Putnam
Global
Growth
Fund
SEMIANNUAL REPORT
April 30, 1996
[LOGO: BOSTON * LONDON * TOKYO]
* "If consistency is a virtue, then Putnam Global Growth Fund is a
saint."
-- Morningstar Report, March 12, 1996
* "We have continued to position Putnam Global Growth Fund to take
advantage of attractive investment opportunities around the world. At
the same time, our emphasis on quality companies with stable earnings
has enabled us to post highly consistent results over the longer-term."
-- Anthony Regan, Fund Manager,
Putnam Global Growth Fund
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
22 Financial statements
[GRAPHIC OMITTED: photo of George Putnam]
(copyright) Karsh, Ottawa
From the Chairman
Dear Shareholder:
Around the globe, investing conditions vary. In Asia, Japan's slumbering
economy seems to be moving tentatively toward wakefulness, Hong Kong's
tensions with China appear to be easing, Singapore's stocks look
overpriced, and Australia's new government may spark the market there.
In Europe, slow growth, increasing unemployment, uncompetitive labor
costs, and overvalued currencies persist, and yet many of the region's
stock markets appear to be taking events in stride. At home, U.S. stocks
have continued to rise in price -- with occasional bouts of volatility.
Putnam Global Growth Fund fared fairly well in this moderate global
equity investing environment, posting solid results for the six months
ended April 30, 1996. Fund managers Anthony Regan on the international
side and Carol McMullen on the domestic side are cautiously optimistic
about prospects for the remainder of fiscal 1996.
Respectfully yours,
/S/George Putnam
George Putnam
Chairman of the Trustees
June 19, 1996
Report from the Fund Managers
Anthony W. Regan
Carol C. McMullen
Buoyed by a moderately upbeat investing environment and vigorous inflows
of cash, many stock markets around the globe have been relatively strong
over the past several months. Putnam Global Growth Fund's semiannual
period results reflected this positive environment. For the six months
ended April 30, 1996, your fund's class A shares returned 12.65% at net
asset value (NAV) and 6.15% at public offering price (POP). For class B
and class M share performance, please turn to page 8 of this report.
* PERFORMANCE OF MANY INTERNATIONAL STOCK MARKETS
GENERALLY POSITIVE
Stock market and economic conditions differed markedly from region to
region over the last six months. Asia, excluding Japan, continued to
enjoy strong economic growth, although this did not boost prices in all
stock markets there. Japan's market moved farther on the road to
recovery -- if somewhat tenuously at times. Western Europe's overall
economic picture was generally lusterless, but a number of companies
there operated with renewed efficiency -- and so bolstered many local
exchanges.
The U.S. dollar strengthened over the period. We believe that more near-
term increases against the Japanese yen remain possible and that the
dollar will gain from any political turmoil in Europe. Accordingly we
are maintaining defensive currency hedges on approximately 60% of the
portfolio's yen exposure and around 30% on the European exposure (United
Kingdom, France, the Netherlands and Germany). These hedges will protect
the fund against a rapid rise in the dollar's value, which makes foreign
stocks worth less in dollar terms.
* JAPANESE ECONOMY MIXED; SMALLER ASIAN MARKETS BENEFIT FROM INVESTMENT
INFLOWS
The Japanese economy still appears to be on its year-long course of
steady, though occasionally sluggish, growth. Consumer prices continue
to decline, business expectations have improved, and there has been a
pause in the rise of unemployment. Political consensus appears to have
been reached over the issue of paying for massive housing loan defaults
with tax revenues. Despite some periodic bouts of market pessimism, the
outlook for corporate profits is positive enough, in our view, to
maintain 18.3% of the fund's overall portfolio in Japanese stocks. Of
course, this is subject to change.
We have increased the fund's weighting in Hong Kong, both in response to
encouraging 1995 corporate results there and because of reduced tension
with China. We trimmed the portfolio's holdings in Singapore during the
period. Many Singapore companies restrict foreign investors to special
classes of shares that are typically more expensive than domestic shares
of the identical companies. As of this report, foreign premiums had
risen to 100% in some cases -- which we consider a poor value. For the
coming months, we plan to maintain investment in Singapore at a reduced
level.
Elsewhere in the Pacific Basin, we decided to invest 1.4% of the fund's
portfolio in Australia. This stock market has underperformed others in
the region in recent months and now appears relatively attractively
valued. Fiscally conservative reforms by Australia's new government
could help the corporate sector and, in turn, boost the local stock
market.
* COST CUTTING AND CORPORATE EFFICIENCY: REVITALIZING WESTERN EUROPE
Within Europe, it is apparent that several governments, especially those
of Germany and France, are concerned about moderate growth, relatively
high unemployment, expensive employment costs, and overvalued
currencies. So far, the policy response has been to cut interest rates.
However, it is unclear whether these rate cuts will spark a widespread
boost in economic activity because consumers in most countries are
facing a decline in disposable income.
[GRAPHIC OF HORIZONTAL BAR CHART OMITTED: COUNTRY ALLOCATION*]
Information reads:
United States 28.8%
Japan 18.3%
United Kingdom 8.0%
The Netherlands 6.4%
France 5.2%
*Based on net assets as of 4/30/96. Holdings will vary over time.
Nevertheless, a number of European stock exchanges have performed well.
Cuts in short-term interest rates have helped markets, as has an
anticipated improvement in the economic situation. Another encouraging
development in our view is an emphasis on shareholder value being
stressed by some corporate managements. Holdings such as Ciba-Geigy,
Swiss Re, and Philips have all sought to improve their efficiency and
return on equity -- improvements that tend to benefit shareholders.
While these stocks, along with others discussed in this report, were
viewed favorably at the end of the fiscal period, all portfolio holdings
are subject to review and adjustment in accordance with the fund's
investment strategy and may vary in the future.
We have decided to reduce the portfolio's weighting slightly in the
United Kingdom and in Spain. Political developments played a large role
in both decisions. The U.K. general election, which must be held by May
1997 at the latest, is likely to result in a government that will seek
to raise taxes on the corporate sector. Results of the Spanish election
were less clear-cut than we had initially hoped, and we took profits in
stocks there whose prices had reached our initial projections.
* MANY U.S. STOCKS REMAIN ATTRACTIVE
U.S. holdings currently account for 28.8% of your fund's overall
portfolio. Over the period, this portion of your fund handily
outperformed the U.S. stock market. The technology sector, in which the
fund continues to have a substantial stake, remained generally strong
throughout the period. We have emphasized software companies, such as
global leader Microsoft and Parametric Technology, as well as networking
companies, such as Cisco Systems. The fund also had a large position in
the health-care industry, in which we targeted several innovative
medical-device makers including Medtronic and Boston Scientific. Your
fund also maintained meaningful exposure in such leading pharmaceutical
companies as Johnson & Johnson and Pfizer, that have strong product
pipelines.
[GRAPHIC CHART OMITTED: TOP TEN HOLDINGS (4/30/96)
Chart reads:
Getronics Electric (The Netherlands)
Software
Ciba-Geigy AG (Switzerland)
Health-care products
Veba AG (Germany)
Conglomerate
Greencore Group PLC (Ireland)
Food processor and agricultural products
Astra AB (Sweden)
Pharmaceuticals
Allied Irish Banks PLC (Ireland)
Banking
Daiwa Securities Ltd. (Japan)
Stock brokerage
Tabacalera (Spain)
Tobacco producer
CRH PLC (Ireland)
Building materials
Omron Tateisi Electronics (Japan)
Advanced electronics
Represents 9.0% of the fund's net assets. Holdings will vary over time.
Resurgent aerospace companies, including Boeing and United Technologies,
remain an area of investment focus. Finally, at the end of the
semiannual period, the portfolio owned shares of Sears Roebuck and
Federated Department Stores, which are benefiting from the improving
outlook for domestic retail companies. However, in view of the strong
performance of the U.S. market in recent years combined with the
relative attractiveness of international markets, we have reduced the
U.S. weighting.
* OUTLOOK
We are cautiously optimistic about the potential for many global stock
markets in the coming months. We will continue to evaluate crucial
corporate and political developments in Japan while tracking the state
of Europe's economies. Finally, in the United States, fundamentals
remain solid, but stock valuations are not inexpensive by most
historical measures. In the longer term, we remain optimistic that
global markets will continue on their course of growth.
