eastern Utilities
Associates. The Trustees are also Trustees of the other
Putnam funds. Those marked with an asterisk (*) are or may be
deemed to be "interested persons" of the fund, Putnam Management
or Putnam Mutual Funds.
ABOUT YOUR INVESTMENT
ALTERNATIVE SALES ARRANGEMENTS
This prospectus offers investors three classes of shares that
bear sales charges in different forms and amounts and that bear
different levels of expenses:
CLASS A SHARES. An investor who purchases class A shares pays a
sales charge at the time of purchase. As a result, class A
shares are not subject to any charges when they are redeemed,
except for certain sales at net asset value that are subject to a
contingent deferred sales charge ("CDSC"). Certain purchases of
class A shares qualify for reduced sales charges. Class A shares
bear a lower 12b-1 fee than class B and class M shares. See "How
to buy shares -- Class A shares" and "Distribution plans."
CLASS B SHARES. Class B shares are sold without an initial sales
charge, but are subject to a CDSC if redeemed within a specified
period after purchase. Class B shares also bear a higher 12b-1
fee than class A and class M shares. Class B shares
automatically convert into class A shares, based on relative net
asset value, approximately eight years after purchase. For more
information about the conversion of class B shares, see the SAI.
This discussion will include information about how shares
acquired through reinvestment of distributions are treated for
conversion purposes. The discussion will also note certain
circumstances under which a conversion may not occur. Class B
shares provide an investor the benefit of putting all of the
investor's dollars to work from the time the investment is made.
Until conversion, class B shares will have a higher expense ratio
and pay lower dividends than class A and class M shares because
of the higher 12b-1 fee. See "How to buy shares -- Class B
shares" and "Distribution plans."
CLASS M SHARES. An investor who purchases class M shares pays a
sales charge at the time of purchase that is lower than the sales
charge applicable to class A shares. Certain purchases of class
M shares qualify for reduced sales charges. Class M shares bear
a 12b-1 fee that is lower than class B shares but higher than
class A shares. Class M shares are not subject to any CDSC and
do not convert into any other class of shares. See "How to buy
shares -- Class M shares" and "Distribution plans."
WHICH ARRANGEMENT IS BEST FOR YOU? The decision as to which
class of shares provides a more suitable investment for an
investor depends on a number of factors, including the amount and
intended length of the investment. Investors making investments
that qualify for reduced sales charges might consider class A or
class M shares. Investors who prefer not to pay an initial sales
charge might consider class B shares. Orders for class B shares
for $250,000 or more will be treated as orders for class A shares
or declined. For more information about these sales
arrangements, consult your investment dealer or Putnam Investor
Services. Shares may only be exchanged for shares of the same
class of another Putnam fund. See "How to exchange shares."
HOW TO BUY SHARES
You can open a fund account with as little as $500 and make
additional investments at any time with as little as $50. You
can buy fund shares three ways- through most investment dealers,
through Putnam Mutual Funds (at 1-800-225-1581), or through a
systematic investment plan. If you do not have a dealer, Putnam
Mutual Funds can refer you to one.
BUYING SHARES THROUGH PUTNAM MUTUAL FUNDS. Complete an order
form and write a check for the amount you wish to invest, payable
to the fund. Return the completed form and check to Putnam
Mutual Funds, which will act as your agent in purchasing shares
through your designated investment dealer.
BUYING SHARES THROUGH SYSTEMATIC INVESTING. You can make regular
investments of $25 or more per month through automatic deductions
from your bank checking account. Application forms are available
from your investment dealer or through Putnam Investor Services.
Shares are sold at the public offering price based on the net
asset value next determined after Putnam Investor Services
receives your order. In most cases, in order to receive that
day's public offering price, Putnam Investor Services must
receive your order before the close of regular trading on the New
York Stock Exchange. If you buy shares through your investment
dealer, the dealer must receive your order before the close of
regular trading on the New York Stock Exchange to receive that
day's public offering price.
CLASS A SHARES
The public offering price of class A shares is the net asset
value plus a sales charge that varies depending on the size of
your purchase. The fund receives the net asset value. The sales
charge is allocated between your investment dealer and Putnam
Mutual Funds as shown in the following table, except when Putnam
Mutual Funds, in its discretion, allocates the entire amount to
your investment dealer.
