Putnam
Global Natural
Resources
Fund
SEMIANNUAL REPORT
February 28, 1997
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "[T]he fund invests across the natural resources spectrum. It complements
its relatively broad industry diversification with cautious stock selection.
Manager Jeanne Mockard emphasizes out-of-favor industries and undervalued
stocks, so the fund's price multiples are far lower than the category norms."
-- Morningstar analysis, February 14, 1997
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
15 Financial statements
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
(copyright) Karsh, Ottawa
Dear Shareholder:
As the world's demand for consumer goods continues to expand, the pressure to
step up production of natural resources has led to a growing number of
attractive investment opportunities in both mature and emerging economies and
among both large and small companies. Putnam Global Natural Resources Fund's
management team seeks to identify -- and take advantage of -- the most
promising of these opportunities.
Drawing on Putnam's extensive worldwide research capability, Fund Manager
Jeanne Mockard oversees a portfolio that represents a broad cross section of
countries, companies, products, and services. In the following report, Jeanne
discusses the market environment that prevailed during the first half of
fiscal 1997 and some of the companies whose securities contributed to the
fund's performance. Then she offers a preview of what she believes the fund
will encounter during the fiscal year's second half.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
April 16, 1997
Report from the Fund Manager
Jeanne L. Mockard
The adoption of free-market policies and economic reforms in many countries in
Asia, Latin America, and the Pacific Rim have created a significant demand for
the world's natural resources. Because governments in developing countries are
seeking to attract business and improve living standards, many have undertaken
large-scale programs to improve their infrastructures -- that is, to rebuild
their roads, telecommunications capabilities, housing, and utilities. Such
improvements have created an increasing need for energy, chemicals, metals,
minerals, and other natural resources.
During the six months ended February 28, 1997, Putnam Global Natural Resources
Fund continued to profit from investments in companies that are benefiting
from this worldwide development. For the semiannual period, your fund's class
A shares rose 12.98% at net asset value and 6.49% at public offering price.
For results over longer periods, and performance of class B and class M
shares, please refer to pages 8 and 9.
* STRONG RETURNS CONTINUED FOR MULTINATIONALS
Although the portfolio is composed primarily of large-company stocks, holdings
are diversified across several different economic sectors. Many of the
companies we hold in the portfolio -- Exxon, Mobil, Dow Chemical, Du Pont --
are familiar multinational concerns that have been successful on two fronts:
first, their goods and services are in strong demand in developing countries
throughout the world, and second, they are benefiting from past and ongoing
restructuring programs. Over the past several years, many of these firms have
instituted "economic value added" (EVA) policies. They have streamlined their
operations, have sold off unprofitable business units, and have made better
use of technology. In effect, these initiatives have lowered business costs
and have increased productivity and profitability.
* ASSETS SHIFTED WITHIN LARGEST PORTFOLIO SECTORS
We made relatively few changes to the portfolio during the period. Oil prices
rose steadily throughout 1996, and at 36.7% of net assets, oil stocks were the
fund's largest sector weighting. As prices peaked in the fall, we shifted
about 5% of the fund's oil assets away from stocks that we believed had become
fully valued and invested in the stocks of oil companies that we believed were
still relatively inexpensive. For example, we reduced the amount of assets
that were invested in Exxon and added to the fund's positions in Mobil and
Amoco.
Chemical stocks, which made up 17% of the portfolio, were the fund's second
largest sector allocation. We added to Du Pont, which at the end of the period
was the fund's second largest holding. We also increased the fund's exposure
to Dow Chemical. We believe that the long-term fundamentals of the chemical
industry are positive and that the individual strengths of these two companies
will continue to be beneficial to the fund's return.
* PAPER STOCK POSITION ADJUSTED AS PRICES, POTENTIAL SHIFT
Throughout 1996, prices on paper, pulp, and packaging products declined
significantly from their 1995 highs. During the fourth quarter of 1996, we
believe the prices of paper and forest products reached their lowest levels.
We began to gradually increase the fund's exposure in this area in
anticipation of strengthening prices. More recently, it became apparent that
this move had been premature and we reduced the emphasis to a market-neutral
weighting while continuing to monitor the sector closely.
[GRAPHIC OMMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Oil and gas 36.7%
Chemicals 17.2%
Metals and mining 10.1%
Oil services 7.2%
Paper and forest products 5.1%
Footnote reads:
*Based on net assets as of 2/28/97. Holdings will vary over time.