The views expressed here are exclusively those of Putnam Management.
They are not meant as investment advice. Although the described holdings
were viewed favorably as of 4/30/96, there is no guarantee the fund will
continue to hold these securities in the future. International investing
involves certain risks, including currency fluctuations, political
developments, and economic instability.
Performance summary
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.
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares
changed over time, assuming you held the shares through the entire
period and reinvested all distributions in the fund.
TOTAL RETURN FOR PERIODS ENDED 4/30/96
Class A Class B Class M
(inception date) (9/1/67) (4/27/92) (3/1/95)
NAV POP NAV CDSC NAV POP
- -----------------------------------------------------------------------
6 months 12.65% 6.15% 12.26% 7.26% 12.41% 8.43%
- -----------------------------------------------------------------------
1 year 22.31 15.27 21.36 16.36 21.56 17.29
- -----------------------------------------------------------------------
5 years 69.68 59.99 -- -- -- --
Annual
average 11.15 9.86 -- -- -- --
- -----------------------------------------------------------------------
10 years 167.18 151.79 -- -- -- --
Annual
average 10.33 9.67 -- -- -- --
- -----------------------------------------------------------------------
Life of
class -- -- 57.01 55.01 28.01 23.55
Annual
average -- -- 11.91 11.55 23.50 19.81
- -----------------------------------------------------------------------
Performance data represent past results, do not reflect future
performance, and will differ for each share class. They do not take into
account any adjustment for taxes payable on reinvested distributions or
for payments under the fund's class A distribution plan prior to its
implementation in fiscal 1990. Investment returns and net asset value
will fluctuate so that an investor's shares, when sold, may be worth
more or less than their original cost. POP assumes 5.75% maximum sales
charge for class A shares and 3.50% for class M shares. CDSC for class B
shares declines from a 5% maximum during the first year to 1% during the
sixth year.
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 4/30/96
MSCI MSCI S&P 500 Consumer
World EAFE Index Price Index
- -----------------------------------------------------------
6 months 13.37% 13.21% 13.75% 1.69%
- -----------------------------------------------------------
1 year 18.71 11.40 30.13 2.90
- -----------------------------------------------------------
5 years 67.68 52.70 100.47 15.61
Annual
average 10.89 8.83 14.92 2.94
- -----------------------------------------------------------
10 years 192.63 174.41 278.35 43.92
Annual
average 11.33 10.62 14.23 3.71
- -----------------------------------------------------------
Life of
class B 68.50 66.86 75.77 12.04
Annual
average 13.93 13.65 15.14 2.88
- -----------------------------------------------------------
Life of
class M 28.71 22.80 38.29 3.58
Annual
average 24.10 19.21 31.93 3.05
- -----------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 3/31/96
(most recent calendar quarter)
Class A Class B Class M
(inception date) (9/1/67) (4/27/92) (3/1/95)
NAV POP NAV CDSC NAV POP
- -----------------------------------------------------------------------
6 months 9.26% 2.94% 8.90% 3.90% 9.02% 5.21%
- -----------------------------------------------------------------------
1 year 24.01 16.90 23.06 18.06 23.25 18.91
- -----------------------------------------------------------------------
5 years 68.96 59.19 -- -- -- --
Annual
average 11.06 9.74 -- -- -- --
- -----------------------------------------------------------------------
10 years 178.85 162.84 -- -- -- --
Annual
average 10.80 10.15 -- -- -- --
- -----------------------------------------------------------------------
Life of
class -- -- 54.32 51.32 25.75 21.37
Annual
average -- -- 11.67 11.12 23.39 19.44
- -----------------------------------------------------------------------
PRICE AND DISTRIBUTION INFORMATION
6 months ended 4/30/96
Class A Class B Class M
- -----------------------------------------------------------------------
Distributions (number) 1 1 1
- -----------------------------------------------------------------------
Income $0.1758 $0.1108 0.1318
- -----------------------------------------------------------------------
Capital gains
- -----------------------------------------------------------------------
Long-term 0.4062 0.4062 0.4062
- -----------------------------------------------------------------------
Total $0.5820 $0.5170 $0.5380
- -----------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- -----------------------------------------------------------------------
10/31/95 $10.13 $10.75 $9.86 $10.09 $10.46
- -----------------------------------------------------------------------
4/30/96 10.77 11.43 10.50 10.75 11.14
- -----------------------------------------------------------------------
TERMS AND DEFINITIONS
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the maximum 5.75% sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time
of the redemption of class B shares and assumes redemption at the end of
the period. Your fund's CDSC declines from a 5% maximum during the first
year to 1% during the sixth year. After the sixth year, the CDSC no
longer applies.
COMPARATIVE BENCHMARKS
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 expressed in U.S. dollars.*
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.
Consumer Price Index (CPI ) is a commonly used measure of inflation; it
does not represent an investment return.
*These indexes assume reinvestment of all distributions and interest
payments and do not take into account commissions or other costs.
Securities in the fund do not match those in the indexes and performance
of the fund will differ. It is not possible to invest directly in an
index.
<TABLE>
<CAPTION>
Portfolio of investments owned
April 30, 196 (Unaudited)
COMMON STOCKS
NUMBER OF SHARES VALUE
<S> <C> <C> <C>
Argentina (0.4%)
- ------------------------------------------------------------------------------------------------
450,000 Astra CIA Argentina DE Petro + $ 956,346
62,746 Banco De Galicia y Buenos Aires Class B ADR 1,474,531
397,325 Banco Frances del Rio De La Plata S.A. 3,802,781
57,500 Banco Frances del Rio De La Plata S.A. ADR 1,653,125
49,700 Capex S.A. 144A GDR 702,261
226,411 Cia Naviera Perez Compac S.A. 1,408,417
34,979 Inversiones Y Represent ADR + 1,049,370
15,300 Siderar S.A.I.C. + 260,100
75,000 Telecom Argentina Class B 339,034
17,100 Telecom Argentina S.A. ADR 773,775
--------------
12,419,740
Australia (1.4%)
- ------------------------------------------------------------------------------------------------
3,000,000 Biota Holdings Ltd. + 9,106,512
11,389,000 Sydney Harbor Casino + 17,285,678
4,258,333 Westpac Banking Corp. # 20,695,294
--------------
47,087,484
Austria (0.1%)
- ------------------------------------------------------------------------------------------------
410,000 Mayr-Melnhof Karton AG 144A ADS + 4,612,500
Belgium (0.9%)
- ------------------------------------------------------------------------------------------------
12,540 Bekaert S.A. 9,768,839
33,000 Solvay S.A. 19,411,763
--------------
29,180,602
Brazil (0.1%)
- ------------------------------------------------------------------------------------------------
