Putnam
Global Natural
Resources
Fund
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
2-29-00
[SCALE LOGO OMITTED]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
The markets continued to provide their share of challenges and
opportunities as your fund closed its books on the first half of fiscal
2000. In the following report, the fund's manager discusses performance
for the period and prospects for the months ahead.
This is the last letter to you and the other shareholders of Putnam Global
Natural Resources Fund that I will be signing. After more than 30 years as
Chairman of the Trustees and President of the Putnam Funds, the time has
come for me to step aside. In June, John Hill will become Chairman. John
is currently an independent Trustee and has served on the board for the
past 14 years. In addition, my son, George Putnam, III, will take on the
role of President. I am confident that the leadership of the funds will be
in exceptionally strong hands.
I will become Chairman Emeritus, remain a Putnam shareholder, and stay in
close touch with the funds. It has been my privilege to serve you.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
April 19, 2000
Report from the Fund Manager
Dolores Snyder Bamford
In the first half of fiscal 2000, Putnam Global Natural Resources Fund's
performance weakened as a rally in basic materials industries came to an
end. The six months ended February 29, 2000 also brought two interest-rate
increases by the Federal Reserve Board, driving down prices of most
natural resources stocks as investors anticipated the possibility of a
slowing economy. At the same time, the period was dominated by "new
economy" stocks, as investors continued to favor fast-growing sectors such
as telecommunications, technology, and media.
Despite these challenges, your fund benefited from the strength of energy
stocks, which represented more than half of the fund's net assets at the
end of the period. Oil and natural gas companies in particular benefited
as crude oil prices rose to their highest levels since the 1991 Gulf
crisis. For many of the industries targeted by your fund, the semiannual
period offered just the type of opportunities we seek -- many attractively
valued stocks whose lower prices do not appear to reflect their actual
worth.
Total return for 6 months ended 2/29/00
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
- --------------------------------------------------------------------------
-7.17% -12.51% -7.49% -12.02% -7.49% -8.39% -7.40% -10.65%
- --------------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods begins on page 5.
* RISING OIL PRICES BOOST ENERGY STOCKS
While steep increases in oil prices had U.S. consumers complaining at the
gas pumps during the semiannual period, many energy stocks were reaping
the rewards. Energy companies, such as the natural gas and oil exploration
and production firms in your fund's portfolio, profited as investors
returned to this sector in anticipation of higher corporate profits.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Oil integrated 27.5%
Oil services 15.9%
Gas pipelines 12.5%
Chemicals 9.8%
Oil exploration
and production 9.4%
Footnote reads:
*Based on net assets as of 2/29/00. Holdings will vary over time.
During the period, U.S. oil prices rose above $30 a barrel for the first
time since the Gulf War 9 years ago. The higher prices are the result of a
restricted supply, that began in April 1998, when OPEC began removing 4.3
million barrels a day from world markets. The restrictions were in
response to an enormous glut of oil that had caused prices to fall as low
as $10 a barrel.
"While soaring oil prices cut into many companies' profits . . . investors can
capitalize on the higher prices. Experts say from a long-term perspective,
energy is an excellent investment."
- -- CNNfn.com, March 14, 2000
As the semiannual period came to a close, OPEC was expected to begin
increasing production levels again, although we expect oil and natural gas
companies to continue to benefit from generally higher prices for some
time.
* FOCUS ON STOCK SELECTION IN BASIC MATERIALS
Stocks in the portfolio's basic materials sector, which includes
industries such as paper, chemicals, and metals, came under increased
pressure during the period. These sectors tend to be more vulnerable to
interest-rate increases as well as the anticipation of future moves by the
Fed. With the possibility of more rate increases in the second half of
fiscal 2000, we remain cautious about basic materials and are focusing on
stocks we believe offer growth potential despite the challenging
environment. Examples in the portfolio include Alcoa, Inc., Dow Chemical
Co., and Avery Dennison Corp.
Alcoa, the world's leading producer of aluminum, experienced a price
collapse during the Asian and Russian crises of 1997/98. Last year,
however, the company recovered dramatically and became the best-performing
stock in the Dow Jones Industrial Average for the 1999 calendar year.
Along with a number of other companies in the basic materials sector,
Alcoa recently announced mergers that could boost its earnings potential.
