Putnam
Balanced
Retirement
Fund
[photo of ??? NEED PRINTED SAMPLE]
ANNUAL REPORT
October 31, 1995
[Putnam logo]
B O S T O N * L O N D O N * T O K Y O
<PAGE>
Fund highlights
[arrow] "Putnam Balanced Retirement Fund is managed as the most conservative
and highest-yielding balanced fund in Putnam's growth and income
category. By using a conservative approach, we seek to offer protection
on the downside of the markets while positioning investors' assets to
benefit on the upside."
--Edward P. Bousa, Fund Manager, Putnam Balanced Retirement Fund
[arrow] Pat Regnier of Morningstar, Inc. says, regarding the fund's name change,
"It's a good thing Putnam isn't messing with success . . . This year,
Bousa and Taubes have generated competitive gains."
--Morningstar Mutual Funds, September 1, 1995
CONTENTS
Report from Putnam Management p. 4
Fund performance summary p. 8
Portfolio holdings p. 13
Financial statements p. 25
2
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From the Chairman [photo of George Putnam]
(c) Karsh, Ottawa
Dear Shareholder:
Putnam Balanced Retirement Fund turned in a very respectable performance for
the fiscal year ended October 31, 1995, demonstrating that a conservatively
oriented, balanced investment does not necessarily go hand in hand with
modest results.
For example, by anticipating the bond market turnaround early in fiscal 1995,
your fund's managers were able to position the portfolio to take full
advantage of the ensuing rally. By shifting assets to foreign bonds, they
were able to capture increasing income and appreciation potential abroad. And
by astute selection of stocks of companies undergoing positive changes, they
were able to carve out a share of the U.S. stock market's rise.
Future results, of course, can never be assumed on the basis of past
performance, but consistency has been a goal of the fund's management. In the
report that follows, your fund's managers discuss prospects for fiscal 1996
and review fiscal 1995 results.
Respectfully yours,
/s/ George Putnam
George Putnam
Chairman of the Trustees
December 20, 1995
3
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Report from the Fund Managers
Edward P. Bousa
Kenneth J. Taubes
Rosemary H. Thomsen
Impressive stock and bond market performance fueled the gains realized by
Putnam Balanced Retirement Fund for the fiscal year ended October 31, 1995.
In addition to favorable market dynamics--low inflation, declining interest
rates, and slowing economic growth--the fund's hearty returns can be
attributed to sound stock picking, strategic bond allocation, and effective
duration management.
As the fiscal year progressed, we increased the portfolio's equity exposure.
We also adjusted the portfolio's weightings in several fixed-income sectors,
trimming positions in the U.S. government and corporate arenas in order to
take advantage of increasing income and appreciation opportunities presented
by foreign bonds and convertible securities. Our strategies proved rewarding:
for the 12-month period, your fund's class A and class B shares returned a
total of 19.32% and 18.25% at net asset value, respectively.
[arrow] FUND'S NAME CHANGED; STRATEGY STILL THE SAME
As you may know, on June 1, 1995, the fund's name was changed from Putnam
Managed Income Trust to Putnam Balanced Retirement Fund. Putnam Management
believed a new name was needed to better reflect the fund's balanced
combination of stocks and bonds. Over the years, your fund has become
Putnam's most conservative growth and income fund, of interest to many
investors either planning for retirement or currently living off their
retirement income. The name change does not affect your fund's ability to
pursue high current return and relative stability of principal.
[arrow] EQUITY PERFORMANCE DRIVEN BY KEEN STOCK SELECTION
Our value-oriented style of investing involves seeking out-of-favor companies
with sound balance sheets as well as companies undergoing positive internal
changes. Evaluating the characteristics of each individual stock remains the
focus of our investment style, and this focus frequently uncovers
opportunities within industries as well.
4
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Throughout the period, we maintained significant exposure to interest-rate
sensitive financial stocks, which provided a substantial boost to fund
performance. Holdings in large money center and superregional banks--such as
J.P. Morgan, Bankers Trust New York, BankAmerica, and NationsBank--enjoyed
significant price appreciation, profiting from falling interest rates,
increasing loan volumes, and in the case of J.P. Morgan, increased securities
underwriting and trading revenues. Merger activity within the industry has
also been a positive influence on these holdings.
Pharmaceutical and health-care stocks were also among the fund's
best-performing holdings, benefiting from the demise of health-care reform,
strong earnings growth, consolidation, and new product introductions.
Telephone utility holdings advanced smartly in response to increased demand
for telecommunications products and services. Bell Atlantic is one portfolio
company positioned to capture a significant share of the fast-growing global
telecommunications business.
Mergers and acquisitions, restructuring, and increasing global market share
have dominated board room discussions across corporate America for several
years now. The trend has touched virtually all areas of the stock market.
Consequently, many portfolio holdings have been positively influenced by
these trends. A prime example is Weyerhaeuser, a major manufacturer of forest
products. Along with naming a new head of its paper operations, the company
has introduced an ambitious cost-cutting program. W.R. Grace & Co. has given
a big boost to the fund as it successfully completed extensive internal
restructuring for improved profitability in the chemicals industry. Philip
Morris, Eastman Kodak, and TRW are other portfolio companies that have reaped
the gains resulting from increased global presence.
Our success over the period was as much a result of the stocks we selected as
those we avoided--for example, electric utilities, one of the poorest
performing stock groups for most of the year. Late in the period, however, as
their valuations became too compelling to ignore, we began purchasing
electric utilities. Those we selected have since picked up in performance.
5
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[arrow] FIXED-INCOME HOLDINGS BENEFIT IN BOND MARKET RALLY
Our fixed-income asset allocation involved taking advantage of the price
appreciation and yield opportunities presented by the declining interest rate
environment that characterized much of fiscal 1995. Recognizing quite early
in the period that a turnaround in the broad market was close at hand, we
concentrated our efforts on extending duration by emphasizing debt securities
with longer maturities. As a measure of an investment's sensitivity to
interest rates, duration plays a key role in fixed-income performance.
Typically, the longer a portfolio's duration, the greater the potential for
share-price appreciation when interest rates decline and inflation
expectations improve.
U.S. government and agency obligations dominated our selections, with an
emphasis on longer-term Treasury issues and discount coupon mortgage-backed
securities. This focus proved rewarding; as the yield curve flattened,
long-term interest rates declined farther than short-term rates. The fund's
Treasury holdings experienced significant price appreciation while the
mortgages provided an attractive income stream.
Our substantial weighting in corporate bonds--both high-yield and
investment-grade--also contributed to the fund's favorable performance.
Improving credit situations, strong cash flow generation, enhanced
productivity, and changing supply/demand dynamics were some of the
sector-specific factors that fostered solid returns. Holdings within the
cable television and entertainment industries were particularly robust
performers, providing generous yields and firm prospects for continued
growth. To obtain further diversification and attractive yield within the
corporate arena, we slightly increased the fund's exposure to non-agency
mortgage securities.
[typeset representation of bar chart]
TOP INDUSTRY SECTORS FOR STOCK HOLDINGS*
Utilities 7.9%
Insurance and finance 6.8%
Oil and gas 3.8%
Consumer nondurables 3.1%
Health care 2.6%
*Based on total net assets as of 10/31/95. Holdings will vary over time.
6
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TOP 10 HOLDINGS (10/31/95)
U.S. Treasury bonds 11-5/8s 11/15/04
- -----------------------------------------------------------------------------
Government National Mortgage Association pass-through
certificates 7s with various due dates from 3/15/23 to 9/15/25
- -----------------------------------------------------------------------------
U.S. Treasury bonds 8-7/8s 8/15/17
- -----------------------------------------------------------------------------
Government National Mortgage Association pass-through
certificates 6-1/2s with various due dates from 7/15/25 to 10/15/25
- -----------------------------------------------------------------------------
U.S. Treasury notes 7-1/4s 8/15/04
- -----------------------------------------------------------------------------
United Kingdom Treasury bonds 9-3/4s 2002
- -----------------------------------------------------------------------------
U.S. Treasury bonds 7-1/2s 11/15/24
- -----------------------------------------------------------------------------
Exxon Corporation
Oil and gas drilling, production, refining, and marketing
- -----------------------------------------------------------------------------
Old Dominion Electric Co. Ser. 93-A 1st mtge.