38,400 CIA Vale Do Rio Doce 704,587
27,615 Comp Energetica De Minas Gerais (Cemig) 144A ADR 686,923
26,600 Telebras Co. ADR 1,436,400
49,700 Usiminas Siderurg Minas 144A ADR + 571,028
--------------
3,398,938
Canada (0.3%)
- ------------------------------------------------------------------------------------------------
225,000 Magna International, Inc. Class A 10,434,375
Chile (0.1%)
- ------------------------------------------------------------------------------------------------
60,600 Banco Osorno y La Union ADR 916,575
45,000 Santa Isabel S.A. ADR + 1,299,375
--------------
2,215,950
Colombia (--%)
- ------------------------------------------------------------------------------------------------
60,000 Banco Industrial Colombiano ADR 1,177,500
39,000 Cementos Paz Del Rio 144A ADR + 482,625
--------------
1,660,125
Denmark (0.9%)
- ------------------------------------------------------------------------------------------------
300,000 Danisco A/S 14,631,668
639,000 Tele Danmark ADS + 16,134,750
--------------
30,766,418
Finland (0.1%)
- ------------------------------------------------------------------------------------------------
96,600 Repola 1,868,789
France (5.2%)
- ------------------------------------------------------------------------------------------------
62,304 Cetelem Group 13,356,879
203,100 Credit Locale de France S.A. 16,022,638
42,682 Docks de France S.A. 8,085,900
302,100 Lafarge Coppee 19,330,195
319,000 Michelin Corp. Class B 15,792,750
108,000 Peugeot S.A. 15,073,651
427,800 SGS-Thomson Microelectronics ADR + 20,106,600
140,000 Societe Generale Paris 16,238,159
249,324 Societe Nationale Elf Aquitaine 18,522,175
36,200 Sommer-Allibert 10,328,861
263,000 Total Corp. ADS 17,829,905
--------------
170,687,713
Germany (1.9%)
- ------------------------------------------------------------------------------------------------
41,300 Millicom International Cellular S.A. + 1,951,425
12,165 Munich Re 22,073,429
28,500 Preussag AG 7,673,292
650,000 VEBA AG 32,285,752
--------------
63,983,898
Hungary (--%)
- ------------------------------------------------------------------------------------------------
31,200 Gideon Richter GDR 144A + 1,076,400
Hong Kong (3.9%)
- ------------------------------------------------------------------------------------------------
9,983,000 Amoy Properties Ltd. 11,228,746
1,200,000 Chen Hsong Holdings. 616,693
3,172,000 Cheung Kong Holdings Ltd. 22,657,730
2,928,000 Citic Pacific Ltd. 11,507,887
362,000 Consolidated Electric Power Asia Ltd. 599,059
46,500 Ek Chor China Motorcycle Co. 685,875
540,075 First Pacific Co., Ltd. 719,188
3,100,000 Golden Resources Development Intl. Ltd. 440,865
1,501,200 Guoco Group Ltd. 7,472,230
4,060,000 Hong Kong Electric Holdings, Ltd. 12,912,552
3,500,000 Hong Kong Land Holdings, Ltd. 7,490,000
310,000 Hong Kong Telecommunications, Ltd. 591,159
1,412,458 HSBC Holdings PLC 21,091,548
2,425,000 Hutchison Whampoa, Ltd. 15,048,871
405,400 New World Infrastructure Ltd. + 901,495
66,000 Shun Tak Holdings Ltd. 47,784
168,000 Sun Hung Kai Properties 1,601,851
1,235,700 Swire Pacific Ltd. Class A 10,544,061
337,000 Varitronix International Ltd. 618,684
--------------
126,776,278
India (0.2%)
- ------------------------------------------------------------------------------------------------
58,000 Ashok Leyland Ltd. 144A GDR + 754,000
36,000 East India Hotel 144A GDR + 1,035,000
50,000 Gujarat Narmada Valley Fertilizer 144A GDR + 375,000
96,710 India Cements Ltd. 144A GDR + 471,461
31,400 Indian Hotels, Ltd. 144A GDR + 910,600
55,600 Indian Petrochemicals Corp. Ltd. 144A ADR + 1,084,200
157,500 KEC International Ltd. 566,087
192,400 Salora International Ltd. 211,919
102,000 State Bank of India Ltd. 897,304
55,680 Telco 144A 988,320
--------------
7,293,891
Indonesia (0.1%)
- ------------------------------------------------------------------------------------------------
432,600 PT Mulia Industrindo 836,205
90,000 Sampoerna Industries 995,482
--------------
1,831,687
Ireland (2.7%)
- ------------------------------------------------------------------------------------------------
5,551,306 Allied Irish Banks PLC 28,878,171
3,061,097 CRH PLC 27,414,037
38,300 Elan Corp. PLC ADR + 2,532,588
6,581,192 Greencore Group PLC 31,263,130
--------------
90,087,926
Italy (0.2%)
- ------------------------------------------------------------------------------------------------
1,404,840 Cartiere Burgo S.P.A. 8,034,085
Japan (18.3%)
- ------------------------------------------------------------------------------------------------
1,300,000 Bridgestone Corp. 24,019,049
74,200 Chubu Electric Power, Inc. 1,872,667
316,000 Cosmo Oil Co. Ltd. # 2,061,523
1,230,000 Dai Nippon Printing Co., Ltd. 23,077,144
1,819,000 Daiwa Securities Ltd. 27,891,335
3,900 East Japan Railway Co. 20,762,858
287,500 Hirose Electric Co. Ltd. 17,688,096
390,000 Ito Yokado Co., Ltd. 22,917,144
1,700,000 KAO Corp. 22,666,668
416,000 Komori Corp. 11,014,096
715,000 Kurita Water Ltd. 17,909,049
77,800 Kyushu Electric Power Inc. 1,926,476
1,053,000 Marui Co., Ltd. 23,166,001
2,424,000 Mitsubishi Motors Corp. 21,792,915
2,360,000 Mitsui Fudoscan Co. Ltd. 22,408,763
526,000 Murata Manufacturing Co. Ltd. 20,338,668
1,060,000 Nippon Express 11,003,810
2,368 Nippon Telegraph and Telephone Corp. 18,289,982
1,059,000 Nippondenso Co., Ltd. 22,995,430
955,000 Nishimatsu Construction Co. 11,187,143
1,100,000 Omron Tateisi Electronics Co. 24,723,811
389,000 Onward Kashiyama Co. Ltd. 6,557,429
473,000 Santen Pharmaceutical Co., Ltd. 11,036,667
225,000 Secom Co., Ltd. 15,857,144
1,569,000 Sekisui Chemical Co., Ltd. 19,724,572
1,330,000 Sharp Corp. 23,053,334
1,080,000 Shimizu Corp. 12,342,858
1,679,000 Tokio Marine & Fire Insurance Co. Ltd. 23,026,287
832,000 Tokyo Electric Power Co., Inc. 22,582,858
3,170,000 Toray Industries Inc. 21,495,620
610,000 Tostem Corp. 18,880,953
936,000 Yamanouchi Pharmaceutical Co. Ltd. 22,107,430
1,000,000 Yamatake Honeywell 18,857,144
1,023,000 Yamato Transport Co. Ltd. 12,470,858
410,000 Yasuda Fire & Marine Insurance Co., Ltd. 3,221,429
--------------
600,927,211
Malaysia (0.8%)
- ------------------------------------------------------------------------------------------------
437,000 Hong Leong Industries Berhad 2,366,426
406,000 Leader Universal 1,196,992
380,000 Malayawata Steel Berhad 716,406
261,000 Malaysian Assurance Alliance 1,559,928
300,000 Malayan Banking Berhad 2,924,188
285,000 Maruichi Malaysia 1,103,189
4,620,000 Sime Darby Berhad 12,787,003
338,000 Southern Bank Berhad 833,815
169,000 Sungei Way Holdings Berhad 779,583
5,368 Tung Ho Steel GDR + 64,416
177,750 Ytl Corp. Berhad 891,245
--------------
25,223,191
Mexico (0.2%)
- ------------------------------------------------------------------------------------------------
216,000 Apasco S.A. 1,174,737
990,000 Cifra S.A. de C.V. Class C + 1,320,000
32,050 International De Ceramica Spons ADR + 240,375
20,000 Panamerican Beverages Inc. Class A 877,500
143,000 Sears Roebuck de Mexico S.A. + 357,018
22,500 Telefonos de Mexico S.A. Class L ADR 765,000
11,562 Telemig (Telec De Minas Gerais) 945,335
--------------
5,679,965
Morocco (--%)
- ------------------------------------------------------------------------------------------------
59,300 Banque Marocaine GDR 144A 882,088
Netherlands (6.4%)
