PUTNAM
GLOBAL
GROWTH
FUND
[Artwork]
ANNUAL REPORT
October 31, 1995
[Putnam Logo]
Boston * London * Tokyo
<PAGE>
<PAGE>
FUND HIGHLIGHTS
"We believe that attractive opportunities exist right now in many international
markets. Indeed, fundamental economic and financial conditions appear quite po-
sitive for an array of industries and companies, particularly as interest rates
continue to decline worldwide. In turn, we will continue to position Putnam
Global Growth Fund to access long-term growth potential, while always keeping
in mind the importance to minimizing volatility."
-- Anthony W. Regan, manager, Putnam Global Growth Fund
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
12 Portfolio holdings
25 Financial statements
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<PAGE>
FROM THE CHAIRMAN [Photograph of George Putnam]
* (C) Karsh, Ottawa
DEAR SHAREHOLDER:
THE RELATIVELY SUBDUED PERFORMANCE OF INTERNATIONAL STOCKS SO FAR IN 1995 IN
COMPARISON TO EXCELLENT RESULTS IN THE U.S. EQUITY MARKET MAY HAVE DISAPPOINTED
SHAREHOLDERS OF PUTNAM GLOBAL GROWTH FUND. HOWEVER, I WOULD URGE THEM NOT TO LO-
SE PERSPECTIVE. GLOBAL MARKETS MAY WELL EXPERIENCE A RETURN TO VIGOR, SPURRED
PERHAPS BY DECLINING INTEREST RATES AROUND THE WORLD.
ALTHOUGH NO ONE CAN EVER PREDICT SUCH THINGS WITH CERTAINTY, PUTNAM MANAGEMENT
SEES MOUNTING EVIDENCE OF GATHERING STRENGTH IN EQUITIES ABROAD. THERE IS GOOD
REASON TO BELIEVE THAT, AS IN THE PAST, PATIENT INVESTORS IN GLOBAL STOCKS
SHOULD BE WELL REWARDED OVER TIME. IN THE REPORT THAT FOLLOWS, FUND MANAGEMENT
DISCUSSES FISCAL 1995 RESULTS IN DETAIL AND PROVIDES INSIGHTS ON PROSPECTS FOR
FISCAL 1996.
I AM PLEASED TO ANNOUNCE THAT CAROL C. MCMULLEN HAS JOINED YOUR FUND'S MANAGE-
MENT TEAM. CAROL, FORMERLY A SENIOR VICE PRESIDENT AT BARING ASSET MANAGEMENT,
HAS 14 YEARS OF INVESTMENT EXPERIENCE. SHE OVERSEES THE U.S. EQUITY PORTION OF
YOUR FUND'S PORTFOLIO.
RESPECTFULLY YOURS,
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
DECEMBER 20, 1995
* (C) Copyright
<PAGE>
REPORT FROM THE FUND MANAGERS
ANTHONY W. REGAN
CAROL C. MCMULLEN
Understandably, many investors in international stock markets are looking with
some envy at the performance of U.S. equities. Indeed, domestic stocks, as mea-
sured by the Standard and Poor's 500 *(R) Index, have gained more than 26% year
over year through October 31, 1995 -- a remarkably strong rally. Outside the
United States, most stock markets were not nearly as robust during this period.
Indeed, Putnam Global Growth Fund's substantial stake in the upbeat U.S. market
- -- approximately 30% of the fund's portfolio -- helped improve the fund's over-
all returns.
However, the fund ends its fiscal year reflecting the subdued performance of ma-
ny international equity markets. Over the fiscal year ended October 31, 1995,
the fund's class A shares rose 5.64%, with class B shares gaining 4.80%, both at
net asset value. These results are in line with the 5.18% average return in Li-
pper Analytical Services Inc.'s global fund category.
PACIFIC RIM -- POCKETS OF STRENGTH OVERSHADOWED BY JAPAN'S STRUGGLES
We believe Asia represents an exceptional opportunity for investors with a long-
term perspective. Many countries in the region are enjoying strong rates of eco-
nomic growth, in part sparked by their highly efficient, educated, and inexpen-
sive work forces. We believe the problems currently besetting the region -- es-
pecially Japan -- will prove temporary, and we are optimistic that these markets
will soon begin to reflect the underlying strength of their economies.
Over the past several months, we have seen strong performance from many of the
fund's holdings in Hong Kong, which currently accounts for 3.3% of net assets.
Hong Kong, whose currency is linked to the dollar and thus is affected by econo-
mic conditions in the United States, benefited from stable-to-declining U.S. in-
terest rates over the period. HSBC Holdings, a banking concern, has had an exce-
llent year; Cheung Kong Holdings, a property developer, has performed well now
that the island's downward real-estate spiral appears to have halted.
* (R) Registered mark
<PAGE>
Elsewhere in Asia, your fund's returns were depressed by its position in Singa-
pore, representing 5.0% of the fund's net assets. In spite of Singapore's abi-
ding economic strength, the country's stock market stagnated over the fund's
annual period. Tighter monetary conditions in response to economic overheating
hampered the market. We did see strong performance from some of the fund's Sin-
gapore holdings, including Jurong Shipyard and Singapore Airlines. In the coming
months, we believe the financial services sector might show strong growth here.
Conditions in Japan, however, are probably the sharpest negative factor affec-
ting both the region and some of your fund's holdings. Since the start of the
1990s, the nation has spent much of the time fighting recession and government
paralysis. However, a recent stimulus package, much derided at first, has appa-
rently begun to support the Japanese market. We are cautiously optimistic that
in the months ahead, Japanese equities might make a decisive move upward. Within
the fund's nearly 20% weighting in Japan, we are particularly upbeat about high-
technology issues, including two semiconductor manufacturers, Rohm and Kyocera,
as well as Omron, an electronics company.
[Bar Chart - Page 5]
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PORTFOLIO ALLOCATION *
- ----------------------------------------------------
4/30/95 10/31/95
Europe 38.3 38.2
Japan 19.7 19.7
US 31.0 25.4
Asia (ex Japan) 10.8 10.8
Latin America 0.6 0.8
- ----------------------------------------------------
* Based on net assets as of the indicated date. Holdings will vary over time.
<PAGE>
Finally, we have hedged 70% of the fund's Japanese holdings back into dollars;
this would help to protect the portfolio should the U.S. dollar continue to
strengthen.
EUROPE SHOWS SIGNS OF SLOWING
Among the fund's European holdings, we have emphasized the United Kingdom, in-
vesting 8.4% of the fund's assets there over the annual period. Holdings spanned
the full spectrum of British industries, from financial services to oil explora-
tion to consumer services. Burmah Oil continues to be a large position, as does
Sears PLC. BAT, a diversified conglomerate operating tobacco and financial ser-
vices concerns, is another large fund holding. We envision relatively sound eco-
nomic conditions in Britain in the coming months, particularly if interest rates
drift lower.
The performance of your fund's other European holdings were somewhat uninspired.
Your fund has approximately a 5% stake in France, whose market stagnated over
the period. France continues to suffer from onerous unemployment, coupled with
high interest rates deemed necessary to keep the franc strong -- a difficult
combination to overcome. A bright spot among our French holdings included SGS-
Thomson Microelectronics, which is benefiting from some of the same factors su-
pporting U.S. technology companies.
The fund's position in the Netherlands is currently 5.2%. We have seen ongoing
strength in the consumer and industrial sectors there. Accordingly, we have pur-
chased shares in Unilever and Wolters Kluwer, both diversified consumer-goods
manufacturers. In our 4.1% position in Switzerland, we continue to be optimistic
about Swiss Reinsurance, a leading reinsurance provider.
U.S. MARKETS RALLY DRAMATICALLY
Over the past year, U.S. investors have enjoyed very strong performance from
stocks across different industry sectors and company sizes. While soaring tech-
nology stocks have seized investor interest, stocks of financial services, con-
sumer goods, and transportation companies have also demonstrated remarkable
strength. Indeed, the U.S. rally appears to be based
<PAGE>
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NET CHANGE IN STOCK MARKETS
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LOCAL
12 MONTHS ENDED 10/31/95 CURRENCY U.S. $
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U.K. 16.2% 12.5%
FRANCE -0.4 5.1
NETHERLANDS 8.1 15.6
SPAIN 3.5 6.2
GERMANY 3.4 10.7
SWITZERLAND 24.1 37.4
JAPAN -8.4 -13.1
AUSTRALIA 2.4 4.9
HONG KONG 0.8 0.8
SINGAPORE -11.2 -7.8
MALAYSIA -13.9 -13.5
UNITED STATES N/A 26.8
WORLD INDEX N/A 9.5
WORLD INDEX (EX U.S.) N/A -0.1
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Source: Morgan Stanley Capital International world indexes. Past performance is
not indicative of future results.
on fundamental long-term improvement in domestic competitiveness and efficiency.
