Putnam
Global Natural
Resources
Fund
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
2-28-99
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* For the 3 years ended March 31, 1999, Putnam Global Natural Resources
Fund's class A shares ranked 7 out of 36 natural resources funds (top 19%)
tracked by Lipper. For the 1-year period ended March 31, 1999, the fund's
class A shares ranked 10 out of 52 (top 19%).*
CONTENTS
4 Report from Putnam Management
9 Fund performance summary
12 Portfolio holdings
16 Financial statements
* For the 5- and 10-year periods ended 3/31/99, the fund ranked 6 out of
22 and 6 out of 13, respectively. Past performance is not indicative of
future results. Lipper rankings are based on total return performance,
vary over time, and do not include the effects of sales charges.
Performance of other share classes will vary.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
Even in adversity, opportunities can often be found by those who seek them
out. Putnam Global Natural Resources Fund's management team has done an
exemplary job of finding fortuitous situations in today's challenging
global economy at a time when some of the most troubled sectors have been
the natural resources industries.
Strategic stock selection has been the fund's strong suit. During the
first half of fiscal 1999, a portfolio positioned to benefit from a
rebound in paper, metals, and natural gas provided above-average results
within the fund's peer group. As the global economy continues to work its
way out of the dislocations triggered by the 1997 Asian financial crisis,
the fund's management remains confident that it is similarly prepared to
benefit from events as they unfold in the months ahead.
I am pleased to announce the appointment of Dolores Snyder Bamford as your
fund's manager. Dolores joined Putnam in 1992 after positions with
Fidelity Investments. She has 10 years of investment experience.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
April 21, 1999
Report from the Fund Manager
Dolores Snyder Bamford
Strategic stock selection and strength in the paper, metals, and natural
gas sectors helped boost Putnam Global Natural Resources Fund's returns
during the six months ended February 28, 1999. Despite continued weakness
in the oil sector, your fund was strengthened by its focus on large
international oil firms and companies that are working to improve their
financial performance through internal change.
For the semiannual period, your fund's class A shares provided a total
return of 8.05% at net asset value and 1.85% at public offering price.
Over the same period, the average return for all natural resources funds
ranked by Lipper was 3.78%. For complete performance information,
including results for other share classes and over longer time periods,
please refer to the summary that begins on page 9.
* FOCUS ON LARGE INTERNATIONAL OIL COMPANIES REMAINS KEY
During the semiannual period, oil companies continued to suffer from
sharply lower prices as a result of oversupply and weak demand. An
unusually warm 1997-98 winter and declining global economic activity,
particularly in Asia, contributed to the supply glut that took oil prices
to a low of $11 a barrel. In this challenging environment, our decision to
focus on large, international oil companies proved beneficial.
A greater portion of the fund's assets was positioned in stocks of
companies whose global reach gives them a competitive advantage. These
companies can often offset a downturn in one geographic area with good
performance in another, and this tends to smooth ups and downs in their
overall performance. Indeed, during the period, stocks of smaller domestic
oil companies underperformed, while large multinational oil stocks saw a
slight improvement.
* FUND SEEKS TO CAPITALIZE ON POSITIVE CHANGE
Another important factor during the period -- and a fundamental component
of your fund's investment strategy -- was our continued emphasis on
companies that are undergoing positive change. Examples include
implementing aggressive cost-reduction programs, restructuring or selling
unprofitable subsidiaries, consolidating, or repurchasing company stock.
Many oil companies have put strategies like these into place to meet the
challenges of intense competition, sharply lower oil prices, and the high
cost of finding new oil reserves. One of the best examples is portfolio
holding Exxon Corp., which is considered a model for effective financial
management. The company is focused on strengthening its balance sheet,
generating free cash flow, and repurchasing stock.