- ------------------------------------------------------------------------------------------------
429,962 ABN AMRO Holding N.V. 22,263,648
457,247 Aegon N.V. 21,781,293
130,000 Akzo-Nobel N.V. 15,102,160
137,600 Dutch State Mines N.V. 14,057,210
488,386 Getronics Electric N.V. 33,927,574
128,500 Gucci Group + 6,987,188
600,000 IHC Caland N.V. 23,572,679
412,300 K.L.M.-Royal Dutch Airlines 13,839,609
606,000 Philips Electronics N.V. 21,402,802
422,400 Royal PTT 15,855,412
140,000 Unilever N.V. 19,107,998
--------------
207,897,573
Norway (--%)
- ------------------------------------------------------------------------------------------------
100,000 Maritime Investment Fund Ltd. + 1,025,000
Pakistan (0.1%)
- ------------------------------------------------------------------------------------------------
82,695 Hubco Power GDR 1,984,680
62,530 Pakistan State Oil 578,193
5,700 Pakistan Telecomm Ltd. 144A GDR + 575,700
--------------
3,138,573
Philippines (0.2%)
- ------------------------------------------------------------------------------------------------
23,210 Benpres Holdings Corp. 144A + 165,487
2,850,000 Bankard, Inc. + 1,581,516
1,900,000 Intl. Container Terminal Svcs. + 1,327,019
94,300 Philippine Commercial International 1,263,108
8,800 Philippine Long Distance Telephone Co. ADR 442,200
297,000 Pilipino Telephone Co. + 443,284
--------------
5,222,614
Portugal (--%)
- ------------------------------------------------------------------------------------------------
107,300 Portucel Industrial Empresa S.A. 144A ADS 603,563
Russia (--%)
- ------------------------------------------------------------------------------------------------
15,000 Oil Co. Lukoil ADR 360,000
35,300 Mosenergo 144A ADS + 423,600
--------------
783,600
Singapore (2.7%)
- ------------------------------------------------------------------------------------------------
995,000 Cycle & Carriage Ltd. 12,036,576
764,000 Development Bank of Singapore 9,677,080
1,187,200 Jardine Matheson Holdings Ltd. 9,497,600
2,465,000 Leader Universal 7,267,449
1,106,000 Malayan Banking Berhad 10,780,505
96,000 Overseas Union Bank Ltd. 744,610
1,490,000 Singapore Airlines Ltd. 15,055,860
310,000 Singapore Press Holdings. 5,867,786
1,863,082 United Overseas Bank Ltd. 18,162,829
--------------
89,090,295
South Africa (0.1%)
- ------------------------------------------------------------------------------------------------
61,700 Energy Africa 740,400
1,006,324 Iscor Iron & Steel Industrial Corp. # 912,090
18,300 Nedcor Ltd. 144A GDR 45,750
74,284 Nedcor 1,012,120
14,592 Polifin Ltd. 27,328
28,145 South African Breweries Ltd. 813,439
97,194 Sasol Ltd. 1,024,751
--------------
4,575,878
South Korea (0.2%)
- ------------------------------------------------------------------------------------------------
500,000 Cho Hung Bank Co. Ltd. 6,939,108
3,000 L.G. Chemical Ltd. 60,139
--------------
6,999,247
Spain (2.1%)
- ------------------------------------------------------------------------------------------------
285,231 Banco de Bilbao-Vizcaya S.A. 10,838,504
363,000 Repsol S.A. 13,308,662
425,000 Repsol S.A. ADS 15,725,000
605,000 Tabacalera S.A. 27,577,792
--------------
67,449,958
Sweden (2.3%)
- ------------------------------------------------------------------------------------------------
657,000 Astra AB Free + 29,181,718
154,230 Electrolux AB 7,770,575
430,000 Pharmacia & Upjohn, Inc. + 16,343,548
139,830 Sandvik AB Class B 3,079,638
1,048,510 Svenska Cellulosa Ser. B 19,771,550
--------------
76,147,029
Switzerland (3.4%)
- ------------------------------------------------------------------------------------------------
12,060 BBC Brown Boveri & Cie AG Ltd. 14,503,022
28,970 Ciba-Geigy AG 33,557,693
8,280 Nestle S.A. 9,191,865
32,500 Rieter Holding AG 9,405,145
10,300 SGS Societe Generale De Surveillance Holdings S.A. 23,183,280
21,406 Swiss Reinsurance 22,369,614
--------------
112,210,619
Taiwan (--%)
- ------------------------------------------------------------------------------------------------
38,849 Hocheng Group Corp. 144A GDR + 485,613
41,813 Yageo Corp 144A GDR + 397,224
--------------
882,837
Thailand (0.2%)
- ------------------------------------------------------------------------------------------------
469,333 Industrial Finance Corp. 1,879,265
16,200 Siam Cement PLC 833,927
302,000 Siam Makro PLC 1,458,937
130,000 Thai Farmers Bank Public Co. 1,492,833
--------------
5,664,962
United Kingdom (8.0%)
- ------------------------------------------------------------------------------------------------
1,200,000 Anglian Water PLC 10,460,214
2,246,484 Argyll Group PLC 11,228,511
3,069,628 B A T Industries PLC 23,222,158
1,418,538 Barclays Bank PLC 15,718,082
87,800 British Petroleum PLC ADR 9,592,150
1,060,603 Burmah Oil PLC 16,973,323
836,000 East Midlands Electric PLC + 7,891,409
3,937,500 Explaura Holdings PLC + 19,562
3,736,000 General Electric Co. (The) PLC 20,164,005
2,000,000 Guinness PLC 14,407,635
995,000 Molins PLC 15,504,015
618,182 North West Water Group PLC 5,528,198
2,536,574 Royal Insurance Holdings PLC 13,900,476
3,405,000 Scottish Power PLC 19,095,197
10,576,400 Sears PLC 16,002,384
272,000 Securicor Group PLC Class A 5,008,136
704,295 Security Services PLC 12,967,666
1,447,356 Siebe PLC 18,739,352
192,600 Smithkline Beecham PLC ADR 10,400,400
14 Tate & Lyle PLC 102
4,032,786 Vodafone Group PLC 16,119,459
--------------
262,942,434
United States (28.8%)
- ------------------------------------------------------------------------------------------------
69,300 3Com Corp. + 3,196,463
45,400 Accustaff, Inc. + 1,350,650
49,300 Adaptec, Inc. + 2,834,750
51,900 Adtran, Inc. + 2,750,700
68,700 American Medical Response + 2,541,900
71,700 America Online, Inc. + 4,588,800
90,600 American International Group, Inc. 8,278,575
237,100 American Telephone & Telegraph Co. 14,522,375
119,700 Amgen, Inc. + 6,882,750
100,700 AON Corp. 5,400,038
79,500 Apollo Group, Inc. Class A 3,498,000
134,900 Ascend Communications, Inc. + 8,296,350
158,800 Bank of Boston Corp. 7,681,950
163,700 BankAmerica Corp. 12,400,275
164,100 Baxter International, Inc. 7,261,425
53,500 Biochem Pharmaceutical, Inc. + 2,434,250
65,600 Bisys Group, Inc. (The) + 2,509,200
97,500 BMC Industries, Inc. 2,608,125
163,700 Boeing Co. 13,443,863
67,700 Boston Chicken, Inc. + 2,166,400
257,900 Boston Scientific Corp. + 11,121,938
101,100 Burlington Northern Santa Fe Corp. 8,846,250
29,400 Cabletron Systems, Inc. + 2,216,025
107,100 Calenergy Inc. 2,784,600
34,700 Cambridge Technology Partners, Inc. + 2,333,575
41,300 Camco International Inc. 1,471,313
140,100 Campbell Soup Co. 8,756,250
63,700 Canandaigua Wine Co. Class A + 1,934,888
46,600 Cardinal Health, Inc. 2,924,150
88,700 Cascade Communications Corp. + 8,892,175
249,100 Case Corp. 12,579,550
136,400 Caterpillar, Inc. 8,729,600
55,400 Charter One Financial, Inc. 1,932,075
118,500 Chase Manhattan Corp. 8,161,688
216,900 Cisco Systems, Inc. + 11,251,688
138,300 Citicorp 10,891,125
44,900 Clear Channel Communications, Inc. + 3,041,975
150,800 Computer Associates Intl., Inc. 11,064,950
37,200 Congoleum Corp. Class A + 344,100
66,800 Corporate Express, Inc. + 2,496,650
31,800 Corrections Corp. of America 2,027,250
86,400 Credit Acceptance Corp. + 1,620,000
66,900 Dayton Hudson Corp. 6,388,950
121,900 Denamerica Corp. + 449,507
167,310 Disney (Walt) Productions, Inc. 10,373,220