Sinking Fund, 7-7/8s 2023
- -----------------------------------------------------------------------------
Federal National Mortgage Association Dwarfs, 6 with various
due dates from 1/1/09 to 10/1/09
These holdings represent 21.9% of the fund's net assets. Portfolio holdings
will vary over time.
Foreign bond holdings were concentrated in the United Kingdom, France, and
Germany. At the fiscal year's midpoint, these holdings peaked at nearly 10%
of net assets. Midsummer rallies across Europe provided us with the
opportunity to sell some French holdings and take profits; we subsequently
reduced the fund's foreign exposure to roughly 3.8% by period's end.
[arrow] OUR FOCUS: DOWNSIDE PROTECTION, UPSIDE POTENTIAL
We believe the fund's equity and fixed-income holdings will continue to
perform well in 1996. The current environment of low inflation,
stable-to-declining interest rates, and slow economic growth bodes well for
the markets. However, given the late stage of the business cycle, we will
structure the fund's corporate bond holdings a bit more defensively. We've
begun to selectively upgrade the fund's corporate bond exposure. On the
equity side, we will continue to target companies with low valuations and
high probability of successful change, carefully scrutinizing balance sheets
to identify those with the potential to perform well regardless of the
economy's direction. We believe this approach--combined with Putnam's
extensive research capabilities--gives your fund effective downside
protection as well as solid appreciation potential within a conservative
income-oriented framework.
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 10/31/95, there is no guarantee the fund will continue to
hold these securities in the future.
7
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Performance summary
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares changed
over time, assuming you held the shares through the entire period and
reinvested all distributions back into the fund. We show total return in two
ways: on a cumulative long-term basis and on average how the fund might have
grown each year over varying periods.
Performance should always be considered in light of a fund's investment
strategy. Putnam Balanced Retirement Fund is designed for investors seeking
high current return and relative stability of principal from a diversified
portfolio of equity and debt securities.
TOTAL RETURN FOR PERIODS ENDED 10/31/95
Class A Class B Class M
(4/19/85)* (2/1/94)* (3/17/95)*
NAV POP NAV CDSC NAV POP
1 year 19.32% 12.46% 18.25% 13.25% -- --
5 years 100.54 88.92 -- -- -- --
Annual average 14.93 13.57 -- -- -- --
10 years 174.07 158.33 -- -- -- --
Annual average 10.61 9.96 -- -- -- --
Life-of-class -- -- 15.00 11.00 13.13% 9.19%
Annual average -- -- 8.31 6.14 -- --
*Commencement of operations
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 10/31/95
Lehman Bros.
S&P 500 Govt./Corp. Consumer
Index Bond Index Price Index
1 year 26.36% 16.61% 2.81%
5 years 121.28 62.81 15.13
Annual average 17.22 10.24 2.86
10 years 320.19 160.55 41.40
Annual average 15.44 10.05 3.52
Life of class B (2/1/94) 26.65 10.33 5.13
Annual average 14.46 5.78 2.90
Life of class M (3/17/95) 18.34 10.55 1.52
Performance data represent past results, do not reflect future performance,
and will differ for each share class. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment returns
and net asset value will fluctuate so that an investor's shares when sold may
be worth more or less than their original cost. POP assumes 5.75% maximum
sales charge for class A shares and 3.50% for class M shares. CDSC for class
B shares assumes 5% maximum contingent deferred sales charge.
8
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[typeset representation of line chart]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000
investment since 10/31/85
Starting value Ending value
$ 9,425 Fund's Class A shares at POP $25,833
$10,000 S&P 500 Index $42,019
$10,000 Lehman Bros. Govt/Corp Bond Index $26,055
$10,000 Consumer Price Index $14,140
(plot points for mountain chart)
Lehman Bros.
Govt/Corp Bond
Date/year Fund at POP S&P 500 Index Index CPI
10/31/85 9,245 10,000 10,000 10,000
10/31/86 10,803 13,315 12,001 10,147
10/31/87 10,119 14,159 12,226 10,607
10/31/88 12,124 16,259 13,525 11,058
10/31/89 14,100 20,531 15,167 11,555
10/31/90 12,882 18,988 16,003 12,282
10/31/91 16,654 25,350 18,463 12,640
10/31/92 18,511 27,866 20,404 13,045
10/31/93 21,783 32,015 23,190 13,404
10/31/94 21,650 33,253 22,343 13,753
10/31/95 25,833 42,019 26,055 14,140s
Past performance is no assurance of future results. A $10,000 investment in
the fund's class B shares at inception on 2/1/94 would have been valued at
$11,500 on 10/31/95 ($11,100 with a redemption at the end of the period).
A $10,000 investment in the fund's class M shares at inception on 3/17/95
would have been valued at $11,313 at net asset value on 10/31/95 ($10,919
at public offering price).
PRICE AND DISTRIBUTION INFORMATION
12 MONTHS ENDED 10/31/95
<TABLE>
<CAPTION>
Distributions: Class A Class B Class M
<S> <C> <C> <C> <C> <C>
Number 4 4 2
Income $0.460 $0.404 $0.214
Total 0.460 0.404 0.214
Share value: NAV POP NAV NAV POP
10/31/94 $ 8.68 $ 9.21 $ 8.67 -- --
3/17/95 -- -- -- $ 8.88 $ 9.20
(inception of class M shares)
10/31/95 9.84 10.44 9.80 9.82 10.18
Current return:
End of period
Current dividend
rate(1) 4.47% 4.21% 3.92% 4.28% 4.13%
Current 30-day
SEC yield(2) 3.81 3.59 3.10 3.35 3.23
</TABLE>
(1)Income portion of most recent distribution, annualized and divided by NAV
or POP at end of period. (2)Based on investment income, calculated using SEC
guidelines.
9
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TOTAL RETURN FOR PERIODS ENDED 9/30/95
(most recent calendar quarter)
Class A Class B Class M
NAV POP NAV CDSC NAV POP
1 year 19.45% 12.58% 18.49% 13.49% -- --
5 years 96.80 85.59 -- -- -- --
Annual average 14.50 13.17 -- -- -- --
10 years 181.20 165.12 -- -- -- --
Annual average 10.89 10.24 -- -- -- --
Life-of-class -- -- 15.23 11.23 -- --
Annual average -- -- 8.92 6.62 13.24% 9.31%
Performance data represent past results, do not reflect future performance,
and will differ for each share class. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment returns
and net asset value will fluctuate so that an investor's shares when sold may
be worth more or less than their original cost.
TERMS AND DEFINITIONS
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee than
class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including any
initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance figures
shown here assume the maximum 5.75% sales charge for class A shares and 3.50%
for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B shares and assumes redemption at the end of the
period. Your fund's CDSC declines from a 5% maximum during the first year to
1% during the sixth year. After the sixth year, the CDSC no longer applies.
Standard & Poor's 500 Index is an unmanaged list of large-capitalization
common stocks and is frequently used as a general gauge of stock market
performance.
Lehman Brothers Government/Corporate Bond Index is an unmanaged list of
publicly issued U.S. Treasury obligations, debt obligations of U.S.
government agencies (excluding mortgage-backed securities), fixed-rate,
nonconvertible investment-grade corporate debt securities and U.S.
dollar-denominated SEC-registered nonconvertible debt issued by foreign
governmental entities or international agencies.
Consumer Price Index (CPI) is a commonly used measure of inflation; it does
not represent an investment return.
These indexes assume reinvestment of all distributions and do not take into
account brokerage commissions or other costs. The fund's portfolio contains
securities that do not match those in the indexes. It is not possible to
invest directly in an index.
10
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PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund*
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Health Sciences Trust
International New Opportunities Fund
Investors Fund
Natural Resources Trust
New Opportunities Fund
OTC Emerging Growth Fund
Overseas Growth Fund
Vista Fund
Voyager Fund
Voyager II
PUTNAM GROWTH
AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Growth and Income Fund II
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
Adjustable Rate U.S. Government Fund
American Government Income Fund
Diversified Income Trust
Federal Income Trust
Global Governmental Income Trust
High Yield Advantage Fund
High Yield Trust
Income Fund
Intermediate U.S. Government Income Fund
Preferred Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
Intermediate Tax Exempt Fund
Municipal Income Fund
Tax Exempt Income Fund
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds+
Arizona, California, Florida, Massachusetts,
Michigan, Minnesota, New Jersey, New York,
Ohio, and Pennsylvania
LIFESTAGES(SM) FUNDS
Putnam Asset Allocation Funds--three
investment portfolios that spread your money
across a variety of stocks, bonds, and money
market investments to help maximize your
return and reduce your risk.