Fund holding Dow Chemical has also taken advantage of acquisition
opportunities, notably its merger with chemicals and plastics giant Union
Carbide, which should be completed later this year. Dow is also keeping
pace with advances in technology and plans to spend $100 million this year
on its Web site and other e-commerce initiatives.
"Although Dolores Snyder Bamford replaced Jeanne Mockard as portfolio manager
in February 1999, it's business as usual . . . Bamford follows the same
conservative approach as her predecessor, who ran the fund for five years and
produced a stellar record."
- -- Ticker Magazine, March 3, 2000
While chemical stocks were weak during the period, worldwide demand for
chemicals was on the rise at the close of the period. This should benefit
a number of fund holdings, such as Avery Dennison, which performed better
than most other chemical stocks during the period. The company, which
specializes in adhesives, plans to continue its growth by expanding
geographically, making acquisitions, and developing new products to
capitalize on e-commerce and Internet usage. While these holdings and
others discussed in this report were viewed favorably at the end of the
fiscal period, all are subject to review and adjustment in accordance with
the fund's investment strategy and may vary in the future.
* FUND SEEKS COMPANIES THAT EMBRACE NEW ECONOMY
Throughout the period, the types of stocks in which your fund invests have
been in a tug-of-war with new economy stocks -- those of technology,
telecommunications, and Internet companies. In addition to targeting
companies committed to improving profits through internal change, we also
seek companies that are embracing the new economy and the sweeping changes
brought on by technology and the Internet.
We believe companies that take a revolutionary approach to their
businesses offer strong long-term growth potential. One example is fund
holding Enron Corp., one of the largest gas and electricity companies in
the world. The company's Web site, EnronOnline, allows companies to trade
a range of energy products with Enron over the Internet. In addition,
Enron is developing a 20,000-mile, high-capacity fiber-optic network that
will be used for telecommunications -- another revolutionary move that
should enhance the company's potential earnings growth.
* EMPHASIS ON ENERGY AND STOCK SELECTION GOING FORWARD
Looking ahead to the second half of fiscal 2000, we are optimistic about
the energy sector and expect strong performance from oil and gas stocks as
the supply/demand equation remains favorable. In other industries, such as
basic materials, we will focus on individual stock selection, seeking
companies with innovative strategies and strong profit-improvement
programs. With more interest-rate increases likely in the next six months,
we will keep a cautious eye on those stocks we believe to be most
vulnerable to investor fears of a slowing economy. As always, we will seek
buying opportunities in stocks we believe offer compelling prices and we
will keep the portfolio well diversified across a range of natural
resources industries.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Exxon Mobil Corp.
Oil integrated
Enron Corp.
Gas pipelines
Williams Cos., Inc.
Gas pipelines
BP Amoco Plc. ADR
(United Kingdom)
Oil integrated
Royal Dutch Petroleum Co.
Plc. ADR (Netherlands)
Oil integrated
Total S.A. ADR (France)
Oil integrated
Schlumberger Ltd.
Oil services
Chevron, Inc.
Oil integrated
Minnesota Mining &
Manufacturing Co.
Chemicals
Global Marine, Inc.
Oil services
Footnote reads:
These holdings represent 36.7% of the fund's net assets as of 2/29/00.
Portfolio holdings will vary over time.
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 2/29/00, 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.