During the period, Exxon announced plans to merge with Mobil Corp., also a
portfolio holding. Experts believe the $80 billion merger will create a
company with the size, scale, and resources to rival some of the world's
richest oil-producing nations. The deal is also expected to encourage
further mergers and acquisitions within the oil industry. While these
holdings, along with others discussed in this report, were viewed
favorably at the end of the fiscal period, all holdings are subject to
review and adjustment in accordance with the fund's strategy and may vary
in the future.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Oil and gas 31.8%
Chemicals 12.9%
Paper and
forest products 11.6%
Gas pipelines 9.0%
Metals and
mining 8.4%
Footnote reads:
*Based on net assets as of 2/28/99. Holdings will vary over time.
* OUTLOOK BRIGHTENS FOR PAPER INDUSTRY
The fund's emphasis on paper companies proved profitable over the period,
as stocks in this sector were boosted by consolidation and expectations
that paper pricing would improve. Paper company mergers have signaled to
investors that profitability in this sector could be on the rise. This,
along with attractive valuations on paper stocks, has contributed to a
rebound in the industry.
During the past year, paper companies have suffered from the economic
turmoil in Asia. Paper and forest-product companies in Thailand,
Singapore, and Malaysia have dealt with a capacity glut by selling paper
at reduced prices. This has caused U.S. imports of Asian paper products to
increase by nearly 1,000% since the summer of 1997, a situation that took
its toll on U.S. paper producers. As a consequence, many companies have
been working internally to improve their financial positions.
International Paper, one of the fund's holdings, implemented cost-cutting
programs and acquired a smaller rival, Union Camp Corp., also a fund
holding during the period. The acquisition is expected to result in
substantial cost savings and process improvements for the combined
company. Two other portfolio standouts during the period were paper
producers Weyerhaeuser Company and Temple Inland, Inc.
* METALS, NATURAL GAS HOLDINGS ALSO BOOST RETURNS
Worth noting among your fund's metal holdings were aluminum producer Alcoa
and Placer Dome, a gold-mining company. With operations in 30 countries,
Alcoa is involved in mining, refining, and fabricating aluminum. To take
advantage of emerging markets, Alcoa has investments in Eastern Europe and
Latin America. Placer Dome, Canada's second-largest gold-mining company,
also mines silver and copper. The company plans to double its gold
reserves by acquiring a stake in an undeveloped South African gold
deposit. Placer Dome operates 13 gold mines and has exploration projects
in more than 30 countries.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Mobil Corp.
Oil and gas
Chevron Corp.
Oil and gas
E.I. du Pont de Nemours & Co., Ltd.
Chemicals
BP Amoco PLC ADR
Oil and gas
Atlantic Richfield Co.
Oil services
Royal Dutch Petroleum Co.
Oil and gas
Burlington Northern Santa Fe Corp.
Railroad
Conoco, Inc.
Oil and gas
Dow Chemical Co.
Chemicals
Coastal Corp.
Gas pipelines
Footnote reads:
These holdings represent 30.4% of the fund's net assets as of 2/28/99.
Portfolio holdings will vary over time.
Like the paper industry, the natural gas sector has also benefited from
recent merger and acquisition activity. Fund holding Enron, for example,
recently acquired utility giant Portland General to take advantage of the
increasing deregulation of the U.S. electric power market. Enron is the
number one buyer and seller of natural gas in the United States and also
has power plant and pipeline projects in several emerging markets.
Another fund holding during the period, Consolidated Natural Gas, was
acquired by Dominion Resources, which boosted its stock price. The stock
of The Williams Companies was also a strong performer. In addition to its
Williams Gas Pipeline business, the company benefited from the strength of
its subsidiary, Williams Communications Group, which offers fiber-optic
services for broadcast and cable networks and other communications
services for businesses.