The three portfolios:
Putnam Asset Allocation: Balanced Portfolio
Putnam Asset Allocation: Conservative Portfolio
Putnam Asset Allocation: Growth Portfolio
MOST CONSERVATIVE INVESTMENTS++
Putnam money market funds:
California Tax Exempt Money Market Fund
Money Market Fund
New York Tax Exempt Money Market Fund
Tax Exempt Money Market Fund
CDs and savings accounts[S].
* Temporarily closed to new investors.
+ Not available in all states.
++ Relative to above.
[S] Not offered by Putnam Investments. Certificates of deposit offer a fixed
rate of return and may be insured, up to certain limits, by federal/state
agencies. Savings accounts may also be insured up to certain limits.
Please call your financial advisor or Putnam at 1-800-225-1581 to obtain a
prospectus for any Putnam fund. It contains more complete information,
including charges and expenses. Please read it carefully before you invest
or send money.
11
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Report of independent accountants
For the year ended October 31, 1995
To the Trustees and Shareholders of
Putnam Balanced Retirement Fund
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments owned, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Putnam Balanced
Retirement Fund, formerly Putnam Managed Income Trust, (the "fund") at
October 31, 1995, and the results of its operations, the changes in its net
assets, and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the fund's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of investments owned at
October 31, 1995 by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion
expressed above.
Price Waterhouse LLP
Boston, Massachusetts
December 14, 1995
12
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Portfolio of investments owned
October 31, 1995
COMMON STOCKS (41.2%)*
NUMBER OF SHARES VALUE
Aerospace and Defense (0.6%)
33,000 General Motors Corp. Class H $ 1,386,000
22,000 Lockheed Martin Corp. 1,498,750
2,884,750
Automotive (0.5%)
18,000 Chrysler Corp. 929,250
30,000 General Motors Corp. 1,312,500
2,241,750
Basic Industrial Products (1.0%)
18,000 Ball Corp. 497,250
13,000 Deere (John) & Co. 1,161,875
33,000 Harnischfeger Industries, Inc. 1,039,500
7,700 Minnesota Mining & Manufacturing Co. 437,938
44,000 Varity Corp. 1,595,000
4,731,563
Business Equipment and Services (0.9%)
10,000 IBM Corp. 972,500
120,000 Unisys Corp. 675,000
20,300 Xerox Corp. 2,633,925
4,281,425
Chemicals (1.8%)
61,000 du Pont (E.I.) de Nemours & Co., Ltd. 3,804,875
3,000 Hoechst AG (Germany) 781,680
57,000 Union Carbide Corp. 2,158,875
70,000 Witco Chemical Corp. 1,977,500
8,722,930
Conglomerates (1.2%)
61,500 Ogden Corp. 1,399,125
59,000 TRW, Inc. 3,879,250
8,000 United Technologies Corp. 710,000
5,988,375
Consumer Non Durables (3.1%)
73,000 American Brands, Inc. 3,129,875
32,000 Avon Products, Inc. 2,276,000
26,000 Corning, Inc. 679,250
36,000 Kimberly-Clark Corp. 2,614,500
56,000 Philip Morris Cos., Inc. 4,732,000
21,900 RJR Nabisco Holdings Corp. 673,425
20,200 Springs Industries, Inc. Class A 866,075
14,971,125
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COMMON STOCKS
NUMBER OF SHARES VALUE
Consumer Services (1.4%)
46,000 Dun & Bradstreet Corp. $ 2,748,500
35,000 Knight-Ridder, Inc. 1,942,500
24,000 McGraw-Hill, Inc. 1,965,000
6,656,000
Electronics and Electrical Equipment (1.1%)
51,300 Eaton Corp. 2,629,125
6,000 Emerson Electric Co. 427,500
36,000 General Signal Corp. 1,147,500
32,000 Honeywell, Inc. 1,344,000
5,548,125
Energy-Related (0.1%)
37,000 Westcoast Energy, Inc. 545,750
Environmental Control (0.4%)
61,000 WMX Technologies, Inc. 1,715,625
Food and Beverages (1.0%)
5,600 Anheuser-Busch Cos., Inc. 369,600
37,100 Archer Daniels Midland Co. 598,238
19,200 Dean Foods Co. 535,200
53,000 Flowers Industries, Inc. 1,146,125
15,200 Heinz (H.J.) Co. 706,800
28,000 Nestle S.A. (Registered) ADR
(Switzerland) 1,400,000
4,755,963
Forest Products (1.3%)
1,800 Crown Vantage, Inc. 35,775
47,000 Potlatch Corp. 1,979,875
3,000 Rayonier, Inc. 112,500
90,000 Weyerhaeuser Co. 3,971,250
6,099,400
Health Care (2.6%)
23,000 American Home Products Corp. 2,038,375
53,600 Baxter International, Inc. 2,070,300
57,000 Bristol-Myers Squibb Co. 4,346,250
28,800 Upjohn Co. 1,461,600
32,000 Warner-Lambert Co. 2,724,000
12,640,525
Insurance and Finance (6.8%)
24,000 Aetna Life & Casualty Co. 1,689,000
4,500 Allmerica Financial Corp. 113,063
58,000 American General Corp. 1,906,750
39,000 AON Corp. 1,603,875
35,000 BankAmerica Corp. 2,012,500
17,232 Bankers Trust New York Corp. 1,098,540
64,000 Beneficial Corp. 3,136,000
11,000 CIGNA Corp. 1,090,375
54,000 CoreStates Financial Corp. 1,964,250
14
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COMMON STOCKS
NUMBER OF SHARES VALUE
Insurance and Finance (continued)
24,000 First Union Corp. $ 1,191,000
70,000 Fleet Financial Group, Inc. 2,712,500
65,800 Keycorp 2,220,750
58,000 Morgan (J.P.) & Co., Inc. 4,473,250
35,000 NationsBank Corp. 2,301,250
82,000 PNC Bank Corp. 2,152,500
21,000 Provident Life & Accident Insurance Co.