In the near term, though, the current rally has shown some signs of aging. With
interest rates likely set to decline in the coming months, however, we believe
domestic stock markets will remain strong.
In the approximately 30% of your fund allocated to the United States, we have
begun to concentrate on medium-sized companies, where valuations and growth
prospects currently appear attractive. One sector where we see exceptional po-
tential is business services. We have also positioned some of the fund's U.S.
holdings to take advantage of the persistent strength in technology; we are up-
beat about holdings in Intel, a world leader in microprocessors.
POTENTIAL FOR GROWTH IN MONTHS AHEAD
Many of the positive factors fueling the rise in U.S. stocks may serve to bu-
ttress global markets in the months ahead. Benign inflation, low interest rates,
and increasing demand may all combine to help improve the environment for global
equities as 1996 approaches. Indeed, we intend to keep your fund's portfolio po-
sitioned to benefit from a renewal in strength in equity markets around the
world.
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 10/31/95, there is no guarantee the fund will continue to hold
these securities in the future. International investing involves certain risks,
including currency fluctuations, economic instability, and political develop-
ments, not present with domestic investments.
<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, assu-
ming you held the shares through the entire period and reinvested all distribu-
tions in the fund. Performance should always be considered in light of a fund's
investment strategy. Putnam Global Growth Fund is designed for investors seeking
capital appreciation through a globally diversified equity portfolio.
TOTAL RETURN FOR PERIODS ENDED 10/31/95
CLASS B CLASS M
CLASS A (4/27/92) (3/1/95)
NAV POP NAV CDSC NAV POP
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1 year 5.64% -0.48% 4.80% -0.20% -- --
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5 years 70.66 60.94 -- -- -- --
Annual average 11.28 9.99 -- -- -- --
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10 years 248.94 228.91 -- -- -- --
Annual average 13.31 12.64 -- -- -- --
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Life-of-class -- -- 39.86 36.86 13.88% 9.91%
Annual average -- -- 10.03 9.35 -- --
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COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 10/31/95
MSCI S&P 500 CONSUMER
WORLD EAFE INDEX PRICE INDEX
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1 year 9.48% -0.37% 26.36% 2.81%
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5 years 64.20 39.94 121.28 15.13
Annual average 10.43 6.95 17.22 2.86
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10 years 255.48 265.72 320.19 41.40
Annual average 13.52 13.85 15.44 3.52
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Life of class B 48.63 47.39 54.53 10.18
Annual average 11.98 11.71 13.20 2.80
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Life of class M 20.83 12.89 21.57 1.86
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Performance data represent past results, do not reflect future performance, and
will differ for each share class. Performance data do not take into account any
adjustment for taxes payable on reinvested distributions or for payments under
the fund's class A distribution plan prior to its implementation in fiscal 1990.
Investment returns and principal value will fluctuate so that an investor's sha-
res, 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 declines from a 5% maximum during the first year to 1% during
the sixth year.
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[Line Chart - Page 9]
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GROWTH OF A $10,000 INVESTMENT
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FUND'S CLASS A MORGAN STANLEY CAPITAL
SHARES AT POP INTERNATIONAL WORLD INDEX S&P 500 INDEX
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1985 9425 10000 10000
1986 14185 14753 13315
1987 15360 17899 14159
1988 16607 21512 16259
1989 19535 24402 20531
1990 19272 21649 18988
1991 22453 25059 25350
1992 22115 23748 27866
1993 28665 30161 32015
1994 31135 32469 33253
1995 32891 35548 42019
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Past performance is no assurance of future results. A $10,000 investment in the
fund's class B shares at inception on 4/27/92 would have been valued at $13,986
on 10/31/95 ($13,686 with a redemption at the end of the period). A $10,000 in-
vestment in class M shares at inception on 3/1/95 would have been worth $11,388
at NAV, and $10,991 at POP on 10/31/95.
PRICE AND DISTRIBUTION INFORMATION
12 months ended 10/31/95
DISTRIBUTIONS: CLASS A CLASS B CLASS M
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Number 1 1 --
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Income $.008 $.008 --
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Capital gains
Long-term $0.281 $0.281 --
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Short-term 0.024 0.024 --
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Total $0.313 $0.313 --
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SHARE VALUE: NAV POP NAV NAV POP
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10/31/94 $9.92 $10.53 $9.74 -- --
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3/1/95 (inception -- -- -- $8.86 $9.18
of class M shares)
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10/31/95 10.13 10.75 9.86 10.09 10.46
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TOTAL RETURN FOR PERIODS ENDED 9/30/95
(most recent calendar quarter)
CLASS B CLASS M
CLASS A (4/27/92) (3/1/95)
NAV POP NAV CDSC NAV POP
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1 year 8.97% 2.75% 8.06% 3.06% -- --
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5 years 81.52 71.17 -- -- -- --
Annual average 12.66 11.35 -- -- -- --
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10 years 286.40 264.24 -- -- -- --
Annual average 14.47 13.80 -- -- -- --
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Life-of-class -- -- 41.71 38.71 15.35% 11.33%
Annual average -- -- 10.70 10.01 -- --
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<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 (S&P) 500 Index is an unmanaged list of common stocks that is
frequently used as a general measure of stock market performance.
MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD INDEX is an unmanaged list of
global equity securities, with all values expressed in U.S. dollars.
MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EAFE INDEX is an unmanaged list of
equity securities from Europe, Australia and the Far East, with all values ex-
pressed in U.S. dollars.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation; it does not
represent an investment return.
Investment indexes assume reinvestment of all distributions and do not take in-
to account brokerage commissions or other costs. The fund's portfolio contains
securities that do not match those in the indexes.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
For the fiscal year ended October 31, 1995
To the Trustees and Shareholders of
Putnam Global Growth Fund
We have audited the accompanying statement of assets and liabilities of Putnam
Global Growth Fund, including the portfolio of investments owned, as of October
31, 1995, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the periods indicated therein.