* IMPROVED OUTLOOK FOR REMAINDER OF FISCAL '99
As the fund enters the second half of its fiscal year, our outlook for a
number of natural resources sectors is improving. As this report was being
written, stocks of oil companies were beginning to rebound on the
expectation that OPEC would soon reduce production in an effort to relieve
the global oil glut. The fundamentals for paper and energy companies are
turning positive and we expect the fund to be well positioned when global
economic demand resumes in these industries. We will continue to monitor
natural resources industries around the world, seeking to keep the
portfolio well diversified while also taking advantage of the stocks of
large multinational companies.
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 2/28/99, 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.
Performance summary
This section provides information about your fund's performance, which
should always be considered in light of its 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.
TOTAL RETURN FOR PERIODS ENDED 2/28/99
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 8.05% 1.85% 7.67% 2.69% 7.76% 3.98%
- ------------------------------------------------------------------------------
1 year -18.87 -23.53 -19.49 -23.21 -19.30 -22.11
- ------------------------------------------------------------------------------
5 years 38.95 30.92 33.88 31.88 35.49 30.71
Annual average 6.80 5.54 6.01 5.69 6.26 5.50
- ------------------------------------------------------------------------------
10 years 115.88 103.50 99.67 99.67 104.59 97.45
Annual average 8.00 7.36 7.16 7.16 7.42 7.04
- ------------------------------------------------------------------------------
Life of fund 188.59 171.95 146.11 146.11 157.87 148.92
Annual average 5.86 5.53 4.96 4.96 5.22 5.03
- ------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 2/28/99
Lipper
Standard Natural
& Poor's Resources
500 Index Average
- ------------------------------------------------------------------------------
6 months 30.29% 3.78%
- ------------------------------------------------------------------------------
1 year 19.74 -29.60
- ------------------------------------------------------------------------------
5 years 194.93 8.07
Annual average 24.15 1.05
- ------------------------------------------------------------------------------
10 years 459.11 71.69
Annual average 18.78 4.97
- ------------------------------------------------------------------------------
Life of fund 1,823.45 486.84
Annual average 17.25 9.98
- ------------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. Returns for class A and class M
shares reflect the current maximum initial sales charges of 5.75% and
3.50%, respectively. Class B share returns for the 1-, 5-, and 10-year
(where available) and life-of-fund periods reflect the applicable
contingent deferred sales charge (CDSC), which is 5% in the first year,
declines to 1% in the sixth year, and is eliminated thereafter. Returns
shown for class B and class M shares for periods prior to their inception
are derived from the historical performance of class A shares, adjusted to
reflect both the initial sales charge or CDSC, if any, currently
applicable to each class and in the case of class B and class M shares,
the higher operating expenses applicable to such shares. All returns
assume reinvestment of distributions at NAV. Investment return and
principal value will fluctuate so that an investor's shares when redeemed
may be worth more or less than their original cost.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 2/28/99
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 1
- ------------------------------------------------------------------------------
Income $0.225 $0.082 $0.118
- ------------------------------------------------------------------------------
Capital gains
- ------------------------------------------------------------------------------
Long-term 1.178 1.178 1.178
- ------------------------------------------------------------------------------
Short-term 0.001 0.001 0.001
- ------------------------------------------------------------------------------
Total $1.404 $1.261 $1.297
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
8/31/98 $15.28 $16.21 $15.00 $15.15 $15.70
- ------------------------------------------------------------------------------
2/28/99 15.15 16.07 14.93 15.07 15.62
- ------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 3/31/99
(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 4.12% -1.86% 3.63% -1.16% 3.83% 0.18%
- ------------------------------------------------------------------------------
1 year -13.29 -18.28 -14.01 -17.98 -13.79 -16.81
- ------------------------------------------------------------------------------
5 years 67.13 57.56 60.93 58.93 62.88 57.16
Annual average 10.82 9.52 9.98 9.71 10.25 9.46
- ------------------------------------------------------------------------------
10 years 130.66 117.45 113.20 113.20 118.58 110.90
Annual average 8.72 8.08 7.86 7.86 8.13 7.75
- ------------------------------------------------------------------------------
Life of fund 222.69 204.08 174.79 174.79 188.16 178.16
Annual average 6.47 6.13 5.56 5.56 5.83 5.63
- ------------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. 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. See first
page of performance section for performance calculation method.