Class B 561,750
23,600 SAFECO Corp. 1,514,825
30,000 Synovus Financial Corp. 753,750
32,495,928
Metals and Mining (0.5%)
34,000 Carpenter Technology Corp. 1,287,750
6,000 Phelps Dodge Corp. 380,250
12,000 Reynolds Metal Co. 604,500
2,272,500
Oil and Gas (3.8%)
27,000 Amoco Corp. 1,724,625
22,000 Enron Corp. 756,250
73,000 Exxon Corp. 5,575,375
18,000 Imperial Oil Ltd. 657,000
17,000 Mobil Corp. 1,712,750
77,000 Occidental Petroleum Corp. 1,655,500
54,000 Phillips Petroleum Co. 1,741,500
28,700 Repsol S.A. ADR (Spain) 850,238
14,000 Royal Dutch Petroleum Co. PLC ADR
(Netherlands) 1,720,250
56,000 Total Corp. ADR (France) 1,729,000
18,122,488
Photography (1.0%)
55,000 Eastman Kodak Co. 3,444,375
36,000 Polaroid Corp. 1,539,000
4,983,375
Real Estate (1.1%)
43,000 Bradley Real Estate Trust, Inc. 618,125
37,900 Duke Realty Investments, Inc. 1,160,688
47,200 Equity Residential Properties Trust 1,321,600
29,000 Evans Withycombe Residential 547,375
40,000 LTC Properties, Inc. 580,000
14,800 Macerich Co. 297,850
20,000 Storage USA, Inc. 585,000
5,110,638
Retail (1.3%)
114,000 K mart Corp. 926,250
59,000 Melville Corporation 1,888,000
53,000 Penney (J.C.) Co., Inc. 2,232,625
37,000 Sears, Roebuck & Co. 1,258,000
6,304,875
Telecommunications (0.2%)
39,000 MCI Communications Corp. 972,563
15
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COMMON STOCKS
NUMBER OF SHARES VALUE
Transportation (1.6%)
2,800 CSX Corp. $ 234,500
12,000 Conrail, Inc. 825,000
36,900 Consolidated Freightways, Inc. 857,925
15,000 Norfolk Southern Corp. 1,158,750
102,200 Ryder System, Inc. 2,465,575
32,000 Union Pacific Corp. 2,092,000
7,633,750
Utilities (7.9%)
42,000 American Telephone & Telegraph Co. 2,688,000
58,100 Bell Atlantic Corp. 3,696,613
32,000 Central Maine Power Co. 444,000
142,000 Cinergy Corp. 4,029,250
38,000 Consolidated Natural Gas Co. 1,444,000
42,000 Dominion Resources, Inc. 1,669,500
31,000 Entergy Corp. 883,500
82,000 NYNEX Corp. 3,854,000
36,000 Oklahoma Gas & Electric Co. 1,440,000
43,000 Pacific Enterprises 1,064,250
72,000 Potomac Electric Power Co. 1,800,000
40,000 Public Service Co. of Colorado 1,365,000
28,000 Public Service Enterprise Group, Inc. 822,500
63,200 Scana Corp. 1,603,700
90,000 Sprint Corp. 3,465,000
27,200 Telefonica de Espana SA ADR (Spain) 1,023,400
77,000 Texas Utilities Electric Co. 2,829,750
59,700 US West, Inc. 2,843,213
35,000 WICOR, Inc. 1,036,875
38,002,551
Total Common Stocks (cost $177,580,890) $197,681,974
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (22.5%)*
PRINCIPAL AMOUNT VALUE
$ 2,513,506 Federal National Mortgage Association
pass-through certificates 7s, with
various due dates from February 1, 2024
to June 1, 2024 $2,492,293
5,340,060 Dwarfs, 6s, with various due dates from
January 1, 2009 to October 1, 2009 5,211,525
13,848,803 Government National Mortgage Association
pass-through certificates 7s, with
various due dates from March 15, 2023 to
September 15, 2025 13,753,524
10,196,993 6-1/2s, with various due dates from July
15, 2025 to October 15, 2025 9,916,613
3,051,412 Midgets 6-1/2s, with various due dates
from July 15, 2008 to June 15, 2009 3,040,915
3,207,383 Midgets 6s, with various due dates from
November 15, 2008 to April 15, 2009 3,140,221
21,665,000 U.S. Treasury Bonds 11-5/8s, November 15,
2004 29,972,228
9,365,000 U.S. Treasury Bonds 8-7/8s, August 15,
2017 12,035,523
4,310,000 U.S. Treasury Bonds 8-1/8s, August 15,
2019 5,188,163
5,615,000 U.S. Treasury Bonds 7-1/2s, November 15,
2024 6,415,138
8,755,000 U.S. Treasury Notes 7-1/4s, August 15,
2004 9,480,002
5,340,000 U.S. Treasury Strips zero %, February 15,
2003 3,475,699
5,435,000 U.S. Treasury Strips zero %, May 15, 2003 3,480,683
95,000 U.S. Treasury Strips zero %, November 15,
2000 71,067
Total U.S. Government and Agency
Obligations (cost $102,912,547) $107,673,594
16
<PAGE>
<TABLE>
<CAPTION>
CORPORATE BONDS AND NOTES (19.2%)*
PRINCIPAL AMOUNT VALUE
<S> <C> <C>
Advertising (--%)
$ 200,000 Outdoor Systems, Inc. sr. notes 10-3/4s, 2003 $ 191,000
Aerospace and Defense (0.1%)
250,000 K&F Industries Inc. sub. deb. 13-3/4s, 2001 260,000
270,000 Sequa Corp. bonds 8-3/4s, 2001 247,050
507,050
Automotive (0.1%)
365,000 Key Plastics Inc. sr. notes 14s, 1999 375,950
Basic Industrial Products (--%)
275,000 Inter-City Products Corp. sr. notes 9-3/4s, 2000 200,750
Broadcasting (1.1%)
50,000 Act III Broadcasting, Inc. sr. sub. notes 9-5/8s,
2003 50,500
250,000 CF Cable TV sr. notes 9-1/8s, 2007 (Canada) 253,750
75,000 Cablevision Systems Corp. sr. sub. deb. 9-7/8s, 2023 77,625
205,000 Cablevision Systems Corp. sr. sub. reset deb.
10-3/4s, 2004 214,225
150,000 Century Communications Corp. sr. notes 9-1/2s, 2005 151,125
200,000 Paxson Communications Corp. 144A sr. sub. notes
11-5/8s, 2002 198,000
3,500,000 Tele-Communications, Inc. sr. deb. 9.8s, 2012 4,009,460
385,000 Telewest Communications PLC deb. stepped-coupon zero
% (11s, 10/1/00), 2007 (United Kingdom)++ 227,631
5,182,316
Building and Construction (--%)
200,000 Scotsman Group, Inc. sr. notes 9-1/2s, 2000 201,000
Business Services (0.1%)
500,000 Corporate Express, Inc. Ser. B, sr. sub. notes
9-1/8s, 2004 497,500
Chemicals (0.5%)
225,000 Acetex Corp. 144A sr. notes 9-3/4s, 2003 231,188
250,000 G-I Holdings, Inc. sr. notes zero %, 1998 186,250
230,000 Huntsman Corp. 1st mtge. 10-5/8s, 2000 250,700
900,000 Lyondell Petrochemical Co. global notes 9-1/8s, 2002 1,009,620
675,000 OSI Specialties Inc. sr. sub. notes 9-1/4s, 2003 742,500
2,420,258
Conglomerates (0.2%)
250,000 ADT Ltd. sr. sub. notes 9-1/4s, 2003 264,375
500,000 MacAndrews & Forbes Holdings, Inc. sub. deb.
notes 13s, 1999 500,625
765,000
Consumer Durable Goods (--%)
106,139 Simmons Mattress Corp. 144A deb. 8s, 2003++++ 106,139
Consumer Non Durables (0.1%)
450,000 Playtex Family Products Corp. sr. sub. notes 9s,
2003 402,750
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
CORPORATE BONDS AND NOTES
PRINCIPAL AMOUNT VALUE
<S> <C> <C>
Consumer Services (1.2%)
$ 100,000 General Media Corp. sr. secd. notes 10-5/8s, 2000 $ 77,000
225,000 Herff Jones, Inc. 144A sr. sub. notes 11s, 2005 232,875
250,000 Centennial Cellular Corp. sr. notes 8-7/8s, 2001 243,125
400,000 Comcast Cellular Corp. sr. participating notes Ser.