These financial statements and financial highlights are the responsibility of
the fund's management. Our responsibility is to express an opinion on these fi-
nancial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain rea-
sonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial state-
ments. Our procedures included confirmation of securities owned as of October
31, 1995 by correspondence with the custodian and brokers. An audit also inclu-
des assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Putnam
Global Growth Fund as of October 31, 1995, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods indica-
ted therein, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
December 15, 1995
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
October 31, 1995
COMMON STOCKS (92.9%)*
NUMBER OF SHARES MARKET VALUE
ARGENTINA (0.3%)
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450,000 Astra CIA Argentina DE Petro $ 666,000
53,175 Banco De Galicia y Buenos Aires Class B ADR 1,016,972
345,500 Banco Frances del Rio De La Plata S.A.+ 2,511,785
50,000 Banco Frances del Rio De La Plata S.A. ADR+ 1,093,750
49,700 Capex S.A. 144A GDR 583,975
200,364 Cia Naviera Perez Companc S.A.+ 883,605
75,000 Telecom Argentina Class B+ 288,750
17,100 Telecom Argentina S.A. ADR+ 656,213
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7,701,050
AUSTRALIA (1.0%)
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1,196,752 Amcor, Ltd. 8,967,454
3,000,000 Biota Holdings Ltd.+ 3,883,650
11,389,000 Sydney Harbor Casino+ 14,223,267
----------------
27,074,371
AUSTRIA (0.2%)
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410,000 Mayr-Melnhof Karton AG 144A ADS 5,842,500
BELGIUM (1.1%)
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18,460 Bekaert S.A. 13,542,133
33,000 Solvay S.A. 16,632,719
----------------
30,174,852
BRAZIL (0.1%)
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27,615 Comp Energetica De Minas Gerais (Cemig)144A ADR 590,271
24,700 Companhia Siderurgica Nacional (Registered) 529,194
2,353 Eletrobras de Brazil (Registered) 668,090
26,600 Telebras Co. ADR 1,073,975
49,700 Usiminas Siderurg Minas 144A ADR 470,237
----------------
3,331,767
CANADA (0.4%)
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225,000 Magna International, Inc. Class A 9,731,250
CHILE (0.1%)
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60,600 Banco Osorno y La Union ADR 818,100
45,000 Santa Isabel S.A. ADR+ 1,018,125
----------------
1,836,225
COLUMBIA (0.1%)
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60,000 Banco Industrial Colombiano ADR 817,500
39,000 Cementos Paz Delaware Rio 144A ADR+ 546,000
----------------
1,363,500
DENMARK (0.3%)
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357,000 Tele Danmark ADS 9,326,625
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
FINLAND (0.7%)
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910,000 Repola $ 17,624,107
FRANCE (5.0%)
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62,304 Cetelem Group 9,953,327
203,100 Credit Local de France S.A. 16,102,409
42,682 Docks de France S.A. 6,503,924
232,100 Lafarge Coppee (Bearer) 15,406,782
219,000 Michelin Corp. Class B (Registered) 8,858,679
88,000 Peugeot S.A. 11,481,004
427,800 SGS-Thomson Microelectronics ADR+ 19,357,950
140,000 Societe Generale Paris 16,057,348
249,324 Societe Nationale Elf Aquitaine (Bearer) 17,004,586
36,200 Sommer-Allibert 9,586,605
194,100 Total Corp. ADS 5,992,838
----------------
136,305,452
GERMANY (1.3%)
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530 Munich Re (Registered)+ 1,100,639
28,500 Preussag AG 8,103,834
650,000 VEBA AG 26,595,314
----------------
35,799,787
HONG KONG (3.3%)
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1,010,000 Chen Hsong Holdings 587,878
2,782,000 Cheung Kong Holdings Ltd. 15,689,053
220,000 Citic Pacific Ltd. 687,216
362,000 Consolidated Electric Power Asia Ltd. 732,784
46,500 Ek Chor China Motorcycle Co., Ltd. 651,000
774,076 First Pacific Co., Ltd. 891,100
3,100,000 Golden Resources Dev. Int. Ltd. 316,767
1,501,200 Guoco Group Ltd. 6,951,439
1,443,458 HSBC Holdings PLC 21,004,375
3,100,000 Hong Kong Electric Holdings, Ltd. 10,545,583
3,500,000 Hong Kong Land Holdings Ltd. 6,300,000
310,000 Hong Kong Telecommunications Ltd. 541,313
2,425,000 Hutchison Whampoa, Ltd. 13,362,092
755,000 Jinhui Shipping & Transp. ADR 906,000
405,400 New World Infrastructure Ltd.+ 713,142
966,000 Shun Tak Holdings Ltd. 762,185
1,235,700 Swire Pacific Ltd. Class A 9,270,308
337,000 Varitronix International Ltd. 642,947
----------------
90,555,182
INDIA (0.2%)
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58,000 Ashok Leyland Ltd. 144A GDR+ 594,500
22,366 Benpres Holdings Corp. 144A GDR+ 128,605
36,000 East India Hotel 144A GDR+ 621,000
50,000 Gujarat Narmada Valley Fertilizer 144A GDR+ 337,500
50,900 India Cements Ltd. 144A GDR 362,663
31,400 Indian Hotels, Ltd. 144A GDR+ 565,200
55,600 Indian Petrochemicals Corp. Ltd. 144A ADR+ 653,300
157,500 KEC International Ltd.+ 521,921
192,400 Salora International Ltd.+ 253,900
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
INDIA (continued)
- --------------------------------------------------------------------------------
12,300 Southern Petrochemical Ltd. 144A+ $ 75,645
34,800 Tata Engineering & Locomotive Co. Ltd. 144A GDR 722,100
----------------
4,836,334
INDONESIA (0.2%)
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92,000 Asia Pacific Resource International Class A+ 667,000
381,000 Astra International (Registered) 763,681
325,000 Indorayon Utama (Registered) 400,882
206,000 PT Mulia Industrindo (Registered) 608,020
13,900 Part Tri Polyta ADR 215,450
160,000 Sampoerna Industries (Registered) 1,480,181
----------------
4,135,214
IRELAND (2.5%)
- --------------------------------------------------------------------------------
4,551,265 Allied Irish Banks 23,001,074
3,025,000 CRH PLC 19,991,572
3,244,250 Greencore Group PLC 26,012,429
----------------
69,005,075
ISRAEL (.%)
- --------------------------------------------------------------------------------
23,300 Teva Pharmaceutical Industries Ltd. ADR 914,525
ITALY (0.3%)
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1,404,840 Cartiere Burgo S.P.A. 8,004,378
JAPAN (19.6%)
- --------------------------------------------------------------------------------
1,300,000 Bridgestone Corp. 18,053,788
280 Chubu Electric Power, Inc. 6,517
1,230,000 Dai Nippon Printing Co., Ltd. 19,607,822
1,819,000 Daiwa Securities Ltd. 21,347,675
1,910,000 Fujitsu, Ltd. 22,789,239
287,500 Hirose Electric Co. Ltd. 18,360,634
390,000 Ito Yokado Co., Ltd. 21,321,269
1,630,000 KAO Corp.+ 19,767,235
416,000 Komori Corp. 9,845,671
650,000 Kurita Water Ltd. 18,117,358
233,000 Kyocera Corp. 19,095,744
93,000 Mabuchi Motor Co. Ltd. 5,630,024
1,140,000 Marui Co., Ltd. 19,733,984
1,250,000 Matsushita Electric Industrial Co., Ltd. 17,726,160
1,800,000 Mitsubishi Motors Corp. 14,998,531
2,047,000 Mitsui Fudoscan Co. Ltd. 16,295,919
526,000 Murata Manufacturing Co. Ltd. 18,467,871
2,068 Nippon Telegraph and Telephone Corp. 16,968,722
829,000 Nippondenso Co., Ltd. 15,161,172
955,000 Nishimatsu Construction Co. 10,740,831
1,129,000 Nisshin Steel Co., Ltd. 4,184,753