TERMS AND DEFINITIONS
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
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 5.75% maximum 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 unmanaged list of common stocks that is
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.
<TABLE>
<CAPTION>
Portfolio of investments owned
February 28, 1999 (Unaudited)
COMMON STOCKS (98.9%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C> <C>
Aluminum (2.1%)
- --------------------------------------------------------------------------------------------------------------------------
113,000 Alcoa Inc. $ 4,576,500
24,500 Reynolds Metal Co. 1,047,375
--------------
5,623,875
Building Products (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
21,600 Sherwin Williams Co. 519,750
Chemicals (12.9%)
- --------------------------------------------------------------------------------------------------------------------------
62,700 Air Products & Chemicals, Inc. 2,014,238
73,200 Dow Chemical Co. 7,201,050
165,500 du Pont (E.I.) de Nemours & Co., Ltd. 8,492,215
43,500 Eastman Chemical Co. 2,052,656
30,400 Great Lakes Chemical Corp. 1,183,700
39,600 Hercules, Inc. 1,096,425
64,700 Monsanto Co. 2,947,894
102,500 PPG Industries, Inc. 5,336,406
98,300 Rohm & Haas Co. 3,071,875
24,000 Union Carbide Corp. 1,056,000
--------------
34,452,459
Conglomerates (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
62,100 Allegheny Teledyne Inc. 1,280,813
20,300 Minnesota Mining & Manufacturing Co. 1,503,469
--------------
2,784,282
Gas Pipelines (9.0%)
- --------------------------------------------------------------------------------------------------------------------------
221,400 Coastal Corp. 7,084,800
61,070 El Paso Energy Corp. 2,225,238
108,700 Enron Corp. 7,065,500
82,600 Sonat, Inc. 2,090,813
145,100 Williams Cos., Inc. 5,368,700
--------------
23,835,051
Gas Utilities (1.6%)
- --------------------------------------------------------------------------------------------------------------------------
55,600 Columbia Gas System, Inc. 2,807,800
21,400 NICOR Inc. 817,213
16,100 Peoples Energy Corp. 546,394
--------------
4,171,407
Machinery (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
15,400 Caterpillar, Inc. 701,663
33,000 Deere (John) & Co. 1,078,688
--------------
1,780,351
Metals and Mining (8.4%)
- --------------------------------------------------------------------------------------------------------------------------
313,000 Barrick Gold Corp. 5,536,187
86,000 Euro Nevada Mining Corp. 1,241,918
199,374 Freeport-McMoRan Copper & Gold Co., Inc. Class A 1,844,210
159,525 Newmont Mining Corp. 2,751,806
24,400 Phelps Dodge Corp. 1,183,400
381,000 Placer Dome Inc. (Canada) 4,167,188
436,000 Rio Tinto PLC (United Kingdom) 5,647,851
--------------
22,372,560
Oil and Gas (31.8%)
- --------------------------------------------------------------------------------------------------------------------------
105,100 Anadarko Petroleum Corp. 2,890,250
23,098 Ashland, Inc. 1,027,861
149,700 Atlantic Richfield Co. 8,177,363
97,826 BP Amoco PLC ADR (United Kingdom) 8,315,210
114,300 Chevron, Corp. 8,786,813
356,500 Conoco, Inc. (NON) 7,241,406
40,300 Elf Aquitane ADR (France) 2,080,488
100,400 Exxon Corp. 6,682,875
36,300 Kerr-McGee Corp. 1,036,819