<PAGE>
SALES CHARGE AMOUNT OF
AS A PERCENTAGE OF: SALES CHARGE
------------------- REALLOWED TO
NET DEALERS AS A
AMOUNT OF TRANSACTION AMOUNT OFFERING PERCENTAGE OF
AT OFFERING PRICE ($) INVESTED PRICE OFFERING PRICE
- ---------------------------------------------------------------
Under 50,000 6.10% 5.75% 5.00%
50,000 but under 100,000 4.71 4.50 3.75
100,000 but under 250,000 3.63 3.50 2.75
250,000 but under 500,000 2.56 2.50 2.00
500,000 but under 1,000,000 2.04 2.00 1.75
- ---------------------------------------------------------------
There is no initial sales charge on purchases of class A shares
of $1 million or more. However, a CDSC of 1.00% or 0.50%,
respectively, will be imposed on redemptions (other than
redemptions by certain participant-directed qualified retirement
plans, which are subject to a two year CDSC of 1.00%, as
described below) within the first or second year after
purchase .
There are also no initial sales charges on Class A shares
purchased by participant-directed qualified retirement plans
with at least 200 eligible employees. A CDSC of 1.00% will,
however, be imposed upon the redemption of shares purchased at
net asset value by a participant-directed qualified retirement
plan (including a plan with at least 200 eligible employees) that
initially invested less than $20 million in Putnam funds and
other investment managed by Putnam Management or its affiliates
and that sells 90% or more of the amount initially invested
within two years after its initial purchase.
Any CDSC will be based on the lower of the share's
cost and current net asset value. Any shares acquired by
reinvestment of distributions will be redeemed without a CDSC.
Shares purchased by certain investors investing $1 million or
more who have made arrangements with Putnam Mutual Funds and
whose dealer of record waived the commission as described below
are not subject to the CDSC.
In determining whether a CDSC is payable, shares not
subject to any charge will be redeemed first . Putnam
Mutual Funds receives the entire amount of any CDSC you pay. See
the SAI for more information about the CDSC.
Except as stated below, Putnam Mutual Funds pays investment
dealers of record commissions on sales of class A shares of $1
million or more based on an investor's cumulative purchases
during the one-year period beginning with the date of the initial
purchase at net asset value. Each subsequent one-year measuring
period for these purposes will begin with the first net asset
value purchase following the end of the prior period. Such
commissions are paid at the rate of 1.00% of the amount under $3
million, 0.50% of the next $47 million and 0.25% thereafter.
On sales at net asset value to a participant-directed qualified
retirement plan initially investing less than $20 million in
Putnam funds and other investments managed by Putnam Management
or its affiliates (including a plan with at least 200 eligible
employees), Putnam Mutual Funds pays commissions during each one-
year measuring period, determined as described above, at the rate
of 1.00% of the first $2 million, 0.80% of the next $1 million
and 0.50% thereafter. On sales at net asset value to all other
participant-directed qualified retirement plans, Putnam Mutual
Funds pays commissions on the initial investment and on
subsequent net quarterly sales at the rate of 0.15%.
A participant-directed qualified retirement plan participating
in a "multi-fund" program approved by Putnam Mutual Funds may
include amounts invested in other mutual funds participating in
such program for purposes of determining whether the plan may
purchase class A shares at net asset value. These investments
will also be included for purposes of the discount privileges and
programs described above.
CLASS B SHARES
Class B shares are sold without an initial sales charge, although
a CDSC will be imposed if you redeem shares within a specified
period after purchase, as shown in the table below. The
following types of shares may be redeemed without charge at any
time: (i) shares acquired by reinvestment of distributions and
(ii) shares otherwise exempt from the CDSC, as described in "How
to buy shares -- General" below. For other shares, the amount of
the charge is determined as a percentage of the lesser of the
current market value or the cost of the shares being redeemed.
YEAR 1 2 3 4 5 6 7+
- -------------------------------------------------------------
CHARGE 5% 4% 3% 3% 2% 1% 0%
In determining whether a CDSC is payable on any redemption, the
fund will first redeem shares not subject to any charge, and then
shares held longest during the CDSC period. For this purpose,
the amount of any increase in a share's value above its initial
purchase price is not regarded as a share exempt from the CDSC.