The paper companies we continue to own are those undergoing positive change.
Because they are improving their earnings and cash flows, reducing costs, and
seeking to expand their market shares, we consider them to offer attractive
potential on their own merits. For example, Union Camp Corporation
manufactures linerboard, packaging, wood products and chemicals as well as
fine paper, while Weyerhaeuser, which grows and harvests timber, manufactures
and markets forest products, also engages in real estate development.
* LOWER GOLD PRICES MAKE MINING STOCKS ATTRACTIVE
During the period, gold prices declined significantly, and so we took
advantage of selected companies in the metals and mining sector. One notable
investment in this area was Freeport-McMoRan, a Louisiana-based company that
has most of its assets in Indonesia. The company is one of the world's leading
businesses engaged in exploring for and recovering copper, gold, and silver.
One of its Indonesian mines contains the world's largest gold reserve and the
third largest open-pit copper reserve. At the end of the period,
Freeport-McMoRan was among the fund's top 10 holdings.
* LOOKING AHEAD WITH CAUTIOUS OPTIMISM
We are optimistic about the long-term prospects for the companies the fund
holds in its portfolio. Going forward, we will continue to monitor changes in
the natural resources sectors throughout the world and will take advantage of
developments that we believe will be beneficial to the fund. We are
particularly interested in the economic development that is taking place in
some of the world's emerging nations and its impact on the types of companies
we hold in the portfolio. We are also closely following the trend toward
privatization that is occurring in both the industrial countries and the
emerging countries. Italy and Hungary, for example, are two countries that
have taken steps to privatize their energy industries. Over the long term, we
believe natural resources companies should be strong investment choices, and
this fund offers investors an excellent opportunity to take advantage of this
sector's growth potential.
The views expressed here are exclusively those of Putnam Management. They are
not meant as investment advice. Although the described holdings were viewed
favorably as of 2/28/97, there is no guarantee the fund will continue to hold
these securities in the future. Funds investing in a single sector may be
subject to more volatility than funds investing in a diverse group of sectors.
International investing involves certain risks, including those related to
economic instability, unfavorable political developments, and currency
fluctuations not present with domestic investments.
TOP 10 HOLDINGS
Du Pont (E.I.) de Nemours & Co., Ltd.
Chemicals
Amoco Corp.
Oil and gas
Mobil Corp.
Oil and gas
Dow Chemical Co.
Chemicals
Exxon Corp.
Oil and gas
Royal Dutch Petroleum Co. PLC ADR (the Netherlands)
Oil and gas
Chevron Corp.
Oil and gas
Schlumberger Ltd.
Oil services
British Petroleum Co. PLC ADR (United Kingdom)
Oil and gas
Freeport-McMoRan Copper & Gold Co., Inc. Class A
Metals and mining
Footnote reads:
These holdings represent 37.1% of the fund's assets as of 2/28/97.
Portfolio holdings will vary over time.
Performance summary
Performance should always be considered in light of a fund's investment
strategy. Putnam Global Natural Resources Fund is designed for investors
seeking capital appreciation through stocks of companies in the energy and
natural resources industries. Current income is only an incidental
consideration.
This section provides, at a glance, information about your fund's performance.