1,100,000 Omron Tateisi Electronics Corp. 25,711,489
314,000 Rohm Co. Ltd. 19,070,316
430,000 Santen Pharmaceutical Co., Ltd. 10,177,016
225,000 Secom Co., Ltd. 14,655,255
1,569,000 Sekisui Chemical Co., Ltd. 20,408,507
630,000 Sharp Corp. 8,749,143
1,030,000 Shimizu Corp. 9,599,901
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
JAPAN (continued)
- --------------------------------------------------------------------------------
1,300,000 Tokio Marine & Fire Insurance Co. Ltd. $ 13,349,632
2,920,000 Toray Industries, Inc. 18,248,213
610,000 Tostem Corp. 18,732,516
936,000 Yamanouchi Pharmaceutical Co. Ltd. 20,871,196
700,000 Yamatake Honeywell 9,515,892
1,023,000 Yamato Transport Co. Ltd. 11,005,378
560,000 Yasuda Fire & Marine Insurance Co., Ltd. 3,395,599
----------------
531,710,972
LUXEMBOURG (0.1%)
- --------------------------------------------------------------------------------
41,300 Millicom International Cellular S.A.+ 1,362,900
MALAYSIA (0.9%)
- --------------------------------------------------------------------------------
60,000 Genting Berhad (acquired 60,000 shares 3/15/95,
cost $1,318,373). 517,180
488,000 Hong Leong Industries Berhad 2,324,084
406,000 Leader Universal 1,094,619
300,000 Malayan Banking Berhad 2,420,593
380,000 Malayawata Steel Berhad 755,304
232,000 Malaysian Assurance Alliance 940,528
285,000 Maruichi Malaysia 1,099,303
4,620,000 Sime Darby Berhad 11,546,817
338,000 Southern Bank Berhad (Registered) 685,126
169,000 Sungei Way Holdings 568,721
176,000 Technology Resources Industries+ 446,806
106,000 Telekom Malaysia 759,318
205,500 Ytl Corp. Berhad 1,116,188
----------------
24,274,587
MEXICO (0.1%)
- --------------------------------------------------------------------------------
216,000 Apasco S.A. 792,911
990,000 Cifra S.A. de C.V. Class C+ 1,010,886
32,050 International De Ceramica ADR+ 184,288
143,000 Sears Roebuck de Mexico S.A.+ 392,194
22,500 Telefonos de Mexico S.A. Class L ADR 618,750
----------------
2,999,029
NETHERLANDS (5.2%)
- --------------------------------------------------------------------------------
229,962 ABN AMRO Holding N.V. 9,656,394
417,247 Aegon N.V. 15,829,435
110,000 Akzo-Nobel N.V. 12,519,476
117,600 Dutch State Mines N.V. 8,803,800
505,006 Getronics Electric N.V. 24,084,458
600,000 IHC Caland N.V. 17,062,512
320,000 K.L.M.-Royal Dutch Airlines 10,559,250
422,400 Koninklijke PPT Nederland N.V. 14,847,805
140,000 Unilever N.V. 18,327,950
95,977 Wolters Kluwer N.V. 8,729,050
----------------
140,420,130
NORWAY (0.1%)
- --------------------------------------------------------------------------------
105,000 Maritime Investment Fund Ltd.+ 1,076,250
35,000 Smedvig Transpotation ADR+ 551,250
----------------
1,627,500
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
PAKISTAN (0.1%)
- --------------------------------------------------------------------------------
82,695 Hubco Power GDR $ 1,354,131
48,100 Pakistan State Oil 506,082
5,700 Pakistan Telecomm Ltd. 144A GDR+ 532,950
----------------
2,393,163
PHILIPPINES (0.1%)
- --------------------------------------------------------------------------------
2,850,000 Bankard, Inc.+ 1,179,273
94,300 Philippine Commercial International Bank+ 773,129
8,800 Philippine Long Distance Telephone Co. ADR 493,900
297,000 Pilipino Telephone Corp.+ 262,933
----------------
2,709,235
PORTUGAL (.%)
- --------------------------------------------------------------------------------
107,300 Portucel Industrial Empresa S.A. 144A ADS+ 756,465
RUSSIA (.%)
- --------------------------------------------------------------------------------
35,300 Mosenergo ADR (Registered)+ 313,288
SINGAPORE (5.0%)
- --------------------------------------------------------------------------------
50,000 Asia Pulp & Paper Co. Ltd. ADR+ 512,500
1,203,000 Cycle & Carriage Ltd. 10,723,594
1,105,000 Development Bank of Singapore (Registered) 12,664,309
1,800,000 Hong Leong Industries 2,781,281
1,708,000 Jardine Matheson Holdings Ltd. 10,418,800
857,000 Jurong Shipyard Ltd. 5,699,186
2,465,000 Leader Universal 6,645,904
1,200,000 Malayan Banking Berhad 9,682,372
2,560,000 Overseas Union Bank Ltd. (Registered) 15,937,743
1,490,000 Singapore Airlines Ltd. (Registered) 13,808,985
558,000 Singapore Press Holdings (Registered) 8,724,302
1,150,000 United Engineers Ltd. 7,151,573
1,863,082 United Overseas Bank Ltd. (Registered) 16,343,980
----------------
136,609,939
SOUTH AFRICA (0.1%)
- --------------------------------------------------------------------------------
697,467 Iscor Iron & Steel Industrial Corp., Ltd. 707,700
67,600 Malbak Ltd. 144A GDR 436,696
18,300 Nedcor Ltd. 144A GDR+ 1,043,100
14,400 Polifin Ltd.+ 31,000
95,800 Sasol Ltd. 827,561
28,000 South African Breweries Ltd. 919,512
----------------
3,965,569
SOUTH KOREA (.%)
- --------------------------------------------------------------------------------
3,000 L.G. Chemical Limited 70,971
SPAIN (2.7%)
- --------------------------------------------------------------------------------
610,000 Banco de Bilbao-Vizcaya S.A. (Registered) 18,648,473
300,000 Hidrolectrica del Cantabrico 9,023,851
2,750,000 Iberdrola S.A. 20,736,007
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
SPAIN (continued)
- --------------------------------------------------------------------------------
34,000 Inversiones Y Represent ADR $ 714,000
363,000 Repsol S.A. 10,844,481
425,000 Repsol S.A. ADR 12,590,625
----------------
72,557,437
SWEDEN (1.2%)
- --------------------------------------------------------------------------------
657,000 Astra AB Free 24,193,783
561,840 Svenska Cellulosa Ser.B 9,624,033
----------------
33,817,816
SWITZERLAND (4.1%)
- --------------------------------------------------------------------------------
8,060 BBC Brown Boveri & Cie, AG, Ltd. (Bearer) 9,344,208
28,970 Ciba-Geigy AG (Registered) 25,068,204
8,280 Nestle S.A. (Registered) 8,673,592
31,250 Rieter Holding AG (Registered) 9,325,484
10,300 SGS Societe Generale De Surveillance Holdings
S.A. (Bearer) 19,448,504
17,286 Swiss Reinsurance (Registered) 18,898,954
20,000 Union Bank of Switzerland (Bearer) 21,654,930
----------------
112,413,876
TAIWAN (.%)
- --------------------------------------------------------------------------------
39,100 Hocheng Group Corp. 144A GDR 338,305
27,690 Tung Ho Steel Enterprise GDR+ 263,055
41,814 Yageo 144A GDR+ 386,780
----------------
988,140
THAILAND (0.2%)
- --------------------------------------------------------------------------------
469,333 Industrial Finance Corp. (Registered) 1,538,949
16,200 Siam Cement PCL (Registered) 883,402
302,000 Siam Makro PCL (Registered)+ 1,062,281
130,000 Thai Farmers Bank Public Co. (Registered) 1,074,722
----------------
4,559,354
UNITED KINGDOM (8.4%)
- --------------------------------------------------------------------------------
1,200,000 Anglian Water PLC 10,681,236
1,724,189 Argyll Group PLC 8,777,536
2,569,629 BAT Industries PLC 21,084,807
1,418,538 Barclays Bank PLC 16,663,325
79,900 British Petroleum PLC ADR 7,051,175
1,048,770 Burmah Oil PLC 16,332,338
836,000 East Midlands Electric PLC 11,485,712
3,937,500 Explaura Holdings PLC+ 46,691
2,180,000 General Electric Co. (The) PLC 10,822,261
1,500,000 Guinness PLC 12,023,505