Thus, when a share that has appreciated in value is redeemed
during the CDSC period, a CDSC is assessed only on its initial
purchase price. For information on how sales charges are
calculated if you exchange your shares, see "How to exchange
shares." Putnam Mutual Funds receives the entire amount of any
CDSC you pay.
CLASS M SHARES
The public offering price of class M shares is the net asset
value plus a sales charge that varies depending on the size of
your purchase. The fund receives the net asset value. The sales
charge is allocated between your investment dealer and Putnam
Mutual Funds as shown in the following table, except when Putnam
Mutual Funds, at its discretion, allocates the entire amount to
your investment dealer.
SALES CHARGE AMOUNT OF
AS A PERCENTAGE OF: SALES CHARGE
------------------- REALLOWED TO
NET DEALERS AS A
AMOUNT OF TRANSACTION AMOUNT OFFERING PERCENTAGE OF
AT OFFERING PRICE ($) INVESTED PRICE OFFERING PRICE
- ---------------------------------------------------------------
Under 50,000 3.63% 3.50% 3.00%
50,000 but under 100,000 2.56 2.50 2.00
100,000 but under 250,000 1.52 1.50 1.00
250,000 but under 500,000 1.01 1.00 1.00
500,000 and above NONE NONE NONE
- ---------------------------------------------------------------
GENERAL
YOU MAY BE ELIGIBLE TO BUY CLASS A SHARES AND CLASS M SHARES AT
REDUCED SALES CHARGES.
Consult your investment dealer or Putnam Mutual Funds for details
about Putnam's combined purchase privilege, cumulative quantity
discount, statement of intention, group sales plan, employee
benefit plans, and other plans. Descriptions are also included
in the order form and in the SAI.
A participant-directed employee benefit plan participating in a
"multi-fund" program approved by Putnam Mutual Funds may include
amounts invested in other mutual funds participating in such
program for purposes of determining whether the plan may purchase
class A shares at net asset value. These investments will also
be included for purposes of the discount privileges and programs
described above.
Sales charges will not apply to class M shares purchased with
redemption proceeds received within the prior 90 days from non-
Putnam mutual funds on which the investor paid a front-end or a
contingent deferred sales charge or to class M shares purchased
by participant-directed qualified retirement plans with at least
50 eligible employees. The fund may also sell class M shares at
net asset value to members of qualified groups.
The fund may sell class A, class B and class M shares at net
asset value without an initial sales charge or a CDSC to the
fund's current and retired Trustees (and their families), current
and retired employees (and their families) of Putnam Management
and affiliates, registered representatives and other employees
(and their families) of broker-dealers having sales agreements
with Putnam Mutual Funds, employees (and their families) of
financial institutions having sales agreements with Putnam Mutual
Funds (or otherwise having an arrangement with a broker-dealer or
financial institution with respect to sales of fund shares),
financial institution trust departments investing an aggregate of
$1 million or more in Putnam funds, clients of certain
administrators of tax-qualified plans, tax-qualified plans when
proceeds from repayments of loans to participants are invested
(or reinvested) in Putnam funds, "wrap accounts" for the benefit
of clients of broker-dealers, financial institutions or financial
planners adhering to certain standards established by Putnam
Mutual Funds, and investors meeting certain requirements who sold
shares of certain Putnam closed-end funds pursuant to a tender
offer by the closed-end fund.
In addition, the fund may sell shares at net asset value without
an initial sales charge or a CDSC in connection with the
acquisition by the fund of assets of an investment company or
personal holding company. The CDSC will be waived on redemptions
of shares arising out of the death or post-purchase disability of
a shareholder or settlor of a living trust account, and on
redemptions in connection with certain withdrawals from IRA or
other retirement plans. Up to 12% of the value of shares subject
to a systematic withdrawal plan may also be redeemed each year
without a CDSC. The SAI contains additional information about
purchasing the fund's shares at reduced sales charges.
Shareholders of other Putnam funds may be entitled to exchange
their shares for, or reinvest distributions from their funds in,
shares of the fund at net asset value.
If you are considering redeeming or exchanging shares or
transferring shares to another person shortly after purchase, you
should pay for those shares with a certified check to avoid any
delay in redemption, exchange or transfer. Otherwise the fund
may delay payment until the purchase price of those shares has
been collected or, if you redeem by telephone, until 15 calendar
days after the purchase date. To eliminate the need for
safekeeping, the fund will not issue certificates for your shares
unless you request them.