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
TOTAL RETURN FOR PERIODS ENDED 2/28/97
Class A Class B Class M
(inception date) (7/24/80) (2/1/94) (7/3/95)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 12.98% 6.49% 12.55% 7.55% 12.76% 8.83%
- ------------------------------------------------------------------------------
1 year 17.82 11.08 16.95 11.95 17.27 13.14
- ------------------------------------------------------------------------------
5 years 76.69 66.54 -- -- -- --
Annual average 12.06 10.74 -- -- -- --
- ------------------------------------------------------------------------------
10 years 186.12 169.70 -- -- -- --
Annual average 11.08 10.43 -- -- -- --
- ------------------------------------------------------------------------------
Life of class -- -- 40.55 37.55 32.96 28.27
Annual average -- -- 11.73 10.94 18.72 16.18
- ------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 2/28/97
Standard Lipper Natural
& Poor's Resources
500 Index Average
- ------------------------------------------------------------------------------
6 months 22.52% 12.83%
- ------------------------------------------------------------------------------
1 year 26.15 17.34
- ------------------------------------------------------------------------------
5 years 118.51 76.78
Annual average 16.92 12.07
- ------------------------------------------------------------------------------
10 years 275.83 186.26
Annual average 14.15 11.09
- ------------------------------------------------------------------------------
Life of class B 77.41 44.56
Annual average 20.48 12.70
- ------------------------------------------------------------------------------
Life of class M 50.65 33.28
Annual average 27.86 18.81
- ------------------------------------------------------------------------------
Performance data represent past results, do not reflect future performance,
and will differ for each share class. They do not take into account any
adjustment for taxes payable on reinvested distributions, or, for class A
shares, distribution fees prior to the implementation of the class A
distribution plan in 1990. Investment returns and principal value will
fluctuate so that an investor's shares, when sold, may be worth more or less
than their original cost. POP assumes 5.75% maximum sales charge for class A
shares and 3.50% for class M shares. CDSC for class B shares assumes the
applicable sales charge, with the maximum being 5%.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 2/28/97
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 1
- ------------------------------------------------------------------------------
Income $0.160 $0.077 $0.124
- ------------------------------------------------------------------------------
Capital gains
- ------------------------------------------------------------------------------
Long-term 0.880 0.880 0.880
- ------------------------------------------------------------------------------
Short-term 0.288 0.288 0.288
- ------------------------------------------------------------------------------
Total $1.328 $1.245 $1.292
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
8/31/96 $18.03 $19.13 $17.81 $17.97 $18.62
- ------------------------------------------------------------------------------
2/28/97 19.03 20.19 18.79 18.96 19.65
- ------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 3/31/97
(most recent calendar quarter)
Class A Class B Class M
(inception date) (7/24/80) (2/1/94) (7/3/95)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 9.00% 2.72% 8.60% 3.60% 8.72% 4.93%
- ------------------------------------------------------------------------------
1 year 12.44 5.99 11.57 6.57 11.85 7.90
- ------------------------------------------------------------------------------
5 years 79.96 69.62 -- -- -- --
Annual average 12.47 11.15 -- -- -- --
- ------------------------------------------------------------------------------
10 years 159.2 144.28 -- -- -- --
Annual average 9.99 9.34 -- -- -- --
- ------------------------------------------------------------------------------
Life of class -- -- 40.10 37.10 32.54 27.86
Annual average -- -- 11.26 10.50 17.47 15.08
- ------------------------------------------------------------------------------
Performance data represent past results, do not reflect future performance,
and will differ for each share class. Investment returns and principal value
will fluctuate so that an investor's shares, when sold, may be worth more or
less than their original cost.
TERMS AND DEFINITIONS
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee than
class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including any
initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance figures
shown here assume the maximum 5.75% sales charge for class A shares and 3.50%
for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of the
redemption of class B shares and assumes redemption at the end of the period.
Your fund's CDSC declines from a 5% maximum during the first year to 1% during
the sixth year. After the sixth year, the CDSC no longer applies.
COMPARATIVE BENCHMARKS
Lipper Natural Resources Average* is composed of funds that invest more than
65% of their equity holdings in the natural resources industries.
Standard & Poor's 500 Index* is an index of common stocks frequently used as a
general measure of stock market performance.
*Securities indexes assume reinvestment of all distributions and interest
payments and do not take in account brokerage fees or taxes. Securities in the
fund do not match those in the indexes and performance of the fund will
differ. It is not possible to invest directly in an index.