995,000 Molins PLC 12,647,684
618,182 North West Water Group PLC 5,815,207
2,536,574 Royal Insurance Holdings PLC 15,680,365
10,576,400 Sears PLC 16,972,108
272,000 Securicor Group PLC Class A 4,270,218
704,295 Security Services PLC 10,466,810
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
UNITED KINGDOM (continued)
- --------------------------------------------------------------------------------
2,690,900 Senior Engineering Group PLC $ 4,233,041
1,439,316 Siebe PLC 17,123,578
175,000 SmithKline Beecham PLC ADR 9,078,125
14 Tate & Lyle PLC 99
4,032,786 Vodafone Group PLC 16,640,928
----------------
227,896,749
UNITED STATES (27.8%)
- --------------------------------------------------------------------------------
147,600 3Com Corp.+ 6,937,200
100,000 A.P.S. Holding Corp.+ 2,050,000
44,500 AVX Corp. 1,385,063
60,000 Advocat, Inc.+ 645,000
40,000 Ahmanson (H.F.) & Co. 1,000,000
7,800 Alco Standard Corp. 690,300
131,100 Alexander Haagen Properties 1,442,100
106,900 Allied-Signal, Inc. 4,543,250
9,200 America Online, Inc.+ 736,000
331,000 American Family Restaurants+ 1,448,125
82,500 American International Group, Inc. 6,960,938
25,000 American Medical Response+ 721,875
126,000 Ameritech Corp. New 6,804,000
178,700 Amgen, Inc.+ 8,577,600
18,900 Analog Devices Inc.+ 682,763
14,400 Andrew Corp.+ 608,400
87,700 Anheuser-Busch Cos., Inc. 5,788,200
17,800 Applebee's International, Inc. 500,625
54,700 Applied Extrusion Technologies, Inc.+ 841,013
122,600 Applied Materials, Inc.+ 6,145,325
105,000 Arcadian Corp. 2,165,625
4,200 Ascend Communications, Inc.+ 273,000
48,500 Atlas Air, Inc.+ 721,438
18,000 BMC Industries, Inc. 695,250
175,000 Baker (J.) Inc. 1,006,250
145,400 Bank of Boston Corp. 6,470,300
184,100 BankAmerica Corp. 10,585,750
114,600 Barnett Banks, Inc. 6,331,650
220,600 Baxter International Inc. 8,520,675
11,400 Baybanks, Inc. 923,400
27,000 Belden & Blake Corp.+ 391,922
152,600 Bell Atlantic Corp. 9,709,175
100,000 Best Products, Inc.+ 493,750
5,900 Biochem Pharmaceutical, Inc.+ 225,675
176,900 Black & Decker Manufacturing Co. 5,992,488
119,000 Boeing Co. 7,809,375
22,800 Boston Scientific Corp.+ 960,450
76,800 Broderbund Software, Inc.+ 5,328,000
98,600 Burlington Northern Santa Fe Corp. 8,270,075
33,000 CIGNA Corp. 3,271,125
50,000 CRA Managed Care, Inc.+ 1,200,000
183,200 CUC International, Inc.+ 6,343,300
86,000 Cabletron Systems, Inc.+ 6,761,750
7,600 Cambridge Technology Partners, Inc.+ 431,300
19,000 Canandaigua Wine Co. Class A+ 912,000
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
UNITED STATES (continued)
- --------------------------------------------------------------------------------
248,200 Capco Automotive Products $ 1,892,525
83,300 Capital Cities/ABC, Inc. 9,881,463
14,300 Capstone Capital Trust, Inc. 264,550
93,125 Cavalier Homes, Inc. 1,583,125
99,300 Ceridian Corp.+ 4,319,550
22,400 Charter One Financial, Inc. 635,600
107,400 Chemical Banking Corp. 6,108,375
230,700 Circle K Corp.+ 4,758,188
118,100 Circuit City, Stores Inc. 3,941,588
24,800 Circus Circus Enterprises, Inc.+ 660,300
101,600 Cisco Systems, Inc.+ 7,874,000
173,000 Citicorp 11,223,375
8,200 Clear Channel Communications, Inc.+ 672,400
6,600 Cognex Corp.+ 394,350
342,000 Collins & Aikman Corp.+ 2,736,000
116,300 Columbia/HCA Healthcare Corp. 5,713,238
65,200 Comcast Corp. Special Class A 1,165,450
15,300 Commercial Net Lease Realty, Inc. 195,075
60,600 Community Care of America, Inc.+ 818,100
19,600 CompUSA, Inc.+ 749,700
312,000 Congoleum Corp. Class A+ 2,613,000
33,600 Corporate Express, Inc.+ 877,800
128,000 Corrpro Cos., Inc.+ 720,000
9,300 Credit Acceptance Corp.+ 218,550
19,500 Crestar Financial Corp. 1,111,500
45,600 Donnkenny, Inc.+ 1,299,600
76,000 Duckwall-Alco Stores, Inc.+ 836,000
12,700 du Pont (E.I.) de Nemours & Co., Ltd. 792,163
19,100 Eckerd Corp.+ 756,838
5,900 Electronics for Imaging, Inc.+ 485,275
102,100 Emerson Electric Co. 7,274,625
153,000 Enron Corp. 5,259,375
111,800 Epitope, Inc.+ 1,537,250
25,800 Equifax, Inc. 1,006,200
79,900 Federal National Mortgage Association 8,379,513
240,300 Federated Department Stores+ 6,097,613
122,200 Felcor Suite Hotels, Inc. 3,528,525
12,800 First American Corp. Tennessee 561,600
21,700 First Bank System, Inc. 1,079,575
83,503 First Data Corp. 5,521,609
105,900 Fluor Corp. 5,983,350
85,000 Franklin Resources, Inc. 4,313,750
254,100 Freeport-McMoRan Copper & Gold Co., Inc. Class A 5,812,538
23,600 Fritz Companies, Inc.+ 826,000
23,200 Gartner Group Inc. Class A+ 1,012,100
163,300 General Motors Corp. Class E 7,695,513
111,800 General Motors Corp. Class H 4,695,600
40,400 General Nutrition Companies, Inc.+ 1,004,950
70,000 Golden Systems Inc.+ 28,438
45,800 Great Lakes Chemical Corp. 3,074,325
43,900 Greentree Financial Corp. 1,168,838
138,200 Guidant Corp. 4,422,400
76,800 HBO & Co. 5,433,600
22,200 HFS, Inc.+ 1,359,750
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
UNITED STATES (continued)
- --------------------------------------------------------------------------------
80,600 HGI Realty, Inc. $ 1,783,275
145,800 Harcourt General, Inc. 5,777,325
11,500 Harman International Industries, Inc. 530,438
24,300 Harnischfeger Industries, Inc. 765,450
27,600 Health Care & Retirement Corp.+ 810,750
38,950 Health Management Assoc., Inc.+ 837,425
220,000 Herbalife International, Inc. 1,650,000
20,900 Heritage Media Corp. Class A+ 579,975
100,800 Hewlett-Packard Co. 9,336,600
170,900 Honeywell, Inc. 7,177,800
78,100 IBM Corp. 7,595,225
70,300 IBP, Inc. 4,209,213
537,247 ICN Pharmaceuticals, Inc. 11,013,564
20,600 IDEXX Laboratories, Inc.+ 839,450
162,600 IVF America, Inc.+ 477,638
47,200 Integrated Health Services, Inc. 1,079,700
134,600 Intel Corp. 9,405,175
159,800 Johnson & Johnson 13,023,700
57,800 Kroger Co.+ 1,929,075
75,600 LCI International, Inc.+ 1,360,800
155,200 LSI Logic Corp.+ 7,313,800
195,800 LTC Properties Inc. 2,839,100
29,800 La Quinta Inns, Inc. 767,350
57,200 Life Partners Group, Inc. 1,036,750
70,400 Lilly (Eli) & Co. 6,802,400
87,700 Linear Technology Corp. 3,836,875
94,500 Lockheed Martin Corp. 6,437,813
443,700 MCI Communications Corp. 11,064,769
30,200 MGIC Investment Corp. 1,717,625
116,000 Malan Realty Investors, Inc. 1,624,000
175,500 Marriott International, Inc. 6,471,563
2,700 McAfee Associates, Inc.+ 157,275
18,500 McDonnell Douglas Corp. 1,512,375
92,100 Medtronic, Inc. 5,318,775
22,400 Mentor Corp. Minnesota 492,800
126,800 Merck & Co., Inc. 7,291,000
35,600 Mercury Finance Co. 685,300
108,400 Merrill Lynch & Co., Inc. 6,016,200
94,500 Microsoft Corp.+ 9,450,000
78,000 Mid Atlantic Realty Trust 643,500
214,300 Mirage Resorts, Inc.+ 7,018,325
91,400 Mobil Corp. 9,208,550
23,200 Morgan (J.P.) & Co., Inc. 1,789,300
54,400 Nabisco Holdings Corp. Class A 1,462,000
22,400 National Data Corp. 593,600
129,000 National Health Investors, Inc. 3,870,000
116,600 NationsBank Corp. 7,666,450
32,600 New World Communications Group, Inc.+ 537,900
75,800 Northwest Airlines, Inc. Class A+ 3,041,475
66,500 Norton McNaughton Inc.+ 1,313,375
15,200 Nuevo Energy Co.+ 336,300
47,000 Oasis Residential, Inc. 1,022,250
269,200 Office Depot, Inc.+ 7,705,850
14,000 Omnicom Group, Inc. 894,250
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
UNITED STATES (continued)