Putnam Mutual Funds will from time to time, at its expense,
provide additional promotional incentives or payments to dealers
that sell shares of the Putnam funds. These incentives or
payments may include payments for travel expenses, including
lodging, incurred in connection with trips taken by invited
registered representatives and their guests to locations within
and outside the United States for meetings or seminars of a
business nature. In some instances, these incentives or payments
may be offered only to certain dealers who have sold or may sell
significant amounts of shares. Certain dealers may not sell all
classes of shares.
DISTRIBUTION PLANS
CLASS A DISTRIBUTION PLAN. The class A plan provides for
payments by the fund to Putnam Mutual Funds at the annual rate of
up to 0.35% of average net assets attributable to class A shares.
The Trustees currently limit payments under the class A plan to
the annual rate of 0.25% of such assets.
Putnam Mutual Funds makes quarterly payments to qualifying
dealers (including, for this purpose, certain financial
institutions) to compensate them for services provided in
connection with sales of class A shares and the maintenance of
shareholder accounts. The payments are based on the average net
asset value of class A shares attributable to shareholders for
whom the dealers are designated as the dealer of record.
This calculation excludes until one year after purchase shares
purchased at net asset value, known as "NAV shares", by
shareholders investing $1 million or more. Also excluded until
one year after purchase are NAV shares purchased by participant-
directed qualified retirement plans with at least 200 eligible
employees. NAV shares are not subject to the one-year exclusion
provision in cases where certain shareholders who invested $1
million or more have made arrangements with Putnam Mutual Funds
and the dealer of record waived the sales commission.
Except as stated below, Putnam Mutual Funds makes the quarterly
payments at the annual rate of 0.20% of such average net asset
value for class A shares outstanding as of December 31, 1989 and
0.25% of such average net asset value of shares acquired after
that date (including shares acquired through reinvestment of
distributions).
For participant-directed qualified retirement plans initially
investing less than $20 million in Putnam funds and other
investments managed by Putnam Management or its affiliates,
Putnam Mutual Funds' payments to qualifying dealers on NAV shares
are 100% of the rate stated above if average plan assets in
Putnam funds (excluding money market funds) during the quarter
are less than $20 million, 60% of the stated rate if average plan
assets are at least $20 million but under $30 million, and 40% of
the stated rate if average plan assets are $30 million or more.
For all other participant-directed qualified retirement plans
purchasing NAV shares, Putnam Mutual Funds makes quarterly
payments to qualifying dealers at the annual rate of 0.10% of the
average net asset value of such shares.
CLASS B AND CLASS M DISTRIBUTION PLANS. The class B and class M
plans provide for payments by the fund to Putnam Mutual Funds at
the annual rate of up to 1.00% of average net assets attributable
to class B shares and class M shares, as the case may be. The
Trustees currently limit payments under the class M plan to the
annual rate of 0.75% of such assets.
Although class B shares are sold without an initial sales charge,
Putnam Mutual Funds pays a sales commission equal to 4.00% of the
amount invested to dealers who sell class B shares. These
commissions are not paid on exchanges from other Putnam funds or
on sales to investors exempt from the CDSC.
The amount paid to dealers at the time of the sale of class M
shares is set forth above under "How to buy shares -- Class M
shares." In addition, to further compensate dealers (including
qualifying financial institutions) for services provided in
connection with sales of class B shares and class M shares and
the maintenance of shareholder accounts, Putnam Mutual Funds
makes quarterly payments to qualifying dealers.
The payments are based on the average net asset value of class B
shares and class M shares attributable to shareholders for whom
the dealers are designated as the dealer of record. Putnam
Mutual Funds makes the payments at an annual rate of 0.25% of
such average net asset value of class B shares and class M
shares, as the case may be.
Putnam Mutual Funds also pays to dealers, as additional
compensation with respect to the sale of class M shares, 0.40% of
such average net asset value of class M shares. For class M
shares, the total annual payment to dealers equals 0.65% of such
average net asset value.
GENERAL. Payments under the plans are intended to compensate
Putnam Mutual Funds for services provided and expenses incurred
by it as principal underwriter of fund shares, including the
payments to dealers mentioned above. Putnam Mutual Funds may
suspend or modify such payments to dealers.