A, zero %, 2000 306,000
225,000 Metrocall, Inc. sr. sub. notes 10-3/8s, 2007 230,625
3,885,000 News America Holdings, Inc. sr. notes 12s, 2001 4,340,167
5,429,792
Electronics and Electrical Equipment (0.1%)
500,000 Amphenol Corp. 144A sr. notes 10.45s, 2001 550,000
Entertainment (1.1%)
250,000 Arizona Charlies Corp. 1st mtge. Ser. B, 12s, 2000+ 202,500
250,000 Casino America, Inc. 1st mtge. deb. 11 11-1/2s, 2001 242,500
300,000 Louisiana Casino Cruises Corp. 1st mtge. 11-1/2s,
1998 294,000
275,000 Marvel Parent Holdings, Inc. sr. secd. disc. notes
zero %, 1998 198,000
100,000 Mohegan Tribal Gaming 144A sr. notes 13-1/2s, 2002 104,750
100,000 Premier Parks, Inc. sr. notes 12s, 2003 103,250
3,700,000 Time Warner, Inc. deb. 9-1/8s, 2013 4,009,727
75,000 Time Warner, Inc. notes 8.18s, 2007 77,381
75,000 Time Warner, Inc. notes 8.11s, 2006 77,147
37,000 Time Warner, Inc. notes 7.975s, 2004 38,009
500 Time Warner, Inc. Floating Rate Note (FRN) 6.835s,
2000 503
5,347,767
Food and Beverages (0.2%)
500,000 Fresh Del Monte Produce Corp. NV Ser. B, sr. notes,
10s, 2003 (Netherlands) 420,000
500,000 PSF Finance (L.P.) sr. exch. notes 12-1/4s, 2004 515,875
125,000 Stater Brothers 144A sr. notes 11s, 2001 126,875
1,062,750
Forest Products (0.2%)
100,000 APP International Finance Co. company guaranty
11-3/4s, 2005 (Netherlands) 102,500
200,000 Domtar, Inc. notes 12s, 2001(Canada) 232,250
250,000 Riverwood International Corp. sr. notes 10-3/4s,
2000 264,375
250,000 Riverwood International Corp. sr. sub. notes
10-3/8s, 2004 266,250
250,000 Stone Container Corp. sr. sub. notes 9-7/8s, 2001 247,500
1,112,875
Health Care (0.5%)
1,340,000 Columbia Healthcare Corp. deb. 8.36s, 2024 1,508,157
100,000 Graphic Controls Corp. 144A sr. sub. notes 12s, 2005 102,000
250,000 Healthsouth Rehabilitaton sr. sub. notes 9-1/2s,
2001 265,000
250,000 McGaw, Inc. sr. notes 10-3/8s, 1999 259,375
250,000 Paracelsus Healthcare Corp. sr. sub. notes 9-7/8s,
2003 252,500
2,387,032
Insurance and Finance (5.0%)
200,000 AIM Management Group sr. secd. notes 9s, 2003 203,000
500,000 American Annuity Group, Inc. sr. sub. notes 11-1/8s,
2003 537,500
18
<PAGE>
CORPORATE BONDS AND NOTES
PRINCIPAL AMOUNT VALUE
Insurance and Finance (continued)
$1,160,000 BAT Capital Corp. 144A med. term notes 6.19s, 2000 $ 1,146,579
500,000 Bankers Life Holding Corp. sr. sub. notes Ser. B,
13s, 2002 570,000
150,000 Centerbank sub. notes 8-3/8s, 2002 152,130
270,000 Chevy Chase Savings Bank Inc. sub. deb. 9-1/4s, 2005 276,075
2,200,000 Citicorp sub. notes 7-1/8s, 2005 2,261,116
250,000 Comdata Network, Inc. sr. notes 12-1/2s, 1999 279,375
3,150,000 Den Danske Bank 144A sub. notes 6.55s, 2003 3,065,013
2,000,000 Goldman, Sachs & Co. 144A deb. 8s, 2013 2,089,400
2,000,000 Great Western Financial Corp. notes 6-1/8s, 1998 1,998,180
175,000 Keystone Group, Inc. sr. secd. notes 9-3/4s, 2003 169,750
2,100,000 Midlantic Banks deb. 9-7/8s, 1999 2,357,481
3,200,000 Penn Central Corp. sub. notes 10-7/8s, 2011 3,309,280
250,000 Phoenix Re Corp. sr. notes 9-3/4s, 2003 264,375
200,000 Reliance Group Holdings, Inc. sr. sub. deb. 9-3/4s,
2003 203,500
2,500,000 Riggs National Corp. sub. deb. 8-1/2s, 2006 2,600,000
2,000,000 Scotland International Finance 144A sub. notes
8.85s, 2006 (United Kingdom) 2,282,500
200,000 Terra Nova Insurance Holdings sr. notes 10-3/4s,
2005 (United Kingdom) 216,000
23,981,254
Lodging (0.2%)
175,000 HMH Properties Inc. 144A sr. notes 9-1/2s, 2005 175,875
300,000 John Q. Hammons Hotels 1st mtge. notes 8-7/8s, 2004 292,500
300,000 La Quinta Motor Inns, Inc. deb. 9-1/4s, 2003 315,000
783,375
Metals and Mining (0.3%)
175,000 Inland Steel Co. 1st mtge. 12s, 1998 192,500
250,000 Ispat Mexicana, SA 144A notes 10-3/8s, 2001 (Mexico) 220,000
250,000 Kaiser Aluminum & Chemical Co. sr. notes 9-7/8s,
2002 256,250
750,000 Noranda Inc. notes 7s, 2005 (Canada) 753,473
1,422,223
Motion Picture Distribution (0.1%)
150,000 AMC Entertainment, Inc. sr. sub. deb. 12 5/8s, 2002 166,500
250,000 United Artists Inc. notes 11-1/2s, 2002 267,500
434,000
Oil and Gas (2.1%)
250,000 Chesapeake Energy Corp. sr. notes 10-1/2s, 2002 252,500
200,000 Gulf Canada Resources Ltd. sr. sub. notes 9-5/8s,
2005 (Canada) 204,500
4,400,000 Occidental Petroleum Corp. sr. notes 11-3/4s, 2011 4,691,852
1,965,000 Parker & Parsley Petroleum Co. sr. notes 8-7/8s,
2005 2,157,786
250,000 Trans Texas Gas Corp. sr. secd. notes 11-1/2s, 2002 261,250
250,000 Triton Energy sr. sub. disc. notes stepped-coupon
zero % (9-3/4s, 12/15/96), 2000++ 231,250
2,030,000 Union Texas Petroleum sr. note 8-3/8s, 2005 2,174,252
9,973,390
19
<PAGE>
CORPORATE BONDS AND NOTES
PRINCIPAL AMOUNT VALUE
Packaging & Container (0.1%)
$ 250,000 Ivex Packaging Corp. sr. sub. notes 12-1/2s 2002 $ 268,750
Railroads (0.1%)
250,000 Westinghouse Air Brake sr. notes 9-3/8s, 2005 261,250
Retail (1.0%)
750,000 County Seat Stores Inc. sr. sub. notes 12s, 2002 675,000
1,035,000 Kmart Corp. pass-through certificate Ser. 95-K3,
8.54s, 2015 934,088
250,000 Loehmanns' Holdings, Inc. sr. notes 10-1/2s, 1997 250,000
200,000 Revco D.S., Inc. sr. notes 9-1/8s, 2000 210,000
500,000 Safeway, Inc. med. term notes 8.57s, 2003 530,000
2,000,000 Sears, Roebuck & Co. med. term notes 5.91s, 1999 1,979,040
4,578,128
Textiles (--%)
200,000 Reeves Industries Inc. sr. sub. notes 11s, 2002 196,000
Transportation (0.1%)
455,000 Blue Bird Body Co. Ser. B, sub. deb. 11-3/4s, 2002 466,375
230,000 Viking Star Shipping sr. secd. notes 9-5/8s, 2003 236,325
702,700
Utilities (4.7%)
2,500,000 Arkla, Inc. notes 8-7/8s, 1999 2,652,175
1,065,000 Citizens Utilities Co. bonds 7.68s, 2034 1,220,000
225,000 Cleveland Electric Illuminating Co. 1st mtge. Ser.
B, 9-1/2s, 2005 225,000
75,000 First PV Funding deb. 10.15s, 2016 75,938
1,100,000 Gulf States Utilities Co. 1st mtge. bonds 8.7s, 2024 1,151,260
796,564 Midland Cogeneration Ventures deb. 10.33s, 2002 836,392
200,000 Midland Funding Corp. II deb. Ser. A, 11 3/4s, 2005 211,000
5,000,000 Old Dominion Electric Co. Ser. 93-A, 1st mtge.
Sinking Fund, 7.78s, 2023 5,279,900
175,000 Texas New Mexico Power deb. 12-1/2s, 1999 196,875
1,685,000 Texas New Mexico Power Utilities 1st mtge. 9-1/4s,
2000 1,784,567
4,700,000 Texas Utilities Electric Co. secd. lease fac. bonds
7.46s, 2015 4,832,446
4,350,000 Toledo Edison med. term. notes 1st mtge. Ser. A,
7.82s, 2003 4,166,865
22,632,418
Total Corporate Bonds and Notes
(cost $91,336,732) $91,973,417
</TABLE>
<TABLE>
<CAPTION>
CONVERTIBLE BONDS AND NOTES (5.1%)*
PRINCIPAL AMOUNT VALUE
<S> <C> <C>
Automotive (0.2%)
$900,000 Magna International cv. sub. deb. 5s, 2002 $ 913,500
Business Equipment and Services (0.1%)
600,000 Unisys Corp. cv. sub. notes 8-1/4s, 2000 495,000
Computer Services and Software (0.1%)
200,000 Sterling Software, Inc. cv. deb. 5-3/4s, 2003 328,750
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
CONVERTIBLE BONDS AND NOTES
PRINCIPAL AMOUNT VALUE
<S> <C> <C>
Consumer Non Durables (0.3%)
$1,750,000 Coleman Worldwide Corp. cv. sr. sec. notes Liquid
Yield Option Note (LYON) zero %, 2013 $ 516,250
1,500,000 Standard Commercial Corp. cv. sub. deb. 7-1/4s, 2007 1,095,000
1,611,250
Consumer Services (1.0%)
3,000,000 Boston Market Inc. cv. notes LYON zero %, 2015 870,000
2,400,000 Comcast Corp. cv. notes 1-1/8s, 2007 1,182,000
1,500,000 Hollinger, Inc. cv. LYON zero %, 2013 455,625
1,500,000 Pharmaceutical Marketing Services Inc. 144A cv. deb.