69,500 DST Systems, Inc. + 2,554,125
158,600 du Pont (E.I.) de Nemours & Co., Ltd. 12,747,475
116,200 Eastman Kodak Co. 8,889,300
54,900 Eckerd Corp. + 2,621,475
48,300 Electronics for Imaging, Inc. + 2,946,300
157,700 Enron Corp. 6,347,425
139,600 Equifax, Inc. 3,420,200
192,600 Federated Department Stores Inc. + 6,428,025
62,900 Finova Group, Inc. 3,490,950
89,100 First Brands Corp. 2,361,150
133,002 First Data Corp. 10,108,152
9,600 Fluor Corp. 634,800
100,700 Franklin Resources, Inc. 5,765,075
183,900 Freeport-McMoRan Copper & Gold Co., Inc. Class A 5,815,838
54,300 Fritz Companies, Inc. + 1,995,525
108,300 Gannett Co., Inc. 7,405,013
76,400 Gartner Group Inc. Class A + 2,616,700
180,100 General Motors Corp. Class E 10,153,138
107,900 General Motors Corp. Class H 6,595,388
145,600 General Nutrition Companies, Inc. + 2,839,200
54,750 Genesis Health Ventures, Inc. + 1,621,969
244,300 GTE Corp. 10,596,513
49,100 Guidant Corp. 2,755,738
192,200 Halliburton Co. 11,027,475
267,200 Harrah's Entertainment Inc. + 9,218,400
63,900 HBO & Co. 7,588,125
67,200 Health Care & Retirement Corp. + 2,478,000
86,950 Health Management Assoc., Inc. (New) + 2,782,400
54,800 Healthsource, Inc. + 1,870,050
43,800 Heritage Media Corp. Class A + 1,680,825
101,100 Hershey Foods Corp. 7,670,963
114,000 Hewlett-Packard Co. 12,069,750
87,000 HFS, Inc. + 4,469,625
165,300 Home Depot, Inc. (The) 7,831,088
223,800 Honeywell, Inc. 11,777,475
107,368 ICN Pharmaceuticals, Inc. 2,415,780
58,400 IDEXX Laboratories, Inc. + 2,598,800
190,300 Informix Corp. + 5,019,163
97,600 Intel Corp. 6,612,400
133,000 Johnson & Johnson 12,302,500
85,900 LCI International, Inc. + 2,233,400
169,400 Lilly (Eli) & Co. 9,994,600
103,700 Lockheed Martin Corp. 8,360,813
39,200 Manpower, Inc. 1,450,400
110,900 Marriott International, Inc. 5,406,375
212,500 MBNA Corp. 6,029,688
31,150 McAfee Associates, Inc. + 1,907,938
234,800 McDonald's Corp. 11,241,050
446,000 MCI Communications Corp. 13,129,125
23,900 Medic Computer Systems, Inc. + 2,234,650
127,300 Medtronic, Inc. 6,762,813
106,600 Mentor Corp. Minnesota 2,518,425
133,300 Microsoft Corp. + 15,112,512
188,300 Mirage Resorts, Inc. + 9,862,213
96,500 Mobil Corp. 11,097,500
48,600 Monsanto Co. 7,362,900
112,800 Morgan (J.P.) & Co., Inc. 9,489,300
43,300 Nabisco Holdings Corp. Class A 1,326,063
106,000 NationsBank Corp. 8,453,500
96,500 Nike, Inc. 8,443,750
58,100 Nine West Group Inc. + 2,491,038
44,600 Octel Communications Corp. + 1,995,850
207,300 Officemax, Inc. + 5,441,625
48,500 Omnicare, Inc. 2,910,000
57,100 Omnicom Group, Inc. 2,476,713
154,400 Oxford Health Plans Inc. + 7,797,200
27,500 Pacificare Health Systems, Inc. Class B + 2,306,563
113,500 Paging Network, Inc. + 2,667,250
312,700 Parametric Technology Corp. + 12,586,175
57,700 Paychex, Inc. 3,909,175
72,100 PeopleSoft, Inc. + 4,542,300
218,400 PepsiCo, Inc. 13,868,400
125,700 Pfizer, Inc. 8,657,588
306,760 Pharmacia & Upjohn, Inc. 11,733,570
156,500 Philip Morris Cos., Inc. 14,104,563
22,800 Physician Reliance Network+ 986,100
53,000 Physician Sales & Service, Inc. + 1,431,000
251,700 Praxair, Inc. 9,721,913
50,400 Premisys Communications, Inc. + 2,205,000
66,900 Primark Corp. + 2,374,950
30,700 Quintiles Transnational Corp. + 2,248,775
74,300 Reynolds & Reynolds Co. Class A 3,436,375
32,000 Robert Half International, Inc. + 1,840,000
309,200 Safeway, Inc. + 10,435,500
51,900 Sanifill, Inc. + 2,251,163
187,700 SBC Communications, Inc. 9,385,000
258,700 Sears, Roebuck & Co. 12,902,663
114,700 Service Corp. 6,093,438
54,100 Sherwin Williams Co. 2,529,175
46,400 Shiva Corp. + 2,772,400
133,200 Sonat, Inc. 5,810,850
6,600 St. John Knits, Inc. 391,875
365,450 Staples, Inc. + 6,943,550
40,500 Sterling Commerce Inc. + 1,417,500
57,800 Stewart Enterprises, Inc. Class A 2,644,350
44,300 Stryker Corp. 2,143,013
42,500 Sun Bancorp, Inc. + 747,150
237,000 Sundstrand Corp. 8,709,750
71,700 Symbol Technologies, Inc. + 3,316,125
47,200 Synopsys, Inc. + 1,947,000
63,700 TCF Financial Corp. 2,253,388
189,500 Tele-Comm Liberty Media Group, Inc. Class A + 5,187,563
172,200 Tellabs, Inc. + 9,514,050
71,800 Textron, Inc. 6,156,850
44,800 The PMI Group, Inc. 1,904,000
74,700 The Sports Auth., Inc. + 2,222,325
60,200 Thermo Electron Corp. + 3,709,825
311,700 TJX Cos., Inc. (The) 9,195,150
44,800 Tommy Hilfiger Corp. + 2,038,400
170,300 Travelers Group Inc. 10,473,450
114,400 U.S. Filter Corp. + 3,517,800
65,400 U.S. Robotics Corp. + 10,235,100
67,100 U.S. Surgical Corp. 2,482,700
118,500 United Healthcare Corp. 6,932,250
66,100 United Technologies Corp. 7,304,050
31,500 United Waste Systems, Inc. + 1,732,500
40,000 Unum Corp. 2,380,000
46,800 Vencor, Inc. + 1,579,500
83,100 Vons Co. + 2,659,200
210,500 Walgreen Co. 6,736,000
88,500 Warner-Lambert Co. 9,889,875
105,400 Whitman Corporation 2,661,350
27,100 Wisconsin Central Transportation Co. + 2,289,950
--------------
945,047,540
Venezuela (--%)
- ------------------------------------------------------------------------------------------------
225,040 Venepal 144A GDR 478,210
184,000 Venezolana de Prerreducidos Caroni Venprecar 1,035,000
--------------
1,513,210
--------------
Total Common Stocks (cost $2,482,345,438) $3,037,324,186
PREFERRED STOCKS (0.1%) *
NUMBER OF SHARES VALUE
- ------------------------------------------------------------------------------------------------
138,200 Banco Bradesco BRC 0.12 NPV (No Par Value) pfd. (Brazil) $ 1,560,480
3,880 Coteminas Cia Tecidos Norte de Minas
BRC 9.64 NPV pfd. (Brazil) 1,627,261
24,700 Companhia Vale Do Rio Doce BRC 2.307
NPV pfd. (Brazil) 697,248
228,000 Refrigeracao Parna S.A. BRC 0.0463 NPV pfd. (Brazil) 567,759
--------------
Total Preferred Stocks (cost $3,691,132) $ 4,452,748
INVESTMENT COMPANIES (0.2%) *
NUMBER OF SHARES VALUE
- ------------------------------------------------------------------------------------------------
104,200 Fleming Russia Securities Fund Ltd. (Russia)+ $ 690,325
21,800 India Magnum Fund Class A (India)+ 1,199,000
3,250 Nordic Recovery Fund N.V. (Sweden)+ 4,241,250
--------------
Total Investment Companies (cost $5,416,790) $ 6,130,575
SHORT-TERM INVESTMENTS (7.0%)*
PRINCIPAL AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
$20,000,000 Ciesco Inc. effective yield of 5.32s, May 22, 1996 $ 19,937,933
25,000,000 Federal National Mortgage Association effective
yield of 5.20s, July 12, 1996 24,740,000
15,000,000 Federal National Mortgage Association effective
yield of 5.14s, May 3, 1996 14,995,717
20,000,000 Ford Motor Credit Co. effective yield of 5.07s,
June 6, 1996 19,898,600
25,000,000 General Motors Acceptance Corp. effective
yield of 5.35s, May 28, 1996 24,899,688
20,000,000 Morgan (J.P.) & Co., Inc. effective yield of 5.06s,
May 7, 1996 19,983,133
20,000,000 Walt Disney Corp. effective yield of 5.26s,
May 31, 1996 19,912,333
25,030,000 Walt Disney Corp. effective yield of 5.25s,
May 20, 1996 24,930,922
59,849,000 Interest in $500,000,000 joint repurchase
agreement dated April 30, 1996 with
Lehman Brothers Inc. due May 1, 1996 with
respect to various U.S. Treasury obligations --
maturity value of $59,857,894 for an effective
yield of 5.30% 59,857,894
--------------
Total Short-Term Investments (cost $229,156,220) $ 229,156,220
--------------
Total Investments (cost $2,720,609,580)*** $3,277,063,729
- ------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $3,289,017,470.
