PUTNAM
GLOBAL
GROWTH
FUND
[Artwork]
SEMIANNUAL REPORT
April 30, 1995
[Putnam Logo]
Boston * London * Tokyo
<PAGE>
PERFORMANCE HIGHLIGHTS
"Opportunities abound in markets around the world, and we believe Putnam Global
Growth Fund is well positioned to pursue such diverse possibilities. In markets
from Europe to Asia, the fund is supported by Putnam's long-time commitment to
intensive research, on-site visits, and investment expertise."
-- Anthony Regan, fund manager
SEMIANNUAL RESULTS AT A GLANCE
- -------------------------------------------------------------------------------
CLASS A CLASS B
TOTAL RETURN: NAV POP NAV CDSC
- -------------------------------------------------------------------------------
(change in value during period
plus reinvested distributions)
6 months ended 4/30/95 -2.71% -8.34% -3.07% -7.75%
- -------------------------------------------------------------------------------
CLASS M (1)
SHARE VALUE: NAV POP NAV NAV POP
- -------------------------------------------------------------------------------
10/31/94 $9.92 $10.53 $9.74 -- --
3/1/95 -- -- -- $8.86 $9.18
4/30/95 9.33 9.90 9.12 9.33 9.67
- -------------------------------------------------------------------------------
CAPITAL GAINS
DISTRIBUTIONS: NO. INCOME LONG-TERM SHORT-TERM TOTAL
- -------------------------------------------------------------------------------
Class A 1 -- $0.272 $0.041 $0.313
Class B 1 -- $0.272 0.041 0.313
- ------------------------------------------------------------------------------
Performance data represent past results and will differ for each share class.
For performance over longer periods, see pages 8 and 9. (1) Class M shares were
introduced on 3/1/95; total return is not shown because of the brevity of the
reporting period. POP assumes 5.75% maximum sales charge for class A shares
and 3.50% for class M shares. CDSC assumes 5% maximum contingent deferred sales
charge.
<PAGE>
FROM THE CHAIRMAN [Photograph of George Putnam]
* (C) Karsh, Ottawa
DEAR SHAREHOLDER:
WHEN PUTNAM GLOBAL GROWTH FUND BEGAN FISCAL 1995 LAST FALL, INTERNATIONAL INVES-
TORS WERE WORRIED THAT EUROPE'S ECONOMIC GROWTH RATE WAS TOO RAPID TO BE SUS-
TAINABLE AND CONFIDENT THAT JAPAN'S ECONOMY WAS POISED TO IMPROVE.
SIX MONTHS LATER, EXPECTATIONS FOR A STRONGER JAPANESE ECONOMY HAVE BEEN DAM-
PENED IN THE WAKE OF THE KOBE EARTHQUAKE. MEANWHILE, EUROPE'S ECONOMIC RECOVERY
HAS CONTINUED AND MAY INDEED HAVE PEAKED. IN ANY CASE, CONDITIONS IN FOREIGN
MARKETS CAN CHANGE RAPIDLY; INVESTORS SHOULD BE PREPARED FOR FLUCTUATIONS.
EXTREME VOLATILITY IN THE CURRENCY MARKETS CHARACTERIZED THE INTERNATIONAL IN-
VESTING ENVIRONMENT THROUGHOUT THE SEMIANNUAL PERIOD. THE DOLLAR'S STEEP DECLI-
NE, BEGINNING IN FEBRUARY, CONTRIBUTED TO THE DIFFICULTY OF MAKING GLOBAL IN-
VESTMENT DECISIONS, AND CONTINUES TO BE A FACTOR IN CERTAIN WORLD MARKETS.
DESPITE THE UNCERTAINTIES, FUND MANAGERS ANTHONY REGAN AND GERALD ZUKOWSKI BE-
LIEVE THE OVERALL ENVIRONMENT FOR INTERNATIONAL EQUITY INVESTING REMAINS POSITI-
VE. THEY DISCUSS THE FUND'S PERFORMANCE AND PROSPECTS IN THE REPORT THAT FO-
LLOWS.
RESPECTFULLY YOURS,
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
JUNE 21, 1995
* (C) Copyright
<PAGE>
REPORT FROM THE FUND MANAGERS
ANTHONY W. REGAN
GERALD ZUKOWSKI
Over the six months ended April 30, 1995, events including the Mexican liquidity
crunch, the collapse of Barings Bank, the Kobe earthquake, and the falling U.S.
dollar have shaken international financial markets. Thus, despite strong corpo-
rate earnings in many countries, the performance of most global funds has been
disappointing over this period -- Putnam Global Growth Fund among them.
Your fund's semiannual returns were closely in line with those of 123 global
funds tracked by Lipper Analytical Services, which slipped an average of -2.47%
over the period. However, your fund's performance over a longer span is more
competitive, as the results on pages 8 and 9 of this report show. Because time
tends to smooth out fluctuations in the global economy, a longer-term perspec-
tive is particularly important when evaluating international investments.
JAPAN SLUMPS UNDER YEN'S WEIGHT
There are two central reasons for your fund's difficulties during the period:
Japan's continuing economic stagnation and the U.S. dollar's decline. In late
1994, we anticipated that the dollar would strengthen against the yen, and moved
to protect the portfolio's large Japanese holdings with defensive hedges. Ins-
tead, the reverse happened -- the yen soared to record highs against the dollar.
This stifled the Japanese stock market, which was already struggling after the
devastating Kobe earthquake, and cut into the fund's returns.
We have since trimmed the fund's weighting in Japan to around 19% of net assets.
However, despite Japan's recent troubles, we believe it prudent to remain in-
vested there. Japan boasts the world's second largest economy and many interna-
tionally competitive companies. In any case, we are guardedly optimistic about
conditions there over the coming months. We consider it a distinct possibility
that the Japanese government, energized by crisis, may cut interest rates, in-
crease public-sector spending, and reduce taxes. We believe that such moves, if
implemented, should stimulate the economy and weaken the overvalued yen.
<PAGE>
We have added to the fund's holdings elsewhere in the region. Southeast Asia
now represents around 11% of the fund's net assets. The fundamental economic
strength of Hong Kong, Singapore, and Thailand cannot be overlooked. Each has
been remarkably successful in developing domestic industries, technological pro-
wess, and financial sophistication. Furthermore, in the coming months, poten-
tially lower interest rates in the United States could stimulate Asian markets,
which are particularly sensitive to the direction of U.S. economic policy.
EUROPE: SUPPORTED BY CORPORATE RESTRUCTURING
We are acknowledging fundamental European economic health by keeping approxima-
tely 38% of the fund's net assets invested on the Continent. Many Western Euro-
pean corporations, once languishing under slow growth, are today reaping the re-
wards of reorganization. Widespread corporate restructuring has helped to bols-
ter profits in the United Kingdom, France, Ireland, and the Netherlands. Many
airlines, financial services firms, and industrial producers are enjoying grow-
ing profits and strong balance sheets. One major exception is Germany, which,
like Japan, has an export-driven economy struggling with an overpriced currency.
[Bar Chart - Page 5]
PORTFOLIO ALLOCATION *
4/30/95 10/31/94
Europe 38.30 37.10
Japan 19.70 23.50
US 31.00 26.70
Asia (ex Japan) 10.80 9.80
Latin America 0.60 1.10
* Based on net assets as of the indicated date. Will vary over time.
<PAGE>
Germany's current difficulties may ultimately benefit Europe overall. Germany's
interest rate reduction in March was meant to relieve the overvalued deutsche-
mark, and could be a precursor to further fiscal loosening. Such a move could
take pressure off other European Union member economies whose rates are closely
tied to Germany's. In turn, widespread easing of interest rates might help to
spark European demand and relieve the unemployment still vexing otherwise vigo-
rous economies such as France's.
We are particularly upbeat about several European companies in the fund's port-
folio. KLM, the Dutch airline, has steadily expanded profits while trimming
costs. Michelin, the French tire manufacturer, has also improved profit margins;
the firm is expanding its market share even as world demand for tires grows.
Union Bank of Switzerland may be poised for strong performance in the months
ahead, with its healthy balance sheet and the prospect of lower Swiss interest
rates.
U.S. STOCKS ENJOY A BROAD, SUSTAINED RALLY
In November, shortly after our last report to you, the U.S. stock market appea-
red stalled. As of this writing, the American market is in the midst of a pro-
foundly strong rally. 1994's robust GDP growth appears to have slowed to a level
deemed acceptable by the Federal Reserve Board, whose inflation-fighting inte-
rest rate increases can stifle the domestic economy. The improving outlook for
interest rates, coupled with strong corporate earnings, have helped fuel the
exuberant market.
While such dramatic increases in prices are unlikely to continue, we believe the
U.S. market remains attractive; accordingly, we have added to the fund's domes-
tic holdings. They now account for around 31% of the fund's net assets, up from
25% at the start of the current fiscal year. We are emphasizing large-capitali-
zation stocks, which currently lead the market and may continue to do well even
in a slowing economy. We have also purchased shares of financial companies, such
as Chemical Bank, which could benefit from the thriving bond market and a posi-
tive interest rate outlook.