6-1/4s, 2003 1,200,000
2,000,000 Rogers Communications cv. deb. 2s, 2005 1,012,500
4,720,125
Electronics and Electrical Equipment (0.2%)
2,600,000 ADT Operations Inc. cv. sub. notes zero %, 2010 1,170,000
Environmental Control (0.1%)
335,000 WMX Technologies, Inc. cv. sub. notes 2s, 2005 279,725
Food and Beverages (0.2%)
1,000,000 Grand Metropolitan PLC cv. unsub. notes 6-1/2s, 2000 1,130,000
Health Care (0.5%)
1,000,000 Integrated Health Services cv. sr. sub. deb. 5-3/4s,
2001 955,000
1,200,000 Quantum Health Resources, Inc. cv. deb. 4-3/4s, 2000 933,000
750,000 Theratx Inc. cv. sub. 8s, 2002 697,500
2,585,500
Insurance and Finance (0.7%)
200,000 Banco Nacional de Mexico SA cv. bonds 7s, 1999
(Mexico) 156,000
2,700,000 Mitsubishi Bank Ltd. International Finance
cv. trust guaranteed notes 3s, 2002 (Bermuda) 2,801,250
500,000 Trenwick Group, Inc. cv. deb. 6s, 1999 531,875
3,489,125
Metals and Mining (0.2%)
1,000,000 Quanex Corp. cv. sub. deb. 6.88s, 2007 917,500
Oil and Gas (0.1%)
500,000 Apache Corp. 144A cv. sub. deb. 6s, 2002 531,875
Pharmaceuticals (0.6%)
5,800,000 Roche Holdings, Inc. 144A cv. unsub. LYON zero %,
2010 (Switzerland) 2,407,000
375,000 Sandoz Capital BVI Ltd. 144A cv. company guaranty
2s, 2002 329,063
2,736,063
Real Estate (0.3%)
1,000,000 Camden Property Trust cv. sub. deb. 7.33s, 2001 941,250
600,000 Liberty Property Trust cv. sub. deb. 8s, 2001 615,000
1,556,250
21
<PAGE>
CONVERTIBLE BONDS AND NOTES
PRINCIPAL AMOUNT VALUE
Telecommunications (0.2%)
$1,000,000 Cellular Communications, Inc. 144A cv. sub. deb.
zero %, 1999 $ 825,000
Transportation (0.3%)
900,000 AMR Corp. cv. sub. deb. 6-1/8s, 2024 877,500
365,000 Alaska Air Group cv. deb. 6-1/2s, 2005 344,013
1,221,513
Total Convertible Bonds and Notes
(cost $23,708,752) $24,511,176
</TABLE>
<TABLE>
<CAPTION>
COLLATERALIZED MORTGAGE OBLIGATIONS (3.4%)*
PRINCIPAL AMOUNT VALUE
<S> <C> <C>
$ 809,675 Chase Mortgage Finance Corp. Ser. 93-3, Class B13,
7.461s, 2024 $ 536,410
876,663 Housing Securities Inc. Ser. 91-B, Class B6, 9s,
2006 875,431
202,778 Ser. 93-J, Class J4, 6.66s, 2009 169,383
92,171 Ser. 93-J, Class J5, 6.66s, 2009 65,902
163,043 Ser. 94-1, Class AB1, 6-1/2s, 2009 132,880
2,290,001 Nationsbank of Texas N.A. 144A FRN secd. notes, Ser.
95-1, 7.7s, 1999 2,288,948
706,869 Prudential Home Loan Corp. Ser. 92-25, Class B3,
8s, 2022 565,716
2,189,738 Prudential Home Mortgage Securities 144A Ser. 94-A
Class 4B, 6.8s, 2024 2,029,956
583,517 144A Ser. 94-D Class 3B, 6.31s, 2009 535,559
816,278 144A Ser. 94-D Class B4, 6.312s, 2009 675,726
3,066,814 144A Ser. 95-C, Class B1, 7.84s, 2001 3,085,503
758,515 Ser. 92-13 Class B3, 7-1/2s, 2007 642,012
853,671 Ser. 93-36, Class M, 7-1/4s, 2023 839,666
1,805,710 Ser. 93-B, Class 5B, 7.8366s, 2023 1,108,255
2,138,358 Ser. 93-D, Class 2B, 7.1082s, 2023 1,949,247
1,029,087 Ser. 93-E, Class 5B, 7.3935s, 2023 590,438
206,990 Ser. 94-31, Class B3, 8s, 2009 176,912
Total Collateralized Mortgage Obligations
(cost $15,614,125) $16,267,944
</TABLE>
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED STOCKS (2.8%)*
NUMBER OF SHARES VALUE
<S> <C> <C>
Automotive (0.5%)
23,000 Ford Motor Co. Ser. A, $4.20 dep. shs. cv. pfd. $2,162,000
Broadcasting (--%)
1,500 Granite Broadcasting $1.938 cv. pfd. 77,250
Consumer Non Durables (0.5%)
20,000 Corning Deleware (L.P.) $3.00 cv. pfd. 900,000
36,000 Fieldcrest Cannon Ser. A, $3.00 cv. pfd. 1,656,000
2,556,000
Energy-Related (0.2%)
18,000 Diamond Shamrock, Inc. 144A $2.50 cv. pfd. 1,019,250
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED STOCKS
NUMBER OF SHARES VALUE
<S> <C> <C>
Entertainment (--%)
20,000 Bally Entertainment Corp. $2.00 cv. pfd. $ 222,500
Food and Beverages (0.2%)
15,000 Chiquita Brands Intl. Inc. Ser. A, $5.75 cv. pfd. 753,750
Health Maintenance Organizations (--%)
12,000 FHP International Corp. Ser. A, $1.25 cv. pfd. 285,000
Insurance and Finance (0.3%)
9,000 Sovereign Bancorp Inc. $3.13 cv. pfd. 509,625
25,000 Union Planters Corp. Ser. E, $2.00 cv. pfd. 950,000
1,459,625
Metals and Mining (0.6%)
89,000 Freeport-McMoRan Copper & Gold Co., Inc.
stepped-coupon $1.25 ($1.75, 8/1/96)++ 2,124,875
20,000 Pittston Mineral Corp. $6.25 cv. pfd. 700,000
2,824,875
Oil and Gas (0.5%)
23,000 Ashland, Inc. $3.125 cv. pfd. 1,259,250
21,000 Tejas Gas Corp. $2.65 cv. pfd. 966,000
2,225,250
Total Convertible Preferred Stocks
(cost $13,908,723) $13,585,500
</TABLE>
<TABLE>
<CAPTION>
FOREIGN GOVERNMENT BONDS AND NOTES (2.6%)*
PRINCIPAL AMOUNT VALUE
<S> <C> <C> <C>
DEM 5,950,000 Germany (Republic of) 7-1/8s, 2003 $ 4,437,682
USD 742,000 Quebec (Government of) deb. 8-5/8s, 2005 828,020
GBP 4,108,000 United Kingdom Treasury bonds 9-3/4s, 2002 7,178,710
Total Foreign Government Bonds and Notes (cost
$12,120,323) $12,444,412
</TABLE>
<TABLE>
<CAPTION>
UNITS (0.1%)*
NUMBER OF UNITS VALUE
<S> <C> <C>
475 ICF Kaiser International, Inc. sr. sub. units 12s, 2003 $446,500
250 Total Renal Care, Inc. units stepped-coupon zero %
(12s, 8/15/99), 2004++ 256,250
Total Units (cost $686,536) $702,750
</TABLE>
<TABLE>
<CAPTION>
WARRANTS (--%)*+
NUMBER OF WARRANTS EXPIRATION DATE VALUE
<S> <C> <C> <C>
95 General Media Corp. 144A 12/31/00 $ 950
900 Louisiana Casino Cruises, Inc. 144A 12/1/98 13,500
Total Warrants (cost $7,273) $14,450
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (2.1%)* (cost $9,930,616)
PRINCIPAL AMOUNT VALUE
<S> <C> <C>
$9,929,000 Interest in $357,916,000 joint repurchase
agreement dated October 31, 1995 with Lehman
Brothers Inc., due November 1, 1995 with
respect to various U.S. Treasury
obligations--maturity value of $9,930,616 for
an effective yield of 5.86% $ 9,930,616
Total Investments (cost $447,806,517)*** $474,785,833
</TABLE>
*Percentages indicated are based on net assets of $479,319,744.