126,800 Mobil Corp. 10,548,172
147,300 Occidental Petroleum Corp. 2,218,706
137,500 Phillips Petroleum Co. 5,319,531
174,000 Royal Dutch Petroleum Co. (NY Registered) (Netherlands) 7,634,250
32,733 Sunoco, Inc. 996,311
106,000 Texaco, Inc. 4,935,625
51,400 Tosco Corp. 1,063,338
182,000 USX-Marathon Group Inc. 3,765,125
68,800 YPF S.A. ADR (Argentina) 1,995,200
--------------
84,715,343
Oil and Gas Exploration and Production (5.7%)
- --------------------------------------------------------------------------------------------------------------------------
73,000 Apache Corp. 1,455,438
181,000 Burlington Resources Inc. 5,859,875
48,900 Diamond Offshore Drilling, Inc. (NON) 1,011,619
60,000 Mitchell Energy & Development Corp. Class B 735,000
220,800 Unocal Corp. 6,223,800
--------------
15,285,732
Oil Services (7.5%)
- --------------------------------------------------------------------------------------------------------------------------
254,000 Baker Hughes, Inc. 4,572,000
65,100 BJ Services Co. (NON) 915,469
37,000 Cooper Cameron Corp. (NON) 855,625
195,600 Halliburton Co. 5,525,700
136,900 Schlumberger Ltd. 6,648,206
40,000 Smith International, Inc. (NON) 972,500
24,000 Transocean Offshore, Inc. 495,000
--------------
19,984,500
Paper and Forest Products (11.6%)
- --------------------------------------------------------------------------------------------------------------------------
70,700 Avery Dennison Corp. 3,795,706
45,500 Boise Cascade Corp. 1,413,344
46,000 Champion International Corp. 1,702,000
54,300 Georgia Pacific Corp. (NON) 3,977,475
87,700 International Paper Co. 3,683,400
100,600 Mead Corp. 3,062,013
106,600 Smurfit-Stone Container Corp. (NON) 1,925,463
47,200 Temple Inland, Inc. 2,829,050
11,900 Union Camp Corp. 795,813
104,400 Weyerhaeuser Co. 5,820,300
54,000 Willamette Industries, Inc. 1,967,625
--------------
30,972,189
Railroads (4.7%)
- --------------------------------------------------------------------------------------------------------------------------
223,299 Burlington Northern Santa Fe Corp. 7,396,779
35,000 CSX Corp. 1,373,750
95,200 Norfolk Southern Corp. 2,671,550
21,600 Union Pacific Corp. 1,012,500
--------------
12,454,579
Steel (1.7%)
- --------------------------------------------------------------------------------------------------------------------------
41,900 Ispat International NV (NY Registered) (Netherlands) 303,775
70,100 Nucor Corp. 3,123,831
39,500 USX-U.S. Steel Group 999,844
--------------
4,427,450
--------------
Total Common Stocks (cost $267,522,624) $ 263,379,528
CONVERTIBLE PREFERRED STOCKS (0.6%) (a) (cost $3,037,961)
NUMBER OF SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
46,000 Kinam Gold, Inc. Ser. B, $3.75 cv. cum. pfd. $ 1,581,250
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $270,560,585) (b) $ 264,960,778
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $266,313,070.
(b) The aggregate identified cost on a tax basis is $270,620,439, resulting in gross unrealized appreciation and
depreciation of $30,870,551 and $36,530,212, respectively, or net unrealized depreciation of $5,659,661.
(NON) 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 Receipts, representing ownership of
foreign securities on deposit with a domestic custodian bank.