One company in the fund's portfolio, IBM, embodies many of the positive changes
we have seen in the United States. After years of declining earnings, IBM recen-
tly embarked on a massive
<PAGE>
NET CHANGE IN STOCK MARKETS
LOCAL
6 MONTHS ENDED 4/30/95 CURRENCY U.S. $
- -------------------------------------------------------
U.K. 4.82% 3.46%
France 3.07 8.43
Netherlands 0.92 10.12
Spain -2.61 -0.75
Germany -2.47 6.38
Switzerland 3.74 14.28
Japan -14.55 -1.40
Australia 2.65 0.66
Hong Kong -13.47 -13.63
Singapore -10.46 -5.53
Malaysia -14.63 -11.61
United States N/A 10.54
World Index N/A 4.56
World Index (ex U.S.) N/A 1.21
Source: MSCI country indexes. Will vary over time.
restructuring process. Today, many of its core products are selling well, recent
quarterly earnings have been robust, and the company's stock price has responded
accordingly.
THE OUTLOOK: WATCH JAPAN
The fluctuations of the past six months serve as a reminder that global inves-
ting poses unique challenges. But foreign markets can also give investors
access to vast possibilities. Companies from Asia to the United States are tra-
ding widely, emphasizing competitiveness, and striving to innovate. Around the
world, opportunities abound for the patient investor.
In the months ahead, we will closely monitor Japan's progress and the direction
of the yen, both of which will affect the performance of your fund. In certain
southeast Asian countries, we envision increasing economic vigor. Corporate
earnings in Europe may continue to accelerate. And we believe the U.S. market
still has room left to grow. In short, we are cautiously optimistic that the
coming months will bring a more positive environment for global equities.
The views expressed here are exclusively those of Putnam Management. They are
not meant as investment advice. Although the described holdings were viewed fa-
vorably as of 4/30/95, there is no guarantee the fund will continue to hold
these securities in the future. International investing involves certain risks,
such as currency fluctuations and political instability.
<PAGE>
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, assum-
ing you held the shares through the entire period and reinvested all distribu-
tions 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 va-
rying periods.
Performance should always be considered in light of a fund's investment strate-
gy. Putnam Global Growth Fund is designed for investors seeking capital appre-
ciation through a globally diversified equity portfolio.
TOTAL RETURN FOR PERIODS ENDED 4/30/95
MORGAN
STANLEY
CAPITAL S&P
CLASS A CLASS B INTERNATIONAL 500
NAV POP NAV CDSC EAFE WORLD INDEX
- -------------------------------------------------------------------------------
6 months -2.71% -8.34% -3.07% -7.75% 1.24% 4.56% 10.46%
- -------------------------------------------------------------------------------
1 year 1.17 -4.63 0.44 -4.41 5.59 9.74 17.44
- -------------------------------------------------------------------------------
5 years 49.62 40.95 -- -- 43.03 53.66 80.85
Annual average 8.39 7.11 -- -- 7.42 8.97 12.58
- -------------------------------------------------------------------------------
10 years 319.05 294.85 -- -- 387.66 296.32 296.60
Annual average 15.41 14.72 -- -- 17.17 14.77 14.77
- -------------------------------------------------------------------------------
Life of class B -- -- 29.37 26.37 49.78 41.95 34.91
Annual average -- -- 8.93 8.08 14.43 12.39 10.50
- -------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 3/31/95
(most recent calendar quarter)
CLASS A CLASS B
NAV POP NAV CDSC
- -------------------------------------------------------------------------------
1 year 0.23% -5.54% -0.42% -5.23%
- -------------------------------------------------------------------------------
5 years 44.20 35.88 -- --
Annual average 7.59 6.32 -- --
- -------------------------------------------------------------------------------
10 years 307.56 284.17 -- --
Annual average 15.09 14.41 -- --
- -------------------------------------------------------------------------------
Life of class B -- -- 25.40 22.40
Annual average -- -- 8.03 7.14
- -------------------------------------------------------------------------------
Fund performance data do not take into account any adjustment for taxes payable
on reinvested distributions. The Fund began offering what are now known as class
A shares on 9/1/67. Effective 4/27/92, the fund began offering class B shares,
and on 3/1/95, class M shares. Performance for class M shares is not shown be-
cause of the brevity of the reporting period. Performance data represent past
results and will differ for each share class. Investment returns and principal
value will fluctuate so an investor's shares, when sold, may be worth more or
less than their original cost.
<PAGE>
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 liabili-
ties, divided by the number of outstanding shares, not including any initial or
contingent deferred sales charge.
PUBLIC OFFERING PRICE (POP) is the price of a mutual fund share plus the maximum
sales charge levied at the time of purchase. POP performance figures shown here
assume the maximum 5.75% sales charge for class A shares and 3.50% for class M
shares.
CONTINGENT DEFERRED SALES CHARGE (CDSC) is a charge applied at the time of the
redemption of class B shares and assumes redemption at the end of the period.
Your fund's CDSC declines from a 5% maximum during the first year to 1% during
the sixth year. After the sixth year, the CDSC no longer applies.
COMPARATIVE BENCHMARKS
STANDARD & POOR'S 500 INDEX is an unmanaged list of common stocks that is fre-
quently used as a general measure of stock market performance.
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX is an unmanaged list of global
equity securities, with all values expressed in U.S. dollars.
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX is an unmanaged list of equity
securities from Europe, Australia and the Far East, with all values expressed in
U.S. dollars.
Indexes assume reinvestment of all distributions and does not take into account
brokerage commissions or other costs. The fund's portfolio contains securities
that do not match those in the indexes.
<PAGE>
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund Capital Appreciation Fund *
Diversified Equity Trust Europe Growth Fund
Global Growth Fund Health Sciences Trust
Investors Fund Natural Resources Fund
New Opportunities Fund OTC Emerging Growth Fund
Overseas Growth Fund Vista Fund
Voyager Fund
PUTNAM GROWTH AND INCOME FUNDS
Convertible Income-Growth Trust Growth and Income Fund II
Managed Income Trust The George Putnam Fund of Boston
The Putnam Fund for Growth and Income Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
Adjustable Rate U.S. Government Fund American Government Income Fund
Diversified 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
LIFESTAGE (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 +++
* Temporarily closed to new investors.
+ Not available in all states.
++ Relative to above.
+++ 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, in-
cluding charges and expenses. please read it carefully before you invest or
send money.