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
primarily through stocks of companies in the energy and natural resources
industries.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 2/29/00
Class A Class B Class C Class M
(inception dates) (7/24/80) (2/1/94) (7/26/99) (7/3/95)
NAV POP NAV CDSC NAV CDSC NAV POP
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 months -7.17% -12.51% -7.49% -12.02% -7.49% -8.39% -7.40% -10.65%
- ------------------------------------------------------------------------------------------
1 year 22.43 15.42 21.51 16.51 21.60 20.60 21.78 17.50
- ------------------------------------------------------------------------------------------
5 years 66.56 56.98 60.60 58.60 60.52 60.52 62.38 56.74
Annual average 10.74 9.44 9.94 9.66 9.93 9.93 10.18 9.40
- ------------------------------------------------------------------------------------------
10 years 112.32 100.16 96.78 96.78 97.14 97.14 101.66 94.63
Annual average 7.82 7.19 7.00 7.00 7.02 7.02 7.27 6.89
- ------------------------------------------------------------------------------------------
Annual average
(life of fund) 6.65 6.33 5.75 5.75 5.85 5.85 6.01 5.82
- ------------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 2/29/00
S&P 500 Lipper Natural
Index Resources Average
- -----------------------------------------------------------------------
6 months 4.11% -5.22%
- -----------------------------------------------------------------------
1 year 11.73 36.50
- -----------------------------------------------------------------------
5 years 206.93 49.96
Annual average 25.13 7.75
- -----------------------------------------------------------------------
10 years 425.39 93.97
Annual average 18.04 6.29
- -----------------------------------------------------------------------
Annual average
(life of fund) 16.96 10.40
- -----------------------------------------------------------------------
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. For class C shares,
returns for periods prior to their inception are derived from the
historical performance of class A shares, adjusted to reflect both the
CDSC currently applicable to class C shares, which is 1% for the first
year and is eliminated thereafter, and the higher operating expenses
applicable to class C 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 2/29/00
Class A Class B Class C Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 1 1
- ------------------------------------------------------------------------------
Income $0.190 $0.053 $0.176 $0.084
- ------------------------------------------------------------------------------
Capital gains
Long-term 0.108 0.108 0.108 0.108
- ------------------------------------------------------------------------------
Short-term 0.205 0.205 0.205 0.205
- ------------------------------------------------------------------------------
Total $0.503 $0.366 $0.489 $0.397
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
- ------------------------------------------------------------------------------
8/31/99 $19.98 $21.20 $19.61 $19.98 $19.82 $20.54
- ------------------------------------------------------------------------------
2/29/00 18.05 19.15 17.78 18.00 17.96 18.61
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 3/31/00 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (7/24/80) (2/1/94) (7/26/99) (7/3/95)
NAV POP NAV CDSC NAV CDSC NAV POP
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 months 7.96% 1.76% 7.57% 2.57% 7.57% 6.57% 7.67% 3.88%
- ------------------------------------------------------------------------------------------
1 year 23.45 16.37 22.54 17.54 22.58 21.58 22.76 18.47
- ------------------------------------------------------------------------------------------
5 years 80.16 69.76 73.45 71.45 73.54 73.54 75.49 69.30
Annual average 12.49 11.17 11.64 11.38 11.66 11.66 11.90 11.10
- ------------------------------------------------------------------------------------------
10 years 136.53 122.89 119.09 119.09 119.43 119.43 124.53 116.68
Annual average 8.99 8.35 8.16 8.16 8.18 8.18 8.42 8.04
- ------------------------------------------------------------------------------------------
Annual average
(life of fund) 7.27 6.95 6.36 6.36 6.47 6.47 6.63 6.44
- ------------------------------------------------------------------------------------------
</TABLE>
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 C shares are not subject to an initial sales charge and are subject
to a contingent deferred sales charge only if the shares are redeemed
during the first year.
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 or C shares and assumes redemption at the end of
the period. Your fund's class B 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. The CDSC for class C shares is 1% for one year after
purchase.
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.
A guide to the financial statements
These sections of the report constitute the fund's financial
statements.
The fund's portfolio lists all the fund's investments and their values as
of the last day of the reporting period. Holdings are organized by asset
type and industry sector, country, or state to show areas of concentration
and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are subtracted
from this total. The result is divided by the number of shares to
determine the net asset value per share, which is calculated separately
for each class of shares. (For funds with preferred shares, the amount
subtracted from total assets includes the net assets allocated to
remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss for
the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that remain
in the portfolio -- any change in unrealized gains or losses over the
period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number of
the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed here
may not match the sources listed in the Statement of operations because
the distributions are determined on a tax basis and may be paid in a
different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment results,
per-share distributions, expense ratios, net investment income ratios and
portfolio turnover in one summary table, reflecting the five most recent
reporting periods. In a semiannual report, the highlight table also
includes the current reporting period. For open-end funds, a separate
table is provided for each share class.