- --------------------------------------------------------------------------------
120,800 Oroamerica, Inc.+ $ 498,300
25,000 Outback Steakhouse, Inc.+ 784,375
569,000 Owens-Illinois Inc.+ 7,183,625
5,900 Oxford Health Plans Inc.+ 461,675
42,600 Paging Network, Inc.+ 979,800
127,900 Parametric Technology Corp.+ 8,553,313
24,300 Paychex, Inc. 1,054,013
4,800 PeopleSoft, Inc.+ 412,800
211,500 PepsiCo, Inc. 11,156,625
154,100 Pfizer, Inc. 8,841,488
155,800 Philip Morris Cos., Inc. 13,165,100
91,600 Pioneer Hi-Bred International, Inc. 4,545,650
54,000 Pittston Co. 1,485,000
8,800 Pittston Minerals Group 85,800
192,000 Plains Resources, Inc.+ 1,308,000
200,500 Praxair, Inc. 5,413,500
11,100 Premark International, Inc. 513,375
121,000 Procter & Gamble Co. 9,801,000
174,100 RFS Hotel Investors, Inc. 2,633,263
362,000 Reckson Associates Realty Corp. 9,728,750
32,200 Red Lion Hotels, Inc.+ 635,950
27,100 Renaissance Communications Corp.+ 606,363
47,400 Reptron Electronics, Inc.+ 722,850
23,300 Revco D.S., Inc.+ 553,375
30,900 Reynolds & Reynolds Co. Class A 1,100,813
173,200 Rightchoice Managed Care, Inc. Class A+ 2,208,300
161,700 Rite Aid Corp. 4,365,900
111,000 River Bank America+ 749,250
5,600 Robert Half International, Inc.+ 204,400
230,200 SBC Communications, Inc. 12,862,425
23,700 STB Systems, Inc.+ 260,700
65,700 Safeway, Inc.+ 3,104,325
13,000 Sanifill, Inc.+ 409,500
50,900 Sara Lee Corp. 1,495,188
67,800 Schlumberger Ltd. 4,220,550
208,200 Scott Paper Co. 11,086,650
16,100 Seagate Technology, Inc.+ 720,475
174,400 Sears, Roebuck & Co. 5,929,600
24,400 Seda Specialty Packaging Corp.+ 271,450
100,700 Seitel, Inc.+ 2,605,613
111,000 Shorewood Packaging Corp.+ 1,859,250
7,200 Sierra On-Line, Inc.+ 268,200
81,500 Sizeler Property Investments, Inc. 743,688
21,900 Softkey International, Inc.+ 689,850
84,500 Sports Club Co., Inc.+ 348,563
35,900 Staples, Inc.+ 955,838
1,200 Star Banc Corp. 66,450
102,800 Sterile Concepts Holdings 1,452,050
20,900 Stewart Enterprises, Inc. Class A 705,375
130,600 Stone Energy Corp.+ 1,485,575
13,300 Storage USA, Inc. 389,025
8,500 Stratacom, Inc.+ 522,750
42,500 Sun Bancorp, Inc. 739,500
83,700 Sundstrand Corp. 5,126,625
<PAGE>
COMMON STOCKS
NUMBER OF SHARES MARKET VALUE
UNITED STATES (continued)
- --------------------------------------------------------------------------------
25,900 Sunglass Hut International+ $ 705,775
4,100 Sybase Inc.+ 159,082
18,500 Symbol Technologies, Inc.+ 645,188
12,800 Synopsys, Inc.+ 480,000
11,500 TCF Financial Corp. 675,625
6,800 TRW, Inc. 447,100
129,600 Tandy Corp. 6,399,000
196,500 Team Rental Group, Inc.+ 2,063,250
172,600 Tele-Comm Liberty Media Group, Inc. Class A+ 4,250,275
286,200 Tele-Communications Inc. (TCI Group) Class A+ 4,865,400
19,100 Tellabs, Inc.+ 649,400
21,700 Tencor Instruments+ 924,963
30,900 Teradyne, Inc.+ 1,031,288
6,400 Texas Instruments, Inc. 436,800
37,600 The PMI Group, Inc. 1,804,800
154,790 Titan Holdings, Inc. 2,186,409
10,700 Tommy Hilfiger Corp.+ 407,938
154,700 Travelers Group Inc. 7,812,350
93,000 Trism, Inc.+ 604,500
51,600 U.S. Robotics Corp.+ 4,773,000
29,800 UJB Financial Corp. 949,875
73,800 Union Acceptance Corp. Class A+ 1,162,350
17,600 United Waste Systems, Inc.+ 695,200
156,800 Upjohn Co. 7,957,600
14,700 Varity Corp.+ 532,875
114,200 Viacom, Inc. Class B+ 5,710,000
31,600 Whitman Corporation 671,500
179,000 Winston Hotels 1,991,375
49,800 Xerox Corp. 6,461,550
100,000 Young Broadcasting Corp. Class A+ 3,050,000
17,200 Zebra Technologies Corp.+ 1,023,400
----------------
754,397,424
URUGUAY (.%)
- --------------------------------------------------------------------------------
36,800 Banco Comercial S.A. 144A GDR 616,400
VENEZUELA (0.1%)
- --------------------------------------------------------------------------------
225,040 Venepal 144A GDR 450,080
184,000 Venezolana de Prerreducidos Caroni Venprecar 943,000
----------------
1,393,080
----------------
TOTAL COMMON STOCKS (cost $2,220,934,317) $2,521,416,218
<PAGE>
PREFERRED STOCKS (0.6%) *
NUMBER OF SHARES MARKET VALUE
- --------------------------------------------------------------------------------
138,200 Banco Bradesco BRC 0.072 NPV (No Par Value)
pfd. (Brazil) $ 1,264,857
4,800 Companhia Vale Do Rio Doce BRC 2.307 NPV
pfd. (Brazil) 773,791
3,880 Coteminas Cia Tecidos Norte de Minas BRC 8.65
NPV pfd. (Brazil) 1,210,608
106,970 Essilor International FF 12.3 pfd. (France) 13,780,672
228,000 Refrigeracao Parna S.A. BRC 0.0463 NPV pfd. (Brazil) 538,284
----------------
TOTAL PREFERRED STOCKS (cost $14,102,958) $ 17,568,212
INVESTMENT FUNDS (0.2%)*
NUMBER OF SHARES MARKET VALUE
21,800 India Magnum Fund Class A (acquired 21,800 shares
3/23/95, cost $1,177,200) (India)+ ++ $ 981,000
104,200 Fleming Russia Securities Fund (Russia)+ 638,225
3,250 Nordic Recovery Fund (Sweden)+ 4,982,250
----------------
TOTAL INVESTMENT FUNDS (cost $5,416,790) $ 6,601,475
CONVERTIBLE BONDS AND NOTES (0.1%)*
PRINCIPAL AMOUNT MARKET VALUE
$ 1,500,000 Emerson Radio Corp. cv. sr. sub. deb. 8 1/2s,
2002 (United States) $ 1,290,000
500,000 Teco Electric & Machinery 144A cv. unsub. 2 3/4s,
2004 (Taiwan) 387,500
320,000 United Micro Electronics 144A cv. unsub. 1 1/4s,
2004 (Taiwan) 430,400
----------------
TOTAL CONVERTIBLE BONDS AND NOTES (cost $2,506,300) $ 2,107,900
UNITS (.%)* (cost $693,420)
NUMBER OF UNITS MARKET VALUE
13,000 Cesc Ltd. Units 144A GDR (Luxembourg)+ $ 188,500
WARRANTS (.%)*+
NUMBER OF WARRANTS EXPIRATION DATE MARKET VALUE
134,140 Cartiere Burgo S.P.A. (Italy) 12/31/95 $ 1,138
43,700 Financing for Sciences (United States) 5/20/99 24,581
31,250 Rieter Holding (Switzerland) 3/13/96 86,653
----------------
TOTAL WARRANTS (cost $4,370) $ 112,372
<PAGE>
SHORT-TERM INVESTMENTS (4.9%)*
PRINCIPAL AMOUNT MARKET VALUE
$ 16,000,000 Federal National Mortgage Association 5.50s,
March 4, 1996 $ 15,696,889
25,000,000 Ford Motor Credit Co. 5.69s, January 9, 1996 24,727,354
25,000,000 General Motors Acceptance Corp. 5.77s,
November 13, 1995 24,951,917
22,894,000 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 $22,897,727 for an effective
yield of 5.86% 22,897,727
14,000,000 MetLife Funding Inc. 5.63s, December 6, 1995 13,923,369
30,000,000 USAA Capital Corp. 5.65s, January 11, 1996 29,665,708
----------------
TOTAL SHORT-TERM INVESTMENTS (cost $131,862,964) $ 131,862,964
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $2,375,521,119)*** $2,679,857,641
- --------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $2,713,884,055.
+ 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 October 31, 1995 was $1,498,180 or less
than 1% of net assets.
*** The aggregate identified cost for federal income tax purposes is
$2,399,381,153, resulting in gross unrealized appreciation and depreciation
of $368,038,155 and $87,561,667, respectively, or net unrealized apprecia-
tion of $280,476,488.
ADR, ADS, or GDR after the name of a holding stands for American Depository
Receipt, American Depository Shares or Global Depository Receipt, respecti-
vely, representing ownership of foreign securities on deposit with a domes-
tic 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 re-
sold in transactions exempt from registration, normally to qualified insti-
tutional buyers.