Portfolio of investments owned
February 28, 1997 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (98.2%) *
NUMBER OF SHARES VALUE
<S> <C> <C>
Aluminum (1.4%)
- ---------------------------------------------------------------------------------------------------------
40,000 Alumax, Inc. + $ 1,565,000
40,000 Aluminum Co. of America 2,850,000
--------------
4,415,000
Chemicals (17.2%)
- ---------------------------------------------------------------------------------------------------------
154,000 Dow Chemical Co. 12,474,000
140,000 du Pont (E.I.) de Nemours & Co., Ltd. 15,015,000
109,000 Eastman Chemical Co. 6,008,625
30,000 Georgia Gulf Corp. 810,000
50,000 Hercules, Inc. 2,325,000
50,000 Olin Corp. 2,000,000
124,000 PPG Industries, Inc. 6,944,000
31,000 Rohm & Haas Co. 2,852,000
32,000 Union Carbide Corp. 1,512,000
154,000 Witco Chemical Corp. 4,735,500
--------------
54,676,125
Conglomerates (2.0%)
- ---------------------------------------------------------------------------------------------------------
65,000 Minnesota Mining & Manufacturing Co. 5,980,000
Construction (0.2%)
- ---------------------------------------------------------------------------------------------------------
14,000 Foster Wheeler Corp. 546,000
Consumer Products (2.1%)
- ---------------------------------------------------------------------------------------------------------
64,000 Kimberly-Clark Corp. 6,784,000
Containers (0.8%)
- ---------------------------------------------------------------------------------------------------------
47,200 Temple Inland, Inc. 2,601,900
Gas Pipelines (3.4%)
- ---------------------------------------------------------------------------------------------------------
61,000 Coastal Corp. 2,775,500
28,000 Columbia Gas System, Inc. 1,645,000
37,185 El Paso Natural Gas Co. 1,994,046
52,400 PanEnergy Corp. 2,233,550
48,500 Williams Cos., Inc. 2,121,875
--------------
10,769,971
Gas Utilities (1.4%)
- ---------------------------------------------------------------------------------------------------------
31,000 Consolidated Natural Gas Co. 1,581,000
55,000 Pacific Enterprises 1,677,500
30,000 Tejas Gas Corp. + 1,312,500
--------------
4,571,000
Machinery (1.6%)
- ---------------------------------------------------------------------------------------------------------
18,300 Caterpillar, Inc. 1,434,263
84,000 Deere (John) & Co. 3,580,500
--------------
5,014,763
Metals and Mining (10.1%)
- ---------------------------------------------------------------------------------------------------------
195,000 Barrick Gold Corp. 5,508,750
43,000 Euro Nevada Mining Corp. 1,408,599
279,374 Freeport-McMoRan Copper & Gold Co., Inc. Class A 9,114,577
27,000 Newmont Gold Co. 1,316,250
40,000 Phelps Dodge Corp. 2,860,000
133,000 Placer Dome, Inc. 2,859,500
60,000 RMI Titanium Co. + 1,080,000
270,000 RTZ Corp. PLC (United Kingdom) 4,122,141
135,000 Santa Fe Pacific Gold Corp. 2,531,250
46,000 Titanium Metals Corp. + 1,259,250
--------------
32,060,317
Oil Services (7.2%)
- ---------------------------------------------------------------------------------------------------------
36,600 BJ Services Co. + 1,454,850
70,000 Baker Hughes, Inc. 2,485,000
62,000 Dresser Industries, Inc. 1,883,250
65,700 McDermott International, Inc. 1,461,825
103,000 Schlumberger Ltd. 10,364,375
40,000 Smith International, Inc. + 1,625,000
115,000 Weatherford Enterra, Inc. + 3,450,000
--------------
22,724,300
Oil and Gas (36.7%)
- ---------------------------------------------------------------------------------------------------------
163,200 Amoco Corp. 13,790,400
37,000 Anadarko Petroleum Corp. 2,081,250
22,000 Atlantic Richfield Co. 2,750,000
68,991 British Petroleum Co., PLC ADR (United Kingdom) 9,132,684
58,000 Burlington Resources, Inc. 2,544,750
169,300 Chevron Corp. 10,919,850
105,000 Elf Aquitane ADR (France) 5,040,000
122,700 Exxon Corp. 12,254,663
50,000 Halliburton Co. 3,231,250
19,000 Kerr-McGee Corp. 1,189,875
38,000 Louisiana Land & Exploration Co. 1,814,500
60,000 Mitchell Energy & Development Corp. Class B 1,290,000
108,400 Mobil Corp. 13,306,100
189,000 Occidental Petroleum Corp. 4,819,500
25,000 Pennzoil Co. 1,434,375
171,000 Phillips Petroleum Co. 7,075,125
66,000 Royal Dutch Petroleum Co. PLC ADR (Netherlands) 11,418,000
19,000 Texaco, Inc. 1,878,625
71,000 Total Corp. ADR (France) 2,813,375
20,000 Unocal Corp. 772,500
182,000 USX-Marathon Group Inc. 4,845,750
66,300 Western Gas Resources, Inc. 1,234,838
30,000 YPF S.A. ADR (Argentina) 802,500
--------------
116,439,910
Oil and Gas Exploration and Production (2.7%)
- ---------------------------------------------------------------------------------------------------------
52,000 Barrett Resources Corp. + 1,709,500
200,000 Gulf Canada Resources, Ltd. (Canada) + 1,400,000
260,000 Petro Canada - 2nd Inst Rcpts (Canada) 2,892,500
150,000 Ulster Petroleums Ltd. (Canada) + 1,091,328
60,326 Union Pacific Resources Group Inc. 1,470,446
--------------
8,563,774
Paper and Forest Products (5.1%)