+ Non-income producing security.
# Forward commitment (Note 1)
*** The aggregate identified cost on a tax basis is $2,731,485,729, resulting in gross unrealized
appreciation and depreciation of $668,773,289 and $123,195,289, respectively, or net unrealized
appreciation of $545,578,000.
ADR, ADS, or GDR, after the name of a holding stands for American Depository Receipt, American
Depository Shares or Global Depository Receipt, respectively, representing ownership of foreign
securities on deposit with a domestic custodian bank.
144A after the name of a security represents those exempt from registration under Rule 144A of
the Securities Act of 1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
- ------------------------------------------------------------------------------------------------
<CAPTION>
Forward Currency Contracts to Sell at April 30, 1996
(aggregate face value $556,246,338)
Market Aggregate Face Delivery Unrealized
Value Value Date Appreciation
- ------------------------------------------------------------------------------------------------
British Pounds $108,526,405 $111,232,717 5/31/96 $2,706,312
French Francs 79,757,853 83,567,019 5/31/96 3,809,166
Japan Yen 358,349,640 361,446,602 7/17/96 3,096,962
- ------------------------------------------------------------------------------------------------
$9,612,440
- ------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
April 30, 1996 (Unaudited)
Assets
- -----------------------------------------------------------------------------
<S> <C>
Investments in securities, at value (identified cost
$ 2,720,609,580) (Note 1) $3,277,063,729
- -----------------------------------------------------------------------------
Cash 2,742,269
- -----------------------------------------------------------------------------
Foreign currency (cost $ 442,760) 409,443
- -----------------------------------------------------------------------------
Dividends and interest receivable 7,481,374
- -----------------------------------------------------------------------------
Receivable for shares of the fund sold 8,686,819
- -----------------------------------------------------------------------------
Receivable for securities sold 11,269,557
- -----------------------------------------------------------------------------
Foreign tax reclaim 2,914,423
- -----------------------------------------------------------------------------
Receivable for open forward currency contracts 9,612,440
- -----------------------------------------------------------------------------
Receivable for closed forward currency contracts 2,317,238
- -----------------------------------------------------------------------------
Total assets 3,322,497,292
Liabilities
- -----------------------------------------------------------------------------
Payable for securities purchased 20,783,329
- -----------------------------------------------------------------------------
Payable for shares of the fund repurchased 3,498,968
- -----------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 5,047,537
- -----------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 2,277,606
- -----------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 6,897
- -----------------------------------------------------------------------------
Payable for administrative services (Note 2) 3,713
- -----------------------------------------------------------------------------
Payable for distribution fees (Note 2) 1,381,338
- -----------------------------------------------------------------------------
Other accrued expenses 480,434
- -----------------------------------------------------------------------------
Total liabilities 33,479,822
- -----------------------------------------------------------------------------
Net assets $3,289,017,470
Represented by
- -----------------------------------------------------------------------------
Paid-in-capital (Notes 1 and 4) 2,651,251,296
- -----------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (18,182,648)
- -----------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions (Note 1) 90,031,884
- -----------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies 565,916,938
- -----------------------------------------------------------------------------
Total -- Representing net assets applicable to capital
shares outstanding $3,289,017,470
Computation of net asset value and offering price
- -----------------------------------------------------------------------------
Net asset value and redemption price per class A share
($2,009,743,519 divided by 186,607,487 shares) $10.77
- -----------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $10.77)* $11.43
- -----------------------------------------------------------------------------
Net asset value and offering price per class B share
($1,208,963,459 divided by 115,176,787 shares)+ $10.50
- -----------------------------------------------------------------------------
Net asset value and redemption price per class M share
($13,972,260 divided by 1,300,299 shares) $10.75
- -----------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $10.75)* $11.14
- -----------------------------------------------------------------------------
Net asset value, redemption and offering price per class Y share
($56,338,232 divided by 5,172,757 shares) $10.89
- -----------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price is reduced.
+ Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended April 30, 1996 (Unaudited)
Investment Income:
- -----------------------------------------------------------------------------
<S> <C>
Dividends (net of foreign tax of $2,070,443) $21,869,722
- -----------------------------------------------------------------------------
Interest 5,385,584
- -----------------------------------------------------------------------------
Total investment income 27,255,306
Expenses:
- -----------------------------------------------------------------------------
Compensation of Manager (Note 2) 9,751,338
- -----------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 4,790,818
- -----------------------------------------------------------------------------
Compensation of Trustees (Note 2) 41,066
- -----------------------------------------------------------------------------
Administrative services (Note 2) 22,198
- -----------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 2,284,599
- -----------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 5,392,857
- -----------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 35,398
- -----------------------------------------------------------------------------
Reports to shareholders 120,072
- -----------------------------------------------------------------------------
Auditing 39,537
- -----------------------------------------------------------------------------
Legal 22,776
- -----------------------------------------------------------------------------
Other 115,338
- -----------------------------------------------------------------------------
Total expenses 22,615,997
- -----------------------------------------------------------------------------
Expense reduction (Note 2) (287,535)
- -----------------------------------------------------------------------------
Net expenses 22,328,462
- -----------------------------------------------------------------------------
Net investment income 4,926,844
- -----------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 63,593,840
- -----------------------------------------------------------------------------
Net realized gain on forward currency contracts and
foreign currency translation (Note 1) 37,332,300
- -----------------------------------------------------------------------------
Net unrealized depreciation on forward currency contracts and
foreign currency translation during the period (7,520,874)
- -----------------------------------------------------------------------------
Net unrealized appreciation on investments during the peri 252,117,627
- -----------------------------------------------------------------------------
Net gain on investments 345,522,893
- -----------------------------------------------------------------------------
Net increase in net assets resulting from operations $350,449,737
- -----------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
April 30 October 31
1996* 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- --------------------------------------------------------------------------------------------------
Operations:
- --------------------------------------------------------------------------------------------------
Net investment income $4,926,844 $19,339,153
- --------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency transactions 100,926,140 100,455,864
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 244,596,753 26,307,148
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 350,449,737 146,102,165
- --------------------------------------------------------------------------------------------------
Distributions to shareholders
- --------------------------------------------------------------------------------------------------
From net investment income
Class A (29,544,233) (1,159,070)
- --------------------------------------------------------------------------------------------------
Class B (11,187,413) (644,782)
- --------------------------------------------------------------------------------------------------
Class M (95,055) --
- --------------------------------------------------------------------------------------------------
Class Y (836,208) (22,144)
- --------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (68,153,175) (46,984,247)
- --------------------------------------------------------------------------------------------------
Class B (40,919,727) (26,094,046)
- --------------------------------------------------------------------------------------------------
Class M (292,366) --
- --------------------------------------------------------------------------------------------------
Class Y (1,697,504) (896,166)
- --------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 377,409,359 305,193,194
- --------------------------------------------------------------------------------------------------
Total increase in net assets 575,133,415 375,494,904
- --------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------
Beginning of period 2,713,884,055 2,338,389,151
- --------------------------------------------------------------------------------------------------
End of period (including distributions in excess of
net investment income and undistributed net
investment income of $18,182,648 and
$18,553,417, respectively) $3,289,017,470 $2,713,884,055
- --------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
March 1, 1995 June 15, 1994
Six months (commencement Six months (commencement
ended of operations) to ended Year ended of operations) to
April 30 October 31 April 30 October 31 October 31
- -------------------------------------------------------------------------------------------------------------------
1996*+ 1995 1996*+ 1995 1994
- -------------------------------------------------------------------------------------------------------------------
Class M Class Y
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $10.09 $8.86 $10.25 $10.00 $9.46
- -------------------------------------------------------------------------------------------------------------------
Investment operations
- -------------------------------------------------------------------------------------------------------------------
Net investment income .01 .01 .04 .09 .01
- -------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 1.19 1.22 1.21 .47 .53
- -------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.20 1.23 1.25 .56 .54
- -------------------------------------------------------------------------------------------------------------------