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
April 30, 1995 (Unaudited)
COMMON STOCKS (93.4%)*
NUMBER OF SHARES VALUE
ARGENTINA (0.4%)
- -------------------------------------------------------------------------------
500,000 Astra CIA Argentina DE Petro $ 693,000
53,175 Banco De Galicia y Buenos Aires Class B ADR 857,447
345,500 Banco Frances del Rio De La Plata S.A. + 2,193,925
50,000 Banco Frances del Rio De La Plata S.A. ADR + 918,750
49,700 Capex S.A. 144A GDR + 733,075
200,364 Cia Naviera Perez Companc S.A. + 817,485
590,235 Ciadea + 2,744,592
75,000 Telecom Argentina Class B 325,500
10,200 Telecom Argentina S.A. ADR 446,250
----------------
9,730,024
AUSTRALIA (1.1%)
- -------------------------------------------------------------------------------
1,196,752 Amcor, Ltd. 8,789,784
3,000,000 Biota Holdings Ltd. + 3,381,600
17,083,000 Sydney Harbor Casino 14,284,805
----------------
26,456,189
AUSTRIA (0.2%)
- -------------------------------------------------------------------------------
410,000 Mayr-Melnhof Karton AG 144A ADS 5,893,750
BELGIUM (1.6%)
- -------------------------------------------------------------------------------
21,500 Bekaert S.A. 16,763,986
39,200 Solvay S.A. 21,004,896
----------------
37,768,882
BRAZIL (0.1%)
- -------------------------------------------------------------------------------
27,615 Comp Energetica De Minas Gerais (Cemig) 144A ADS 631,693
24,700,000 Companhia Siderurgica Nacional 642,469
2,353,000 Eletrobras de Brazil 642,896
26,600 Telebras Co. ADR 947,625
49,700 Usiminas Siderurg Minas 144A ADR 599,506
----------------
3,464,189
CHILE (--%)
- -------------------------------------------------------------------------------
60,600 Banco Osorno y La Union ADR 727,200
COLUMBIA (--%)
- -------------------------------------------------------------------------------
39,000 Cementos Paz Delaware Rio 144A ADR + 633,750
DENMARK (0.7%)
- -------------------------------------------------------------------------------
630,850 Tele Danmark A/S ADS 16,559,813
FINLAND (0.8%)
- -------------------------------------------------------------------------------
910,000 Repola 18,281,081
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
FRANCE (7.0%)
- -------------------------------------------------------------------------------
41,536 Cetelem Group $ 8,762,621
203,100 Credit Local de France S.A. 17,278,956
42,682 Docks de France S.A. 6,361,133
211,000 Lafarge Coppee (Bearer) 16,408,732
400,000 Michelin Corp. Class B (Registered) + 17,908,640
156,200 Pechiney International 3,996,190
103,000 Peugeot S.A. 14,827,818
630,000 SGS-Thomson Microelectronics ADR + 23,467,500
140,000 Societe Generale D.Enterprises 15,350,258
249,324 Societe Nationale Elf Aquitaine (Bearer) 19,880,098
36,200 Sommer-Allibert 13,803,777
171,991 Ugine S.A. (Bearer) 12,152,867
41,740 Union Assurance 1,132,277
----------------
171,330,867
GERMANY (1.8%)
- -------------------------------------------------------------------------------
29,295 Schering AG 21,733,638
57,000 VEBA AG 21,226,031
----------------
42,959,669
HONG KONG (2.4%)
- -------------------------------------------------------------------------------
1,010,000 Chen Hsong Holdings 544,693
1,240,000 Cheung Kong Holdings Ltd. 5,222,012
362,000 Consolidated Electric Power Asia Ltd. 792,635
3,100,000 Golden Resources Dev. Intl. Ltd. 236,220
1,446,200 Guoco Group Ltd. 5,492,668
1,158,556 HSBC Holdings PLC 13,432,414
1,724,000 Hong Kong Electric Holdings, Ltd. 5,289,404
3,500,000 Hong Kong Land Holdings Ltd. 6,580,000
3,142,000 Hong Kong Telecommunications Ltd. 6,149,208
917,000 Hutchison Whampoa, Ltd. 3,980,239
755,000 Jinhui Shipping & Transp. ADR + 830,500
790,000 National Mutual Asia Ltd. 461,834
1,235,700 Swire Pacific Ltd. Class A 8,260,902
337,000 Varitronix International Ltd. 491,953
----------------
57,764,682
INDIA (0.2%)
- -------------------------------------------------------------------------------
66,300 Autoriders Finance Ltd. + 559,182
36,000 East India Hotel 144A GDR + 490,680
50,000 Gujarat Narmada Valley Fertilizer 144A GDR + 437,500
50,900 India Cements Ltd. 144A GDR 483,550
21,800 India Magnum Fund Class A (acquired 3/23/95
shares 21,800 cost $1,177,200) + ++ 1,046,400
31,400 Indian Hotels, Ltd. 144A GDR 521,240
55,600 Indian Petrochemicals Corp. Ltd. 144A ADR + 861,800
157,500 Kec International Ltd. + 751,905
192,400 Salora International Ltd. + 416,392
12,300 Southern Petrochemical Ltd. 144A GDR + 98,400
----------------
5,667,049
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
INDONESIA (0.1%)
- -------------------------------------------------------------------------------
80,000 Asia Pacific Resource International Class A + $ 630,000
381,000 Astra International (Registered) 486,499
325,000 Indorayon Utama (Registered) + 655,233
13,900 Part Tri Polyta ADR 298,850
160,000 Sampoerna Industries (Registered) 939,072
----------------
3,009,654
IRELAND (2.8%)
- -------------------------------------------------------------------------------
4,474,516 Allied Irish Banks 20,702,243
3,025,000 CRH PLC 18,661,225
130,000 Elan Corp., PLC ADR + 4,598,750
3,215,022 Greencore Group PLC 22,824,084
----------------
66,786,302
ITALY (0.4%)
- -------------------------------------------------------------------------------
1,404,840 Cartiere Burgo S.P.A. 9,380,960
1,974,500 CIR-Compagnie Industriali Riunite S.P.A. + 1,030,294
----------------
10,411,254
JAPAN (19.7%)
- -------------------------------------------------------------------------------
50,480 Asahi Diamond Industrial Co. Ltd. 749,850
1,142,000 Bridgestone Corp. 18,456,547
290,000 CSK Corp. 8,029,723
28,000 Chubu Electric Power, Inc. 778,610
1,150,000 Dai Nippon Printing Co., Ltd. 19,269,170
1,422,000 Daiwa Securities Ltd. 17,912,365
1,910,000 Fujitsu, Ltd. 19,497,280
150,000 Hirose Electric Co. Ltd. 9,108,735
370,000 Ito Yokado Co., Ltd. 19,917,988
580,800 JGC Corp. 9,179,602
361,000 KAO Corp. + 4,375,753
416,000 Komori Corp. 10,332,026
360,000 Kurita Water Ltd. 8,770,068
130,000 Mabuchi Motor Co. Ltd. 8,573,981
1,140,000 Marui Co., Ltd. 17,475,972
1,150,000 Matsushita Electric Industrial Co., Ltd. 19,269,170
780,000 Mitsubishi Bank Ltd. 19,094,478
1,800,000 Mitsubishi Motors Corp. 16,705,980
490,000 Murata Manufacturing Co. Ltd. 19,681,536
829,000 Nippondenso Co., Ltd. 16,648,973
905,000 Nishimatsu Construction Co. 10,862,172
3,623,000 Nisshin Steel Co., Ltd. 18,168,983
1,100,000 Omron Tateisi Electronics Corp. 21,568,580
347,600 Santen Pharmaceutical Co., Ltd. 8,798,416
835,000 Sanwa Bank Ltd. 18,059,464
160,000 Secom Co., Ltd. 10,419,488
1,189,000 Sekisui Chemical Co., Ltd. 14,835,985
70,000 Shandong Huaneng Power ADR 568,750
930,000 Shimizu Corp. 9,968,670
450,000 Takuma Co. Ltd. 7,647,075
1,000,000 Tokio Marine & Fire Insurance Co. Ltd. 11,883,500
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
JAPAN (continued)
- -------------------------------------------------------------------------------
600,000 Tokyo Electric Power Co., Inc. $ 19,180,020
2,420,000 Toray Industries, Inc. 16,880,952
90,000 Tostem Corp. 3,262,032
17,000 Toyo Seikan Kaisha Ltd. 585,859
736,000 Yamanouchi Pharmaceutical Co. Ltd. + 16,530,486
500,000 Yamatake Honeywell 8,496,750
923,800 Yamato Transport Co. Ltd. 10,571,875
1,000,000 Yasuda Fire & Marine Insurance Co., Ltd. 7,106,400
----------------
479,223,264
LUXEMBOURG (0.1%)
- -------------------------------------------------------------------------------
58,000 Ashok Leyland Ltd. 144A GDR + 710,500
21,100 Benpres Holdings Corp. 144A GDR + 147,700
36,500 Millicom International Cellular S.A. + 907,938
----------------
1,766,138
MALAYSIA (1.3%)
- -------------------------------------------------------------------------------
60,000 Genting Berhad 546,450
606,000 Hong Leong Industries Berhad 3,213,376
267,000 Leader Universal + 870,020
178,000 Leader Universal (New Class A) + 558,386
300,000 Malayan Banking Berhad 2,052,210
232,000 Malaysian Assurance Alliance 755,948
285,000 Maruichi Malaysia Steel Tube 899,831