+Non-income-producing security.
++The interest or dividend rate and date shown parenthetically represent
the new interest or dividend rate to be paid and the date the fund will
begin receiving interest or dividends at this rate.
++++Income may be received in cash or additional securities at the discretion
of the issuer.
***The aggregate identified cost for federal income tax purposes is
$448,189,853, resulting in gross unrealized appreciation and depreciation
of $37,545,694 and $10,949,714, respectively, or net unrealized
appreciation of $26,595,980.
The rates shown on FRN, which are securities paying interest rates that
vary to changes in the market interest rates, are the current interest
rates at October 31, 1995, which are subject to change based on the terms
of the security.
Forward Currency Contracts to Sell at October 31, 1995
<TABLE>
<CAPTION>
Market Aggregate Delivery Unrealized
Value Face Value Date (Depreciation)
<S> <C> <C> <C> <C>
British Pounds $ 6,670,868 $ 6,541,951 12/13/95 $(128,917)
Deutschemarks 4,116,306 3,941,315 12/13/95 (174,991)
$10,787,174 $10,483,266 $(303,908)
</TABLE>
ADR or ADS after the name of a holding stands for American Depository Receipt
or American Depository Shares, respectively, representing ownership of
foreign securities on deposit with a domestic custodian bank.
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.
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
Statement of assets and liabilities
October 31, 1995
<TABLE>
<S> <C>
Assets
Investments in securities, at value (identified cost $447,806,517) (Note 1) $474,785,833
Cash 35,882
Dividends, interest and other receivables 5,492,052
Receivable for shares of the fund sold 125,249
Receivable for securities sold 22,750,815
Total assets 503,189,831
Liabilities
Payable for securities purchased 21,673,203
Payable for shares of the fund repurchased 225,824
Payable for compensation of Manager (Note 2) 783,737
Payable for administrative services (Note 2) 811
Payable for compensation of Trustees (Note 2) 484
Payable for investor servicing and custodian fees (Note 2) 206,697
Payable for distribution fees (Note 2) 108,863
Other accrued expenses 130,212
Payable for open forward currency contracts 303,908
Payable for closed forward currency contracts 436,348
Total liabilities 23,870,087
Net assets $479,319,744
Represented by
Paid-in capital (Note 4) $443,897,838
Undistributed net investment income (Note 1) 303,908
Accumulated net realized gain on investment transactions (Note 1) 8,437,582
Net unrealized appreciation of investments and assets and liabilities in
foreign currencies 26,680,416
Total--Representing net assets applicable to capital shares outstanding $479,319,744
Computation of net asset value and offering price
Net asset value and redemption price of class A shares
($468,724,515 divided by 47,634,945 shares) $9.84
Offering price per share (100/94.25 of $9.84)* $10.44
Net asset value and offering price of class B shares
($10,073,396 divided by 1,027,902 shares)** $9.80
Net asset value and redemption price of class M shares
($521,833 divided by 53,154 shares) $9.82
Offering price per share (100/96.50 of $9.82)* $10.18
</TABLE>
*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.
25
<PAGE>
Statement of operations
Year ended October 31, 1995
<TABLE>
<S> <C>
Investment income:
Interest $19,544,542
Dividends (net of foreign tax of $35,667) 8,107,245
Total investment income 27,651,787
Expenses:
Compensation of Manager (Note 2) 2,979,923
Investor servicing and custodian fees (Note 2) 832,039
Compensation of Trustees (Note 2) 17,134
Reports to shareholders 78,765
Auditing 47,525
Legal 22,297
Postage 121,189
Distribution fees--class A (Note 2) 1,129,769
Distribution fees--class B (Note 2) 66,028
Distribution fees--class M (Note 2) 823
Administrative services (Note 2) 9,711
Other 41,436
Total expenses 5,346,639
Expense reduction (Note 2) (246,764)
Net expenses 5,099,875
Net investment income 22,551,912
Net realized gain on investments (Notes 1 and 3) 9,314,099
Net realized gain on forward currency contracts and foreign currency
translation (Notes 1 and 3) 362,878
Net unrealized appreciation of investments, forward currency contracts and
foreign currency translation during the year 48,139,850
Net gain on investments 57,816,827
Net increase in net assets resulting from operations $80,368,739
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
Statement of changes in net assets
<TABLE>
<CAPTION>
Year ended
October 31
1995 1994
<S> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income $ 22,551,912 $ 24,396,806
Net realized gain on investments and foreign
currency translation 9,676,977 5,850,454
Net unrealized appreciation (depreciation) of
investment and assets and liabilities in foreign
currencies 48,139,850 (34,072,630)
Net increase (decrease) in net assets resulting
from operations 80,368,739 (3,825,370)
Distributions to shareholders:
From net investment income:
Class A (22,841,206) (24,376,662)
Class B (278,156) (41,307)
Class M (3,268) --
From net realized gain on investments
Class A (23,194) (5,806,154)
Class B (500) (44,300)
Class M (26) --
In excess of net realized gain on investments
Class A -- (176,371)
Class B -- (1,346)
Class M -- --
Decrease from capital share transactions (Note 4) (37,398,366) (57,623,727)
Total increase (decrease) in net assets 19,824,023 (91,895,237)
Net assets
Beginning of year 459,495,721 551,390,958
End of year (including undistributed net
investment income of $303,908 and $0,
respectively) $479,319,744 $459,495,721
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
Financial highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
For the period February 1, 1994
March 17, 1995 (commencement
(commencement of operations)
of operations) to Year ended to
October 31 October 31 October 31
1995 1995 1994
Class M Class B
<S> <C> <C> <C>
Net asset value, beginning of period $8.88 $8.67 $9.31
Investment operations
Net investment income .25 .38 .34
Net realized and unrealized gain (loss) on investments .90 1.15 (.60)
Total from investment operations 1.15 1.53 (.26)
Less distributions:
From net investment income (.21) (.40) (.27)
From net realized gain on investments -- -- (.11)
Tax returns of capital -- -- --
Total distributions (.21) (.40) (.38)
Net asset value, end of period $9.82 $9.80 $8.67
Total investment return at net asset value (%) (a) 13.13(b) 18.25 (2.75)(b)
Net assets, end of period (in thousands) $522 $10,073 $4,196
Ratio of expenses to average net assets (%) (c) 1.09(b) 1.91 1.34(b)
Ratio of net investment income to average
net assets (%) 2.76(b) 4.09 3.20(b)
Portfolio turnover (%) 131.00 131.00 125.69
</TABLE>
*During fiscal year 1992, the fund expanded its investment flexibility to
include corporate bonds, foreign securities, warrants and restricted
securities. Accordingly, results of operations prior to fiscal 1992, as
presented above, may not reflect those that would have been achieved under
the fund's current investment policies. (Note 1).
(a)Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b)Not annualized.
(c)The ratio of expenses to average net assets for the year ended October 31,
1995 included amounts paid through brokerage service and expenses offset
arrangements. Prior period ratios exclude these amounts. See Note 2.
28
<PAGE>
<TABLE>
<CAPTION>
Year ended October 31
1995 1994 1993 1992* 1991
Class A
<S> <C> <C> <C> <C> <C>
$8.68 $9.28 $8.50 $8.56 $7.47
.45 .43 .45 .16 .21
1.17 (.49) .99 .74 1.87
1.62 (.06) 1.44 .90 2.08
(.46) (.43) (.45) (.16) (.19)
-- (.11) (.21) (.80) (.75)
-- -- -- -- (.05)
(.46) (.54) (.66) (.96) (.99)
$9.84 $8.68 $9.28 $8.50 $8.56
19.32 (.61) 17.68 11.15 29.29
$468,725 $455,299 $551,391 $633,181 $699,858
1.15 1.08 1.02 1.11 1.09
4.93 4.92 5.06 1.87 2.56
131.00 125.69 224.28 118.43 135.18
</TABLE>
29
<PAGE>
Notes to financial statements
October 31, 1995
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end management investment company. The fund seeks high
current return by investing in a diversified portfolio of equity and debt
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 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
policies are in conformity with generally accepted accounting principles.