<TABLE>
<CAPTION>
The fund's portfolio
February 29, 2000 (Unaudited)
COMMON STOCKS (99.1%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Aluminum (2.3%)
- --------------------------------------------------------------------------------------------------------------------------
42,400 Alcan Aluminum Ltd. (Canada) $ 1,399,200
80,800 Alcoa, Inc. 5,534,800
--------------
6,934,000
Chemicals (9.8%)
- --------------------------------------------------------------------------------------------------------------------------
36,700 Avery Dennison Corp. 2,227,231
56,500 BOC Group PLC 1,141,330
38,200 Dow Chemical Co. 4,144,700
79,875 du Pont (E.I.) de Nemours & Co., Ltd. 4,033,688
23,300 Eastman Chemical Co. 837,344
75,800 Engelhard Corp. 1,032,775
76,300 Minnesota Mining & Manufacturing Co. 6,723,938
92,300 Monsanto Co. 3,582,394
45,100 PPG Industries, Inc. 2,226,813
72,700 Rohm & Haas Co. 2,935,263
--------------
28,885,476
Computers (2.2%)
- --------------------------------------------------------------------------------------------------------------------------
31,600 Gateway, Inc. (NON) 2,172,500
18,100 Hewlett-Packard Co. 2,434,450
19,200 IBM Corp. 1,958,400
--------------
6,565,350
Consumer Goods (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
31,200 Kimberly-Clark Corp. 1,612,650
Electric Utilities (2.4%)
- --------------------------------------------------------------------------------------------------------------------------
81,700 Carolina Power & Light Co. 2,430,575
104,700 Entergy Corp. 2,120,175
103,200 SCANA Corp. 2,457,450
--------------
7,008,200
Gas Pipelines (12.5%)
- --------------------------------------------------------------------------------------------------------------------------
43,100 Coastal Corp. 1,812,894
55,800 Dynegy, Inc. 2,615,625
81,800 El Paso Energy Corp. 3,031,713
212,100 Enron Corp. 14,634,900
45,100 Equitable Resources, Inc. 1,702,525
315,700 Williams Cos., Inc. 13,200,206
--------------
36,997,863
Gas Utilities (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
91,000 Kinder Morgan, Inc. 2,536,625
Metals (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
101,400 Broken Hill Proprietary Co., Ltd. (Australia) 2,028,000
33,000 Pohang Iron & Steel Co., Ltd. ADR (South Korea) 829,125
--------------
2,857,125
Metals and Mining (5.7%)
- --------------------------------------------------------------------------------------------------------------------------
341,100 Barrick Gold Corp. 5,564,194
177,874 Freeport-McMoRan Copper & Gold Co., Inc. Class A 2,279,011
111,900 Inco Ltd. (Canada) (NON) 1,958,250
171,925 Newmont Mining Corp. 3,803,841
42,460 Phelps Dodge Corp. 2,000,928
92,700 Rio Tinto Plc (United Kingdom) (NON) 1,373,329
--------------
16,979,553
Oil Exploration and Production (9.4%)
- --------------------------------------------------------------------------------------------------------------------------
76,300 Alberta Energy Company Ltd. 2,098,250
140,600 Apache Corp. 5,131,900
101,000 Burlington Resources, Inc. 2,790,125
119,800 Devon Energy Corp. 4,462,550
116,300 Newfield Exploration Co. (NON) 3,605,300
164,800 Talisman Energy, Inc. (Canada) 4,284,800
194,500 Union Pacific Resources Group, Inc. 1,738,344
67,900 Vastar Resources, Inc. 3,602,944
--------------
27,714,213
Oil Integrated (27.5%)
- --------------------------------------------------------------------------------------------------------------------------
239,752 BP Amoco PLC ADR (United Kingdom) 11,268,344
99,500 Chevron, Inc. 7,431,406
137,000 Conoco, Inc. 2,628,688
149,853 Conoco, Inc. Class B 2,950,231
297,360 Exxon Mobil Corp. 22,394,925
120,200 Occidental Petroleum Corp. 1,930,713
207,900 Royal Dutch Petroleum Co. PLC ADR (Netherlands) 10,914,750
66,200 Sunoco, Inc. 1,634,313
119,500 Texaco, Inc. 5,668,781
87,300 Tosco Corp. 2,335,275
129,144 Total S.A. ADR (France) 8,668,791
88,800 USX-Marathon Group, Inc. 1,920,300
64,100 Valero Energy Corp. 1,634,550
--------------
81,381,067
Oil Services (15.9%)
- --------------------------------------------------------------------------------------------------------------------------
185,000 Baker Hughes, Inc. 4,786,875
96,900 BJ Services Co. (NON) 5,529,356
125,900 ENSCO International, Inc. 3,808,475
261,200 Global Marine, Inc. (NON) 5,860,675
57,500 Halliburton Co. 2,195,781
81,400 Nabors Industries, Inc. (NON) 2,920,225
92,200 Rowan Companies, Inc. (NON) 2,316,525
104,000 Schlumberger Ltd. 7,683,000
53,500 Smith International, Inc. (NON) 3,353,781
127,719 Transocean Sedco Forex, Inc. 5,036,918
81,000 Weatherford International, Inc. 3,645,000
--------------
47,136,611
Paper & Forest Products (5.9%)
- --------------------------------------------------------------------------------------------------------------------------
63,900 Boise Cascade Corp. 1,905,018
16,200 Champion International Corp. 838,350
626,000 Jefferson Smurfit Group PLC (Ireland) 1,433,620
86,400 Mead Corp. 2,586,600
126,900 Smurfit-Stone Container Corp. (NON) 1,729,013
73,600 Temple Inland, Inc. 3,762,800
63,500 Weyerhaeuser Co. 3,258,343
55,100 Willamette Industries, Inc. 1,869,955
--------------
17,383,699
Railroads (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
29,000 Kansas City Southern Industries, Inc. 2,283,750
Regional Bells (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