4,620,000 Sime Darby Berhad 11,781,462
169,000 Sungei Way Holdings 670,389
176,000 Technology Resources Industries + 448,818
106,000 Telekom Malaysia Berhad 729,407
51,000 Tung Ho Steel GDR + 994,500
1,150,000 United Engineers Berhad Ltd. 6,609,970
205,500 Ytl Corp. Berhad 931,634
----------------
31,062,401
MEXICO (--%)
- -------------------------------------------------------------------------------
32,050 International De Ceramica ADR + 292,456
NETHERLANDS (4.9%)
- -------------------------------------------------------------------------------
29,962 ABN AMRO Holding N.V. 1,151,573
162,263 Aegon N.V. 12,587,844
110,000 Akzo-Nobel N.V. 12,747,053
106,900 Dutch State Mines N.V. 8,981,171
505,006 Getronics Electric N.V. 20,644,999
600,000 IHC Caland N.V. 16,378,020
320,000 K.L.M.-Royal Dutch Airlines + 9,723,808
422,400 Koninklijke PPT Nederland N.V. 14,711,770
261,857 Wolters Kluwer N.V. 21,291,802
----------------
118,218,040
NORWAY (0.1%)
- -------------------------------------------------------------------------------
100,000 Maritime Investment Fund + 1,037,500
35,000 Smedvig Transpotation ADR 490,000
----------------
1,527,500
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
PAKISTAN (0.1%)
- -------------------------------------------------------------------------------
82,695 Hubco Power GDR $ 1,013,013
48,100 Pakistan State Oil 471,183
5,700 Pakistan Telecomm Ltd. 144A GDR + 581,400
----------------
2,065,596
PHILIPPINES (--%)
- -------------------------------------------------------------------------------
2,850,000 Bankard, Inc. + 625,860
8,800 Philippine Long Distance Telephone Co. ADR 561,000
----------------
1,186,860
RUSSIA (--%)
- -------------------------------------------------------------------------------
87,800 Fleming Russia Securities Fund Ltd. + 395,100
SINGAPORE (5.3%)
- -------------------------------------------------------------------------------
1,203,000 Cycle & Carriage Ltd. 9,841,502
1,105,000 Development Bank of Singapore (Registered) 11,815,213
1,800,000 Genting Berhad 16,393,500
1,084,000 Hong Leong Industries 5,748,018
750,000 Jardine Matheson Holdings Ltd. 5,962,500
1,257,000 Jurong Shipyard Ltd. 9,651,875
1,479,000 Leader Universal + 4,819,322
986,000 Leader Universal (New Class A) + 3,093,082
1,200,000 Malayan Banking Berhad 8,208,840
2,560,000 Overseas Union Bank Ltd. (Registered) 14,788,608
1,490,000 Singapore Airlines Ltd. (Registered) 14,327,989
465,000 Singapore Press Holdings (Registered) + 8,008,602
1,552,569 United Overseas Bank Ltd. (Registered) 16,155,257
----------------
128,814,308
SOUTH AFRICA (0.1%)
- -------------------------------------------------------------------------------
678,760 Iscor Iron & Steel Industrial Corp., Ltd. 841,866
95,800 Sasol Ltd. 926,242
28,000 South African Breweries Ltd. 773,480
----------------
2,541,588
SOUTH KOREA (--%)
- -------------------------------------------------------------------------------
3,000 L.G. Chemical Limited + 84,219
SPAIN (2.1%)
- -------------------------------------------------------------------------------
386,200 Argentaria Corp. (Registered) 12,466,150
300,000 Hidrolectrica del Cantabrico 9,075,420
1,550,000 Iberdrola S.A. 10,182,415
146,989 Immobiliaria Metropolitana Vasco Central 4,321,447
15,000 Inversiones Y Represent ADR 348,750
28,000 Repsol S.A. 890,187
425,000 Repsol S.A. ADS 13,600,000
----------------
50,884,369
SWEDEN (1.7%)
- -------------------------------------------------------------------------------
657,000 Astra AB Free 19,166,661
3,250 Nordic Recovery Fund + 4,907,500
1,027,800 Svenska Cellulosa AB Ser. B 18,244,992
----------------
42,319,153
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
SWITZERLAND (3.8%)
- -------------------------------------------------------------------------------
20,500 BBC Brown Boveri & Cie A.G., Ltd. (Bearer) $ 20,275,915
11,826 Georg Fischer (Bearer) 13,703,058
3,845 Georg Fischer (Registered) 864,158
8,280 Nestle S.A. (Registered) 8,102,601
5,700 Rieter Holding AG (Registered) 7,477,043
2,750 Rieter Holding AG Part Cert 711,850
9,300 SGS Societe Generale De Surveillance Holdings S.A. 15,533,892
17,286 Swiss Reinsurance (Registered) 12,078,281
15,600 Union Bank of Switzerland (Bearer) 14,379,019
----------------
93,125,817
TAIWAN (0.1%)
- -------------------------------------------------------------------------------
44,280 Hocheng Group Corp. 144A GDR + 736,155
28,000 Yageo Corp 144A GDR + 553,000
----------------
1,289,155
THAILAND (0.2%)
- -------------------------------------------------------------------------------
469,333 Industrial Finance Corp. (Registered) 1,002,261
16,200 Siam Cement PLC (Registered) 931,738
117,000 Siam Makro Public Co. (Registered) + 447,350
84,000 Siam Makro Public Co. Ltd. + 333,127
130,000 Thai Farmers Bank Public Co. (Registered) 1,142,167
----------------
3,856,643
UNITED KINGDOM (9.1%)
- -------------------------------------------------------------------------------
2,240,000 Amec PLC 2,526,048
1,200,000 Anglian Water PLC 9,666,000
2,516,902 Argyll Group PLC 11,596,626
1,547,837 BAT Industries PLC + 11,694,837
1,652,540 Barclays Bank PLC 17,011,743
1,036,716 Burmah Oil PLC 14,580,374
1,463,700 CLM Insurance Fund PLC 2,004,391
836,000 East Midlands Electric PLC 8,875,394
3,937,500 Explaura Holdings PLC + 47,643
2,180,000 General Electric Co. (The) PLC 10,711,648
1,500,000 Guinness PLC 11,345,550
995,000 Molins PLC 9,617,670
1,119,094 North West Water Group PLC 10,204,235
205,000 Pearson PLC 1,892,355
2,500,338 Royal Insurance Holdings PLC 12,204,899
11,600,000 Sears PLC 19,528,600
272,000 Securicor Group PLC Class A 3,996,306
704,295 Security Services PLC 8,997,509
2,690,900 Senior Engineering Group PLC 3,576,475
1,527,316 Siebe PLC 13,852,603
393,100 Southern Electric PLC 4,186,004
2,815,476 Tate & Lyle PLC 19,639,634
4,032,786 Vodafone Group PLC 12,636,332
----------------
220,392,876
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
UNITED STATES (25.1%)
- -------------------------------------------------------------------------------
100,000 A.P.S. Holding Corp. + $ 2,237,500
124,000 AMR Corp. 8,354,500
172,400 Adaptec, Inc. + 5,516,800
15,000 Advocat, Inc. + 178,125
153,000 Alexander Haagen Properties 1,740,375
69,000 American Electronic Components, Inc. + 560,625
271,000 American Express Co. 9,417,250
376,000 American Family Restaurants + 1,692,000
118,500 American General Corp. 3,910,500
120,000 Armstrong World Industries, Inc. 5,460,000
23,100 Avalon Properties, Inc. 453,338
284,600 Avon Products, Inc. 18,000,950
113,000 Back Bay Restaurant Group, Inc. + 550,875
175,000 Baker (J.) Inc. 2,187,500
131,800 Bank of Boston Corp. 4,415,300
90,000 BankAmerica Corp. 4,455,000
47,500 Bankers Life Holding Corp. 997,500
45,000 Baxter International, Inc. 1,563,750
65,000 Beacon Properties Corp. 1,275,625
76,000 Beckman Instruments, Inc. New 2,071,000
54,000 Bell Atlantic Corp. 2,963,250
100,000 Best Products, Inc. + 662,500
137,000 Block (H & R), Inc. 5,771,125
531,900 Brunswick Corp. 11,369,363
143,700 Burlington Industries, Inc. + 1,580,700
54,405 CBS Inc. 3,488,721
46,000 CIGNA Corp. 3,340,750
97,000 CMC Group, Inc. + 218,250
136,800 CWM Mortgage Holdings, Inc. 1,470,600
86,000 Cabletron Systems, Inc. + 4,085,000
27,400 Camden Property Trust 575,400
337,000 Capco Automotive Products 2,990,875
101,000 Capital Cities/ABC, Inc. 8,534,500
89,000 Capstone Capital Trust, Inc. 1,412,875
134,500 Cavalier Homes, Inc. 1,546,750
72,400 CenterPoint Properties Corp. 1,375,600
50,000 Chambers Development Co., Inc. Class A + 281,250
14,400 Chateau Properties, Inc. 297,000
272,500 Chemical Banking Corp. 11,376,875
195,000 Circle K Corp. + 3,241,875
272,500 Circus Circus Enterprises, Inc. + 9,026,563
22,000 Citicorp 1,020,250
42,500 Citizens Investments, Inc. 568,650
330,000 Collins & Aikman Corp. + 2,475,000
50,000 Coltec Holdings Inc. + 912,500
53,000 Columbia/HCA Healthcare Corp. 2,226,000
63,000 Commercial Net Lease Realty, Inc. 763,875
142,100 Computer Associates International, Inc. 9,147,688