Less distributions:
- -------------------------------------------------------------------------------------------------------------------
From net investment income (.13) -- (.20) (.01) --
- -------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.41) -- (.41) (.30) --
- -------------------------------------------------------------------------------------------------------------------
Total distributions (.54) -- (.61) (.31) --
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.75 $10.09 $10.89 $10.25 $10.00
- -------------------------------------------------------------------------------------------------------------------
Total investment return at
net asset value (%)(a) 12.41(b) 13.88(b) 12.77(b) 6.00 5.71(b)
- -------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $13,972 $5,853 $56,338 $42,582 $29,396
- -------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%)(c) .98(b) 1.23(b) .50(b) 1.06 .37(b)
- -------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets (%) .06(b) .17(b) .43(b) 1.20 .42(b)
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 33.13(b) 63.31 33.13(b) 63.31 17.45
- -------------------------------------------------------------------------------------------------------------------
Average commission rate paid (d) $.0380 -- $.0380 -- --
- -------------------------------------------------------------------------------------------------------------------
See page 27 for notes to financial highlights.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
Six months
ended Year ended
April 30 October 31
- --------------------------------------------------------------------------------------------
1996*+ 1995 1994 1993
- --------------------------------------------------------------------------------------------
Class B
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $9.86 $9.74 $9.19 $7.22
- --------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------
Net investment income (.01) .03 .01 .05
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 1.17 .40 .71 1.99
- --------------------------------------------------------------------------------------------
Total from investment operations 1.16 .43 .72 2.04
- --------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------
From net investment income (.11) (.01) -- (.06)
- --------------------------------------------------------------------------------------------
From net realized gain
on investments (.41) (.30) (.17) (.01)
- --------------------------------------------------------------------------------------------
Total distributions (.52) (.31) (.17) (.07)
- --------------------------------------------------------------------------------------------
Net asset value, end of period $10.50 $9.86 $9.74 $9.19
- --------------------------------------------------------------------------------------------
Total investment return at
net asset value (%) (a) 12.26(b) 4.80 7.95 28.44
- --------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,208,963 $975,794 $801,443 $233,195
- --------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%)(c) 1.00(b) 2.04 2.11 2.09
- --------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets (%) (.07)(b) .29 .12 .23
- --------------------------------------------------------------------------------------------
Portfolio turnover (%) 33.13(b) 63.31 17.45 49.53
- --------------------------------------------------------------------------------------------
Average commission rate paid (d) .0380 -- -- --
- --------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (Continued)
(For a share outstanding throughout the period)
April 27, 1992
(Commencement Six months
of operations) ended Year ended
to October 31 April 30 October 31
- --------------------------------------------------------------------------------------------
1992 1996*+ 1995 1994
- --------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $7.50 $10.13 $9.92 $9.30
- --------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------
Net investment income .01 .03 .09 .02
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (.29) 1.19 .43 .77
- --------------------------------------------------------------------------------------------
Total from investment operations (.28) 1.22 .52 .79
- --------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------
From net investment income -- (.17) (.01) --
- --------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.41) (.30) (.17)
- --------------------------------------------------------------------------------------------
Total distributions -- (.58) (.31) (.17)
- --------------------------------------------------------------------------------------------
Net asset value, end of period $7.22 $10.77 $10.13 $9.92
- --------------------------------------------------------------------------------------------
Total investment return at
net asset value (%) (a) (3.73)(b) 12.65(b) 5.64 8.62
- --------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $18,154 $2,009,744 $1,689,656 $1,507,550
- --------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%)(c) 1.16(b) .63(b) 1.28 1.33
- --------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets (%) .21(b) .30(b) 1.05 .83
- --------------------------------------------------------------------------------------------
Portfolio turnover (%) 61.84 33.13(b) 63.31 17.45
- --------------------------------------------------------------------------------------------
Average commission rate paid (d) -- .0380 -- --
- --------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (Continued)
(For a share outstanding throughout the period)
Year ended October 31
- ----------------------------------------------------------------------------
1993 1992 1991
- ----------------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $7.25 $7.64 $7.12
- ----------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------
Net investment income .07 .10 .12
- ----------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 2.06 (.22) .96
- ----------------------------------------------------------------------------
Total from investment operations 2.13 (.12) 1.08
- ----------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------
From net investment income (.07) (.12) (.15)
- ----------------------------------------------------------------------------
From net realized gain
on investments (.01) (.15) (.41)
- ----------------------------------------------------------------------------
Total distributions (.08) (.27) (.56)
- ----------------------------------------------------------------------------
Net asset value, end of period $9.30 $7.25 $7.64
- ----------------------------------------------------------------------------
Total investment return at
net asset value (%) (a) 29.62 (1.51) (16.51)
- ----------------------------------------------------------------------------
Net assets, end of period
(in thousands) $940,985 $630,764 $684,450
- ----------------------------------------------------------------------------
Ratio of expenses to average
net assets (%)(c) 1.39 1.56 1.47
- ----------------------------------------------------------------------------
Ratio of net investment income to
average net assets (%) .85 1.28 1.60
- ----------------------------------------------------------------------------
Portfolio turnover (%) 49.53 61.84 70.64
- ----------------------------------------------------------------------------
Average commission rate paid (d) -- -- --
- ----------------------------------------------------------------------------
* Unaudited.
+ Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
(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 and thereafter includes amounts paid through brokerage service and
expense offset arrangements. Prior period ratios exclude these amounts. (Note 2)
(d) Average commission rate paid is presented for fiscal periods beginning on
or after September 1, 1995 in conformance with requirements issued by the SEC.
</TABLE>
Notes to financial statements
April 30, 1996 (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 markets 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. Class A
shares are sold with a maximum front-end sales charge of 5.75%. Class B
shares, which convert to class A shares after eight years, 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 shares are redeemed within approximately six years of
purchase. Class M shares are sold with a maximum front end sales charge
of 3.50% and pay an ongoing distribution fee that is 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.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class
(including the distribution fees applicable to such class). Each class
votes as a class only with respect to its own distribution plan or other
matters on which a class vote is required by law or determined by the
Trustees. Shares of each class would receive their pro-rata share of the
net assets of the fund, if the fund were liquidated. In addition, the
Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies followed
by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities. Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are
readily available are stated at market value, which is determined using
the last reported sale price, or, if no sales are reported -- as in the
case of some securities traded over-the-counter -- the last reported bid
price. Securities quoted in foreign currencies are translated into U.S.
dollars at the current exchange rate. Gains and losses that arise from
changes in market prices of investments. The effects on net investment
income arising from changes in exchange rates are also not segregated.
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.
Securities purchased or sold on a forward commitment or delayed delivery
basis may be settled a month or more after the trade date; interest
income is not accrued until settlement date. The fund instructs the
custodian to segregate assets in a separate account with a current value
at least equal to the amount of its forward commitment purchase
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under the
contract.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested
cash balances into a joint trading account along with the cash of other
registered investment companies managed by Putnam Investment Management,
Inc. ("Putnam Management"), the fund's Manager, a wholly-owned
subsidiary of Putnam Investments, Inc. and certain other accounts. These
balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the
market value of which at the time of purchase is required to be in an
amount at least equal to the resale price, including accrued interest.
Putnam Management is responsible for determining that the value of these
underlying securities is at all times at least equal to the resale
price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy
or sell is executed). Interest income is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date except that certain
dividends from foreign securities are recorded as soon as the fund is
informed of the ex-dividend date.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, 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 investment income
and foreign withholding taxes recorded on the fund's books and the U.S.
dollar equivalent amounts actually received or paid. Net unrealized
gains and losses on foreign currency transactions arise from changes in
the value of open forward currency contracts and assets and liabilities
other than investments at the period end, resulting from changes in the
exchange rate.
F) 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 U.S. dollar value of forward currency contracts is
determined using forward currency exchange rates supplied by a quotation
service. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is "marked to market" daily and
the change in market value is recorded as an unrealized gain or loss.