- ---------------------------------------------------------------------------------------------------------
18,600 Boise Cascade Corp. 611,475
70,000 Fort Howard Corp. + 2,082,500
15,000 Georgia Pacific Corp. 1,170,000
66,700 International Paper Co. 2,784,725
50,300 Mead Corp. 2,929,975
21,900 Union Camp Corp. 1,056,675
94,200 Weyerhaeuser Co. 4,356,750
20,000 Willamette Industries, Inc. 1,280,000
--------------
16,272,100
Railroads (4.4%)
- ---------------------------------------------------------------------------------------------------------
37,433 Burlington Northern Santa Fe Corp. 3,116,297
10,034 Conrail, Inc. 1,048,550
75,000 CSX Corp. 3,459,375
44,000 Norfolk Southern Corp. 4,009,500
39,000 Union Pacific Corp. 2,349,750
--------------
13,983,472
Refining and Marketing (0.3%)
- ---------------------------------------------------------------------------------------------------------
32,733 Sun, Co., Inc. 883,791
Steel (1.6%)
- ---------------------------------------------------------------------------------------------------------
70,000 Birmingham Steel Corp. 1,268,750
50,000 Carpenter Technology Corp. 1,825,000
20,000 Nucor Corp. 962,500
31,000 USX-U.S. Steel Group 972,625
--------------
5,028,875
--------------
Total Common Stocks (cost $267,968,435) $ 311,315,298
CONVERTIBLE PREFERRED STOCKS (1.3%) *
NUMBER OF SHARES VALUE
- ---------------------------------------------------------------------------------------------------------
46,000 Amax Gold, Inc. Ser. B, $3.75 cv. pfd. $ 2,553,000
13,000 Ashland, Inc. $3.125 cv. pfd. 845,000
36,364 Atlantic Richfield Co. $2.23 LYON
(Liquid Yield Option Notes) cv. pfd. 831,827
--------------
Total Convertible Preferred Stocks
(cost $4,718,185) $ 4,229,827
CONVERTIBLE BONDS AND NOTES (0.3%)*(cost $770,000)
PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------
$770,000 Lomak Petroleum, Inc. 144A cv. sub. deb. 6s, 2007 $ 847,000
- ---------------------------------------------------------------------------------------------------------
Total Investments (cost $273,456,620) *** $ 316,392,125
- ---------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $317,156,605.
*** The aggregate identified cost on a tax basis is $273,552,979, resulting in gross unrealized
appreciation and depreciation of $49,018,539 and $6,179,393, respectively, or net unrealized
appreciation of $42,839,146.
+ Non-income producing security.
144A after the name of a security represents those exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
ADR after the name of a foreign holding stands for American Depository Receipt, representing ownership
of foreign securities on deposit with a domestic custodian bank.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
February 28, 1997 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $273,456,620) (Note 1) $316,392,125
- ---------------------------------------------------------------------------------------------------
Dividends and interest receivables 1,176,669
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 1,447,658
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 3,765,690
- ---------------------------------------------------------------------------------------------------
Total assets 322,782,142
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 3,087,562
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 600,001
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 1,051,965
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 543,987
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 93,053
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 6,683
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,319
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 174,928
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 66,039
- ---------------------------------------------------------------------------------------------------
Total liabilities 5,625,537
- ---------------------------------------------------------------------------------------------------
Net assets $317,156,605
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $268,615,649
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 492,243
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment (Note 1) 5,113,208
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 42,935,505
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $317,156,605
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($205,744,719 divided by 10,809,862 shares) $19.03
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $19.03)* $20.19
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($106,272,244 divided by 5,654,563 shares)** $18.79
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($5,139,642 divided by 271,021 shares) $18.96
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $18.96)* $19.65
- ---------------------------------------------------------------------------------------------------
* 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.