42,900 Bell Atlantic Corp. 2,099,418
Steel (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
26,300 USX-U.S. Steel Group 575,313
Telecommunications (1.5%)
- --------------------------------------------------------------------------------------------------------------------------
24,700 ALLTEL Corp. 1,432,600
60,300 AT&T Co. 2,981,080
--------------
4,413,680
--------------
Total Common Stocks (cost $256,237,315) $ 293,364,593
SHORT-TERM INVESTMENTS (--%) (a) (cost $77,000)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
$77,000 Interest in $702,686,000 joint repurchase agreement
dated February 29, 2000 with Morgan (J.P) & Co., Inc.
due March 1, 2000 with respect to various U.S. Treasury
obligations -- maturity value of $77,012 for an effective
yield of 5.76% $ 77,000
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $256,314,315) (b) $ 293,441,593
- --------------------------------------------------------------------------------------------------------------------------
Percentages indicated are based on net assets of $296,079,808.
(b) The aggregate identified cost on a tax basis is $262,552,531, resulting in gross unrealized appreciation and
depreciation of $47,596,545 and $16,707,483, respectively, or net unrealized appreciation of $30,889,062.
(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 Depositary Receipt, representing ownership of foreign
securities on deposit with a domestic custodian bank.
DIVERSIFICATION BY COUNTRY
Distribution of investments by country of issue at February 29, 2000: (as percentage of Market Value)
Canada 2.6%
France 3.0
Netherlands 3.7
United Kingdom 4.3
United States 85.0
Other 1.4
-----
Total 100.0%
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
February 29, 2000 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $256,314,315) (Note 1) $293,441,593
- -----------------------------------------------------------------------------------------------
Cash 682
- -----------------------------------------------------------------------------------------------
Dividends and interest receivable 812,632
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 766,360
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 6,453,247
- -----------------------------------------------------------------------------------------------
Total assets 301,474,514
Liabilities
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 3,682,018
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 872,120
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 551,244
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 53,153
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 18,320
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,097
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 180,182
- -----------------------------------------------------------------------------------------------
Other accrued expenses 36,572
- -----------------------------------------------------------------------------------------------
Total liabilities 5,394,706
- -----------------------------------------------------------------------------------------------
Net assets $296,079,808
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $266,580,479
- -----------------------------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (158,950)
- -----------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on investments (Note 1) (7,481,401)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 37,139,680
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $296,079,808
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($166,852,086 divided by 9,242,540 shares) $18.05
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $18.05)* $19.15
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($122,746,303 divided by 6,905,065 shares)** $17.78
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($1,269,437 divided by 70,539 shares)** $18.00
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($5,211,982 divided by 290,155 shares) $17.96
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $17.96)* $18.61
- -----------------------------------------------------------------------------------------------
* 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 29, 2000 (Unaudited)
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $9,224) $ 2,863,262
- -----------------------------------------------------------------------------------------------
Interest 22,780
- -----------------------------------------------------------------------------------------------
Total investment income 2,886,042
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 1,138,625
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 239,669
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 8,704
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,375
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 229,586
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 672,445
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 3,539
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 26,273
- -----------------------------------------------------------------------------------------------
Reports to shareholders 17,002
- -----------------------------------------------------------------------------------------------
Auditing 17,146