158,100 Congoleum Corp. Class A + 2,312,213
129,800 Corrpro Cos., Inc. + 2,401,300
235,300 Crown American Realty Trust 2,941,250
25,000 DPL, Inc. 521,875
101,000 Deere (John) & Co. 8,282,000
8,400 Dexter Corp. 192,150
41,000 Diebold, Inc. 1,701,500
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
UNITED STATES (continued)
- -------------------------------------------------------------------------------
45,600 Donnkenny, Inc. + $ 815,100
86,000 Duckwall-Alco Stores, Inc. + 752,500
114,600 Dun & Bradstreet Corp. 5,973,525
348,000 EMC Corp. + 6,873,000
69,600 Eastex Energy, Inc. + 261,000
28,000 Echlin, Inc. 1,022,000
69,000 Epitope, Inc. + 1,173,000
25,000 Federal National Mortgage Association 2,206,250
122,200 Felcor Suite Hotels, Inc. 2,856,425
43,700 Financing for Sciences + 125,637
12,000 First Financial Management Corp. 877,500
173,800 First Industrial Realty Trust 3,041,500
177,000 First Interstate Bancorp 13,606,875
247,000 Ford Motor Co. 6,669,000
104,000 Foundation Health Corp. + 2,886,000
175,000 GTE Corp. 5,971,875
342,850 General Electric Co. 19,199,600
50,000 General Growth Properties, Inc. 1,012,500
210,000 General Motors Corp. 9,476,250
43,000 General RE Corp. 5,477,125
70,000 Golden Systems Inc. + 35,000
148,300 Grace (W.R.) & Co. 7,952,587
38,000 Health Systems International, Inc. Class A + 969,000
50,000 Heinz (H.J.) Co. 2,100,000
199,000 Herbalife International, Inc. 2,462,625
92,000 Holophane Corp. + 1,748,000
55,000 Horizon Outlet Centers 1,210,000
134,000 IBM Corp. 12,696,500
470,107 ICN Pharmaceuticals, Inc. 7,874,292
146,000 ITT Corp. 15,257,000
205,800 IVF America, Inc. + 347,288
98,000 Imperial Oil Ltd. 3,503,500
103,000 Integrated Health Services, Inc. 3,566,375
212,200 LTC Properties Inc. 2,758,600
72,000 Landstar System, Inc. + 2,088,000
18,400 Lehman Brothers Holding, Inc. 358,800
105,600 Life Partners Group, Inc. 2,059,200
239,100 Limited Inc. (The) 5,110,763
94,000 Lowe's Cos., Inc. 2,714,250
9,000 MBNA Corp. 272,250
225,000 Magna International, Inc. Class A 7,790,625
116,000 Malan Realty Investors, Inc. 1,595,000
73,000 Manufactured Home Communities, Inc. 1,149,750
162,000 Mapco, Inc. 9,213,750
40,000 McArthur/Glen Realty Corp. 530,000
84,000 McDonnell Douglas Corp. 5,208,000
82,000 Merrill Lynch & Co., Inc. 3,731,000
78,000 Mid Atlantic Realty Trust 663,000
198,000 Mid Ocean, Ltd. + 5,667,750
49,900 Millipore Corp. 3,062,613
81,000 Minerals Technologies, Inc. 2,693,250
62,500 Morgan (J.P.) & Co., Inc. 4,101,563
21,000 Morgan Stanley Group, Inc. 1,459,500
140,500 National Health Investors, Inc. 3,688,125
57,000 NationsBank Corp. 2,850,000
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
UNITED STATES (continued)
- -------------------------------------------------------------------------------
101,700 Norfolk Southern Corp. $ 6,852,038
301,700 Northwest Airlines, Inc. Class A + 8,975,575
66,500 Norton McNaughton, Inc. + 1,147,125
66,400 Nuevo Energy Co. + 1,269,900
118,000 O'Sullivan Industries Holdings + 944,000
47,000 Oasis Residential, Inc. 1,028,125
120,800 Oroamerica, Inc. + 694,600
30,000 Owens & Minor, Inc. Holding Co. 405,000
519,000 Owens-Illinois Inc. + 6,163,125
143,000 Parametric Technology Corp. + 6,792,500
57,900 Penn National Gaming, Inc. + 593,475
147,000 Penney (J.C.) Co., Inc. 6,431,250
220,100 PepsiCo, Inc. 9,161,663
85,000 Pfizer, Inc. 7,363,125
46,000 Pittston Minerals Group 563,500
42,000 Post Properties, Inc. 1,244,250
315,800 Premark International, Inc. 15,237,350
174,100 RFS Hotel Investors, Inc. 2,524,450
150,000 RJR Nabisco Holdings Corp. 4,106,250
106,000 Raychem Corp. 3,776,250
24,000 Reliance Group Holdings, Inc. 132,000
71,100 Reptron Electronics, Inc. + 1,039,837
97,200 Rightchoice Managed Care, Inc. Class A + 1,263,600
175,800 Rite Aid Corp. 4,087,350
111,000 River Bank America + 777,000
40,400 Ross Stores, Inc. 393,900
8,500 Royal Caribbean Cruises Ltd. 202,938
53,000 Royal Dutch Petroleum Co. PLC ADR 6,572,000
31,700 STB Systems, Inc. + 356,625
132,000 Sara Lee Corp. 3,679,500
24,400 Seda Specialty Packaging Corp. + 259,250
48,000 Seitel, Inc. + 1,536,000
112,000 Sensormatic Electronics Corp. 3,332,000
51,000 Service Corp. International 1,440,750
90,000 Shorewood Packaging Corp. + 1,417,500
81,500 Sizeler Property Investments, Inc. 815,000
264,650 Snap-On, Inc. 9,858,213
20,000 Speedway Motorsports, Inc. + 367,500
108,000 Sports Club Co., Inc. + 594,000
308,500 Sprint Corp. 10,180,500
213,800 Sterile Concepts Holdings 2,619,050
140,300 Sterling Software, Inc. + 4,770,200
118,600 Stone Energy Corp. + 1,645,575
64,600 Sun Communities, Inc. 1,380,825
177,450 TJX Cos., Inc. (The) 2,040,675
2,100 TRW, Inc. 156,187
99,500 Tandem Computers, Inc. + 1,268,625
289,800 Tandy Corp. 14,345,100
236,500 Team Rental Group, Inc. + 1,921,563
97,000 The PMI Group, Inc. + 3,613,250
139,800 Titan Holdings, Inc. + 1,537,800
1,100 Tivoli Systems, Inc. + 42,075
150,000 TransTexas Gas Corp. + 1,987,500
124,000 Tribune Co. 7,331,500
93,000 Trism, Inc. + 732,375
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
UNITED STATES (continued)
- -------------------------------------------------------------------------------
70,000 US WEST, Inc. $ 2,896,250
241,200 USX-Marathon Group 4,522,500
256,000 Union Texas Petroleum Inc. 5,472,000
20,837 Vishay Intertechnology, Inc. + 1,231,988
12,000 Walden Residential Properties, Inc. 231,000
139,000 Western Digital Corp. + 2,224,000
131,000 Winston Hotels 1,310,000
58,000 Xerox Corp. 7,141,250
111,000 Young Broadcasting Corp. Class A + 2,442,000
40,000 Zeigler Coal Holding Co. 455,000
----------------
611,776,506
URUGUAY (--%)
- -------------------------------------------------------------------------------
50,000 Banco Comercial S.A. 144A GDR 650,000
VENEZUELA (0.1%)
- -------------------------------------------------------------------------------
225,040 Venepal 144A 506,340
184,000 Venezolana de Prerreducidos Caroni Venprecar 920,000
----------------
1,426,340
----------------
TOTAL COMMON STOCKS (cost $1,994,709,115) $2,270,342,684
PREFERRED STOCKS (0.7%)*
NUMBER OF SHARES VALUE
BRAZIL (0.1%)
- -------------------------------------------------------------------------------
79,100,000 Banco Bradesco $ 613,784
4,800,000 Companhia Vale Do Rio Doce 800,000
2,630,000 Coteminas Cia Tecidos Norte de Minas 692,710
228,000,000 Refrigeracao Parna S.A. 485,891
----------------
2,592,385
FINLAND (0.1%)
- -------------------------------------------------------------------------------
40,000 Nokia Corp. ADR 1,640,000
FRANCE (0.5%)
- -------------------------------------------------------------------------------
106,970 Essilor International 13,205,639
----------------
TOTAL PREFERRED STOCKS (cost $14,696,502) $ 17,438,024
UNITS (0.6%)*
NUMBER OF UNITS VALUE
LUXEMBOURG (--%)
- -------------------------------------------------------------------------------
13,000 Cesc Ltd. units ADR $ 299,000
UNITED KINGDOM (0.6%)
- -------------------------------------------------------------------------------
1,500,000 Rothmans International units PLC 14,764,800
----------------
TOTAL UNITS (cost $11,314,916) $ 15,063,800
<PAGE>
CONVERTIBLE PREFERRED STOCKS (0.2%)* (cost $1,697,672)
NUMBER OF SHARES VALUE
UNITED STATES (0.2%)
- -------------------------------------------------------------------------------
40,000 Citicorp $5.375 cv. pfd. $ 5,100,000
CONVERTIBLE BONDS AND NOTES (0.1%)*
PRINCIPAL AMOUNT VALUE
TAIWAN (--%)
- -------------------------------------------------------------------------------
$ 500,000 Teco Electric & Machinery 144A cv. 2 3/4s, 2004 $ 425,000
320,000 United Micro Electric 144A cv. 1 1/4s, 2004 480,000
----------------
905,000
UNITED KINGDOM (--%)
- -------------------------------------------------------------------------------
750,000 Danka Business Systems 144A cv. sub. notes
6 3/4s, 2002 836,250
UNITED STATES (0.1%)
- -------------------------------------------------------------------------------
160,000 O'Brien Environmental Energy Inc. cv. sub. deb.