The payments are also subject to the continuation of the relevant
distribution plan, the terms of service agreements between
dealers and Putnam Mutual Funds, and any applicable limits
imposed by the National Association of Securities Dealers, Inc.
HOW TO SELL SHARES
You can sell your shares to the fund any day the New York Stock
Exchange is open, either directly to the fund or through your
investment dealer. The fund will only redeem shares for which it
has received payment.
SELLING SHARES DIRECTLY TO THE FUND. Send a signed letter of
instruction or stock power form to Putnam Investor Services,
along with any certificates that represent shares you want to
sell. The price you will receive is the next net asset value
calculated after the fund receives your request in proper form
less any applicable CDSC. In order to receive that day's net
asset value, Putnam Investor Services must receive your request
before the close of regular trading on the New York Stock
Exchange.
If you sell shares having a net asset value of $100,000 or more,
the signatures of registered owners or their legal
representatives must be guaranteed by a bank, broker-dealer or
certain other financial institutions. See the SAI for more
information about where to obtain a signature guarantee. Stock
power forms are available from your investment dealer, Putnam
Investor Services and many commercial banks.
If you want your redemption proceeds sent to an address other
than your address as it appears on Putnam's records, a signature
guarantee is required. Putnam Investor Services usually requires
additional documentation for the sale of shares by a corporation,
partnership, agent or fiduciary, or a surviving joint owner.
Contact Putnam Investor Services for details.
THE FUND GENERALLY SENDS YOU PAYMENT FOR YOUR SHARES THE BUSINESS
DAY AFTER YOUR REQUEST IS RECEIVED. Under unusual circumstances,
the fund may suspend redemptions, or postpone payment for more
than seven days, as permitted by federal securities law.
You may use Putnam's Telephone Redemption Privilege to redeem
shares valued up to $100,000 from your account unless you have
notified Putnam Investor Services of an address change within the
preceding 15 days. Unless an investor indicates otherwise on the
account application, Putnam Investor Services will be authorized
to act upon redemption and transfer instructions received by
telephone from a shareholder, or any person claiming to act as
his or her representative, who can provide Putnam Investor
Services with his or her account registration and address as it
appears on Putnam Investor Services' records.
Putnam Investor Services will employ these and other reasonable
procedures to confirm that instructions communicated by telephone
are genuine; if it fails to employ reasonable procedures, Putnam
Investor Services may be liable for any losses due to
unauthorized or fraudulent instructions. For information,
consult Putnam Investor Services.
During periods of unusual market changes and shareholder
activity, you may experience delays in contacting Putnam Investor
Services by telephone. In this event, you may wish to submit a
written redemption request, as described above, or contact your
investment dealer, as described below. The Telephone Redemption
Privilege is not available if you were issued certificates for
your shares that remain outstanding. The Telephone Redemption
Privilege may be modified or terminated without notice.
SELLING SHARES THROUGH YOUR INVESTMENT DEALER. Your dealer must
receive your request before the close of regular trading on the
New York Stock Exchange to receive that day's net asset value.
Your dealer will be responsible for furnishing all necessary
documentation to Putnam Investor Services, and may charge you for
its services.
HOW TO EXCHANGE SHARES
You can exchange your shares for shares of the same class of
certain other Putnam funds at net asset value beginning 15 days
after purchase. Not all Putnam funds offer all classes of
shares. If you exchange shares subject to a CDSC, the
transaction will not be subject to the CDSC. However, when you
redeem the shares acquired through the exchange, the redemption
may be subject to the CDSC, depending upon when you originally
purchased the shares. The CDSC will be computed using the
schedule of any fund into or from which you have exchanged your
shares that would result in your paying the highest CDSC
applicable to your class of shares. For purposes of computing
the CDSC, the length of time you have owned your shares will be
measured from the date of original purchase and will not be
affected by any exchange.
To exchange your shares, simply complete an Exchange
Authorization Form and send it to Putnam Investor Services. The
form is available from Putnam Investor Services. For federal
income tax purposes, an exchange is treated as a sale of shares
and generally results in a capital gain or loss. A Telephone
Exchange Privilege is currently available for amounts up to
$500,000. Putnam Investor Services' procedures for telephonic
transactions are described above under "How to sell shares." The
Telephone Exchange Privilege is not available if you were issued
certificates for shares that remain outstanding. Ask your
investment dealer or Putnam Investor Services for prospectuses of
other Putnam funds. Shares of certain Putnam funds are not
available to residents of all states.