Diversification by Country
Distribution of investments by country of issue at February 28, 1999: (as percentage of Market Value)
Canada 1.6%
Netherlands 3.0
United Kingdom 5.4
United States 88.4
Other 1.6
-----
Total 100.0%
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
February 28, 1999 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $270,560,585) (Note 1) $264,960,778
- -----------------------------------------------------------------------------------------------
Dividends and interest receivable 962,321
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 929,904
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 3,629,936
- -----------------------------------------------------------------------------------------------
Total assets 270,482,939
Liabilities
- -----------------------------------------------------------------------------------------------
Distributions payable to shareholders 6,084
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 1,203,098
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 658,252
- -----------------------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 1,566,001
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 486,710
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 38,036
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 15,420
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,124
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 155,735
- -----------------------------------------------------------------------------------------------
Other accrued expenses 39,409
- -----------------------------------------------------------------------------------------------
Total liabilities 4,169,869
- -----------------------------------------------------------------------------------------------
Net assets $266,313,070
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $289,319,349
- -----------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 291,941
- -----------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on investments (Note 1) (17,698,413)
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (5,599,807)
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $266,313,070
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($153,430,703 divided by 10,125,947 shares) $15.15
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $15.15)* $16.07
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($107,521,346 divided by 7,202,514 shares)** $14.93
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($5,361,021 divided by 355,697 shares) $15.07
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $15.07)* $15.62
- -----------------------------------------------------------------------------------------------
* 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, 1999 (Unaudited)
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $16,641) $ 3,363,048
- -----------------------------------------------------------------------------------------------
Interest 50,201
- -----------------------------------------------------------------------------------------------
Total investment income 3,413,249
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 1,031,760
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 200,331
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 9,121
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,392
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 213,155
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 588,742
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 23,885
- -----------------------------------------------------------------------------------------------
Reports to shareholders 16,260
- -----------------------------------------------------------------------------------------------
Registration fees 1,678
- -----------------------------------------------------------------------------------------------
Auditing 17,636
- -----------------------------------------------------------------------------------------------
Legal 1,878
- -----------------------------------------------------------------------------------------------
Postage 28,450
- -----------------------------------------------------------------------------------------------
Other 28,783
- -----------------------------------------------------------------------------------------------
Total expenses 2,165,071
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (23,752)
- -----------------------------------------------------------------------------------------------
Net expenses 2,141,319
- -----------------------------------------------------------------------------------------------
Net investment income 1,271,930
- -----------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (15,625,623)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 36,935,861
- -----------------------------------------------------------------------------------------------
Net gain on investments 21,310,238
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $22,582,168
- -----------------------------------------------------------------------------------------------
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
1999* 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Decrease in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 1,271,930 $ 2,487,942
- ---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions (15,625,623) 21,860,526
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments and assets and liabilities
in foreign currencies 36,935,861 (121,285,286)
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 22,582,168 (96,936,818)
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income
Class A (2,162,804) (2,239,396)
- ---------------------------------------------------------------------------------------------------------------
Class B (565,276) (484,057)
- ---------------------------------------------------------------------------------------------------------------
Class M (41,873) (57,359)
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (11,333,095) (14,717,567)
- ---------------------------------------------------------------------------------------------------------------
Class B (8,127,561) (9,190,367)
- ---------------------------------------------------------------------------------------------------------------
Class M (418,372) (572,336)
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) (4,387,098) 5,130,761
- ---------------------------------------------------------------------------------------------------------------
Total decrease in net assets (4,453,911) (119,067,139)
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 270,766,981 389,834,120
- ---------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $291,941 and $1,789,964, respectively) $266,313,070 $270,766,981
- ---------------------------------------------------------------------------------------------------------------
* 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
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $15.28 $22.13 $18.03 $16.09 $14.73 $20.51
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .10(c) .20(c) .25(c) .28(c) .29 .19
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.17 (5.47) 5.18 2.09 1.31 (2.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.27 (5.27) 5.43 2.37 1.60 (2.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.22) (.21) (.16) (.34) (.24) (.19)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.18) (1.37) (1.17) (.09) -- (2.91)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- -- -- -- (.50)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.40) (1.58) (1.33) (.43) (.24) (3.60)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.15 $15.28 $22.13 $18.03 $16.09 $14.73
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 8.05* (25.34) 31.39 14.95 11.10 (9.67)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) 153,431 $157,589 $239,539 $170,678 $135,330 $129,449
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .58* 1.20 1.23 1.27 1.13 1.24
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .57* .95 1.26 1.62 1.89 1.24
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 20.27* 28.63 39.25 47.71 42.75 189.83
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) 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).