11s, 2011 49,600
880,000 Regency Health Services, Inc. cv. 6 1/2s, 2003 994,400
----------------
1,044,000
----------------
TOTAL CONVERTIBLE BONDS AND NOTES (cost $2,777,300) $ 2,785,250
WARRANTS (--%)*+
NUMBER OF EXPIRATION
WARRANTS DATE VALUE
ITALY (--%)
- -------------------------------------------------------------------------------
134,140 Cartiere Burgo S.P.A. Wts. 12/31/95 $ 18,095
UNITED STATES (--%)
- -------------------------------------------------------------------------------
43,700 Financing for Sciences Wts. 5/20/99 13,656
----------------
TOTAL WARRANTS (cost $4,370) $ 31,751
SHORT-TERM INVESTMENTS (5.6%)*
PRINCIPAL AMOUNT VALUE
$25,000,000 Federal National Mortgage Association 5.87s,
July 21, 1995 $ 24,669,813
30,000,000 GTE Southwest Inc. 5.93s, May 5, 1995 29,980,233
20,000,000 General Electric Capital Corp. 5.98s, June 20, 1995 19,833,889
15,000,000 MetLife Funding Inc. 5.93s, May 24, 1995 14,940,700
20,000,000 Morgan (J.P.) & Co., Inc. 5.92s, May 5, 1995 19,986,844
27,370,000 Interest in $485,809,000 joint repurchase agreement
dated April 30, 1995 with Morgan (J.P.) & Co., Inc.
due May 1, 1995 with respect to various U.S. Treasury
obligations-- maturity value of $27,383,457 for an
effective yield of 5.90% 27,383,457
----------------
TOTAL SHORT-TERM INVESTMENTS (cost $136,794,936) $ 136,794,936
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $2,161,994,811)*** $2,447,556,445
- -------------------------------------------------------------------------------
<PAGE>
NOTES
* Percentages indicated are based on net assets of $2,432,070,657, which co-
rrespond to a net asset value per class A, class B, class M and class Y sha-
res of $9.33, $9.12, $9.33 and $9.43 respectively.
+ Non-income-producing security.
++ Restricted, excluding 144A securities, as to public resale. At the date of
acquisition, these securities were valued at cost. There were no outstanding
unrestricted securities of the same class as those held. Total market value
of restricted securities owned at April 30, 1995 was $1,046,400 or --% of
net assets.
*** The aggregate identified cost on a tax basis is $2,172,339,230, resulting
in gross unrealized appreciation and depreciation of $358,951,873 and
$83,734,658, respectively, or net unrealized appreciation of $275,217,215.
ADR, ADS or GDR after the name of a foreign holding stands for American Deposi-
tory Receipt, American Depository Shares or Global Depository Receipt respecti-
vely, representing ownership of foreign securities on deposit with a domestic
custodian bank.
144A after the name of a security represents those exempt from registration un-
der Rule 144A of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional bu-
yers.
FORWARD CURRENCY CONTRACTS OUTSTANDING AT APRIL 30, 1995
(aggregate face value $555,473,732)
AGGREGATE UNREALIZED
MARKET FACE DELIVERY APPRECIATION/
VALUE VALUE DATE (DEPRECIATION)
British Pounds (Sell) $ 35,807,244 $ 34,512,055 5/22/95 $ (1,295,189)
British Pounds (Sell) 62,737,280 61,479,216 8/22/95 (1,258,064)
French Francs (Sell) 12,128,080 12,270,591 8/22/95 142,511
French Francs (Sell) 26,410,796 24,263,501 5/22/95 (2,147,295)
French Francs (Sell) 46,031,760 44,272,614 8/22/95 (1,759,146)
Japanese Yen (Sell) 293,850,647 255,822,574 8/22/95 (38,028,073)
Japanese Yen (Sell) 46,208,603 46,662,809 8/22/95 454,206
Netherland Guilders
(Sell) 21,162,033 18,878,607 5/22/95 (2,283,426)
Netherland Guilders
(Sell) 21,570,980 20,184,653 8/22/95 (1,386,327)
Swiss Francs (Sell) 18,639,150 16,381,830 5/22/95 (2,257,320)
Swiss Francs (Sell) 22,687,615 20,745,282 8/22/95 (1,942,333)
TOTAL $ (51,760,456)
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1995 (Unaudited)
ASSETS
- -------------------------------------------------------------------------------
Investments in securities, at value (identified cost
$2,161,994,811) (Note 1) $2,447,556,445
Foreign currency (cost $3,231,781) (Note 1) 4,865,412
Dividends and interest receivable 11,611,955
Receivable for shares of the Fund sold 9,466,718
Receivable for securities sold 50,515,776
Foreign tax receivable 300,028
Receivable for open forward currency contracts 596,717
Prepaid expenses 2,634
- -------------------------------------------------------------------------------
TOTAL ASSETS $2,524,915,685
LIABILITIES
- -------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 2,195,749
Payable for securities purchased 23,160,651
Payable for shares of the Fund repurchased 2,902,608
Payable for compensation of Manager (Note 2) 3,796,082
Payable for administrative services (Note 2) 3,009
Payable for compensation of Trustees (Note 2) 848
Payable for investor servicing and custodian fees (Note 2) 1,754,181
Payable for distribution fees (Note 2) 996,035
Other accrued expenses 209,353
Payable for open forward currency contracts 52,357,173
Payable for closed forward currency contracts 5,469,339
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 92,845,028
- -------------------------------------------------------------------------------
NET ASSETS $2,432,070,657
REPRESENTED BY
- -------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $2,212,330,566
Undistributed net investment income 9,618,349
Accumulated net realized loss on investment transactions (25,395,950)
Net unrealized appreciation on investments, forward currency
contracts, and foreign currency translation 235,517,692
- -------------------------------------------------------------------------------
TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO CAPITAL SHARES
OUTSTANDING $2,432,070,657
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- -------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($1,551,339,181 divided by 166,267,038 shares) $9.33
Offering price per class A share (100/94.25 of $9.33) * $9.90
Net asset value and offering price per class B share
($850,496,091 divided by 93,291,825 shares) + $9.12
Net asset value and redemption price per class M share
($636,463 divided by 68,206 shares) $9.33
Offering price per class M share (100/96.5 of $9.33) * $9.67
Net asset value and offering price per class Y share
($29,598,922 divided by 3,137,360 shares) $9.43
- -------------------------------------------------------------------------------
* 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.
<PAGE>
STATEMENT OF OPERATIONS
Six months ended April 30, 1995 (Unaudited)
INVESTMENT INCOME:
- -------------------------------------------------------------------------------
Dividends (net of foreign tax of $2,110,646) $19,190,471
- -------------------------------------------------------------------------------
Interest 3,679,611
- -------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 22,870,082
- -------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------
Compensation of Manager (Note 2) $7,666,267
- -------------------------------------------------------------------------------
Investor servicing and custodian fee (Note 2) 3,629,509
- -------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 24,456
- -------------------------------------------------------------------------------
Reports to shareholders 72,212
- -------------------------------------------------------------------------------
Auditing 31,326
- -------------------------------------------------------------------------------
Legal 15,178
- -------------------------------------------------------------------------------
Registration fees 99,612
- -------------------------------------------------------------------------------
Administrative services (Note 2) 17,358
- -------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 1,812,896
- -------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 3,945,317
- -------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 283
- -------------------------------------------------------------------------------
Other 51,204
- -------------------------------------------------------------------------------
TOTAL EXPENSES 17,365,618
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 5,504,464
- -------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 7,996,436
- -------------------------------------------------------------------------------
Net realized loss on forward currency contracts and foreign
currency translation (Note 1) (15,496,396)
- -------------------------------------------------------------------------------
Net unrealized depreciation on forward currency contracts and
foreign currency translation during the period (49,057,583)
- -------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (10,437,762)
- -------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (66,995,305)
- -------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(61,490,841)
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
APRIL 30 OCTOBER 31
1995* 1994
- -------------------------------------------------------------------------------
INCREASE IN NET ASSETS
- -------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------
Net investment income $ 5,504,464 $ 11,127,270
- -------------------------------------------------------------------------------
Net realized gain (loss) on investments,
forward currency contracts and foreign
currency translation (7,499,960) 54,003,718
- -------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments, forward currency contracts, and
foreign currency translation (59,495,345) 64,744,066
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (61,490,841) 129,875,054
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (48,143,318) (18,205,009)
- -------------------------------------------------------------------------------
Class B (26,738,828) (5,583,193)
- -------------------------------------------------------------------------------
Class Y (918,308) --
- -------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 230,972,801 1,058,122,192
- -------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 93,681,506 1,164,209,044
- -------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------
Beginning of period 2,338,389,151 1,174,180,107
- -------------------------------------------------------------------------------
END OF PERIOD (including undistributed net
investment income of $9,618,349 and
$4,113,885, respectively) $2,432,070,657 $2,338,389,151
- -------------------------------------------------------------------------------
* Unaudited.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS *
(For a share outstanding throughout the period)
MAR. 1, 1995 JUNE 15, 1994 APR. 27, 1992
(COMMENCE- SIX (COMMENCE- SIX (COMMENCE-
MENT OF MONTHS MENT OF MONTHS MENT OF
OPERATIONS) ENDED OPERATIONS) ENDED YEAR ENDED OPERATIONS)
TO APR. 30 APR. 30 TO OCT. 31 APR. 30 OCT. 31 TO OCT. 31
1995+ 1995+ 1994 1995+ 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS M CLASS Y CLASS B
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $8.86 $10.00 $9.46 $9.74 $9.19 $7.22 $7.50
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net investment income -- .04 .01 -- .01 .05 .01
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .47 (.30) .53 (.31) .71 1.99 (.29)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT
OPERATIONS .47 (.26) .54 (.31) .72 2.04 (.28)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- -- -- -- (.06) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on
investments -- (.31) -- (.31) (.17) (.01) --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -- (.31) -- (.31) (.17) (.07) --
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $9.33 $9.43 $10.00 $9.12 $9.74 $9.19 $7.22
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (b) 5.30(c) (2.48)(c) 5.71(c) (3.07)(c) 7.95 28.44 (3.73)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $636 $29,599 $29,396 $850,496 $801,443 $233,195 $18,154
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) .41(c) .49(c) .37(c) 1.00(c) 2.11 2.09 1.16(c)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .07(c) .50(c) .42(c) -- .12 .23 .21(c)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 28.92(c) 28.92(c) 17.45 28.92(c) 17.45 49.53 61.84
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
+ Unaudited.