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 no sales are reported--as in the case of some
securities traded over-the-counter--the last reported bid price, except that
certain U.S. government obligations are stated at the mean between the last
reported bid and asked prices. Securities quoted in foreign currencies are
translated into U.S. dollars at the current exchange rate. Short-term
investments having remaining maturities of 60 days or less are stated at
amortized cost, which approximates market value, and other investments are
stated at fair market value following procedures approved by the Trustees.
Market quotations are not considered to be readily available for certain
long-term corporate bonds and notes; 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.
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 managed by Putnam Investment Management, Inc. ("Putnam
Management"), the fund's Manager, a wholly-owned subsidiary of Putnam
Investments, Inc., and certain other accounts. These balances may be
30
<PAGE>
invested in one or more repurchase agreements and/or short-term money market
instruments.
C) Repurchase agreements The fund, 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. The fund's Manager 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. Discount on zero-coupon, stepped-coupon and payment in kind
bonds is accreted according to the effective yield method.
E) Forward currency contracts The fund may engage in forward currency
contracts, which are agreements between two parties to buy and sell
currencies at a set price on a future date, to protect against a decline in
value relative to the U.S. dollar of the currencies in which its portfolio
securities are denominated or quoted (or an increase in the value of a
currency in which securities a fund intends to buy are denominated, when a
fund holds cash reserves and short-term investments). The market value of the
contract will fluctuate with changes in currency exchange rates. The contract
is "marked to market" daily and the change in market value is recorded as an
unrealized gain or loss. When the contract is closed, the fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
The fund could be exposed to risk if the value of the currency changes
unfavorably, if the counterparties to the contracts are unable to meet the
terms of their contracts or if the fund is unable to enter into a closing
position. The maximum potential loss from forward currency contracts is the
aggregate face value in U.S. dollars at the time the contract was opened;
however, Putnam Management believes the likelihood of such a loss to be
remote.
F) Federal taxes It is the policy of the fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986. Therefore, no provision has been made for federal taxes on income,
capital gains or unrealized appreciation of securities held and excise tax on
income and capital gains.
G) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date. Capital
gain distributions, if any, are recorded on the ex-dividend date and paid
annually. The amount and character of income and gains to be distributed are
determined in accordance with the income tax regulations which may differ
from generally accepted accounting principles. These differences include
treatment of realized and unrealized gains and losses on forward foreign
currency contracts, market discount, paydown gains and losses on mortgage
backed securities and losses on wash sale transactions. Reclassifications are
made to the fund's capital accounts to reflect income and gains available for
distribu-
31
<PAGE>
tion (or available capital loss carryovers) under income tax regulations.
For the year ended October 31, 1995, the fund reclassified $874,626 to
increase undistributed net investment income and $1,423 to increase
paid-in-capital, with a decrease to accumulated net realized gains of
$876,049. The calculation of net investment income per share in the financial
highlights table excludes these adjustments.
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 for
the quarter. Such fee is based on the following annual rates: 0.65% of the
first $500 million of average net assets, 0.55% of the next $500 million,
0.50% of the next over $500 million, and 0.45% of any amount over $1.5
billion. This fee is subject, under current law, to reduction in any year to
the extent that expenses (exclusive of distribution fees, brokerage,
interest, taxes and credits allowed by PFTC) of the fund exceed 2.5% of the
first $30 million of average net assets. 2.0% of the next $70 million and
1.5% of any amount over $100 million, and by the amount of certain brokerage
commissions and fees (less expenses) received by affiliates of the Manager on
the fund's portfolio transactions.
The fund reimburses Putnam Management for 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.
Trustees of the fund receive an annual Trustee's fee of $1,010, and an
additional fee for each Trustees' meeting attended. Trustees who are not
interested persons of the Manager and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings.
During the year ended October 31, 1995, the fund adopted a Trustee Fee
Deferral Plan (the "Plan") which allows the Trustees to defer the receipt of
all or a portion of Trustees fees payable on or after July 1, 1995. The
deferred fees remain in the fund and are invested in the fund or in other
Putnam funds until distribution in accordance with the Plan.
Custodial functions for the funds are provided by Putnam Fiduciary Trust
Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor Services,
a division of PFTC.
For the year ended October 31, 1995, fund expenses were reduced by $246,764
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 offset arrangements in an
income-producing asset if it had not entered into such expense offset
arrangements.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments,
Inc., for services provided and expenses incurred by it in distributing
shares of the fund. The Plans provide for payments by the fund to Putnam
Mutual Funds Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the
average net assets attributable to class A, class B and class M shares,
respectively. The Trustees have approved payment by the fund at an annual
rate
32
<PAGE>
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 year ended October 31, 1995, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $55,650 from the sale of class A
shares, $11,307 in contingent deferred sales charges from redemptions of
class B shares, and net commissions of $1,075 from the sale of class M
shares. A deferred sales charge of up to 1% is assessed on certain
redemptions of class A. For the year ended October 31, 1995, Putnam Mutual
Funds Corp., acting as underwriter received no deferred sales charges on
class A redemptions.
Note 3
Purchases and sales of securities
During the year ended October 31, 1995, purchases and sales of investment
securities other than U.S. government obligations and short-term investments
aggregated $253,522,893 and $274,302,581, respectively. Purchases and sales
of U.S. government obligations aggregated $321,491,746 and $332,631,061,
respectively. 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 October 31, 1995, there was an unlimited number of shares of beneficial
interest authorized, divided into three classes, class A, class B and class M
capital shares. Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Year ended October 31
1995 1994
Class A Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 3,666,969 $ 34,258,708 1,996,341 $ 17,703,585
Shares issued in
connection with
reinvestment of
distributions 1,527,615 13,617,752 1,913,722 16,905,211
5,194,584 47,876,460 3,910,063 34,608,796
Shares repurchased (9,988,950) (90,819,921) (10,870,674) (96,488,990)
Net decrease (4,794,366) $(42,943,461) (6,960,611) $(61,880,194)
</TABLE>
<TABLE>
<CAPTION>
For the period
February 1, 1994
(commencement of
Year ended operations) to
October 31 October 31
1995 1994
Class B Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 869,347 $ 8,068,014 528,835 $4,648,625
Shares issued in
connection with
reinvestment of
distributions 19,011 171,458 5,566 48,364
888,358 8,239,472 534,401 4,696,989
Shares repurchased (344,450) (3,202,711) (50,407) (440,522)
Net increase 543,908 $ 5,036,761 483,994 $4,256,467
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
For the period March 17, 1995
(commencement of operations)
to October 31
1995
Class M Shares Amount
<S> <C> <C>
Shares sold 53,846 $515,096
Shares issued in connection
with reinvestment of
distributions 288 2,727
54,134 517,823
Shares repurchased (980) (9,489)
Net increase 53,154 $508,334
</TABLE>
Federal tax information (Unaudited)
The fund has designated 25.45% of the distributions from net investment
income as qualifying for the dividends received deduction for corporations.
The Form 1099 you receive in January 1996 will show the tax status of all
distributions paid to your account in calendar 1995.
34
<PAGE>
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
INDEPENDENT
ACCOUNTANTS
Price Waterhouse LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Brett C. Browchuk
Vice President
Thomas V. Reilly
Vice President
Edward P. Bousa
Vice President and Fund Manager
Kenneth J. Taubes
Vice President and Fund Manager
Rosemary H. Thomsen
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
John D. Hughes
Senior Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Balanced
Retirement 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.
Shares of mutual funds are not deposits or obligations of, or guaranteed or
endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board or any other
agency; and involve risk, including the possible loss of principal amount
invested.
35
<PAGE>
PUTNAM INVESTMENTS Bulk Rate
The Putnam Funds U.S. Postage
One Post Office Square PAID
Boston, Massachusetts 02109 Putnam
Investments
21701-034/243/908 12/95
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS:
(1) Bold and italic typefaces are displayed in normal type.
(2) Headers (e.g., the name of the fund) are omitted.
(3) Certain tabular and columnar headings and symbols are displayed
differently in this filing.
(4) Bullet points and similar graphic signals are omitted.
(5) Page numbering is omitted.
(6) Trademark symbol replaced with (TM); Service Mark symbol is replaced
with (SM)