The exchange privilege is not intended as a vehicle for short-
term trading. Excessive exchange activity may interfere with
portfolio management and have an adverse effect on all
shareholders. In order to limit excessive exchange activity and
in other circumstances where Putnam Management or the Trustees
believe doing so would be in the best interests of the fund, the
fund reserves the right to revise or terminate the exchange
privilege, limit the amount or number of exchanges or reject any
exchange. Shareholders would be notified of any such action to
the extent required by law. Consult Putnam Investor Services
before requesting an exchange. See the SAI to find out more
about the exchange privilege.
HOW THE FUND VALUES ITS SHARES
THE FUND CALCULATES THE NET ASSET VALUE OF A SHARE OF EACH CLASS
BY DIVIDING THE TOTAL VALUE OF ITS ASSETS, LESS LIABILITIES, BY
THE NUMBER OF ITS SHARES OUTSTANDING. SHARES ARE VALUED AS OF
THE CLOSE OF REGULAR TRADING ON THE NEW YORK STOCK EXCHANGE EACH
DAY THE EXCHANGE IS OPEN.
Portfolio securities for which market quotations are readily
available are valued at market value. Short-term investments
that will mature in 60 days or less are valued at amortized cost,
which approximates market value. All other securities and assets
are valued at their fair value following procedures approved by
the Trustees.
HOW THE FUND MAKES DISTRIBUTIONS TO SHAREHOLDERS; TAX INFORMATION
The fund distributes any net investment income and any net
realized capital gains at least annually. Distributions from net
investment income, if any, are expected to be small.
Distributions from capital gains are made after applying any
available capital loss carryovers. Distributions paid by the
fund with respect to class A shares will generally be greater
than those paid with respect to class B and class M shares
because expenses attributable to class B and class M shares will
generally be higher.
YOU CAN CHOOSE FROM THREE DISTRIBUTION OPTIONS:
- - Reinvest all distributions in additional fund shares without
a sales charge;
- - Receive distributions from net investment income in cash
while reinvesting capital gains distributions in additional
shares without a sales charge; or
- - Receive all distributions in cash.
You can change your distribution option by notifying Putnam
Investor Services in writing. If you do not select an option
when you open your account, all distributions will be reinvested.
All distributions not paid in cash will be reinvested in shares
of the class on which the distributions are paid. You will
receive a statement confirming reinvestment of distributions in
additional shares (or in shares of other Putnam funds for
Dividends Plus accounts) promptly following the quarter in which
the reinvestment occurs.
If a check representing a fund distribution is not cashed within
a specified period, Putnam Investor Services will notify you that
you have the option of requesting another check or reinvesting
the distribution in the fund or in another Putnam fund. If
Putnam Investor Services does not receive your election, the
distribution will be reinvested in the fund. Similarly, if
correspondence sent by the fund or Putnam Investor Services is
returned as "undeliverable," fund distributions will
automatically be reinvested in the fund or in another Putnam
fund.
The fund intends to qualify as a "regulated investment company"
for federal income tax purposes and to meet all other
requirements as necessary for it to be relieved of federal taxes
on income and gains it distributes to shareholders. The fund
will distribute substantially all of its ordinary income and
capital gain net income on a current basis.
All fund distributions will be taxable to you as ordinary income,
except that any distributions of net long-term capital gains will
be taxable as such, regardless of how long you have held the
shares. Distributions will be taxable as described above whether
received in cash or in shares through the reinvestment of
distributions.
Fund transactions in foreign currencies and hedging activities
will likely produce a difference between book income and taxable
income. This difference may cause a portion of the fund's income
distributions to constitute a return of capital for tax purposes
or require the fund to make distributions exceeding book income
to qualify as a regulated investment company for tax purposes.
SHAREHOLDERS OF THE FUND WHO ARE U.S. CITIZENS OR RESIDENTS MAY
BE ABLE TO CLAIM A FOREIGN TAX CREDIT OR DEDUCTION ON THEIR U.S.