* The table has been restated to reflect a 4-for-1 share split declared by the fund to shareholders of record on October 27, 1989,
payable on October 28, 1989.
** Per share investment income, expenses and net investment income for the year ended December 31, 1986 have been determined on the
basis of the weighted average number of shares outstanding during the year.
(a) Reflects an expense limitation applicable during the year. As a result of such limitation, expenses of the fund for fiscal 1986
reflect a reduction of $0.01 per share.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Not annualized.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS * (Continued)
(For a share outstanding throughout the period)
SIX
MONTHS
ENDED
APR. 30 YEAR ENDED OCTOBER 31
1995+ 1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $9.92 $9.30 $7.25 $7.64 $7.12 $7.42
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net investment income .03 .02 .07 .10 .12 .12
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.31) .77 2.06 (.22) .96 (.21)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT
OPERATIONS (.28) .79 2.13 (.12) 1.08 (.09)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- (.07) (.12) (.15) (.14)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on
investments (.31) (.17) (.01) (.15) (.41) (.07)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.31) (.17) (.08) (.27) (.56) (.21)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $9.33 $9.92 $9.30 $7.25 $7.64 $7.12
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (b) (2.71)(c) 8.62 29.62 (1.51) (16.51) (1.35)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $1,551,339 $1,507,550 $940,985 $630,764 $648,450 $560,019
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) .63(c) 1.33 1.39 1.56 1.47 1.44
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .37(c) .83 .85 1.28 1.60 1.56
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 28.92(c) 17.45 49.53 61.84 70.64 95.39
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS * (Continued)
(For a share outstanding throughout the period)
TEN
MONTHS
ENDED
OCT. 31 YEAR ENDED DECEMBER 31
1989 1988 1987 1986** 1985
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $6.51 $6.07 $7.60 $5.88 $3.94
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net investment income .11 .09 .07 .06(a) .03
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .80 .46 .44 2.07 2.31
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT
OPERATIONS .91 .55 .51 2.13 2.34
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- (.11) (.13) (.03) (.06)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on
investments -- -- (1.91) (.38) (.34)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -- (.11) (2.04) (.41) (.40)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $7.42 $6.51 $6.07 $7.60 $5.88
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (b) 14.07(c) 9.04 7.26 37.66 65.03
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $482,750 $478,489 $522,569 $411,793 $90,625
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) 1.06(c) 1.40 1.39 1.07(a) 1.32
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 1.52(c) 1.34 1.03 .85(a) 1.04
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 66.91(c) 102.90 113.05 175.68 134.07
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1995 (Unaudited)
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 capital
appreciation by investing primarily in common stocks traded in securities mar-
kets located in a number of foreign countries and in the United States.
The fund offers class A, class B, class M and class Y shares. The fund commenced
its public offering of Class M shares on March 1, 1995. 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 may be subject to a contingent deferred sales charge, if those sha-
res are redeemed within six years of purchase. Class M shares are sold with a
maximum front-end sales charge of 3.50%, and an ongoing distribution fee that is
higher than class A shares and lower than class B shares. Class Y shares, which
do not pay a front-end or contingent deferred sales charge, are generally sub-
ject to the same expenses as class A, class B and class M shares, but do not
bear a distribution fee. Class Y shares are sold only to defined contribution
plans with an initial investment of $250 million in a combination of Putnam
funds and other investments managed by Putnam. In addition, the Trustees decla-
re separate dividends on each class of shares. Expenses of the fund are borne
pro-rata by the holder of all classes of shares, except that each class bears
expenses unique to that class (including the distribution fees applicable to
such class), and 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 decla-
re separate dividends on each class of shares.
The following is a summary of significant accounting policies consistently fo-
llowed 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 avail-
able are stated at market value, which is determined using the last reported sa-
le price, or, if no sales are reported -- as in the case of some securities tra-
ded 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. Short-term investments having remaining maturities of 60 days or
less are stated at amortized cost which approximates market, and other invest-
ments 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 compa-
nies managed by Putnam Investment Management, Inc. (Putnam Management), the
fund's Manager, a wholly-owned subsidiary of
<PAGE>
Putnam Investments, Inc., and certain accounts. 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 cus-
todian, 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). In-
terest income is recorded on the accrual basis and 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 Securities quoted in foreign currencies are
translated into U.S. dollars at the current exchange rate. The fund does not
isolate that portion of the results of operations resulting from changes in fo-
reign exchange rates on investments from fluctuations arising from changes in
market prices of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investment.
Foreign-denominated receivables and payables are "marked-to-market" daily using
the current exchange rate. The fluctuation between the original exchange rate
and the current exchange rate is recorded as unrealized translation gain or
loss. Upon receipt or payment, the fund realizes a gain or loss amounting to the
difference between the original value and the ending value of the receivable or
payable.
F) OPTION ACCOUNTING PRINCIPLES When the fund writes a call or put option, an
amount equal to the premium received by the fund is included in the fund's
"Statement of Assets and Liabilities" as an asset and an equivalent liability.
The amount of the liability is subsequently "marked-to-market" to reflect the
current market value of the option written. The current market value of an op-
tion is the last sale price or, in the absence of a sale, the last offering pri-
ce. If an option expires on its stipulated expiration date, or if the fund en-
ters into a closing purchase transaction, the fund realizes a gain or loss if
the cost of a closing purchase transaction exceeds the premium received when the
option was written without regard to any unrealized gain or loss on the underly-
ing security, and the liability related to such option is extinguished. If a
written call option is exercised, the fund realizes a gain or loss from the sale
of the underlying security and the proceeds of the sale are increased by the
premium originally received. If a written put option is exercised, the amount of
the premium originally received reduces the cost of the security which the fund
purchases upon exercise of the option.
The fund writes covered call options; that is, options for which it holds the
underlying security or its equivalent. Accordingly, the risk in writing a call
option is that the fund relinquishes the opportunity to profit if the market
price of the underlying security increases and the option is exercised. In wri-
ting a put option, the fund assumes the risk of incurring a loss if the market
price of the underlying
<PAGE>
security decreases and the option is exercised.
The premium paid by the fund for the purchase of a call or put option is inclu-
ded in the fund's "Statement of Assets and Liabilities" as an investment and
subsequently "marked-to-market" to reflect the current market value of the op-
tion. If an option which the fund has purchased expires on the stipulated expi-
ration date, the fund realizes a loss in the amount of the cost of the option.
If the fund enters into a closing sale transaction, the fund realizes a gain or
loss, depending on whether the proceeds from the closing sale transaction are
greater or less than the cost of the option. If the fund exercises a call op-
tion, the cost of the security acquired by exercising the call is increased by
the premium paid to buy the call. If the fund exercises a put option, it reali-
zes a gain or loss from the sale of the underlying security and the proceeds
from such sale are decreased by the premium originally paid.
OPTIONS ON FOREIGN CURRENCIES The fund writes and purchases put and call options
on foreign currencies. The accounting principles and risks involved are similar
to those described above relating to options on securities. The amount of poten-
tial loss to the fund upon exercise of a written call option is the value (in
U.S. dollars) of the currency sold, converted at the spot price, less the value
of the U.S. dollars received in exchange. The amount of potential loss to the
fund upon exercise of a written put option is the value (in U.S. dollars) of the
currency received converted at the spot price, less the value of the U.S. do-
llars paid in exchange.
FORWARD CURRENCY CONTRACTS A forward currency contract is an agreement between
two parties to buy or sell a currency at a set price on a future date. The mar-
ket value of the contract will fluctuate with changes in currency exchange ra-
tes. The contract is "marked-to-market" daily and the change in market value is
recorded by the fund 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 va-
lue of the contract at the time it was opened and the value at the time it was
closed. The maximum potential loss from forward currency contracts is the aggre-
gate face value in U.S. dollars at the time the contract was opened; however,
management believes the likelihood of such a loss to be remote.
G) 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 In-
ternal 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. Therefo-
re, no provision has been made for federal taxes on income, capital gains or un-
realized appreciation of securities held and excise tax on income and capital
gains.
H) DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders are recorded by
the fund on the ex-dividend date.
The character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences include treatment of certain gains and losses on
foreign currency transactions. Reclassifications are made to the
<PAGE>
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 servi-
ces is paid quarterly based on the average net assets of the fund for the quar-
ter. Such fee is based on an annual rate of 0.80% of the first $500 million of
average net assets, 0.70% of the next $500 million, 0.65% of the next $500 mi-
llion and 0.60% of any amount over $1.5 billion. Under current law, the fee is
subject to reduction in any year to the extent that expenses (exclusive of dis-
tribution fees, brokerage, interest and taxes) 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 commi-
ssions and fees (less expenses) received by affiliates of the Manager on the
fund's portfolio transactions.
The fund also reimburses the Manager for the compensation and related expenses
of certain officers of the fund and their staff who provide administrative ser-
vices 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 $3,700 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.
Custodial functions for the fund are provided by the Putnam Fiduciary Trust Com-
pany (PFTC), a subsidiary of Putnam Investments, Inc. Investor servicing agent
functions are currently provided by Putnam Investor Services, a division of
PFTC.
Investor servicing and custodian fees reported in the Statement of
Operations for the period ended April 30, 1995 have been reduced by
credits allowed by PFTC.
As part of the custodial contract between Putnam Fiduciary Trust Company and the
subcustodian bank, the subcustodian has a lien on the securities of the fund to
the extent permitted by the fund's investment restrictions to cover any advances
made by the subcustodian for the settlement of securities purchased by the
fund. At April 30, 1995, the payable to subcustodian represents the amount due
for cash advanced for the settlement of a security purchase.
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 Compa-
ny 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 provi-
ded and expenses incurred by it in distributing shares of the fund. The Plans
provide for payment by the fund to Putnam Mutual Funds Corp. at an annual rate
up to 0.35%, 1.00% and 1.00% of the average net assets attributable to class A,
class B and class M shares, respectively. The Trustees have approved payment by
the fund at an annual rate of 0.25%, 1.00% and 0.75% of the average net assets
attributable to class A, class B and class M shares respectively.
<PAGE>
For the six months ended April 30, 1995, Putnam Mutual funds Corp., acting as
underwriter received net commissions of $489,671 from the sale of class A sha-
res, $874,585 in contingent deferred sales charges from redemptions of class B
shares, and net commissions of $1,966 from the sale of class M shares. A de-
ferred sales charge of up to 1% is assessed on certain redemptions of class A
shares purchased as part of an investment of $1 million or more. For the six
months ended April 30, 1995, Putnam Mutual Funds Corp., acting as underwriter
received $6,596 on class A redemptions.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the six months ended April 30, 1995, purchases and sales of investment
securities other than short-term investments aggregated $652,619,243 and
$474,288,149, respectively. There were no purchases or sales of U.S. government
obligations during the period. 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 April 30, 1995, there was an unlimited number of shares of beneficial inte-
rest authorized. Transactions in capital shares were as follows:
SIX MONTHS ENDED
APRIL 30 1995
CLASS A SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 35,947,718 $327,230,099
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 4,941,329 44,867,269
- -------------------------------------------------------------------------------
40,889,047 372,097,368
- -------------------------------------------------------------------------------
Shares repurchased (26,658,961) (242,463,082)
- -------------------------------------------------------------------------------
NET INCREASE 14,230,086 $129,634,286
- -------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31 1994
CLASS A SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 89,867,991 $864,456,541
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 1,757,924 16,542,020
- -------------------------------------------------------------------------------
91,625,915 880,998,561
- -------------------------------------------------------------------------------
Shares repurchased (40,809,495) (391,801,048)
- -------------------------------------------------------------------------------
NET INCREASE 50,816,420 $489,197,513
- -------------------------------------------------------------------------------
<PAGE>
SIX MONTHS ENDED
APRIL 30 1995
CLASS B SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 20,196,460 $180,943,975
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 2,773,150 24,653,302
- -------------------------------------------------------------------------------
22,969,610 205,597,277
- -------------------------------------------------------------------------------
Shares repurchased (12,001,567) (106,812,212)
- -------------------------------------------------------------------------------
NET INCREASE 10,968,043 $98,785,065
- -------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31 1994
CLASS B SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 67,923,259 $643,916,531
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 543,647 5,055,913
- -------------------------------------------------------------------------------
68,466,906 648,972,444
- -------------------------------------------------------------------------------
Shares repurchased (11,507,056) (108,633,648)
- -------------------------------------------------------------------------------
NET INCREASE 56,959,850 $540,338,796
- -------------------------------------------------------------------------------
FOR THE PERIOD MARCH 1, 1995
(COMMENCEMENT OF OPERATIONS) TO
APRIL 30 1995
CLASS M SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 68,432 $622,292
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions -- --
- -------------------------------------------------------------------------------
68,432 622,292
- -------------------------------------------------------------------------------
Shares repurchased (226) (2,050)
- -------------------------------------------------------------------------------
NET INCREASE 68,206 $620,242
- -------------------------------------------------------------------------------
SIX MONTHS ENDED
APRIL 30 1995
CLASS Y SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 575,547 $5,404,567
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 100,143 918,308
- -------------------------------------------------------------------------------
675,690 6,322,875
- -------------------------------------------------------------------------------
Shares repurchased (478,547) (4,389,667)
- -------------------------------------------------------------------------------
NET INCREASE 197,143 $1,933,208
- -------------------------------------------------------------------------------
FOR THE PERIOD JUNE 15, 1994
(COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31 1994
CLASS Y SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 2,962,991 $28,809,511
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions -- --
- -------------------------------------------------------------------------------
2,962,991 28,809,511
- -------------------------------------------------------------------------------
Shares repurchased (22,774) (223,628)
- -------------------------------------------------------------------------------
NET INCREASE 2,940,217 $28,585,883
- -------------------------------------------------------------------------------
<PAGE>
OUR COMMITMENT TO QUALITY SERVICE
CHOOSE AWARD-WINNING SERVICE.
Putnam Investor Services has won the DALBAR Quality Tested Service Seal for the
past five years, through 1994. DALBAR, an independent research firm, ran more
than 10,000 tests of 38 shareholder service components. In every category,
Putnam outperformed the industry standard.
HELP YOUR INVESTMENT GROW.
Set up a systematic program for investing with as little as $25 a month from a
Putnam fund or from your checking or savings account. *
SWITCH FUNDS EASILY.
You can move money from one account to another with the same class of shares
without a service charge. (This privilege is subject to change or termination.)
ACCESS YOUR MONEY QUICKLY.
You can get checks sent regularly or redeem shares any business day at the then-
current net asset value, which may be more or less than their original cost.
For details about any of these or other services, contact your financial advisor
or call the toll-free number shown below and speak with a helpful Putnam repre-
sentative.
To make an additional investment in this or any other putnam fund, contact your
financial advisor or call our toll-free number:
1-800-225-1581.
* Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market. Investors should consider their ability to con-
tinue purchasing shares during periods of low price levels.
<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
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 Charles E. Porter
President Executive Vice President
Patricia C. Flaherty Lawrence J. Lasser
Senior Vice President Vice President
Gordon H. Silver Peter Carman
Vice President Vice President
Brett Browchuk Thomas V. Reilly
Vice President Vice President
Anthony W. Regan Gerald Zukowski
Vice President and Fund Manager Vice President and Fund Manager
William N. Shiebler John R. Verani
Vice President Vice President
Paul M. O.Neil John D. Hughes
Vice President Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Global Growth Fund.
It may also be used as sales literature when preceded or accompanied by the cu-
rrent prospectus, which gives details of sales charges, investment objectives
and operating policies of the fund, and the most recent copy of Putnam's Quar-
terly Performance Summary. For more information, or to request a prospectus,
call toll free: 1-800-225-1581.
SHARES OF MUTUAL FUNDS ARE NOT DEPOSITS OF, OR GUARANTEED OR ENDORSED BY, ANY
FINANCIAL INSTITUTION, ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPO-
RATION (FDIC), THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND INVOLVE RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
---------------
PUTNAM INVESTMENTS Bulk Rate
U.S. Postage
THE PUTNAM FUNDS PAID
One Post Office Square Putnam
Boston, Massachusetts 02109 Investments
---------------
18303-005/882/513
<PAGE>
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND
EDGAR-FILED TEXTS:
(1) Boldface typeface is displayed with capital letters, italic typeface is
displayed in normal type.
(2) Because the printed page breaks are not reflected, certain tabular and
columnar headings and symbols are displayed differently in this filing.
(3) Bullet points and similar graphic signals are omitted.
(4) Page numbering has been omitted.
(5) The trademark symbol has been replaced by (TM).
(6) The copyright symbol has been replaced by (C).
(7) The registered mark symbol has been replaced by (R).
(8) The dagger symbol has been replaced by +
(9) The double dagger symbol has been replaced by ++
(10) The section symbol has been replaced by +++