FORWARD CURRENCY CONTRACTS TO SELL AT OCTOBER 31,1995
UNREALIZED
MARKET AGGREGATE DELIVERY APPRECIATION/
VALUE FACE VALUE DATE (DEPRECIATION)
- --------------------------------------------------------------------------------
British Pounds $ 92,732,636 $ 90,890,756 11/30/95 $(1,841,880)
French Francs 56,649,772 55,851,456 11/30/95 (798,316)
Japanese Yen 352,489,346 372,708,541 2/20/96 20,219,195
Netherland
Guilders 56,361,990 55,569,454 11/30/95 (792,536)
-------------------------------------------------------------------
$558,233,744 $575,020,207 $16,786,463
-------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
ASSETS
- --------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $2,375,521,119) (Note 1) $2,679,857,641
- --------------------------------------------------------------------------------
Cash 318,553
- --------------------------------------------------------------------------------
Foreign currency (cost $340,155) (Note 1) 319,218
- --------------------------------------------------------------------------------
Dividends, interest and other receivables 3,373,610
- --------------------------------------------------------------------------------
Receivable for shares of the Fund sold 4,893,715
- --------------------------------------------------------------------------------
Receivable for securities sold 105,002,844
- --------------------------------------------------------------------------------
Foreign tax receivable 2,763,437
- --------------------------------------------------------------------------------
Receivable for open forward currency contracts 20,219,195
- --------------------------------------------------------------------------------
TOTAL ASSETS 2,816,748,213
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for securities purchased 84,402,397
- --------------------------------------------------------------------------------
Payable for shares of the Fund repurchased 3,148,048
- --------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 4,569,434
- --------------------------------------------------------------------------------
Payable for administrative services (Note 2) 3,979
- --------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 2,239
- --------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 2,182,221
- --------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 1,191,675
- --------------------------------------------------------------------------------
Other accrued expenses 749,171
- --------------------------------------------------------------------------------
Payable for open forward currency contracts 3,432,732
- --------------------------------------------------------------------------------
Payable for closed forward currency contracts 3,182,262
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 102,864,158
- --------------------------------------------------------------------------------
NET ASSETS $2,713,884,055
- --------------------------------------------------------------------------------
REPRESENTED BY
- --------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $2,273,841,937
- --------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 18,553,417
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign
currency transactions (Note 1) 100,168,516
- --------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies 321,320,185
- --------------------------------------------------------------------------------
TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO
CAPITAL SHARES OUTSTANDING $2,713,884,055
- --------------------------------------------------------------------------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- --------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($1,689,656,069 divided by 166,804,947 shares) $10.13
- --------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $10.13)* $10.75
- --------------------------------------------------------------------------------
Net asset value and offering price per class B share
($975,793,667 divided by 98,983,605 shares)+ $ 9.86
- --------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($5,852,758 divided by 579,867 shares) $10.09
- --------------------------------------------------------------------------------
Offering price per class M share (100/96.5 of $10.09)* $10.46
- --------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($42,581,561 divided by 4,154,894 shares) $10.25
- --------------------------------------------------------------------------------
* 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
Year ended October 31, 1995
INVESTMENT INCOME:
- --------------------------------------------------------------------------------
Dividends (net of foreign tax of $3,398,519) $ 48,417,886
- --------------------------------------------------------------------------------
Interest 8,584,825
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 57,002,711
- --------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------
Compensation of Manager (Note 2) 16,544,148
- --------------------------------------------------------------------------------
Investor servicing and custodian fee (Note 2) 7,637,422
- --------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 64,353
- --------------------------------------------------------------------------------
Reports to shareholders 137,672
- --------------------------------------------------------------------------------
Auditing 147,003
- --------------------------------------------------------------------------------
Legal 37,962
- --------------------------------------------------------------------------------
Postage 449,812
- --------------------------------------------------------------------------------
Registration fees 468,057
- --------------------------------------------------------------------------------
Administrative services (Note 2) 42,538
- --------------------------------------------------------------------------------
Distribution fees . Class A (Note 2) 3,916,662
- --------------------------------------------------------------------------------
Distribution fees . Class B (Note 2) 8,662,106
- --------------------------------------------------------------------------------
Distribution fees . Class M (Note 2) 9,707
- --------------------------------------------------------------------------------
Other 21,135
- --------------------------------------------------------------------------------
TOTAL EXPENSES 38,138,577
- --------------------------------------------------------------------------------
EXPENSE REDUCTION (Note 2) (475,019)
- --------------------------------------------------------------------------------
NET EXPENSES 37,663,558
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 19,339,153
- --------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 116,238,479
- --------------------------------------------------------------------------------
Net realized loss on forward currency contracts and foreign
- --------------------------------------------------------------------------------
currency translation (Note 1) (15,782,615)
- --------------------------------------------------------------------------------
Net unrealized appreciation on forward currency contracts and
foreign currency translation during the year 17,970,022
- --------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 8,337,126
- --------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 126,763,012
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $146,102,165
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED OCTOBER 31
1995 1994
- --------------------------------------------------------------------------------
INCREASE IN NET ASSETS
- --------------------------------------------------------------------------------
Operations:
- --------------------------------------------------------------------------------
Net investment income $ 19,339,153 $ 11,127,270
- --------------------------------------------------------------------------------
Net realized gain on investments and foreign
currency transactions 100,455,864 54,003,718
- --------------------------------------------------------------------------------
Net unrealized appreciation of investments
and assets and liabilities in foreign currencies 26,307,148 64,744,066
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 146,102,165 129,875,054
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Class A (1,159,070) --
Class B (644,782) --
Class Y (22,144) --
- --------------------------------------------------------------------------------
From net realized gain on investments:
Class A (46,984,247) (18,205,009)
Class B (26,094,046) (5,583,193)
Class Y (896,166) --
- --------------------------------------------------------------------------------
Increase from capital share transactions
(Note 4) 305,193,194 1,058,122,192
- --------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 375,494,904 1,164,209,044
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year 2,338,389,151 1,174,180,107
- --------------------------------------------------------------------------------
END OF YEAR (including undistributed net
investment income of $18,553,417 and
$4,113,885, respectively) $2,713,884,055 $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)
MARCH 1, 1995 JUNE 15, 1994
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) YEAR ENDED OF OPERATIONS) YEAR ENDED
TO OCTOBER 31 OCTOBER 31 TO OCTOBER 31 OCTOBER 31
1995 1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS M CLASS Y
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
BEGINNING OF PERIOD $8.86 $10.00 $9.46 $9.74 $9.19
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net investment income .01 .09 .01 .03 .01
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.22 .47 .53 .40 .71
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT
OPERATIONS 1.23 .56 .54 .43 .72
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
From net investment
income -- (.01) -- (.01) --
- -----------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments -- (.30) -- (.30) (.17)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -- (.31) -- (.31) (.17)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.09 $10.25 $10.00 $9.86 $9.74
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (a) 13.88(b) 6.00 5.71(b) 4.80 7.95
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $5,853 $42,582 $29,396 $975,794 $801,443
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) (c) 1.23(b) 1.06 .37(b) 2.04 2.11
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .17(b) 1.20 .42(b) .29 .12
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 63.31 63.31 17.45 63.31 17.45
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
(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 period ended October 31, 1995 includes amounts paid
through expense offset arrangements. Prior period ratios exclude these amounts. (Note 2)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (Continued)
(For a share outstanding throughout the period)
APRIL 27, 1992
(COMMENCEMENT
OF OPERATIONS)
TO OCTOBER 31 YEAR ENDED OCTOBER 31
1993 1992 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B CLASS A
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
BEGINNING OF PERIOD $7.22 $7.50 $9.92 $9.30 $7.25 $7.64 $7.12
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net investment income .05 .01 .09 .02 .07 .10 .12
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.99 (.29) .43 .77 2.06 (.22) .96
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT
OPERATIONS 2.04 (.28) .52 .79 2.13 (.12) 1.08
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
From net investment
income (.06) -- (.01) -- (.07) (.12) (.15)
- -----------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments (.01) -- (.30) (.17) (.01) (.15) (.41)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.07) -- (.31) (.17) (.08) (.27) (.56)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.19 $7.22 $10.13 $9.92 $9.30 $7.25 $7.64
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (a) 28.44 (3.73)(b) 5.64 8.62 29.62 (1.51) (16.51)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $233,195 $18,154 $1,689,656 $1,507,550 $940,985 $630,764 $684,450
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) (c) 2.09 1.16(b) 1.28 1.33 1.39 1.56 1.47
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .23 .21(b) 1.05 .83 .85 1.28 1.60
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 49.53 61.84 63.31 17.45 49.53 61.84 70.64
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<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 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 but lower than class B shares. Class Y shares,
which are sold at net asset value, are generally subject to the same expenses as
class A shares and class B shares, but do not bear a distribution fee. Class Y
shares are sold to defined contribution plans that initially invest at least
$250 million in a combination of Putnam funds and other investments managed by
Putnam Management or its affiliates. In addition, the Trustees declare separate
dividends on each class of shares. Expenses of the fund are borne pro-rata by
the holder 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 di-
vidends 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. 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, and other investments are stated at fair value following procedures
approved by the Trustees.