** Redemption price per share is equal to net asset value less any applicable contingent deferred
sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended February 28, 1997 (Unaudited)
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $13,284) $ 3,427,743
- --------------------------------------------------------------------------------------------------
Interest 209,827
- --------------------------------------------------------------------------------------------------
Total investment income 3,637,570
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 1,017,584
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 291,452
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 14,567
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,930
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 242,172
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 460,765
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 15,362
- --------------------------------------------------------------------------------------------------
Reports to shareholders 39,673
- --------------------------------------------------------------------------------------------------
Registration fees 18,790
- --------------------------------------------------------------------------------------------------
Auditing 18,953
- --------------------------------------------------------------------------------------------------
Legal 3,591
- --------------------------------------------------------------------------------------------------
Postage 21,917
- --------------------------------------------------------------------------------------------------
Total expenses 2,148,756
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (54,943)
- --------------------------------------------------------------------------------------------------
Net expenses 2,093,813
- --------------------------------------------------------------------------------------------------
Net investment income 1,543,757
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 10,073,475
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 21,469,785
- --------------------------------------------------------------------------------------------------
Net gain on investments 31,543,260
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $33,087,017
- --------------------------------------------------------------------------------------------------
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
February 28 August 31
1997* 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $ 1,543,757 $ 2,936,986
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 10,073,475 13,903,973
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 21,469,785 8,598,159
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 33,087,017 25,439,118
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income
Class A (1,593,013) (2,905,176)
- ----------------------------------------------------------------------------------------------------------------------
Class B (385,225) (559,144)
- ----------------------------------------------------------------------------------------------------------------------
Class M (26,332) (11,830)
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (11,629,001) (789,766)
- ----------------------------------------------------------------------------------------------------------------------
Class B (5,843,417) (194,224)
- ----------------------------------------------------------------------------------------------------------------------
Class M (248,026) (3,751)
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 64,100,272 53,426,929
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 77,462,275 74,402,156
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 239,694,330 165,292,174
- ----------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $492,243 and $953,056, respectively) $317,156,605 $239,694,330
- ----------------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share February 28
operating performance (Unaudited) Year ended August 31
- ------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $18.03 $16.09 $14.73 $20.51 $17.57 $17.74
- ------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income .12 .28 (b) .29 .19 .23 .35
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 2.21 2.09 1.31 (2.37) 3.41 .44
- ------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 2.33 2.37 1.60 (2.18) 3.64 .79
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.16) (.34) (.24) (.19) (.18) (.39)
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.17) (.09) -- (2.91) (.52) (.57)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- -- (.50) -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.33) (.43) (.24) (3.60) (.70) (.96)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $19.03 $18.03 $16.09 $14.73 $20.51 $17.57
- ------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 12.98* 14.95 11.10 (9.67) 21.79 5.12
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $205,745 $170,678 $135,330 $129,449 $133,585 $109,705
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .61* 1.27 1.13 1.24 1.18 1.61
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .64* 1.62 1.89 1.24 1.25 2.13
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 22.44* 47.71 42.75 189.83 170.54 28.33
- ------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0528 $.0547
- ------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Per share net investment income has been determined on the basis of the weighted average number
of shares outstanding during the period.
(c) The ratio of expenses to average net assets for the period ended August 31, 1996 and thereafter
includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios
exclude these amounts. (Note 2)
(d) Average commission rate paid on security trades is required for fiscal periods beginning on
or after September 1, 1995.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share February 28 Feb. 1, 1994+
operating performance (Unaudited) Year ended August 31 to August 31
- ------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $17.81 $15.94 $14.65 $14.78
- ------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income .07 .15 (b) .16 .13 (b)
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 2.16 2.07 1.33 (.26)
- ------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 2.23 2.22 1.49 (.13)
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.08) (.26) (.20) --
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.17) (.09) -- --
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.25) (.35) (.20) --
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $18.79 $17.81 $15.94 $14.65
- ------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 12.55* 14.14 10.38 (.88)*
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $106,272 $66,375 $29,916 $10,244
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .99* 2.04 1.87 1.11*
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .28* .85 1.20 .90*
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 22.44* 47.71 42.75 189.83
- ------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0528 $.0547
- ------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Per share net investment income has been determined on the basis of the weighted average number
of shares outstanding during the period.