(c) Per share net investment income has been determined on the basis of the weighted average number
of shares outstanding during the period.
</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
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $15.00 $21.77 $17.81 $15.94 $14.65 $14.78
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .04(c) .04(c) .10(c) .15(c) .16 .13(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.15 (5.37) 5.11 2.07 1.33 (.26)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.19 (5.33) 5.21 2.22 1.49 (.13)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.08) (.07) (.08) (.26) (.20) --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.18) (1.37) (1.17) (.09) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.26) (1.44) (1.25) (.35) (.20) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $14.93 $15.00 $21.77 $17.81 $15.94 $14.65
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 7.67* (25.91) 30.40 14.14 10.38 (.88)*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $107,521 $107,252 $142,442 $66,375 $29,916 $10,244
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .95* 1.95 1.98 2.04 1.87 1.11*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .21* .21 .52 .85 1.20 .90*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 20.27* 28.63 39.25 47.71 42.75 189.83
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) 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).
(c) Per share net investment income has been determined on the basis of the weighted average number
of shares outstanding during the period.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share February 28 July 3, 1995+
operating performance (Unaudited) Year ended August 31 to August 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $15.15 $21.99 $17.97 $16.07 $15.59
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .05(c) .09(c) .15(c) .19(c) .03
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.17 (5.42) 5.16 2.09 .45
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.22 (5.33) 5.31 2.28 .48
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.12) (.14) (.12) (.29) --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (1.18) (1.37) (1.17) (.09) --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.30) (1.51) (1.29) (.38) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.07 $15.15 $21.99 $17.97 $16.07
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 7.76* (25.73) 30.79 14.39 3.08*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $5,361 $5,926 $7,853 $2,641 $46
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .83* 1.70 1.73 1.85 .28*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .32* .45 .77 1.07 .44*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 20.27* 28.63 39.25 47.71 42.75
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) 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).
(c) Per share net investment income has been determined on the basis of the weighted average number
of shares outstanding during the period.
</TABLE>
Notes to financial statements
February 28, 1999 (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.
Securities quoted in foreign currencies are translated into U.S. dollars
at the current exchange rate. 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. Collateral
for certain tri-party repurchase agreements is held at the counterparty's
custodian in a segregated account for the benefit of the fund and the
counterparty. Putnam Management is responsible for determining that the
value of these underlying securities is at all times at least equal to the
resale price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). 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) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, and other assets and liabilities are recorded in the
books and records of the fund after translation to U.S. dollars based on
the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when accrued or incurred. The fund
does not isolate that portion of realized or unrealized gains or losses
resulting from changes in the foreign exchange rate on investments from
fluctuations arising from changes in the market prices of the securities.
Such gains and losses are included with the net realized and unrealized
gain or loss on investments. Net realized gains and losses on foreign
currency transactions represent net realized exchange gains or losses on
closed forward currency contracts, disposition of foreign currencies and
the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net unrealized appreciation
and depreciation of assets and liabilities in foreign currencies arise
from changes in the value of open forward currency contracts and assets
and liabilities other than investments at the period end, resulting from
changes in the exchange rate.
F) Line of credit The fund has entered into a committed line of credit
with certain banks. This line of credit agreement includes restrictions
that the fund maintain an asset coverage ratio of at least 300% and
borrowings must not exceed prospectus limitations. For the six months
ended February 28, 1999, the fund had no borrowings against the line of
credit.
G) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies. It is also the intention of the fund to distribute an amount
sufficient to avoid imposition of any excise tax under Section 4982 of the
Internal Revenue Code of 1986, as amended. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held nor for excise tax on income and capital
gains.
H) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid at least annually. The amount and character of income and gains
to be distributed are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles.