- -----------------------------------------------------------------------------------------------
Legal 3,264
- -----------------------------------------------------------------------------------------------
Postage 9,891
- -----------------------------------------------------------------------------------------------
Other 31,272
- -----------------------------------------------------------------------------------------------
Total expenses 2,400,791
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (30,913)
- -----------------------------------------------------------------------------------------------
Net expenses 2,369,878
- -----------------------------------------------------------------------------------------------
Net investment income 516,164
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 1,274,528
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities
in foreign currencies during the period 12,570
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (26,810,928)
- -----------------------------------------------------------------------------------------------
Net loss on investments (25,523,830)
- -----------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(25,007,666)
- -----------------------------------------------------------------------------------------------
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 29 August 31
2000* 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 516,164 $ 2,510,717
- ---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and
foreign currency transactions 1,274,528 (1,369,261)
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments
and assets and liabilities in foreign currencies (26,798,358) 106,473,706
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (25,007,666) 107,615,162
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income
Class A (1,797,242) (2,162,804)
- ---------------------------------------------------------------------------------------------------------------
Class B (376,428) (565,276)
- ---------------------------------------------------------------------------------------------------------------
Class C (6,874) --
- ---------------------------------------------------------------------------------------------------------------
Class M (30,294) (41,873)
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (2,960,719) (10,182,664)
- ---------------------------------------------------------------------------------------------------------------
Class B (2,223,058) (7,302,527)
- ---------------------------------------------------------------------------------------------------------------
Class C (12,226) --
- ---------------------------------------------------------------------------------------------------------------
Class M (112,880) (375,903)
- ---------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments
Class A -- (1,150,430)
- ---------------------------------------------------------------------------------------------------------------
Class B -- (825,034)
- ---------------------------------------------------------------------------------------------------------------
Class M -- (42,469)
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) (29,191,905) 2,065,937
- ---------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (61,719,292) 87,032,119
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 357,799,100 270,766,981
- ---------------------------------------------------------------------------------------------------------------
End of period (including distributions in excess of
net investment and undistributed net investment
income of $158,950 and $1,535,724, respectively) $296,079,808 $357,799,100
- ---------------------------------------------------------------------------------------------------------------
* 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 29
operating performance (Unaudited) Year ended August 31
- ----------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $19.98 $15.28 $22.13 $18.03 $16.09 $14.73
- ----------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income .06(c) .20(c) .20(c) .25(c) .28(c) .29
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (1.49) 5.91 (5.47) 5.18 2.09 1.31
- ----------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (1.43) 6.11 (5.27) 5.43 2.37 1.60
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.19) (.23) (.21) (.16) (.34) (.24)
- ----------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.31) (1.06) (1.37) (1.17) (.09) --
- ----------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- (.12) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (.50) (1.41) (1.58) (1.33) (.43) (.24)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $18.05 $19.98 $15.28 $22.13 $18.03 $16.09
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (7.17)* 42.50 (25.34) 31.39 14.95 11.10
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) 166,852 200,824 $157,589 $239,539 $170,678 $135,330
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .57* 1.16 1.20 1.23 1.27 1.13
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .32* 1.09 .95 1.26 1.62 1.89
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 138.56* 118.37 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.
(d) Per share net investment income amounted to less than $0.01 per share.