(c) The ratio of expenses to average net assets for the period ended August 31, 1996 and thereafter
includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios
exclude these amounts. (Note 2)
(d) Average commission rate paid on security trades is required for fiscal periods beginning on
or after September 1, 1995.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------
Six months
ended Year For the period
Per-share February 28 ended July 3, 1995+
operating performance (Unaudited) August 31 to August 31
- ------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $17.97 $16.07 $15.59
- ------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income .09 .19(b) .03
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 2.19 2.09 .45
- ------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 2.28 2.28 .48
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.12) (.29) --
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.17) (.09) --
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.29) (.38) --
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $18.96 $17.97 $16.07
- ------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 12.76* 14.39 3.08*
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $5,140 $2,641 $46
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .86* 1.85 .28*
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .39* 1.07 .44*
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 22.44* 47.71 42.75
- ------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0528 $.0547
- ------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Per share net investment income has been determined on the basis of the weighted average number
of shares outstanding during the period.
(c) The ratio of expenses to average net assets for the period ended August 31, 1996 and thereafter
includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios
exclude these amounts. (Note 2)
(d) Average commission rate paid on security trades is required for fiscal periods beginning on
or after September 1, 1995.
</TABLE>
Notes to financial statements
February 28, 1997 (Unaudited)
Note 1
Significant accounting policies
Putnam Global Natural Resources Fund, (the "fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-ended
management investment company. The fund continues to seek capital appreciation
by investing primarily in the common stocks of companies in the energy and
natural resource industries, but may also invest a portion of its assets in
other industries and in fixed-income securities.
The fund offers class A, class B and class M shares. Class A shares are sold
with a maximum front-end sales charge of 5.75%. Class B shares, which convert
to class A shares after approximately eight years, do not pay a front-end
sales charge, but pay a higher ongoing distribution fee than class A shares,
and are subject to a contingent deferred sales charge, if those shares are
redeemed within six years of purchase. Class M shares are sold with a maximum
front-end sales charge of 3.50% and pay an ongoing distribution fee that is
lower than class B shares and higher than class A shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
the distribution fees applicable to such class). Each class votes as a class
only with respect to its own distribution plan or other matters on which a
class vote is required by law or determined by the Trustees. Shares of each
class would receive their pro-rata share of the net assets of the fund, if the
fund were liquidated. In addition, the Trustees declare separate dividends on
each class of shares.
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. 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, or, if not sales are reported -- as in the case of some
securities traded over-the-counter -- the last reported bid price. Market
quotations are not considered to be readily available for some convertible
securities; such investments are stated at fair value on the basis of
valuations furnished by a pricing service approved by the Trustees, which
determines valuations for normal, institutional-size trading units of such
securities using methods based on market transactions for comparable
securities and various relationships between securities which are generally
recognized by institutional traders. Short-term investments having remaining
maturities of 60 days or less are stated at amortized cost, which approximates
market, and other investments 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 Investment
Management, Inc. ("Putnam Management"), the fund's Manager, a wholly-owned
subsidiary of Putnam Investments, 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. 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). 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.
E) 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. 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.
F) 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
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.
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
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, 0.43% of any excess
thereafter. Prior to December 20, 1996, any amount over $1.5 billion was based
on 0.50%.
As part of the custodian 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 funds investment restrictions to cover any advances made by
the subcustodian bank for the settlement of securities purchased by the fund.
At February 28, 1997, the payable to the subcustodian bank represents the
amount due for cash advance for the settlement of a security purchased.
The fund 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 aggregate amount of all such
reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam Fiduciary
Trust Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the six months ended February 28, 1997, fund expenses were reduced by
$54,943 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.
Trustees of the fund receive an annual Trustees fee of $870 and an additional
fee for each Trustee's meeting attended. Trustees who are not interested
persons of Putnam Management and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "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 in the fund and are invested
in certain Putnam funds until distribution in accordance with the 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
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 distribution plans (the "Plans") with respect to its
class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments
Inc., for services provided and expenses incurred by it in distributing shares
of the fund. The Plans provide for payments by the fund to Putnam Mutual Funds
Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets
attributable to class A, class B and class M shares, respectively. The
Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00%
and 0.75% of the average net assets attributable to class A, class B and class
M shares respectively.
For the six months ended February 28, 1997, Putnam Mutual Funds Corp., acting
as underwriter received net commissions of $87,062 and $5,885 from the sale of
class A and class M shares, respectively and $57,809 in contingent deferred
sales charges from redemptions of class B shares. A deferred sales charge of
up to 1% is assessed on certain redemptions of class A shares. For the six
months ended February 28, 1997, Putnam Mutual Funds Corp., acting as
underwriter received $1,207 on class A redemptions.