B) JOINT TRADING ACCOUNT Pursuant to an exemptive order issued by the Securities
and Exchange Commission, the fund may transfer uninvested cash balances into a
joint trading account along with the cash of other registered investment compa-
nies and certain
<PAGE>
other accounts managed by Putnam Investment Management, Inc., ("Putnam Manage-
ment"), the fund's Manager, a wholly-owned subsidiary of Putnam Investments,
Inc. These balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) REPURCHASE AGREEMENTS The fund or any joint trading account, through its 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. Putnam Management is responsible
for determining that the value of these underlying securities is at all times at
least equal to the resale price, including accrued interest.
D) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME Security transactions are
accounted for on the trade date (date the order to buy or sell is executed). 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 The accounting records of the fund are maintai-
ned in U.S. dollars. The market value of foreign securities, currency holdings,
other assets and liabilities are recorded in the books and records of the fund
after translation to U.S. dollars based on the exchange rates on that day. The
cost of each security is determined using historical exchange rates. Income and
withholding taxes are translated at prevailing exchange rates when accrued or
incurred. The fund does not isolate that portion of realized or unrealized gains
or losses resulting from changes in the foreign exchange rate on investments
from fluctuations arising from changes in the market prices of the securities.
Such fluctuations are included with the net realized and unrealized gain or loss
on investments. Net realized gains and losses on foreign currency transactions
represent net exchange gains or losses on closed forward currency contracts,
disposition of foreign currencies and the difference between the amount of in-
vestment income and foreign withholding taxes recorded on the fund's books and
the U.S. dollar equivalent amounts actually received or paid. Net unrealized
gains and losses on foreign currency transactions arise from changes in the va-
lue of open forward currency contracts and assets and liabilities other than in-
vestments at the period end, resulting from changes in the exchange rate.
F) 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 maximum potential loss from forward currency contracts is the
aggregate face value in U.S. dollars at the time the contract was opened. The
fund could be exposed to risk if the value of the currency changes unfavorably,
if the counterparties to the contracts are
<PAGE>
unable to meet the terms of their contracts or if the fund is unable to enter
into a closing position.
G) FEDERAL TAXES It is the policy of the fund to distribute all of its taxable
income within the prescribed time and otherwise comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the fund to distribute an amount sufficient to avoid impo-
sition 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.
H) DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders from net invest-
ment income are recorded by the fund on the ex-dividend date. Capital gain dis-
tributions, if any, are recorded on the ex-dividend date and paid annually. The
amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences include treatment of realized and un-
realized gains and losses on forward foreign currency contracts, losses on wash
sale transactions and unrealized gains on passive foreign investment companies.
Reclassifications are made to the fund's capital accounts to reflect income and
gains available for distribution (or available capital loss carryovers) under
income tax regulations.
For the year ended October 31, 1995, the fund reclassified $3,073,624 to decrea-
se undistributed net investment income and $12,709,022 to decrease paid-in-
capital, with an increase to accumulated net realized gains of $15,782,646. 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 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 Putnam Management on
the fund's portfolio transactions.
The fund also reimburses Putnam Management for the compensation and related ex-
penses of certain officers of the fund and their staff who provide administra-
tive 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 $4,810 and an additional
fee for each Trustees' meeting attended. Trustees who are not interested persons
of Putnam Management and who serve on committees of the Trustees receive addi-
tional 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 re-
main in the fund and are invested in the fund or in other Putnam funds until
distribution in accordance with the Plan.
<PAGE>
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 provided by Putnam Investor Services, a division of PFTC.
For the year ended October 31, 1995, fund expenses were reduced by $475,019 un-
der expense offset arrangements with PFTC. 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 arran-
gements.
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.
For the year ended October 31, 1995, Putnam Mutual Funds Corp., acting as under-
writer received net commissions of $893,503 and $10,969 from the sale of class A
shares and class M shares, respectively. There were $1,720,078 in contingent de-
ferred sales charges from redemptions of class B shares. A deferred sales charge
of up to 1% is assessed on certain redemptions of class A shares. For the year
ended October 31, 1995, Putnam Mutual Funds Corp., acting as underwriter recei-
ved $26,951 on class A redemptions.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the year ended October 31, 1995, purchases and sales of investment secu-
rities other than short-term investments aggregated $1,763,199,629 and
$1,474,926,140, respectively. There were no purchases or sales of U.S. govern-
ment obligations during the year. In determining the net gain or loss on securi-
ties 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 inte-
rest authorized. Transactions in capital shares were as follows:
YEAR ENDED
OCTOBER 31, 1995
CLASS A SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 68,492,496 $649,257,185
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 4,941,635 44,870,047
- -------------------------------------------------------------------------------
73,434,131 694,127,232
- -------------------------------------------------------------------------------
Shares repurchased (58,666,136) (560,108,246)
- -------------------------------------------------------------------------------
NET INCREASE 14,767,995 $ 134,018,986
- -------------------------------------------------------------------------------
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>
YEAR ENDED
OCTOBER 31, 1995
CLASS B SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 36,604,976 $339,453,881
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 2,773,499 24,656,265
- -------------------------------------------------------------------------------
39,378,475 364,110,146
- -------------------------------------------------------------------------------
Shares repurchased (22,718,652) (210,414,554)
- -------------------------------------------------------------------------------
NET INCREASE 16,659,823 $153,695,592
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
YEAR ENDED
OCTOBER 31, 1995
CLASS Y SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 2,547,793 $24,844,353
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 100,142 918,308
- -------------------------------------------------------------------------------
2,647,935 25,762,661
- -------------------------------------------------------------------------------
Shares repurchased (1,433,258) (13,977,402)
- -------------------------------------------------------------------------------
NET INCREASE 1,214,677 $11,785,259
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
FOR THE PERIOD
MARCH 1, 1995
(COMMENCEMENT OF
OPERATIONS) TO
OCTOBER 31, 1995
CLASS M SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 618,124 $6,076,061
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions -- --
- -------------------------------------------------------------------------------
618,124 6,076,061
- -------------------------------------------------------------------------------
Shares repurchased (38,257) (382,704)
- -------------------------------------------------------------------------------
NET INCREASE 579,867 $5,693,357
- -------------------------------------------------------------------------------
FEDERAL TAX INFORMATION
(Unaudited)
Pursuant to Section 852 of the Internal Revenue Code, the Fund hereby designates
$0.28 per share (or if different, the amount necessary to offset net capital ga-
in earned by the Fund) for share classes A, B and Y as capital gain dividends
for its taxable year ended October 31, 1995.
The Fund has designated 31.91% of the distributions from net investment income
as qualifying for the dividends received deduction for corporations.
For the period, dividends from foreign countries were $37,423,274 or $.1383 per
share for all share classes. Taxes paid to foreign countries were $3,398,519
or $0.01 per share for all share classes.
The Form 1099 you receive in January 1996 will show the tax status of all dis-
tributions paid to your account in calendar 1995.
<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
Coopers &Lybrand L.L.P.
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 Vice President
Peter Carman Vice President
Brett C. Browchuk Anthony W. Regan
Vice President Vice President and Fund Manager
Carol C. McMullen William N. Shiebler
Vice President and Fund Manager Vice President
John R. Verani Paul M. O.Neil
Vice President Vice President
John D. Hughes Beverly Marcus
Vice President and Treasurer 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 OR OBLIGATIONS OF, OR GUARANTEED OR EN-
DORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT INSURED BY THE FEDERAL DEPOSIT IN-
SURANCE CORPORATION (FDIC), THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND
INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
<PAGE>
<PAGE>
---------------
PUTNAM INVESTMENTS Bulk Rate
U.S. Postage
THE PUTNAM FUNDS PAID
One Post Office Square Putnam
Boston, Massachusetts 02109 Investments
---------------
21700-005/882/513 12/95
<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 triple dagger symbol has been replaced by +++