When the contract is closed, the fund records a realized gain or loss
equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed. The fund could be
exposed to risk if the value of the currency changes unfavorably, if the
counterparties to the contracts are unable to meet the terms of their
contracts or if the fund is unable to enter into a closing position.
G) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies. It is also the intention of the fund to distribute
an amount sufficient to avoid imposition of any excise tax under Section
4982 of the Internal Revenue Code of 1986. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held and for excise tax on income and capital
gains.
H) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid annually. The amount and character of income and gains to be
distributed are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles.
Reclassifications are made to the fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
Note 2
Management fee, administrative services, and other transactions
Compensation of Putnam Management, for managment and investment advisory
services is paid quarterly based on the average net assets of the fund.
Such fee is based on the following annual rates: 0.80% of the first $500
million of average net assets, 0.70% of the next $500 million, 0.65% of
the next $500 million, 0.60% of any amount over $1.5 billion subject,
under current law, to reduction in any year to the extent that expenses
(exclusive of 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 excess over $100 million and by the amount of
certain brokerage commissions and fees (less expenses) received by
affiliates of Putnam Management on the fund's portfolio transactions.
The fund reimburses Putnam Management for the compensation and related
expenses of certain officers of the fund and their staff who provide
administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Trustees of the fund receive an annual Trustees fee of $4,770 and an
additional fee for each Trustee's meeting attended. Trustees who are not
interested persons of Putnam Management and who serve on committees of
the Trustees receive additional fees for attendance at certain committee
meetings.
The fund adopted a Trustee Fee Deferral Plan (the "Plan") which allows
the Trustees to defer the receipt of all or a portion of Trustees Fees
payable on or after July 1, 1995. The deferred fees remain in the fund
and are invested in the fund or in other Putnam funds until distribution
in accordance with the Plan.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam
Investments, Inc. Investor servicing agent functions are provided by
Putnam Investor Services, a division of PFTC.
For the six months ended April 30, 1996, fund expenses were reduced by
$287,535 under expense offset arrangements with PFTC and brokerage
service arrangements. Investor servicing and custodian fees reported in
the Statement of operations exclude these credits. The fund could have
invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if it had not entered
into such arrangements.
The fund has adopted distribution plans (the "Plans") with respect to
its class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to
compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of
Putnam Investments Inc., for services provided and expenses incurred by
it in distributing shares of the fund. The Plans provide for payments by
the fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%,
1.00% and 1.00% of the average net assets attributable to class A, class
B and class M shares, respectively. The Trustees have approved payment
by the fund at an annual rate of 0.25%, 1.00% and 0.75% of the average
net assets attributable to class A, class B and class M shares
respectively.
For the six months ended April 30, 1996, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $592,969 and $15,969
from the sale of class A and class M shares, respectively and $779,996
in contingent deferred sales charges from redemptions of class B shares.
A deferred sales charge of up to 1% is assessed on certain redemptions
of class A shares. For the six months ended April 30, 1996, Putnam
Mutual Funds Corp., acting as underwriter received $15,290 on class A
redemptions.
Note 3
Purchases and sales of securities
During the six months ended April 30, 1996, purchases and sales of
investment securities other than short-term investments aggregated
$1,649,468,562 and $925,123,489, respectively. There were no purchases
and sales of U.S. government obligations. In determining the net gain or
loss on securities sold, the cost of securities has been determined on
the identified cost basis.
Note 4
Capital shares
At April 30, 1996, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
April 30, 1996
- ----------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------
Shares sold 38,100,355 $392,349,839
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 9,383,632 91,678,073
- ----------------------------------------------------
47,483,987 484,027,912
Shares
repurchased (27,681,447) (285,053,643)
- ----------------------------------------------------
Net increase 19,802,540 $198,974,269
- ----------------------------------------------------
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
- ----------------------------------------------------
Six months ended
April 30, 1996
- ----------------------------------------------------
Class B Shares Amount
- ----------------------------------------------------
Shares sold 21,248,424 $213,831,170
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 5,083,323 48,545,746
- ----------------------------------------------------
26,331,747 262,376,916
Shares
repurchased (10,138,565) (101,914,369)
- ----------------------------------------------------
Net increase 16,193,182 $160,462,547
- ----------------------------------------------------
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
- ----------------------------------------------------
Six months ended
April 30, 1996
- ----------------------------------------------------
Class M Shares Amount
- ----------------------------------------------------
Shares sold 801,569 $8,269,284
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 37,518 366,553
- ----------------------------------------------------
839,087 8,635,837
Shares
repurchased (118,655) (1,220,182)
- ----------------------------------------------------
Net increase 720,432 $7,415,655
- ----------------------------------------------------
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
- ----------------------------------------------------
Six months ended
April 30, 1996
- ----------------------------------------------------
Class Y Shares Amount
- ----------------------------------------------------
Shares sold 1,528,852 $15,994,261
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 256,730 2,533,712
- ----------------------------------------------------
1,785,582 18,527,973
Shares
repurchased (767,719) (7,971,085)
- ----------------------------------------------------
Net increase 1,017,863 $10,556,888
- ----------------------------------------------------
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
- ----------------------------------------------------
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
Voyager Fund II
PUTNAM GROWTH
AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Growth and Income Fund II
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
Adjustable Rate U.S. Government Fund
American Government Income Fund
Diversified Income Trust
Federal Income Trust
Global Governmental Income Trust
High Yield Advantage Fund
High Yield Trust
Income Fund
Intermediate U.S. Government Income Fund
Preferred Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
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
LIFESTAGESM 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
INVESTMENT+
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++
* Not available in all states.
+ Relative to above.
++ Not offerred by Puttnam Investments Certificates of deposit offer a
fixed rate of return and may be insured up to certain limits by
federal/state agencies. Savings accounts may also be insured up to
certain limits. Please call your financial advisor or putnam at 1-
800-225-1581 to obtain a prospectus for any Putnam fund it contains
more complete information, including charges and expenses. Please
read it carefully before you invest or send money.
Our commitment to quality service
* CHOOSE AWARD-WINNING SERVICE
Putnam Investor Services has won the DALBAR Quality Tested Service Seal
for the past six years. In 1995, over 146,000 tests of 56 shareholder
service components demonstrated that Putnam outperformed the industry
standard in every category.
* HELP YOUR INVESTMENT GROW
Set up a systematic program for investing with as little as $25 a month
from a Putnam money market 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 the
original cost of the shares.
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 representative.
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.
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
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Brett C. Browchuk
Vice President
Anthony W. Regan
Vice President and Fund Manager
Carol C. McMullen
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
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 current prospectus, which gives details of sales
charges, investment objectives, and operating policies of the fund, and
the most recent copy of Putnam's Quarterly Performance Summary. For more
information, or to request a prospectus, call toll free: 1-800-225-1581.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the
Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board
or any other agency; and involve risk, including the possible loss of
the principal amount invested.
Putnam Investments
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- -------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- -------------------
25118-005/882/907 6/96
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
- -------------------------------------------------------------------------
Putnam Global Growth Fund
Supplement to Semiannual Report dated 4/30/96
The following information has been prepared to provide class Y shareholders
with a performance overview specific to their holdings. Class Y shares are
offered exclusively to defined contribution plans investing $250 million or
more in one or more of Putnam's funds or private accounts. Performance of
class Y shares, which incur neither a front-end load, distribution fee, nor
contingent deferred sales charge, will differ from performance of class A, B,
and M shares, which are discussed more extensively in the semiannual report.
SEMIANNUAL RESULTS AT A GLANCE
- -------------------------------------------------------------------------
Total return: NAV
Six months ended 4/30/96 12.77%
One year ended 4/30 /96 22.57
Life of class (since 6/15/94) 26.49
Annual average 12.74
- -------------------------------------------------------------------------
Share value: NAV
10/31/95 $10.25
4/30/96 10.89
- -------------------------------------------------------------------------
Distributions: No. Income Capital gains Total
1 $0.2000 $0.406 $0.606
- -------------------------------------------------------------------------
Please note that past performance does not indicate future results.
Investment return and principal value will fluctuate so your shares, when
redeemed, may be worth more or less than their original cost. See full report
for information on comparative benchmarks. If you have questions, please
consult your fund prospectus or call Putnam toll free at 1-800-752-9894.