Note 3
Purchase and sales of securities
During the six months ended February 28, 1997, purchases and sales of
investment securities other than short-term investments aggregated
$112,249,995 and $64,834,375, respectively. There were no purchases and sales
of U.S. government obligations. In determining the net gain or loss on
securities sold, the cost of securities has been determined on the identified
cost basis.
Note 4
Capital shares
At February 28, 1997, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
February 28, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 6,870,264 $132,676,308
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 619,102 11,663,870
- ------------------------------------------------------------
7,489,366 144,340,178
Shares
repurchased (6,147,198) (118,647,606)
- ------------------------------------------------------------
Net increase 1,342,168 $25,692,572
- ------------------------------------------------------------
Year ended
August 31, 1996
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 11,202,058 $196,442,808
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 196,998 3,248,494
- ------------------------------------------------------------
11,399,056 199,691,302
Shares
repurchased (10,341,511) (181,209,527)
- ------------------------------------------------------------
Net increase 1,057,545 $18,481,775
- ------------------------------------------------------------
Six months ended
February 28, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 6,013,697 $113,879,867
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 289,893 5,400,693
- ------------------------------------------------------------
6,303,590 119,280,560
Shares
repurchased (4,376,894) (83,201,641)
- ------------------------------------------------------------
Net increase 1,926,696 $36,078,919
- ------------------------------------------------------------
Year ended
August 31, 1996
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 6,522,110 $113,561,023
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 39,356 644,251
- ------------------------------------------------------------
6,561,466 114,205,274
Shares
repurchased (4,709,889) (81,820,138)
- ------------------------------------------------------------
Net increase 1,851,577 $32,385,136
- ------------------------------------------------------------
Six months ended
February 28, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 287,810 $5,506,305
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 13,020 244,648
- ------------------------------------------------------------
300,830 5,750,953
Shares
repurchased (176,767) (3,422,172)
- ------------------------------------------------------------
Net increase 124,063 $2,328,781
- ------------------------------------------------------------
Year ended
August 31, 1996
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 242,106 $4,266,444
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 735 12,120
- ------------------------------------------------------------
242,841 4,278,564
Shares
repurchased (98,755) (1,718,546)
- ------------------------------------------------------------
Net increase 144,086 $2,560,018
- ------------------------------------------------------------
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Global Natural Resources Fund *
Health Sciences Trust
International Growth Fund +
International New Opportunities Fund
Investors Fund
New Opportunities Fund
OTC & Emerging Growth Fund [DBL. DAGGER]
Vista Fund
Voyager Fund
Voyager Fund II
PUTNAM GROWTH
AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Diversified Income Trust II
Federal Income Trust
Global Governmental Income Trust
High Yield Advantage Fund
High Yield Trust
Income Fund
Intermediate U.S. Government
Income Fund
Preferred Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New
Jersey, New York, Ohio and Pennsylvania
LIFESTAGESM FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market
investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
MOST CONSERVATIVE
INVESTMENTS **
Putnam money market funds: ++
California Tax Exempt Money Market Fund
Money Market Fund
New York Tax Exempt Money Market Fund
Tax Exempt Money Market Fund
CDs and savings accounts [2 DBL. DAGGERS]
* Formerly Natural Resources Fund
+ Formerly Overseas Growth Fund
[DBL. DAGGER] Formerly OTC Emerging Growth Fund
[SECTION MARK] Not available in all states.
** Relative to above.
++ An investment in a money market fund is neither insured nor
guaranteed by the U.S. government. These funds are managed to maintain a
price of $1.00 per share, although there is no assurance that this price
will be maintained in the future.
[2 DBL. DAGGERS] Not offered by Putnam Investments. Certificates of
deposit offer a fixed rate of return and may be insured up to certain
limits by federal/state agencies. Savings accounts may also be insured
up to certain limits. Please call your financial advisor or Putnam at
1-800-225-1581 to obtain a prospectus for any Putnam fund. It contains
more complete information, including charges and expenses. Please read
it carefully before you invest or send money.
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
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Brett C. Browchuk
Vice President
Thomas V. Reilly
Vice President
Jeanne L. Mockard
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Global Natural
Resources 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' website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed or
endorsed by, any financial institution, are not insured by the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board or any other agency,
and involve risk, including the possible loss of principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachussetts 02109
- --------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- --------------------
32139-018/501/2AD 4/97