(e) Ratio of net investment income to average net assets is less than 0.01%.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ----------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share February 29
operating performance (Unaudited) Year ended August 31
- ----------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $19.61 $15.00 $21.77 $17.81 $15.94 $14.65
- ----------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (.01)(c) .06(c) .04(c) .10(c) .15(c) .16
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (1.46) 5.81 (5.37) 5.11 2.07 1.33
- ----------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (1.47) 5.87 (5.33) 5.21 2.22 1.49
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.05) (.08) (.07) (.08) (.26) (.20)
- ----------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.31) (1.18) (1.37) (1.17) (.09) --
- ----------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (.36) (1.26) (1.44) (1.25) (.35) (.20)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.78 $19.61 $15.00 $21.77 $17.81 $15.94
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (7.49)* 41.42 (25.91) 30.40 14.14 10.38
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $122,746 $146,228 $107,252 $142,442 $66,375 $29,916
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .95* 1.91 1.95 1.98 2.04 1.87
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) (.06)* .35 .21 .52 .85 1.20
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 138.56* 118.37 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.
(d) Per share net investment income amounted to less than $0.01 per share.
(e) Ratio of net investment income to average net assets is less than 0.01%.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS C
- ---------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share February 29 July 26, 1999
operating performance (Unaudited) to August 31
- ---------------------------------------------------------------------------------------------------------------------------
2000 1999
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $19.98 $19.78
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income --(c)(d) .02
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (1.49) .18
- ---------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (1.49) .20
- ---------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------
From net
investment income (.18) --
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.31) --
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.49) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $18.00 $19.98
- ---------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (7.49)* 1.01
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,269 $209
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .95* .19
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) --*(e) .13
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 138.56* 118.37
- ---------------------------------------------------------------------------------------------------------------------------
+ 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.
(d) Per share net investment income amounted to less than $0.01 per share.
(e) Ratio of net investment income to average net assets is less than 0.01%.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ----------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share February 29 July 3, 1995+
operating performance (Unaudited) Year ended August 31 to August 31
- ----------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $19.82 $15.15 $21.99 $17.97 $16.07 $15.59
- ----------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income .01(c) .11(c) .09(c) .15(c) .19(c) .03
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (1.48) 5.86 (5.42) 5.16 2.09 .45
- ----------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (1.47) 5.97 (5.33) 5.31 2.28 .48
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.08) (.12) (.14) (.12) (.29) --
- ----------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.31) (1.06) (1.37) (1.17) (.09) --
- ----------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- (.12) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (.39) (1.30) (1.51) (1.29) (.38) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.96 $19.82 $15.15 $21.99 $17.97 $16.07
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (7.40)* 41.72 (25.73) 30.79 14.39 3.08*
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $5,212 $10,537 $5,926 $7,853 $2,641 $46
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .82* 1.66 1.70 1.73 1.85 .28*
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .04* .62 .45 .77 1.07 .44*
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 138.56* 118.37 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.
(d) Per share net investment income amounted to less than $0.01 per share.
(e) Ratio of net investment income to average net assets is less than 0.01%.
</TABLE>
Notes to financial statements
February 29, 2000 (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.
The fund offers class A, class B, class C 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 C
shares are subject to the same fees and expenses as class B shares, except
that class C shares have a one-year 1.00% contingent deferred sales charge
and do not convert to class A shares. Class M shares are sold with a
maximum front end sales charge of 3.50% and pay an ongoing distribution
fee that is higher than class A shares but lower than class B and class C
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 that 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
of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period.
Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sales price on its principal exchange, or if no sales are
reported -- as in the case of some securities traded over-the-counter --
the last reported bid price. Short-term investments having remaining
maturities of 60 days or less are stated at amortized cost, which
approximates market value. Other investments, including restricted
securities, are stated at fair value following procedures approved by the
Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam 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). Gains or losses on securities sold are determined on
the identified cost basis.
Interest income is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date except that certain dividends from
foreign securities are recorded as soon as the fund is informed of the
ex-dividend date.
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. Investments in foreign securities involve
certain risks, including those related to economic instability,
unfavorable political developments, and currency fluctuations, not present
with domestic investments.
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 29, 2000, 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, and
0.43% thereafter.