INCOME TAX RETURNS WITH RESPECT TO FOREIGN TAXES PAID BY THE
FUND. If at the end of the fiscal year more than 50% of the
value of the fund's total assets represents securities of foreign
corporations, the fund intends to make an election permitted by
the Internal Revenue Code to treat any foreign taxes it paid as
paid by its shareholders. In this case, shareholders who are
U.S. citizens, U.S. corporations and, in some cases, U.S.
residents generally will be required to include in U.S. taxable
income their pro rata share of such taxes, but may then generally
be entitled to claim a foreign tax credit or deduction (but not
both) on their share of such taxes.
The fund may own shares in certain foreign investment entities,
referred to as "passive foreign investment companies." In order
to avoid U.S. federal income tax, and an additional charge on a
portion of any "excess distribution" from such companies or gain
from the disposition of such shares, the fund has elected to
"mark to market" annually its investments in such entities and
will distribute any resulting net gain to shareholders. As a
result, the fund may be required to sell securities it would have
otherwise continued to hold in order to make distributions to
shareholders to avoid any fund-level tax.
Early in each year Putnam Investor Services will notify you of
the amount and tax status of distributions paid to you for the
preceding year.
The foregoing is a summary of certain federal income tax
consequences of investing in the fund. You should consult your
tax adviser to determine the precise effect of an investment in
the fund on your particular tax situation (including possible
liability for state and local taxes).
ABOUT PUTNAM INVESTMENTS, INC.
PUTNAM MANAGEMENT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1937.
Putnam Mutual Funds is the principal underwriter of the fund and
of other Putnam funds. Putnam Fiduciary Trust Company is the
fund's custodian. Putnam Investor Services, a division of Putnam
Fiduciary Trust Company, is the fund's investor servicing and
transfer agent.
Putnam Management, Putnam Mutual Funds and Putnam Fiduciary Trust
Company are subsidiaries of Putnam Investments, Inc., which is
wholly owned by Marsh & McLennan Companies, Inc., a publicly-
owned holding company whose principal businesses are
international insurance and reinsurance brokerage, employee
benefit consulting and investment management.
<PAGE>
MAKE THE MOST OF YOUR PUTNAM PRIVILEGES
The following services are available to you as a Putnam mutual
fund shareholder.
SYSTEMATIC INVESTMENT PLAN Invest as much as you wish ($25 or
more) on any business day of the month except for the 29th, 30th,
or 31st. The amount will be automatically transferred from your
checking or savings account.
SYSTEMATIC WITHDRAWAL Make regular withdrawals of $50 or more
monthly, quarterly, or semiannually from an account valued at
$10,000 or more. Your automatic withdrawal may be
made on any business day of the month except for the 29th,
30th, or 31st.
SYSTEMATIC EXCHANGE Transfer assets automatically from one
Putnam account to another on a regular, prearranged basis. There
is no additional charge for this service.
FREE EXCHANGE PRIVILEGE Exchange money between Putnam funds in
the same class of shares without charge. The exchange privilege
allows you to adjust your investments as your objectives change.
A signature guarantee is required for exchanges of more than
$500,000 and shares of all Putnam funds may not be available
to all investors .
Investors may not maintain, within the same fund, simultaneous
plans for systematic investment or exchange and systematic
withdrawal or exchange. These privileges are subject to change
or termination.
For more information about any of these services and privileges,
call your investment advisor or a Putnam customer service
representative toll-free at 1-800-225-1581.
<PAGE>
PUTNAM GLOBAL NATURAL RESOURCES FUND
One Post Office Square
Boston, MA 02109
FUND INFORMATION:
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
INVESTOR SERVICING AGENT
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
CUSTODIAN
Putnam Fiduciary Trust Company
One Post Office Square
Boston, MA 02109
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
PUTNAMINVESTMENTS
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
<PAGE>
Differences between the typeset (printed) prospectus and the
EDGAR filing version.
1. Each interior page of the prospectus includes the word
"prospectus" at the bottom of the page.
2. Pagination is different in printed prospectus.
3. Section headings and subheadings in the printed prospectus
are printed in boldface type with colored ink.
4. The first page of the printed prospectus contains an
illustration of balanced scales, Putnam's logo.
5. The last page of the printed prospectus contains a graphic
recyclable logo.
<PAGE>