Reclassifications are made to the fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
Note 2
Management fee, administrative
services and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund.
Such fee is based on the following annual rates: 0.70% of the first $500
million of average net assets, 0.60% of the next $500 million, 0.55% of
the next $500 million, 0.50% of the next $5 billion, 0.475% of the next $5
billion, 0.455% of the next $5 billion, 0.44% of the next $5 billion,
0.43% thereafter.
As part of the subcustodian contract between the subcustodian bank and
Putnam Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments,
Inc., the subcustodian bank has a lien on the securities of the fund to
the extent permitted by the fund's investment restrictions to cover any
advances made by the subcustodian bank for the settlement of securities
purchased by the fund. At February 28, 1999, 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 an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The aggregate
amount of all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by PFTC. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the six months ended February 28, 1999, fund expenses were reduced by
$23,752 under expense offset arrangements with PFTC and brokerage service
arrangements. Investor servicing and custodian fees reported in the
Statement of operations exclude these credits. The fund could have
invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if it had not entered
into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $720 has
been allocated to the fund, 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 "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
in the fund and are invested in certain Putnam funds until distribution in
accordance with the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as 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 currently limit payment by the fund to 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, 1999, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $40,901 and $2,739 from
the sale of class A and class M shares, respectively and $140,646 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, 1999, Putnam Mutual
Funds Corp., acting as underwriter received $1,132 on class A redemptions.
Note 3
Purchase and sales of securities
During the six months ended February 28, 1999, purchases and sales of
investment securities other than short-term investments aggregated
$61,428,060 and $88,800,069, 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, 1999, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Six months ended
February 28, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 4,217,066 $ 71,461,427
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 776,071 12,137,797
- -----------------------------------------------------------------------------
4,993,137 83,599,224
Shares
repurchased (5,180,150) (87,866,354)
- -----------------------------------------------------------------------------
Net decrease (187,013) $ (4,267,130)
- -----------------------------------------------------------------------------
Year ended
August 31, 1998
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 6,636,246 $138,150,832
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 784,021 15,186,476
- -----------------------------------------------------------------------------
7,420,267 153,337,308
Shares
repurchased (7,932,422) (162,465,816)
- -----------------------------------------------------------------------------
Net decrease (512,155) $ (9,128,508)
- -----------------------------------------------------------------------------
Six months ended
February 28, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 1,755,044 $ 29,029,283
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 477,125 7,361,968
- -----------------------------------------------------------------------------
2,232,169 36,391,251
Shares
repurchased (2,178,580) (35,876,396)
- -----------------------------------------------------------------------------
Net increase 53,589 $ 514,855
- -----------------------------------------------------------------------------
Year ended
August 31, 1998
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 4,347,358 $90,988,489
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 428,684 8,196,424
- -----------------------------------------------------------------------------
4,776,042 99,184,913
Shares
repurchased (4,170,414) (85,774,873)
- -----------------------------------------------------------------------------
Net increase 605,628 $13,410,040
- -----------------------------------------------------------------------------
Six months ended
February 28, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 100,384 $ 1,651,195
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 27,372 426,193
- -----------------------------------------------------------------------------
127,756 2,077,388
Shares
repurchased (163,265) (2,712,211)
- -----------------------------------------------------------------------------
Net decrease (35,509) $ (634,823)
- -----------------------------------------------------------------------------
Year ended
August 31, 1998
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 316,065 $ 6,715,396
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 31,199 601,499
- -----------------------------------------------------------------------------
347,264 7,316,895
Shares
repurchased (313,110) (6,467,666)
- -----------------------------------------------------------------------------
Net increase 34,154 $ 849,229
- -----------------------------------------------------------------------------
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
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Thomas V. Reilly
Vice President
Anthony I. Kreisel
Vice President
Dolores Snyder Bamford
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
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 the
principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
www.putnaminv.com
- ---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
SA007 51084 018/501/2AD 4/99