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 Putnam Fiduciary
Trust Company (PFTC), a 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 29, 2000, fund expenses were reduced by
$30,913 under expense offset arrangements with PFTC and brokerage service
arrangements (only if applicable to your fund). Investor servicing and
custodian fees reported in the Statement of operations exclude these
credits. The fund could have invested a portion of the assets utilized in
connection with the expense offset arrangements in an income producing
asset if it had not entered into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $729 has
been allocated to the fund, and an additional fee for each Trustees
meeting attended. Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as a Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and meeting
fees for the three years preceding retirement. Pension expense for the
fund is included in Compensation of Trustees in the Statement of
operations. Accrued pension liability is included in Payable for
compensation of Trustees in the Statement of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B, class C 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%,
1.00% and 1.00% of the average net assets attributable to class A, class
B, class C and class M shares, respectively. The Trustees have approved
payment by the fund at an annual rate of 0.25%, 1.00%, 1.00% and 0.75% of
the average net assets attributable to class A, class B, class C and class
M shares respectively.
For the six months ended February 29, 2000, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $20,475 and $1,037 from
the sale of class A and class M shares, respectively, and received
$176,388 and $362 in contingent deferred sales charges from redemptions of
class B and class C shares, respectively. A deferred sales charge of up to
1% is assessed on certain redemptions of class A shares. For the six
months ended February 29, 2000, Putnam Mutual Funds Corp., acting as
underwriter received $275 on class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended February 29, 2000, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $444,291,740 and $481,681,325, respectively. There
were no purchases and sales of U.S. government obligations.
Note 4
Capital shares
At February 29, 2000, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Six months ended February 29, 2000
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 1,337,638 $ 25,841,858
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 234,587 4,276,509
- -----------------------------------------------------------------------------
1,572,225 30,118,367
Shares
repurchased (2,380,189) (45,639,908)
- -----------------------------------------------------------------------------
Net decrease (807,964) $(15,521,541)
- -----------------------------------------------------------------------------
Year ended August 31, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 9,489,587 $170,456,258
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 775,875 12,134,731
- -----------------------------------------------------------------------------
10,265,462 182,590,989
Shares
repurchased (10,527,918) (188,703,653)
- -----------------------------------------------------------------------------
Net decrease (262,456) $ (6,112,664)
- -----------------------------------------------------------------------------
Six months ended February 29, 2000
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 1,173,293 $ 22,238,067
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 125,021 2,246,622
- -----------------------------------------------------------------------------
1,298,314 24,484,689
Shares
repurchased (1,850,970) (34,780,114)
- -----------------------------------------------------------------------------
Net decrease (552,656) $(10,295,425)
- -----------------------------------------------------------------------------
Year ended August 31, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 4,974,343 $ 89,304,868
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 476,918 7,358,783
- -----------------------------------------------------------------------------
5,451,261 96,663,651
Shares
repurchased (5,142,465) (91,552,333)
- -----------------------------------------------------------------------------
Net increase 308,796 $ 5,111,318
- -----------------------------------------------------------------------------
Six months ended February 29, 2000
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 78,160 $ 1,489,786
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 870 15,832
- -----------------------------------------------------------------------------
79,030 1,505,618
Shares
repurchased (18,976) (355,476)
- -----------------------------------------------------------------------------
Net increase 60,054 $1,150,142
- -----------------------------------------------------------------------------
For the period July 26, 1999
(commencement of operations)
to August 31, 1999
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 10,485 $ 216,902
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
10,485 216,902
Shares
repurchased -- --
- -----------------------------------------------------------------------------
Net increase 10,485 $ 216,902
- -----------------------------------------------------------------------------
Six months ended February 29, 2000
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 182,016 $ 3,493,006
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 7,420 134,665
- -----------------------------------------------------------------------------
189,436 3,627,671
Shares
repurchased (431,040) (8,152,752)
- -----------------------------------------------------------------------------
Net decrease (241,604) $(4,525,081)
- -----------------------------------------------------------------------------
Year ended August 31, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 866,310 $ 16,408,162
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 27,372 426,192
- -----------------------------------------------------------------------------
893,682 16,834,354
Shares
repurchased (753,129) (13,983,973)
- -----------------------------------------------------------------------------
Net increase 140,553 $ 2,850,381
- -----------------------------------------------------------------------------
Fund information
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Thomas V. Reilly
Vice President
Deborah Kuenstner
Vice President
Dolores Snyder Bamford
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Richard G. Leibovitch
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam 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' Web site: www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
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PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
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For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
SA007 59734 018/501/2AD 4/00
